Despite deploying additional software tools to help bring more clarity to the agency’s accounting for assets and liabilities, the Department of Defense (DoD) said last week that it failed its fifth consecutive yearly financial audit.
Michael J. McCord, Under Secretary of Defense Comptroller and Chief Financial Officer at DoD, said during a Nov. 15 press briefing that the audit for Fiscal Year 2022 came back once again with a “disclaimer of opinion” which in finance-speak means that the audit is not “clean.”
Auditors typically issue disclaimers of opinion due to the absence of financial information, or management cooperation, that would allow them to complete their review and issue an unqualified opinion on the results.
“The results of the fifth annual DoD-wide financial audit will be a disclaimer of opinion for DoD as a whole. This is the same as last year and, you know, not unexpected. We did expect this disclaimer,” stated McCord during the briefing.
The latest audit found 28 different areas of material weaknesses, with only three being of new concern.
Despite failing to get a clean audit for FY2022, McCord said DoD has been making some progress on problems underlying the auditing process, including through use of the agency’s Advana big data platform for advanced analytics.
“We’re also making progress on metrics and dashboards” through use of the Advana platform, said McCord, who added, “having these kind of common sight pictures of data is one of the areas where we’re making progress.”
McCord said he remains optimistic that DoD will continue to make strides on improving its audit results, but that goal will take more time to reach.
“We are seeing people invest in systems, and analytics and things like that I think are going to pay off,” he said. “But at the same time, it’s fair to say that we have some challenges, in particular, on putting a value on inventory. That is still a pretty big hill for us to climb.”