IMMEDIATE RELEASE

DoD Completes First Full Financial Statement Audit; Findings Will Directly Benefit Readiness


This week, the Department of Defense fulfilled its commitment to the American people by completing a full-scope, department-wide, financial statement audit.  

More than 1,200 auditors conducted over 900 site visits at over 600 locations across the DOD and examined hundreds of thousands of items. 

Auditors evaluated data for accuracy and completeness to verify counts, location and condition of military equipment, real property and inventory.  Auditors also tested for security vulnerabilities in DOD business systems and validated the accuracy of personnel records and actions, such as promotions and separations. 

“The release of the first-ever Department of Defense audit is a historic accomplishment and indicates our commitment to accountability and reform. We conducted the audit to facilitate transparency with Congress and the American taxpayer and to determine corrective actions to instill long-term discipline,” Patrick M. Shanahan, deputy secretary of defense, said.

Multiple DOD organizations received the highest rating of unmodified or “clean” audit opinions, including the U.S. Army Corps of Engineers – Civil Works; the Military Retirement Fund; Defense Health Agency – Contract Resource Management; Defense Contract Audit Agency; and the Defense Finance and Accounting Services Working Capital Fund.  The Medicare-Eligible Retiree Health Care Fund and the Defense Commissary Agency received modified opinions, which means they do not comply with generally accepted accounting principles but financial statements are fairly presented.

With a department-wide audit, some organizations are new to the audit process. These organizations received a disclaimer, meaning multiple issues need to be fixed.  The auditors provided favorable feedback that Army, Navy and Air Force properly accounted for major military equipment and military and civilian pay. Auditors found no evidence of fraud. They identified issues the department needs to address, including inventory, real property and information technology security. 

The department started the audit in December 2017 in order to find problems and fix them.  DOD is committed to fixing these issues and continuing to improve the ability to defend the nation while being good stewards of the taxpayers’ money.

The DOD-wide audit report and links to component audit reports will be available at
http://comptroller.defense.gov/odcfo/AFR2018.aspx.