Accountability from Flightline to Bottomline
Gulf Coast Professional Development Seminar

 “One key to making a budget work in any fiscal environment, but especially now will be streamlining overhead, eliminating waste, and improving our business practices —ensuring that we are operating in a common sense, accountable, and modern business environment”
 “All hands” effort across DoD
 Accelerate SBR audit readiness from 2017 to 2014
 Plan in 60 days
 2-Letter tiger team
Accountability from Flightline to Bottomline
2

 “This is a an enterprise-wide effort that demands the determined commitment of leadership”
 “…improve our audit readiness plans, identifying opportunities to accelerate work and transition from headquarters to base-level activities ”
 “…we are counting on you to assist in process reviews, respond to audit requests, and lead these critical efforts”
“Air Force leadership is committed to achieving audit readiness and we are counting on you to assist in process reviews, respond to audit requests and lead these critical efforts.” General Breedlove and Ms Conaton
Accountability from Flightline to Bottomline

Accountability from Flightline to Bottomline

 What is FIAR?
 What does FIAR mean to you?
 What is the AF strategy for FIAR?
 What is the status AF FIAR efforts?


What are the FIAR challenges?
“Your FIAR’d” examples
 How you can help put out the FIAR?
 “FIAR” Truck Example (time permitting)
Accountability from Flightline to Bottomline

Today:
“I spent all of my budget”
“I got more money to fund additional requirements”
-
“My systems track spending
(obligations) but lack an audit trail”
FIAR
Standard Processes: efficient…consistent approach…shorter learning curve….customer is happy…the auditor is happy
Internal Controls: s eparation of duties…mitigate fraud, waste and abuse…safeguard funds
Audit Trail: k now where the money is…decision support….efficient use of funds….CC happy
Compliant Systems:
Necessary to achieve standard processes, internal controls and an audit trail
Tomorrow:
-
“I spent my budget on these things and could also fund these requirements”
- Documentation to support my obligations is available and the audit trail exists
Auditable Financial Statements will:
1) Increase credibility with Congress, auditors, and taxpayers by proving the AF spends the money in the manner that was intended
2) Give CC confidence funds were used in the most effective manner to support the warfighter
Accountability from Flightline to Bottomline

Wave 1:



Focus on the flow of money from receipt by SAF to distribution down to the
MAJCOMs
Includes all appropriations for the current fiscal year
Asserted as audit ready Sep 2010
Wave 3:



Accountability for the assets and supplies
Air Force can account for all of the assets/supplies that are reported in the system of record for a particular end-item (e.g. aircraft in
REMIS) and that the entire universe of those items reside in the system of record
Conduct inventories on a regular basis


Wave 2:
 Life-cycle of funds (commit, obligate, spend)
Audit trail for all funds
Performed testing of the internal controls to ensure minimal risk to misstatement
 Tested and reconcile d starting and ending balances
Wave 4:


Air Force has an audit trail to prove the valuations of assets, no matter when they were purchased
Successful completion will allow the Air Force to successfully undergo full ‐ scope financial statement audits
Accountability from Flightline to Bottomline
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SAF/HAF Level
• Articulate policies and processes properly
• Provide opportunities to enhance audit readiness understanding (e.g. training)
•
Ensure systems are CFO Compliant and provide clear audit trail
• Implement and monitor FIAR strategy and progress
•
Liaise with DoD
• Communicate with MAJCOMs
MAJCOM Level
• Enforce data standardization
• MAJCOM unique policies are clearly defined and CFO Compliant
•
Provide training to maintain the FIAR vigilance
• Serve as the MAJCOM liaison to SAF and base-level
•
Support process improvement, pre-audit and audit activities
• Communicate with Bases
• Know what you spent, know what you bought….and be able to prove it
Base Level
•
Input transactions properly
• Follow up and track documents to support audit trail
• Be on the look out for negative trends
• “Purpose, Time, and Amount” used to certify funds
• Work closely with DFAS
• Promote the message of audit readiness to individuals
• Understand “How you fit into the big picture”
Every job, at every level, in FM impacts the Financial Statements….YOU Matter!!!
Accountability from Flightline to Bottomline

 The whole process starts with RAs
 Initiate purchases and are most knowledgeable about them
 Accurate and timely recording of commitments
 RAs must ensure
 Financial transactions are recorded in the current period and the related economic events occurred in the same period
 Critical for RAs to follow through
 Obligations of funds is important; but proper liquidation when transactions are completed is just as important
 Properly recording the transaction in the system is important…and worth saying twice! 
RAs are link between commanders and financial statements…the FIAR starts with them!
Accountability from Flightline to Bottomline
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 Recorded obligations represent valid orders, contracts, or other events that will require future payment
 Obligations are recorded in bulk amounts and supported by binding agreements
 Obligations are properly liquidated when transactions are completed
 Transactions are recorded in the current period and the related economic events occurred in the same period
 All obligations incurred are properly recorded
 Obligations are recorded at the proper amounts
 Lifecycle management of funds execution
 Work Open Document Listing/Tri-annual Review
Accountability from Flightline to Bottomline
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FM
USM
AQ
A1
A4
A6
A7
MAJCOM
Base Level
DFAS
Other Svc’s
DLA
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
AUDIT
READY
X
X
X
X
X
X
X
X
X
X
X
X
Air Force Audit Readiness will take an enterprise effort
Accountability from Flightline to Bottomline
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Org
AQ
A few examples of how you can support right now
Ensure data is properly updated in contracting systems and supporting documentation is retained in accordance with audit standards
A4
A6
Close old contracts and deobligate funds
Support of Equipment/Inventory/OM&S systems and reporting; ensure periodic inventories are performed and documentation is maintained
Support of IT General and Application controls; identify places where general controls are shared across various systems to reduce “strain” on PMOs
A7 Recording, tracking, and reporting of Real Property in ACES-RP and NexGen IT; Accurately estimate and record Environmental Liabilities
MAJCOM (All
Orgs)
Base Level
(All Orgs)
Maintain supporting documentation; perform TAR and deobligate excess obligations; standardize base level processes; fully utilize the Management Internal Control (MIC) Program
Follow standard processes; Input transactions properly the first time; track down and retain documents to support the audit trail
Accountability from Flightline to Bottomline
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1.0
Discovery
Statement to
Process Analysis
Prioritize
2.0
Corrective
Action
Design Audit-
Ready
Environment
Develop
Corrective
Actions
Assess & Test
Controls
Resource
Evaluate
Supporting
Documentation
Execute
3.0
Evaluation
Test
Decide
4.0
Assertion
Compile
Process, Control
& System
Documentation
Compile
Supporting
Documentation
5.0
Validation
Assertion
Documentation
Review
6.0
Audit
Engage Auditor
Assertion
Examination
Support Audit
Auditor Issues
Report
Note: The gray boxes are key tasks that must be repeated on a continuous basis as they are key in achieving and maintaining auditability and reliable financial information .
Red text is changes to May 2010 FIAR Guidance
Accountability from Flightline to Bottomline
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



Budget Authority


Resources - Appropriations, Allotments,
Apportionments, Nonexpenditure
Transfers, Rescissions
Status of Resources – Unobligated
Apportioned and Unavailable
Reimbursements
 Incorporates spending authority, offsetting collections and any outlays associated with the reimbursable process
Obligations


Encompasses the entire budget execution process
Impacts anyone that receives, commits and obligates AF funds
Outlays


Covers the payment process to liquidate an obligation
Impacts anyone that obligates AF funds
Accountability from Flightline to Bottomline

 Two of the four financial assertions that auditors will test in Wave 3
 Other two are Rights and Presentation & Disclosure
 Focus is on Mission Critical Assets (MCA)
 Military Equipment
 Real Property
 Inventory (WCF)
 Operating Materials and Supplies (OM&S)
 General Equipment
 Direct impact to the Balance Sheet
Accountability from Flightline to Bottomline
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 Connects to SBR processes from acceptance of the item (i.e. WAWF)
 Add item into accountable property system of record (ASPR)
 Conduct annual physical inventories (except Real Property every 5 years)
 Ensure inventories are conducted and documented
 Inventory sheets must be signed and dated
 Reconcile physical inventories to ASPR at local and enterprise level
 Proper Use of key data fields
 Item identifier, asset type, item description, operational status, condition code, date placed-in-service or transfer, inventory date
Accountability from Flightline to Bottomline
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Description
Budget Authority – Fund Receipt/Distribution
Fund Balance with Treasury Reconciliation
Due
Accomplishments
30-Sep-10 SBR
31-Dec-10 SBR
USD(C) Priority
Military Equipment, Cruise Missiles, Drones, Aerial Targets 31-Dec-10 Existence & Completeness
Fiscal Year 2012 Goals
Uninstalled Missile Motors
Spare Engines
Funds Distribution to Base
MDAP (SBIRS)
30-Mar-12
29-Feb-12
31-Mar-12
30-Sep-12
Existence & Completeness
Existence & Completeness
SBR
SBR
Reimbursable Budget Authority (RBA)
Fiscal Year 2013 Goals
31-Dec-12 SBR
Hire to Retire (Civilian Pay)
Hire to Retire (Military Pay)
Real Property
MILSTRIPS
Vendor Pay
31-Dec-12 SBR
31-Mar-13 SBR
30-Jun-13 Existence & Completeness
31-Jul-13 SBR
31-Aug-13 SBR
Fiscal Year 2014 Goals
Reimbursable Work Order (RWO)
Contracts (MOCAS)
Net Outlays
Financial Statement & Compilation
Spare Parts - AF Managed/AF Possessed
Munitions
Spare Parts - Ctr Managed/Ctr Possessed
Spare Parts - Ctr Managed/AF Possessed
Inventory (WCF)
General Equipment
Government Furnished Equipment
31-Dec-13 SBR
31-Dec-13 SBR
31-Dec-13 SBR
31-Dec-13 SBR
30-Jun-14 Existence & Completeness
30-Jun-14 Existence & Completeness
Future Goals
30-Sep-15 Existence & Completeness
30-Sep-15 Existence & Completeness
31-Dec-15 Existence & Completeness
30-Sep-15 Existence & Completeness
31-Mar-16 Existence & Completeness a/o 2/24/12
Current Status
Opinion - Sustainment
Opinion - Sustainment
Under DoDIG Examination (6/30/12)
Preparing assertion documentation
Preparing assertion documentation
Preparing assertion documentation (CAPs)
In Discovery Stage
In Discovery Stage (CAP)
In Discovery Stage
In Discovery Stage
In Discovery Stage
Not Started
Not Started
In Discovery Stage (CAP)
In Discovery Stage
In Discovery Stage
In Discovery Stage
Not Started
In Discovery Stage
Not Started
Not Started
In Discovery Stage
Not Started
In Discovery Stage
Accountability from Flightline to Bottomline
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Air Force
FY10 FY 11 FY 12 FY13 FY 14 FY15 FY 16 FY 17
2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Wave 1 - Appropriations Received
Appropriations Received
Wave 2 - Statement of Budgetary Resources
Rescissions (not audited)
Non-expenditure Transfers (not audited)
Funds Distribution to Base
Reimbursable Budget Authority
Reimbursable Work Orders
Civilian Pay
Military Pay
Contracts (MOCAS)
Examination of One Acquisition Program (SBIRS)
Contracts Pay (Vendor Pay)
MILSTRIPS
Net Outlays (incl. FBWT )
Financial Statement Compilation and Reporting
Examination of DEAMS at TRANSCOM/Scott AFB
Complete SBR
a/o 2/24/12
Notes:
1 Discovery Phase include the activities of Process Documentation, Development of Test Plans, Conducting Testing, and Analyzing the Test Results
2 Corrective Action Phase includes the implementation, monitoring and validation of corrective actions
Legend
FIP Development
Underway
Discovery 1
Corrective Action 2
Audit Readiness
Assertion
Validation
Under Audit or
Sustainment
FBWT Recon
Capability
Indicates Change from Original
Milestone
DEAMS
Examination
Acceleration of a
Milestone
Accountability from Flightline to Bottomline
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Air Force
Wave 3 - Existence & Completeness
Military Equipment
Military Equipment
Real Property
Real Property
Operating Materials and Supplies (OM&S)
OM&S - Missile Motors
OM&S - Spare Engines
OM&S - Cruise Missiles & Drones
OM&S - Munitions
OM&S - Spares (AF Managed)
OM&S - Spares (Contractor Managed, Contractor Possessed)
OM&S - Spares (Contractor Managed, AF Possessed)
Inventory
WCF Inventory
General Equipment
Medical Equipment
Government Furnished Equipment
Other
a/o 2/24/12
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Notes:
1 Discovery Phase include the activities of Process Documentation, Development of Test Plans, Conducting Testing, and Analyzing the Test Results
2 Corrective Action Phase includes the implementation, monitoring and validation of corrective actions
Legend
FIP Development
Underway
Discovery
Corrective Action
Audit Readiness
Assertion
Validation
Under Audit or
Sustainment
Indicates Change from Original
Acceleration of a
Milestone
Accountability from Flightline to Bottomline
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 Effective communication within FM and other functional communities on how they can help
 Illustrating how everyone fits into the “big picture”
 Translating this “foreign language” into action and results
 2014 is just around the corner and FY 2017 is not that far beyond that…Time is of the essence
 Educating Key Stakeholders….Why this matters
 Efficient use of funds and resources
 Credibility will help support need for additional funding
 Enhanced decision support to fund operational needs
 Systems limitations
This Is Not Just An FM Initiative – It Will Take the Entire AF Enterprise
Accountability from Flightline to Bottomline

 Lead FIAR efforts within your unit and spread the word at every opportunity….be a “FIARMAN”
 Follow the document retention policy (e.g. pay related documents stored for 6 yrs and 3 months); as well as within other Comptroller offices and functional communities on base
 Take the MIC Program seriously….effective internal controls are critical success factors to audit readiness
 Work with your functional counterparts and show them how they fit into the “big picture”
 Participate on Assessable Unit Teams
 Functional knowledge resides outside “the Beltway” (e.g. MilPay,
GAFS-BL, local purchases, etc.)
Business events create financial transactions and impact audit readiness
Accountability from Flightline to Bottomline

Area
Requisitions and
Other Initiating
Documents
Invoices
Fund Control
Funds
Distribution
Functional
Community
FM, RA’s
Where You Can Assist Now
FM, DFAS
FM, RA’s
DFAS, FM, RA’s
Controls are in place to ensure:
• The item requested is consistent with statutory intent of the appropriation and is not otherwise prohibited
• The item requested is a necessary expense
• The LOA on each requisition is in line with the purpose of the business event
• The cost estimate is reasonably accurate
• Commitment is recorded accurately and timely
Controls are in place to ensure:
• Quantity billed and unit price of items are accurate
• Goods or services have been received prior to certifying invoice for payment
• Invoices are processed promptly
• Documentation is retained and available for audit
Controls are in place to ensure:
• LOA for all activity is valid and supports the purpose of the business event
• Funding is available to process the transaction
• Only valid codes are available to be cited
• Adhere to the new document number construct for funds distribution through AFM to
GAFS-BL; this is the first step in auditability of our budget
• Reconcile funds received and funds available, at a minimum, quarterly
Accountability from Flightline to Bottomline

Area
Procurements
Reimbursable
Orders
Functional
Community
AQ
Where You Can Assist Now
Receipt of Goods and Services
All who certify receipt of goods or services
Any organization performing reimbursable work
Controls are in place to ensure:
• Item purchased is to satisfy a bona fide need
• LOA cited for each transaction is consistent with purpose for the purchase of the item
• FY funding used is appropriate for the transaction
• Obligation is recorded accurately and timely
• Applicable commitment is liquidated or adjusted
• All procurement actions are recorded
• Documentation is retained and available for audit
Quantity received is accurate
• Goods or services have been received by designated end user
• Receiving report is completed and recorded timely
• The appropriate accountable property system is updated to reflect the receipt of the item, if applicable
• Receipt is recorded accurately and timely
• Documentation is retained and available for audit
Controls are in place to ensure:
• Statutory authority for performing work for others is valid
• Orders are supported by documented evidence of a formal offer and acceptance
• All billable costs are charged to the applicable customer order
• Documentation is retained and available for audit
Accountability from Flightline to Bottomline

Area
MORDs
Travel
Payments
All
Functional
Community
FM, DFAS
Where You Can Assist Now
DFAS, FM
Controls are in place to ensure:
• MORDs are only prepared when documents to support valid obligation/reimbursable transactions are not immediately available
• Documentation to support cost estimate is retained and available for audit
• LOA for all activity is valid and supports the purpose of the business event
• MORDs are reversed when the actual obligating document is recorded
Controls are in place to ensure:
• The LOA on each travel order is in line with the purpose of the travel
• The cost estimate is reasonably accurate
• Documentation is retained and available for audit
• Validate and Account for Government Orders Outstanding (GOO); if necessary, deobligate funds
• If partial payment, LOA is valid for the specific items that are being paid
• Disbursement is recorded accurately and timely
• Applicable obligation is liquidated or adjusted
• Documentation is retained and available for audit
Accountability from Flightline to Bottomline

Area
Real Property
(RP)
Accountability
Accountability of
Property (other than RP)
A4/7
Payroll All
Functional
Community
A7
Where You Can Assist Now
• Timely processing of DD Forms 1354 to place facilities into service
• Conduct physical inventories once every 5 years (20% each year), update the asset record in ACES-RP and ensure documentation is filed
• Maintain source documentation for the life of the asset
• Ensure Receiving Report is accurate and signed
• Ensure asset is recorded in the Accountable Property System of Record (APSR) when Air Force takes ownership of the asset
• Conduct physical inventories each year and ensure asset record in the APSR reflects the “date of last inventory”
• Maintain source documentation for the life of the asset (including proof of last physical inventory)
• Potential Logistic Compliance Team review items
Controls are in place to ensure:
• Codes used to record each payment are accurate
• Reimbursable work is reported and identified separately
• Timecards are recorded accurately and timely
• Documentation is retained and available for audit
Accountability from Flightline to Bottomline

Area
Systems
Quality
Assurance
Functional
Community
Where You Can Assist Now
All FM and Feeder
System PMO’s
All
•
Documentation to support CFO compliance is current and readily available:
System accreditation
• Security plan
• System controls
• User listing
• Test plans
• Recent audits
• Risk assessments
• Interfaces
• Transaction flows
• System and user documentation
• Ensure all controls are in place and are followed
• Ensure all transactions are recorded
• Ensure all transactions are processed timely
• Ensure all errors are identified and corrected promptly
• Validate data elements using FM DQS for ALL address requests
• Don't knowingly use invalid data element values (even when you intend to go back and correct them)
• Correct known errors as soon as possible - the longer you wait, the worse it gets
• Understand SFIS (structure - not a system) and how Legacy will translate
Accountability from Flightline to Bottomline

 Hyperlinks
 FIAR/FIP CoP
 December 2011 OUSD(C) FIAR Guidance
 November 2011 FIAR Plan Status Report
 AF Business Rules on the FIP/FIAR CoP (Under Revision)
 Documents Mention/Discussed
 Joint USM and Vice Chief Memo
 Mandatory Document Number Construct Memo
 USD(C) Priority Memo


USD(AT&L) Memo
FIAR Info to MAJCOM FM’s
Accountability from Flightline to Bottomline

Accountability from Flightline to Bottomline

Accountability from Flightline to Bottomline
29

Accountability from Flightline to Bottomline

Purchase of an FIAR Truck –
Impact to Audit Readiness
 Example follows the purchase of a “FIAR” truck at base-level
 Understand, fire trucks are not procured at base-level; however:


Everyone can relate to a fire truck
They are found on every base


Meet capitalization threshold
Accountability takes place at base-level
 Interchange fire truck with any capital asset (over $20K) purchased
(i.e. generator, utility truck, etc.) for applicability


Financial impacts are the same
Accountable Property System of Record could be different
 Process steps are similar for the purchase of goods and services, but these costs are not capitalized on the balance sheet
Accountability from Flightline to Bottomline
31

Planning and Requirement
Development Phase
 Step 1 : Business Case Analysis
– Base needs a Fire
Truck (Asset)
 AIR FORCE INSTRUCTION 63-101: ACQUISITION
AND SUSTAINMENT LIFE CYCLE MANAGEMENT
No Impact to
AF Financial
Statements….Yet
 Step 2: Justification and Report Generation
 Information is input into Financial Information Resource
System (FIRST)



Budget is prepared in Automated Budget Interactive
Data Environment System (ABIDES)
Budget is approved by Congress
Budget is signed by President
 Air Force Receives Current Budget in ABIDES
Accountability from Flightline to Bottomline
32

Budget Execution –
Funds Receipt
 Step 3: Funding is received
 Treasury issues funding warrants to Air Force
 SAF/FMB transfers information from ABIDES into the Automated Funds Management (AFM) system for distribution to the MAJCOMs
 AFM information is transferred to the Air Force accounting system General Accounting &
Finance System – Re-host (GAFS-R)
 Financial Statement Impact
 Air Force must satisfy the Key Control Objective
(KCO) in order to become audit ready:
 Appropriation transactions (or other forms of budget authority): Recorded appropriation (or other forms of budget authority) is the same as the appropriation or other legislation, was made available for obligation (including restrictions on amount, purpose & timing) and pertains to the entity
(Dept of the Air Force)
3. Budget Authority
A. Appropriation
Accountability from Flightline to Bottomline
33

Budget Execution –
Funds Distribution
 Step 4: Distribution to MAJCOM
 Funding Authorization Document (FAD) is transferred to MAJCOM through AFM and is converted into Excel or loaded into FMSuite for allotment to bases


The standardized AFM document ID is one of key requirements for an audit trail, this allows the Air Force to reconcile the fund distribution balance
Funding is recorded with the proper appropriation symbol (ex. 3080 - Other
Procurement, Air Force)
 Financial Statement Impact
 Air Force must satisfy the KCO in order to become audit ready:
 Recorded apportionments agree with the
OMB apportionments and the total amount apportioned does not exceed the total amount appropriated
9. Unobligated Balance
A. Apportioned
Accountability from Flightline to Bottomline
34

Procure to Pay –
Requisitioning and Sourcing
 Step 5: Request for Procurement
 The Base prepares a purchase request in the Automated Business Services System
(ABSS)
 Common forms are Form 36 (Purchase Request), AF Form 9 (Purchase Request), and AF Form 185 (Project Order)


Financial Services Office (FSO) ensures a Program Summary Record (PSR) matches the Long Line of Accounting (LOA) on the purchase order and it exists in
General Accounting and Finance System - Base Level (GAFS-BL) system
FSO checks the availability of funding to support request, this is done by entering the purchase request amount into the GAFS-BL utilizing the PSR as a commitment
(C) of funds Detailed contract information is interfaced from MOCAS into GAFS-BL to record the Commitment (C)
 No Direct Financial Statement Impact
 However there is a risk within this step – if the FSO does not validate the availability of funding it could create an Anti-Deficiency Act (ADA) violation
Accountability from Flightline to Bottomline
35

Procure to Pay –
Contracting and Purchasing
 Step 6A: Contract for Procurement
 The accounting record update allows the funds certifier to certify and release the purchase request to the contracting officer for procurement action, the funds certification data is sent via ABSS to contracting
 The contracting officer (CO) receives the request, completes the acquisition process and prepares a contract incorporating all the data entered by the requestor

 CO prepares the contract in Standard Procurement System (SPS)
 In the course of finalizing the details of the contract, it is reviewed by legal,
Defense Contract Management Agency (DCMA), and the vendor
 Once the contract is awarded copies are distributed - Electronic image (PDF) is sent to the vendor, DCMA and the originating financial specialist via e-mail
Detailed contract information is interfaced from SPS into Mechanization Of Contract
Administration Services (MOCAS)
NOTE: For this example, MOCAS used; however most base level folks are familiar with IAPS and probably use this system for most purchases
Accountability from Flightline to Bottomline
36

Procure to Pay –
Contracting and Purchasing
 Step 6B: Purchasing of Asset
 The associated GAFS-BL Document
Summary Record (DSR) is used to match the incoming obligation transactions against the purchase request document number (Step 5) – Commitment to
Obligation (C to O) this is simultaneous with contracting (Step 6A), once the contract is awarded
8. Obligations Incurred
A. Direct
 Financial Statement Impact
 Air Force must satisfy the KCO in order to become audit ready:
 Obligations represent valid orders that will require future payment
 Obligations are for the same purpose for which the appropriation was made
Accountability from Flightline to Bottomline
37

Procure to Pay –
Receipt and Acceptance
 Step 7: Receipt of Asset
 The Base receives the Fire Truck from the vendor, examines the asset, accepts the asset received and creates a receiving document

 On-line Vehicle Integrated Management System (OLVIMS) reportable vehicles include fire fighting and base maintenance vehicles/ equipment of commercial or military design
The Base’s Vehicle Fleet Manager (VFM) or Vehicle Management Superintendent
(VMS) takes delivery of the asset on behalf of the Air Force


The VFM completes a receipt/acceptance report (DD250) which is forwarded to
Defense Finance and Accounting Service (DFAS) through Wide Area Work Flow
(WAWF)
DFAS vendor pay receipt/acceptance data is interfaced from WAWF or input manually into MOCAS
 Receipt/Acceptance data flows electronically from MOCAS into GAFS-BL booking the Accounts Payable
Accountability from Flightline to Bottomline
38

Procure to Pay –
Receipt and Acceptance


Step 7: Receipt of Asset
Financial Statement Impact
 Statement of Budgetary Resources (SBR)
 Air Force must satisfy the KCO in order to become audit ready:

 Obligations are recorded in the proper period
Balance Sheet (BS)
 Air Force must satisfy the KCO in order to become audit ready:
 Obligations are recorded in the proper period
18. Obligated Balance, net, end of period
A. Unpaid Obligations
4. Accounts Payable
Accountability from Flightline to Bottomline
39

Procure to Pay –
Invoice and Distribution
 Step 8A: Process Invoice & Matching and Distribution
 DFAS conducts a three-way matching of the documentations provided (contract, receiving report and invoice)
 DFAS Vendor Pay personnel verify that the invoice meets proper invoice requirements and that the vendor is actively registered in Central Contractor
Registration (CCR) and Corporate Electronic Funds Transfer (CEFT)

 The invoice is also verified against the contract to determine if the charges are correct
If all of the necessary documentation exists, DFAS processes the disbursement in
Centralized Disbursing System (CDS)

 The payment process begins when DFAS receives a demand for payment however payment is not made until the receipt of a DD250 or any other approved receipt & acceptance document is in DFAS possession either electronically via
WAWF or manually submitted (mailed or faxed)
CDS generates check issue and Electronic Fund Transfer (EFT) files and interfaces the associated accountability data to GAFS-R
Accountability from Flightline to Bottomline
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Procure to Pay –
Invoice and Distribution


Step 8A: Process Invoice & Matching and Distribution
Financial Statement Impact
 Statement of Budgetary Resources (SBR)

 Air Force must satisfy the KCO in order to become audit ready:
 Outlay, collection and receipt transactions represent valid, authorized transactions and pertain to the entity
Balance Sheet (BS)
 Air Force must satisfy the KCO in order to become audit ready:
 Outlays are for the purposes for which the appropriation was provided and in an amount not exceeded the obligation, as adjusted, authorizing the outlay (supports
ADA)
19. Outlays
1.
Assets
A.
Intragovernmental
1.
Fund Balance w/Treasury
Accountability from Flightline to Bottomline
41

Acquire to Retire –
Place into Service
 Step 8B: Place into Service


The receiving activity is required to produce a receiving report upon receipt and acceptance of the Fire Truck
Upon receipt the base level personnel, VFM, forwards a copy of the DD 250 to DFAS for processing
 The VFM enters all applicable data to include UIUD, serial number, and placed into service date into OLVIMS

 Asset information is ultimately passed to AFEMS, the Accountable Property
System of Record (APSR)
Bases set and implement local guidance in the form of Operating Instruction (OIs) in accordance with (IAW) AFI 33-360, Publications and Forms Management for reporting on inventory reconciliation
 Upon notification that the reconciliation is complete, the VMS begins the process of collecting cost and entering value for newly procured assets as well as any “child” assets into OLVIMS
 Financial Triggers:
 (+) Receipt of Newly Procured Equipment
Accountability from Flightline to Bottomline
42

Acquire to Retire –
Place into Service


Step 8B: Place into Service
Financial Statement Impact
 Statement of Budgetary Resources (SBR)

 No Impact
Balance Sheet (BS)
 Air Force must satisfy the KCO in order to become audit ready:



Ensure recorded assets exist at a given date
Ensure recorded assets at a given date, are supported by appropriate detailed records that are accurately summarized and reconciled to the account balance
Ensure recorded assets are owned by the entity. The entity has rights to the recorded asset at a given date
1.
Assets
E.
Property Plant and Equipment
Accountability from Flightline to Bottomline
43

Acquire to Retire –
Monitor Assets


Step 9: Asset Accountability Reconciliation





Base level personnel are required to perform periodic inventory of on hand PP&E, and perform a reconciliation of the inventory results against the information recorded in OLVIMS
Any discrepancies that are noted between the asset inventory and the records in
OLVIMS are reported to the base level VFM
A discrepancy report is prepared detailing the differences between the results of the inventory and the records in OLVIMS
Base level VMS updates the records in OLVIMS to reflect the results of the inventory
Maintaining the results of the current and last inventory is critical for Existence and
Completeness assertions
Step 10: Asset Maintenance/Modification




Maintenance and modification requirements for assets are established by VFM and
VMS using the AIR FORCE INSTRUCTION 23-302 Material Management VEHICLE
MANAGEMENT
Asset modifications that meet the capitalization threshold ($20K) are identified and added to OLVIMS
VMS enter “child” assets and applicable value in OLVIMS (capitalized modifications applied dependant upon total asset valuation after modifications are complete)
Proper recording of modifications (cost, date of modification, etc.) is important to full financial statement audit readiness
Accountability from Flightline to Bottomline
44

Acquire to Retire –
Monitor Assets
 Step 12: Asset Depreciation
 Asset depreciation calculations are programmed to occur automatically in AFEMS
 At the end of each month current total PP&E asset value (which represents the net updates for new receipts and adjustments from inventory reconciliations) accumulated depreciation and summarized transactional data is forwarded from
OLVIMS to GAFS-R for use in the financial reporting process
 Critical to ensure placed in service date, acquisition cost, useful life fields are accurate and match the information on the supporting documentation (DD250 and invoice)
 Financial Triggers:




(+)Asset Found During Inventory
(-) Asset Lost During Inventory
(-) Depreciation
(+/-) Modifications
Accountability from Flightline to Bottomline
45

Acquire to Retire –
Disposition of Assets
 Step 13: Asset Disposition
 (1) Disposition Authority (USCENTAF AOR Only). Deployed sites do not have local authority to salvage vehicles disposition decisions will be made by the MAJCOM. To request salvage instructions units need to submit an AFTO Form 91, Limited
Technical Inspection-Motor Vehicle, to CENTAF-AUAB
 (2) Defense Reutilization and Marketing Service (DRMS) Procedures. Contact
Regional or Zone DRMS Manager for processing guidance after a vehicle has been approved for DRMS. If DRMS representation is not able to assist with disposal, the
MAJCOM or NAF Vehicle Management Staffs will direct disposal IAW DOD 4160.21-
M, Defense Materiel Disposition Manual, Chapter 8, Abandonment or Destruction
(A/D)


Disposal summarized transactional data is forwarded from OLVIMS to SBSS-ILS to
AFEMS to GAFS-R for use in the financial reporting process
Critical to maintain supporting documentation of the asset disposal (sale of asset, destruction, etc.) for Existence and Completeness
 Asset records in OLVIMS must be updated within 30 days of disposal of the vehicle
 Financial Triggers:
 (-) Disposal
Accountability from Flightline to Bottomline
46

47
 Incorporates an “enterprise-wide” approach
 SAF/FM and SAF/USM responsible for audit readiness
 Governance structure in place to enforce accountability
 Includes redefined Assessable & Sub-assessable units for the SBR
 Establishes “firm” milestone dates for E&C assertions with the functional communities
 Spends least amount of time in Discovery in order to move to corrective action sooner, given the tight timeline
 Assesses financial and mixed feeder systems to ensure IT General and
Application controls are tested and effective
 Incorporates MAJCOM and base-level personnel – this is where the audit will go when we are under audit
 Assumes higher level of risk to meet audit readiness by FY14
Accountability from Flightline to Bottomline
47

48
 Table below contains overarching risks the Air Force identified that may impede the ability to achieve the accelerated plan
Risk to Achieving the AF Plan Actions to Mitigate Risk
Corrective actions not fully implemented prior to assertion of the SBR
Critical Enterprise Resource Planning System
(ERPs) not fully deployed prior to September 2014
Acquisition of contractor expertise is a timely process
Interim examinations delayed by DoDIG’s right of first refusal
OUSD(C) timeline for assertion review is too long
- Governing bodies will prioritize CAPs
- Develop a robust communication strategy
Work with system PMO’s to ensure audit readiness requirements are addressed in the ERP
- Conduct a QDD for all financial and financial feeder systems
-Proactively work with GSA to ensure procurement is awarded timely
- Ensure knowledge transfer is achieved from one contractor to the next
- Establish a process with OUSD(C) to procure an IPA when DoDIG is unable to perform examination timely (e.g. Military Equipment)
- Provide OUSD(C) interim products for review
Increased employee turnover due to added stress and pace of plan
Lack of audit infrastructure to prepare for and respond to financial statement audits conducted in accordance with Generally Accepted Auditing
Standards (GAAS)
-Proactively manage the plan and limit the amount of reactive exercises
- Provide adequate resources to accomplish the plan
-Develop audit response capabilities (based on lessons learned by
USMC) – ex. SharePoint site
- Provide training to AF personnel on the preparing for, going through and sustaining a financial statement audit
Accountability from Flightline to Bottomline
48

Accountability from Flightline to Bottomline
49

 Objectives that capture the outcomes needed to achieve proper financial reporting and serve as a point against which the effectiveness of financial controls can be evaluated
 Effective internal controls mitigate risks and provide assurance that financial information is properly and accurately recorded and reported
 Critical to successful financial statement audits. KCOs do the following:
 Ensures key risks are mitigated during audit readiness efforts
 Ensures internal controls are aligned with financial statement assertions
 During Evaluation & Discovery activities, assessing internal controls is a prerequisite
Accountability from Flightline to Bottomline

 Documentation retained to demonstrate control activities are properly designed and operate to satisfy KCOs, as well support individual financial transactions and accounting events
 Some examples:
 Obligating document and related modifications such as contract purchase order, MIPR, etc.
 Unpaid Obligations (Undelivered Orders) brought forward and at end of period are supported by valid obligating documents such as contracts, reimbursable agreements, MIPRs, purchase orders, etc.
 Receiving report, and billing document such as vendor invoice (or equivalent), or accrual estimate support (if invoice has not been received)
Accountability from Flightline to Bottomline

 Documentation retained to demonstrate control activities are properly designed and operate to satisfy KCOs, as well support individual financial transactions and accounting events
 For example
 Tier 1 – physical inventory count documentation (book to floor, floor to book), detailed asset listing, summary schedule reporting amounts/quantities by class of asset, reconciliation to general ledger, policies & procedures demonstrating consistency of treatment
 Tier 2 – asset logs (maintenance or usage), missionmanagement/logistics data, track maps, physical indicators of ownership of rights.
Accountability from Flightline to Bottomline

Objective: Provide the Air Force with a level of assurance that their mission-critical assets in the related Accountable Property System of Record (APSR) exist, the records are complete, and that their internal controls are designed and operating effectively .
Purpose
Validate assets recorded in APSR exist
Purpose
Validate assets on the flight line exist in
APSR
Purpose
Document and review internal controls for inventory management and accountability
Purpose
Ensure data in APSR is supported with documentation; verify
Rights and Obligations
Test
Randomly selected
“X” Assets from APSR data for each base/location
Test
Select at least ”X” assets to physically observe that were not in the Existence population
Test
Validate process;
Administer questionnaire regarding processes and perform interview
Accountability from Flightline to Bottomline
Test
Validate supporting documentation exists and is maintained for assets being tested
53