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The Component military equipment baseline values were misstated by at least $4.2 billion. In addition, the Component could not support ownership of at least 420 military equipment end-items or the completeness of the military equipment program baseline. As a result, the Component could not rely on the baseline to assert that military equipment was ready for audit.
Example#1: We could not validate the ending balance of $8.6 million in assets reported on the FY 2004 Financial Statements despite available documentation to support ownership of the land assets. Our FY 2002 sample results showed that the Component could not provide supporting documentation for $1.78 billion of the $2.35 billion (76 percent) that represented administrative cost. Further, the remaining costs that made up the statistical sample represented land tract costs that included unsupported costs for land tracts and unsupported values for land assets acquired through donations. In addition, the value of land assets could have been misstated because the ending balance included costs associated with land tracts that were disposed of and did not include costs of reservoirs that were misclassified as buildings and structures. As a result, the ending balance for land assets was not ready for substantive audit testing and audit. |