DISA fund earns 'clean' status in DOD-wide audit

An audit of DISA's fiscal 2011 Defense Working Capital Fund found the fund was financially transparent and accurate. DISA is one of six agencies so far to clear the Defense Department audit, which will be ongoing through 2014.

The other five agencies that received the “clean” audit were the Defense Contract Audit Agency, the Army Corps of Engineers, the DOD Inspector General, the Defense Commissary Agency and Defense Financing and Accounting Services, Crawford said.

After five years of preparation, the Defense Information Systems Agency has received its first “clean audit” decision under a federal law that mandates financial transparency.

DISA earned the audit green-light through an audit of its fiscal 2011 Defense Working Capital Fund financial statement. It represents DISA’s accuracy in its accounting and financial management for its working capital fund, which includes money coming from its customers. A separate general fund contains money appropriated from Congress, and efforts to get that fund audit-ready are ongoing.


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“This is an independent look according to accounting standards that says the customer – whether the Army, Navy, Air Force, Marine Corps or one of our other agencies out there, even such as the State Department – that we have fair and accurate books, and that their investments are fairly represented in our financial statements,” said Jimaye Sones, DISA chief financial executive/comptroller. “For an IT-based organization that’s as dynamic as we are, with all of the missions we support ... this is quite an accomplishment.”

DISA is one of six agencies under DOD that cleared the audit test. The Defense Department is the only one of the 24 applicable agencies to not receive the “clean” decision from an independent audit authority, as not all of its components received the favorable decision.

In a whitehouse.gov blog post, Controller of the Office of Federal Financial Management Danny Werfel acknowledged that DOD’s sheer mass and complicated makeup and missions have slowed efforts to become audit-ready, but he praised the measures the department is taking to correct the issue.

DOD “still faces several challenges in obtaining an audit opinion largely due to the size and complexity of the agency. But they are committed to getting there,” Werfel wrote. “Last month, [Defense] Secretary Leon Panetta went up to Congress and committed to achieving an audit by 2014 – three years sooner than previously planned. To achieve this goal, DOD has established a path forward that focuses on improving the information the agency uses most in order to manage mission critical assets.”

DOD is also increasing the resources dedicated to audit-readiness, Werfel noted.

Still, those problems are also familiar within DISA.

“DOD is so big – in DISA itself we’ve got more than $8 billion appropriated, and the working capital fund is about $6.8 billion. So we’re talking about a large amount of money; we’re talking about a very diverse set of numbers, working with various customers, agencies and departments,” Sones said.

DISA’s inherent role as one actively involved in the wars in Iraq and Afghanistan further complicates its financial operations, according to Barbara Crawford, chief of DISA’s Chief Financial Executive Accounting Compliance and Operations Division and lead for both DISA’s Audit Support Team and Internal Control Team.

“DISA operates in a very dynamic environment. Things change and DISA has to respond from a mission perspective quickly to the needs of its customers. Any change that occurs in the mission is going to have an impact on our financial processes and how we report,” she said.

In the next year, DISA will work to maintain its auditability while also looking toward getting its Congress-appropriated fund audit-ready as well.

“Moving forward we’ll have to sustain this, and that’s a challenge. We also have a general fund of about $1.5 billion that we’ll be looking at this [upcoming] year. At the end of next year what we’d like to see is both our general fund and our working capital fund passing the audit – that’s our way forward,” Sones said.

“It’s not just a matter of staying the course; we have to stay on top of all the changing mission requirements that DISA will have in order to make sure we keep these financial disciplines in place moving forward,” Crawford added.

Despite the challenges, Sones noted that the rest of DOD may be able to look to DISA as a model as the department works to achieve ambitious financial-transparency goals over the next two to three years.

“The achievement of this clean audit has told the department yes, in fact, an agency can pass one of these audits. And that’s an important to the initiative because there was some question as to whether an agency could pass one of these audits, especially a working capital fund. This proves that if you make this part of your everyday business…you can achieve these goals with the right effort,” he said.

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