The Property and Equipment (P&E) Policy Office is tasked with developing the annual Acquisition, Technology and Logistics (AT&L) Statement of Assurance (SoA). Department of Defense (DoD) Instruction 5010.40, “Managers’ Internal Control Program Procedures,” and the DoD Federal Managers’ Financial Integrity Act (FMFIA), “Over Non-Financial Operations,” details the process for developing the Statement of Assurance (SoA).
The SoA discloses material weaknesses identified through an assessment that tests the effectiveness of the Office of the Secretary of Defense (OSD) Principal Staff Assistants’ (PSAs’) and Department of Defense (DoD) Field Activities’ internal management controls for all mission essential programs, administrative, and operational activities. The SoA also describes the plans and schedules to correct any material weaknesses reported. However, SoA does not disclose the material weaknesses for financial reporting activities.
There are three possible assurance statements:
As part of the Department’s goal to supply timely, reliable, consistent, and accurate financial information, the Components compile Financial Improvement Plans, or FIPs. FIPs identify financial management weaknesses, and detail the milestones within each Business Rule for addressing these weaknesses to achieve audit readiness. Maintained by each Component, FIPs also provide estimated completion dates for these actions. FIPs are living documents that contributors can review and update in real time to reflect progress against specific tasks. Each task in a FIP is assigned to a specific milestone or milestones. These milestones feed directly into the Financial Improvement and Audit Readiness (FIAR) Plan and set the strategy for achieving audit readiness.
Sound financial management and reform is critical to the Department’s success. In 2005, the DoD Comptroller established the FIAR Directorate to manage and integrate Department-wide financial improvement efforts. The Components detail accomplishments and progress against milestones to the FIAR Directorate for reporting in the FIAR Plan. The FIAR Plan describes specific corrective actions to achieve reliable, accurate, and complete financial data for use in key management decisions. It focuses on problems such as weak internal controls, incomplete or inaccurate information, and systems that cannot properly process data and information. By establishing and monitoring critical milestones for resolving these problems, the FIAR Plan gives decision makers better information and more options. This collaboration allows a single, comprehensive and integrated strategy for financial improvement efforts across the Department, and enables Components to learn from each other’s approaches, challenges, and successes. The November 2012 FIAR Plan is the most current plan. For more information on FIAR, go to the OUSD(Comptroller) website.
The Department of Defense’s long term goals are to report General and Military Equipment on DoD financial statements accurately, timely, and reliably and to provide decision makers with better information. The Property and Equipment (P&E) Policy Office is responsible for both the General and Military Equipment priority segments of the Mission Critical Asset Phase (Wave 3) of the FIAR Plan. As such, the P&EP Office reviews General and Military Equipment FIPs as they are submitted and works in conjunction with the FIAR Directorate to provide meaningful feedback to the Components to help them improve upon their processes. The following are key elements that should be addressed in Military and General Equipment FIPs to achieve compliant ratings on the FIP scorecards: