Internal Controls Over the U.S. Special Operations Command Military Equipment Baseline Valuation Effort

摘要

The overall objective was to evaluate the reliability of the internal controls over valuation and rights and obligations assertions for the military equipment baseline. The objective also included a limited evaluation of the completeness assertion. This report addresses the P&EPO and Special Operations Command's (SOCOM) internal controls over the SOCOM universe of military equipment. This report is the second in a series. The final report will summarize all findings for the series and recommend corrective actions, as appropriate. The P&EPO and SOCOM internal controls over the valuation, rights and obligations, and completeness of the universe of programs for SOCOM's military equipment baseline were not effective. Specifically, the internal controls did not ensure that the SOCOM military equipment baseline included: (1) values based on proper documentation and appropriate methodologies, (2) capitalization dates reported in accordance with supporting documentation. (Because of previously identified deficiencies over end item quantities, the P&EPO requested the audit team evaluate only the internal controls over the completeness of the SOCOM universe of programs.) (3) waivers that were appropriately granted and supported, and (4) a complete universe of SOCOM military equipment programs. As a result, SOCOM cannot ensure the accuracy of the military equipment net book value of $4.5 billion presented in its September 30, 2006, financial statements. This report concludes that the internal controls over valuation, rights and obligations, and completeness of the universe of programs for the SOCOM September 30, 2006, military equipment baseline did not result in reasonable estimates of the historical costs of the equipment.