Financial Reporting Procedures for Defense Distribution Depots - Defense Logistics Agency Business Area of the Defense Business Operations Fund

摘要

In our audit of the FY 1993 Financial Statements for the Distribution Depots--Defense Logistics Agency Business Mea of the Defense Business Operations Fund, we evaluated procedures and controls used by the Defense Finance and Accounting Service (DFAS) to prepare the distribution depots' FY 1992 Statement of Financial Position. FY 1992 ending balances represent FY 1993 opening balances for the depots' asset and liability accounts. Our review was made to determine the effect existing procedures and controls will have on the preparation of the FY 1993 financial statements. Since establishment of the Defense Business Operations Fund (DBOF), the General Accounting Office; Inspector General (IO), DoD; and Service audit agencies have completed several audits on the preparation of financial statements for activities of the DBOF. The audits identified the lack of adequate procedures, controls, and accounting systems to produce reliable financial statements. Our audit disclosed material inaccuracies in the distribution depot asset and liability accounts. Additionally, needed improvements, identified by prior audits, had not been implemented as of the date of our audit. Until the DoD financial community has had the opportunity to correct long standing problems with its financial systems and financial reporting procedures, additional audit efforts on the distribution depots' FY 1993 financial statements has been curtailed. As discussed with Office of Management and Budget officials, we have modified our future financial statement audit approach to evaluate only certain major DBOF accounts on an Agency-wide basis for FY 1993.