Navigating the Navy's transition from audit readiness to audit response.

Author:Fenstermacher, Karen

The Department of the Navy's (DON) Fiscal Year (FY) 2015 Statement of Budgetary Activity (SBA) financial statement audit has kicked off. On December 3, 2014, the reality of this audit came to fruition when Cotton and Company, an independent public accounting firm, was awarded the General Fund Navy SBA Audit contract. As the Navy embarks on its first financial audit, the Office of Financial Operations' (FMO) focus is to position the DON to meet audit response requirements, while continuing to accomplish other audit readiness initiatives to meet demands stemming from future financial statement audits.

The SBA Audit has long been in sight for the DON and over the past several years, the Financial Improvement and Audit Readiness (FIAR) Plan has guided our focus in preparing for the audit through stakeholder training, process Improvement, and --controls testing. Our steady progress has established a new benchmark for Navy financial management and we look forward to forging new paths on our audit journey.

The Audit Training Engagement Roadshow

In Fall 2014, FMO took to the road to promote audit awareness to Navy Commands. The Audit Response & Evaluation Division (FMO-5) conducted the Audit Training Engagement (Roadshow) from October to December at nearly every Navy Budget Submitting Office (BSO) and at the Office of Budget (FMB), with planned engagements at Naval Operations (OPNAV) and the Office of the Secretary of the Navy (SECNAV). These day-long roadshow site visits are part of FMO's outreach efforts to ensure that all Navy Commands and senior leadership have sufficient awareness and expectations for the FY 2015 SBA Audit.

The Roadshow provided an overview of the audit infrastructure and timeline, while giving Commands the opportunity to Interact directly with FMO leadership. Leading the Roadshow team was Mr. Alex Hardisson, FMO-5 Director, along with representatives from his region teams and a group of private-sector auditors with federal audit experience. The Roadshow's structure was designed to establish an open two-way dialogue and to set a collaborative tone moving forward. Specifically, these sessions focused on Audit 101: Overview, Expectations, & Timeline, Financial Information Systems Controls Audit Manual Testing, FMO-5 Structure & Support Capabilities, and Common Exceptions & Observations from previous segment examinations. The Roadshow was a big success with nearly 750 members of the Commands' financial management community and their senior leadership participating in the events.

During the Roadshow, FMO emphasized the following key themes:

  1. Audit is the new operating reality and will continue Into perpetuity.

  2. Audit is not BSO centric; it is an audit of the entire Navy enterprise.

  3. Audit involves all Navy Commands, Echelons, and Shared Service Providers (SSP) that will require heightened communication, collaboration, and enterprise-wide partnerships.

I had the pleasure of providing a FMO leadership update at most roadshow site visits and of discussing the achievements the DON has made thus far. The roadshow is the beginning of a two-way dialogue between Commands and FMO leadership and going forward, I will hold monthly check-ins with all Navy Commands while FMO-5 will engage in...

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