A new video featuring Defense Logistics Agency Director Navy Vice Adm. Mark Harnitchek highlights the agency’s audit readiness goals and emphasizes the need for employees to get involved in the effort.
Although Secretary of Defense Leon Panetta set a fiscal 2017 deadline for the Defense Department to be fully audit ready, DLA’s goal is to be audit ready by fiscal 2015. In the two-minute video, available on the agency’s audit readiness website, Harnitchek touches upon the importance of audit readiness and how the agency plans to achieve it.
“The fact is, [the Defense Department] has long faced a challenge of being fully audit ready,” he says in the video. “How do we do that? We do that by understanding our processes, the internal controls within them, and making sure that the resulting data is accurate and in compliance with the rules. It will increase the public’s confidence in our financial status and enhance their trust that we have good controls to mitigate risk and keep our data safe.”
Harnitchek notes that it’s up to DLA employees to help with the agency’s upcoming efforts, emphasizing that audit readiness efforts involve more than just finances.
“It’s anything involving procedures, from keeping timecards to tracking inventory,” he said. “If you’re not already doing it, it’s important to document your operating procedures. Paperwork should be clearly filled out and signed by the appropriate approving officials. Know where those documents are so you can easily retrieve them. And be available to assist your local audit readiness team members, answer their questions, or work with them to fix something that won’t pass audit standards.”
DLA employees’ impact on audit readiness is the main focus of the latest outreach efforts, Simone Reba, deputy director of DLA Finance, wrote in a blog post Jan. 30. She wrote that it’s the small mistakes that can really add up.
“If you’ve ever owned a house and had a leaky pipe, you know what I’m talking about,” she wrote. “Ignoring a leaky pipe by relying on a bucket to catch the drips can easily serve as a ‘quick fix’ but can eventually lead to serious problems. Is it one drop of water that causes the problem? No. It’s the cumulative effect of multiple drops over time that causes your ceiling to cave in, just like in our situation with financial reports. It’s not one missing receiving report that could potentially cause us to fail an audit; it’s the accumulation of multiple missing receiving reports and multiple financial reports with errors that will cause us to fail. Everyone at DLA – whether they realize it or not – has an effect on our financial statements.”
Reba compared DLA and the federal government’s laws and rules to ingredients in a recipe.
“Every ingredient in a recipe is included for a reason, just like every law, regulation, [standard operating procedure], and policy is in place for a reason: to help guard against small mistakes snowballing into avalanches,” she wrote. “Skipping over or ignoring a law, regulation, SOP, or policy could have a dramatic effect downstream on the overall financial health of DLA. Even if the overlooked policy isn’t a financial policy, it can have a monumental effect on financial statements in the end.”
And there is no better time than now, Reba emphasized, to fix the little things to ensure DLA is audit ready in fiscal 2015.
“Now is the time to ask these questions, not 2015,” she wrote. “When we have auditors in-house they will visit the Field Command locations and ask employees specific questions about policies related to their work. Now is the time to make sure we know the answers to these questions … not 2015.”
Click here to view the video in its entirety.