WASHINGTON (NNS) -- The Navy took its first big step toward achieving a congressional mandate, Dec. 4, when a contract was signed commencing its first financial statement audit on its Schedule of Budgetary Activity (SBA).
This significant milestone is the culmination of several years of diligent, focused work by the Navy's business professionals.
Being "ready for audit" means that Navy business operations ensure accountability for Navy dollars spent on goods and services supporting its warfighters.
"We'll be asked by private sector auditors to demonstrate that we can track the dollars we spend - whether it's paying our people, buying F-35s on a multibillion-dollar contract, or buying cleaning supplies with a purchase card," said Karen Fenstermacher, deputy assistant secretary of the Navy (Financial Operations). "A successful SBA reassures Congress and the public that we're conscientious stewards of the funds we're appropriated."
The large Navy cadre of contracting, logistics, financial, and personnel specialists have worked hard to improve the business processes and systems used to make purchases and pay people, bringing organizational procedures into compliance with financial audit standards. Auditors will determine where the team has been successful and what areas still need further improvement.
"The Navy has never undergone a financial statement audit," said Susan J. Rabern, assistant secretary of the Navy (Financial Management and Comptroller). "Reaching this milestone is the result of persistence and teamwork throughout the Navy organization, and I am extremely proud of the Sailors and civilians who got us to this goal."
The Army and the Air Force will join the Navy in this initial round of SBA audits. The Marine Corps received a favorable audit opinion from the DoD Inspector General on its fiscal year 2012 Schedule of Budgetary Activity and provided the other Services with useful "lessons learned." Financial audits will continue on a yearly basis.
"Annual financial statement audits provide another assurance of high standards as we conduct our worldwide business activities," said Rabern.
The first audit begins in December and will continue for more than a year. After a short planning period, the auditors will travel to selected commands to survey field-level business activities. They will then select a large sample of business transactions from across the Navy this year and determine whether they were executed according to audit standards. Ultimately, the audit team will issue a report on their findings.
"Even if you don't have contact with the audit team, you help the Navy achieve success by always using prescribed procedures when spending the Navy's dollars, and by keeping good records," said Fenstermacher. "Doing things right when it comes to spending public funds should always be our mantra."