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American Society of Military Comptrollers

Theodore J. WilliamsAir Force Auditor General3 June 2010

Auditing: It’s Not Just About the

Dollars

I n t e g r i t y - S e r v i c e - E x c e l l e n c e

Overview

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Audit Guidance

Internal Controls

Types of Audits

Financial Performance (Operational)

Performance Audit Examples

I n t e g r i t y - S e r v i c e - E x c e l l e n c e

Audit Guidance

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Government Auditing Standards (The Yellow Book)

Generally Accepted Government Auditing Standards (GAGAS)

DoD Instruction 7600.02, Audit Policies

I n t e g r i t y - S e r v i c e - E x c e l l e n c e

Reasonable assurance objectives are being achieved:

Effectiveness and efficiency of operations

Reliability of financial reporting

Compliance with applicable laws and regulations

Internal Control Structure (5 Components)

Control Environment

Risk Assessment

Control Activities

Information and Communication

Monitoring

Internal Controls

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I n t e g r i t y - S e r v i c e - E x c e l l e n c e

Financial vs Performance (Operational)

Internal Controls Review

PerformanceProgram Efficiency &

EffectivenessCondition, Cause, &

Effect Findings &

Recommendations

Objectives (Risk) Tests ReportAudit

FinancialNumbers Properly Stated/Presented

Completeness, Accuracy, etc.

Opinion on Financial Presentation

Types of Audits

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I n t e g r i t y - S e r v i c e - E x c e l l e n c e

Financial Audits

Objective (Risk): Assess whether financial information is: Stated in accordance with Generally Accepted Accounting Principles (GAAP)

Reliable

Benefits: Primarily nonmonetary; mitigate risk

Data accuracy/completeness

Compliance with laws and regulations

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If not, Why? (Internal Control Process)

I n t e g r i t y - S e r v i c e - E x c e l l e n c e

Performance Audits

Objective (Risk): Assess whether the entity: Acquires/uses resources effectively/efficiently

Programs are achieving intended results

Complies with applicable laws and regulations

Benefits: Monetary and nonmonetary; mitigate risk

Streamline processes

Cost avoidances

Operational readiness

Personnel safety

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If not, Why? (Internal Control Process)

I n t e g r i t y - S e r v i c e - E x c e l l e n c e

Performance AuditsRemotely Piloted Aircraft

88

Objective. Evaluate whether Air Force’s training program produced number of RPA pilots necessary to meet contingency requirements

Effect. Manned aircraft pilots temporarily assigned to meet RPA requirements…training plan not sustainable or efficient…disjointed career paths for both

Recommendation. Create specific RPA career path to improve Air Force’s ability to provide this critical weapon system

Air Force currently implementing RPA-specific career path

I n t e g r i t y - S e r v i c e - E x c e l l e n c e

Performance AuditsHurricane Disaster Planning

99

Objective. Evaluate whether Air Force’s Emergency Management program included adequate protection and preparation measures to respond to disasters

Effect. Gaps and inconsistencies in processes to protect installation assets, ensure personnel security and allow necessary communication operability

Recommendation. Update hurricane planning checklists & develop standard operating procedures for communication frequency management

Audit provided installation commanders complete readiness picture

I n t e g r i t y - S e r v i c e - E x c e l l e n c e

Performance AuditsAOR Aerial Port Operations

1010

Objective. Evaluate whether U.S. Air Forces Central Area of Responsibility (AOR) personnel efficiently used airlift capacity to manage wartime contingency cargo and passenger movement

Effect. 40% of cargo missions flew at less than 50% capacity, 20% flew empty…inadequate metrics/processes for identifying and minimizing unused capacity

Recommendation. Implement aerial port process improvements for better coordination between airlift planners and management of contracted commercial airlift

Audit helped identify and develop controls to increase airlift efficiency

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American Society of Military Comptrollers

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