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DOD acknowledged that it is unable to accurately record, report, collect, and reconcile Intragovernmental accounts receivable as well as accounts receivable due from the public. DOD identified accounts receivable as a material weakness based on its FY 2008 assessment of internal control over financial reporting, as required by OMB Circular A-123, Appendix A. [DOD IG Report 2010-002, p. 6]
Example#1: The Component performed departmental-level trading partner adjustments valued at $51.8 million that ultimately impacted the mid-year FY 2005 balance sheet. However, the Component provided insufficient documentation to support the adjustments or to trace transaction amounts to source data. As a result, auditors were not able to verify $51.8 million in trading partner adjustments to the accounts receivable balance sheet amount. Inability to document adjustments and transaction amounts significantly impacts the audit readiness of accounts receivable. |