In 2010, Congress mandated the Department of Defense (DoD) to produce audit-ready financial statements by Sept. 30, 2017. While the DoD has made significant progress toward audit readiness over the last seven years, there is still much to do.
The DoD’s strategy directed the financial management community to focus most audit readiness activities on a limited set of financial statements. Thus, many uniformed and civilian leaders relied on — and still view — the financial community as being solely responsible for audit success. This creates the perception that an audit resides in the realm of the higher headquarters, or the staff, and is not the commander’s responsibility. Unfortunately, this couldn’t be further from the truth.
Today, audits impact much more than just the financial departments of government and military organizations. Full-scale audits can touch all aspects of an organization, from the systems involved in personnel and equipment to the commander themselves. Thus, auditability is about much more than just financial compliance; it can help leaders build long-term solutions that reduce future audit demands while also benefiting their ultimate mission. Government and military leaders need to rethink the way they approach organizational auditing, and adopt an enterprise-wide mindset.
By broadening their perspective on auditing and audit readiness, government and military organizations can better see, prioritize and allocate resources to meet mission needs. Shifting to an enterprise understanding of audits can help leaders use information gleaned from the auditing process to improve the organization as a whole. Furthermore, as organizations become more prepared for and experienced with the auditing process, teams impacted will benefit from less stress and higher performance.
The sustained improvement that comes with transforming audits from a labor-intensive burden into a strategy-driving asset requires a cultural shift in thinking across the entire organization, and a tailored approach to ensure success. Effective audit strategies group activities into three areas: response, remediation and sustainment. Focusing on these three areas and creating synergy across mission and audit needs can help government and military organizations leverage their audits to improve mission readiness.
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