Milestone met in 6th annual financial statement audit year

  • Published
  • Secretary of the Air Force Public Affairs

The Department of the Air Force recently concluded its sixth full financial statement audit cycle and accomplished a significant milestone for fiscal year 2023.

The fund balance with treasury material weakness, representing 44% of all assets tracked on the DAF financial statements, was fully remediated, making the DAF the first department in the Department of Defense to achieve this milestone.

“We are incredibly proud, and thankful, for our team’s unrelenting push to get our fund balance with treasury material weakness across the finish line,” said Honorable Kristyn Jones, assistant secretary of the Air Force for Financial Management and Comptroller, performing the duties of Under Secretary of the Air Force. “The weight of this achievement cannot be understated; we’ve proven, yet again, that the Air Force is effectively developing solutions that are solving some of our biggest challenges.”

While the independent public accountant continues to issue a “disclaimer of opinion” for the general fund and working capital fund, the fund balance with treasury material weakness remediation marks a leap forward for the DAF on its flight path toward auditability. A key factor in this success was the implementation of DAF treasury reporting compensating controls, which validated the completeness and accuracy of over 99% of FY23 collections and disbursements to the treasury. This advancement not only enhances the general fund balance sheet's auditability, but also demonstrates the DAF’s ability to accurately track appropriated funds, increasing transparency and accountability with American taxpayers.

The DAF saw substantial improvements reducing its open notices of findings & recommendations from the auditor by 19.6% across the portfolio. Similarly, targeted investments in the information technology systems resulted in milestone achievements. The DAF’s accounting system, the Defense Enterprise Accounting and Management System, successfully garnered a modified audit opinion for its system and organization controls — type 1, an improvement from last year’s adverse opinion.

The DAF also made advancements against its military equipment material weakness in FY23 by implementing critical financial controls, including additional oversight controls for military equipment construction in progress and the execution of monthly data quality controls to identify and investigate abnormal transactional activities. These controls enabled faster error detection and affirmation that asset values are posted accurately to financial statements.

“This is a top priority for the DAF, and our team has worked diligently to tackle the root causes of critical deficiencies,” Jones said. “As a result of their hard work, the auditor has narrowed its focus to just three targeted findings for military equipment, which we are prioritizing in FY24.”

By identifying areas for improvement, the annual audit is continuing to create pathways for real and meaningful change. The DAF is seizing those opportunities and responding by developing solutions to transform its systems, capabilities and processes to better ensure Airmen and Guardians have the resources they need, when and where they need them, to accomplish the mission.