Sec. 2. Findings
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Congress makes the following findings: Section 9 of Article I of the Constitution of the United States requires all agencies of the Federal Government, including the Department of Defense, to publish . a regular statement and account of the receipts and expenditures of all public money Section 3515 of title 31, United States Code, requires the agencies of the Federal Government, including the Department of Defense, to present auditable financial statements beginning not later than March 1, 1997.
The Department has not complied with this law. The Federal Financial Management Improvement Act of 1996 ( 31 U.S.C. 3512 note) requires financial systems acquired by the Federal Government, including the Department of Defense, to be able to provide information to leaders to manage and control the cost of Government. The Department has not complied with this law. The financial management of the Department of Defense has been on the High-Risk list of the Government Accountability Office, which means that the Department is not consistently able to . control costs; ensure basic accountability; anticipate future costs and claims on the budget; measure performance; maintain funds control; [and] prevent and detect fraud, waste, and abuse The National Defense Authorization Act for Fiscal Year 2002 ( Public Law 107–107 ) requires the Secretary of Defense to report to Congress annually on the reliability of the financial statements of the Department of Defense, to minimize resources spent on producing unreliable financial statements, and to use resources saved to improve financial management policies, procedures, and internal controls.
In 2005, the Department of Defense created a Financial Improvement and Audit Readiness
(FIAR)Plan, overseen by a directorate within the office of the Under Secretary of Defense (Comptroller), to improve Department business processes with the goal of producing timely, reliable, and accurate financial information that could generate an audit-ready annual financial statement. In December 2005, that directorate, known as the FIAR Directorate, issued the first of a series of semiannual reports on the status of the Financial Improvement and Audit Readiness Plan. The National Defense Authorization Act for Fiscal Year 2010 ( Public Law 111–84 ) requires regular status reports on the Financial Improvement and Audit Readiness Plan described in paragraph (6), and codified as a statutory requirement the goal of the Plan in ensuring that Department of Defense financial statements are validated as ready for audit not later than September 30, 2017. In addition, the National Defense Authorization Act for Fiscal Year 2013 ( Public Law 112–239 ) requires that the statement of budgetary resources of the Department of Defense be validated as ready for audit by not later than September 30, 2014. At a September 2010 hearing of the Senate, the Government Accountability Office stated that past expenditures by the Department of Defense of $5,800,000,000 to improve financial information, and billions of dollars more of anticipated expenditures on new information technology systems for that purpose, may not suffice to achieve full audit readiness of the financial statements of the Department. At that hearing, the Government Accountability Office could not predict when the Department would achieve full audit readiness of such statements.
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- Pub. L. 107-107
- Pub. L. 111-84
- Pub. L. 112-239
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