The inspector general’s office at DoD has issued a guide to help non-auditors understand agency financial audits, saying that management can find in them useful information on “the effectiveness of each reporting entity’s business systems, processes, and controls.”
While focusing on the recent department-wide audit at DoD, the first of its kind, the report explains terminology and indicators that apply in financial audits across government. They can be daunting for non-auditors because they “contain technical language and follow a format dictated by auditing standards,” but managers can find in them indictors of problems such as “weak information technology controls, insufficient controls to ensure the accuracy and completeness of property, and incomplete universes of financial transactions.”
Such information can be found in sections including management’s discussion and analysis, which gives a high-level overview of operations and financial performance; and the statement of budgetary resources, which explains how money comes in, whether unspent money from prior years remains available, and restrictions on carrying funding forward.
Such information can produce a more accurate assessment of how an agency spends its money; help fix vulnerabilities in information technology systems; prevent wasteful practices; and improve operational decisions, it said.
In the case of the recently completed DoD-wide audit, it added, the department “did not expect to obtain a clean opinion . . . the most important outcome this year was not the overall opinion, but that the audit identified specific deficiencies in DoD financial management and reporting processes, and that the DoD makes progress in fixing those deficiencies.”