The Army announced completion of its Fiscal Year 2021 audits Nov.18, which resulted in disclaimers of opinion. Auditors issue a disclaimer of opinion when the data or documentation provided is insufficient. The full financial reports are available here.
As required by law, the Army conducted its fourth annual audit of the financial statements for its general fund and working capital fund. The Army continues to make tangible audit progress, demonstrating improved accountability of property, and Soldier and Civilian pay and benefits.
“Although the Army still has some challenges to navigate, we continue to show progress toward obtaining a clean audit opinion,” said Assistant Secretary of the Army for Financial Management and Comptroller, Caral E. Spangler. “Overall, we have taken a deeper dive into our processes to make necessary corrections, and enhanced communication with our auditors.”
The service also increased the responsiveness and improved the accuracy of data provided to support auditor testing, and made essential improvements to Information Technology application and security controls.
Specific areas of growth in the Army’s FY 2021 audit include:
- A 70 percent reduction in differences between the Army and U.S. Treasury accounting of Army funds. This reduction helps the Army to improve its tracking and use of appropriated funds.
- A significant decrease in the number of repeat IT Notice of Findings and recommendations for the general fund and working capital fund (35 percent and 22 percent, respectively).
- An expansion of controls testing at five times as many munitions retail locations in FY 2021 compared to FY 2020. This increase provides enhanced visibility into Army assets, leading to more-informed decision making.
The audit also assessed 13 material weaknesses for the Army General Fund, and 14 for the Army Working Capital Fund.
As noted in the FY 2021 Army Financial Report, many of the areas identified for improvement overlap between the two funds. These areas include:
- Beginning year balances;
- General property, plant and equipment; and
- Financial reporting.
The Army is working to remediate these weaknesses, devising corrective action plans to tighten oversight and internal controls over financial reporting.
The Army’s goal is to obtain an audit opinion for the general fund and working capital fund in the next five to ten years. To do so, the Army plans to prioritize remediation of significant findings that inhibit progress using an agile approach focused on specific deficiencies certified by the audit firm.
The service also plans to invest in training to improve data quality, execution of policies and procedures, and provision of supporting audit evidence.