Marines pass full financial audit, first for any US military branch

The US Marine Corps has passed a full financial audit for the first time, with the service announcing Friday that the fiscal 2023 financial audit received an “unmodified audit opinion” after a rigorous two-year review.

The milestone — something the Defense Department and the other armed services have yet to achieve — comes after nearly two decades of trying to prepare the Corps’ records and several failed audits along the way.

During this two-year audit, the Marine Corps had independent third-party auditors from Ernst and Young review the value of all of its assets listed on the financial statements. The body also had to prove that each item was there and was where the agency said it was.

Gregory Koval, the assistant deputy administrator for resources, told reporters that the review team made more than 70 site visits in the US and around the world. In these visits, they inspected more than 7,800 real assets such as land and buildings. 5,900 pieces of military equipment. 1.9 million pieces of non-munitions supplies, such as spare parts. and 24 million rounds of ammunition, some of which are stored at Army and Navy facilities.

If a vehicle was not where it was listed because it was out conducting operations, or a piece of ammunition was not there because it had already been fired in a recent exercise, the Corps had to show documentation or photos of that, too, in order to explain the discrepancies .

Koval said it final financial report states that the Marine Corps passed its audit but still has some areas in which it can improve.

Lt. Gen. James Adams, the deputy commander for programs and resources, said one area of ​​focus is automating processes. Today, there are different systems where data has to be manually moved from one system to another, introducing the opportunity for errors. The agency is moving toward integrated, automated systems that will avoid human error when exchanging information between human resources and financial data systems, for example.

Adams said passing the audit now will make everything in the future more manageable. That latest audit required a third party to validate the existence and value of every single item the Marines own, which required significant historical research, he explained.

Subsequent audits, on the other hand, will be able to assume that past information is correct and thus only cover “from this point forward,” rather than asking Marines to prove information about financial transactions of this financial year.

Adams said the Corps came close to completing previous audits in a single fiscal year, but due to the massive amount of historical research, they were unable to complete the audit and cross the finish line in a single year. For the 23rd year audit, the agency requested an extension, which could prove to be a model for other agencies.

“It was the goal of the commandant of the Marine Corps to pass the audit because he wants to demonstrate the credibility of the Marine Corps to Congress and to the taxpayers,” Ed Gardiner, assistant deputy commandant for programs and resources, told reporters. .

In addition to taking more time, this audit also used the Army’s new general ledger software, Defense Agency Initiativewhich auditors had confidence in, according to Gardiner.

Gardiner explained that the agencies were required by law to begin their financial audits in the 1990s, but the Marine Corps did not begin producing statements in preparation for an audit until 2006. The first audit in 2010 showed much room for improvement. he said. In late 2013, the Marines announced that they had passed a limited scope audit for FY12 — but in March 2015, a number Financial and supervisory leaders reported that the results were unreliable and the clean pass would be nullified.

In 2017, the Marine Corps began conducting full financial statement audits.

The full audit of the 2023 financial statements was conducted to the highest standards, Gardiner said, with the Ernst and Young team not only audited by a review team but also by the Pentagon’s inspector general team.

“We’ve gotten to the end of the process and we’ve learned lessons that we can share with the rest of the department,” he said, adding that the Marine Corps hopes those lessons “can be a catalyst for the rest of the department.”

Pentagon Comptroller Michael McCord made similar comments in November, when the Pentagon failed its sixth audit since 2018.

Noting the Marine Corps expansion, McCord said “we’re very focused on this as a test case for the department and the larger services.”

“Whatever the results are when we receive the auditor’s final opinion, I want to congratulate the USMC and, in particular, [Marine Corps Commandant Gen.] Eric Smith for their leadership and effort,” added McCord.

Megan Eckstein is the naval war reporter at Defense News. Covers military news since 2009, focusing on US Navy and Marine Corps operations, acquisition programs, and budgets. She has reported from four geographic fleets and is happiest reporting stories from a ship. Megan is a graduate of the University of Maryland.

Read the original at Defence247.gr

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