FBw T Statement of Difference Enterprise Solution Defense

FBw. T - Statement of Difference- Enterprise Solution Defense Finance and Accounting Service October 25, 2019 Ms. Ann Dennis, FBw. T Project Manager Carol. A. Dennis 8. Civ@Mail. Mil 614 -701 -3431 Integrity - Service - Innovation

AGENDA Ø OVERALL AGENCY INITIATIVE Ø WHAT IS A STATEMENT OF DIFFERENCE (SOD)? Ø AUDIT GAP Ø MATERIALITY Ø ENTERPRISE STRATEGY Ø ENTERPRISE TEAM PROGRESS Decrease Risk Øin. MANAGEMENT ANALYSIS PACKAGE/UNIVERSE OF TRANSACTIONS (Uo. T) Ø ROOT CAUSE ANALYSIS Ø NEXT STEPS Integrity - Service - Innovation 2

Overall Agency Initiative - FBw. T CMR (Indy) SOD (Columbus) Decrease in Risk Suspense (Cleveland) Integrity - Service - Innovation 3

Statement of Difference – True/False Statement of Differences result from differences between monthly totals reported at Treasury and Accounting records? q True q False Decrease in Risk Integrity - Service - Innovation 4

Statement of Difference – True/False Statement of Differences (SODs) result from differences between monthly totals reported at Treasury and Accounting records? q True ü False Answer: Statement of Differences (SODs) result from differences between monthly totals reported at Treasury and the Disbursing Records? Integrity - Service - Innovation 5

Statement of Difference – Audit GAP v Audit Gap/Risk: ü Department-Wide 12 -31 -18 Total = $6. 6 B; 3 -31 -19 Total = $5. 0 B; 6 -30 -19 Total = $2. 2 B ü SODs not resolved within 60 days - Not meeting Do. DFMR Guidelines ü SODs not recorded to GL, misstatement of cash ü SODs not identified to entity ü SODs managed by both DFAS and Non-DFAS entities 10/24/2021 Integrity - Service - Innovation 6

Statement of Difference – Enterprise Materiality Assessment 10/24/2021 Integrity - Service - Innovation 7

Statement of Difference – Our 2019 Progress Enterprise Strategy Decrease in Risk Integrity - Service - Innovation 8

Statement of Difference – Project Plan/Major Milestones v Major Milestones: ü Identify Material DSSN’s by Entity ü Identify Universe of Transaction by DSSN ü Resolve 12 -31 -18 SOD Balances ü Resolve 03 -31 -19 SOD Balances ü Resolve 06 -30 -19 SOD Balances ü Resolve 09 -30 -19 SOD Balances ü Implement Processes and Control Upgrades 10/24/2021 Integrity - Service - Innovation ECDs Complete Complete 10 -31 -19 01 -20 -20 9

Statement of Difference – June 30 Balances for Material DFAS Managed DSSNs $ 5, 0 $ 4, 5 $ 4, 0 $ 3, 5 $ 3, 0 $ 2, 5 $ 2, 0 $ 1, 5 $ 1, 0 $ 0, 5 $июн-18 сен-18 Total ($B) 10/24/2021 дек-18 Accounting Month Within Timeframe Integrity - Service - Innovation мар-19 июн-19 Overage 10

Statement of Difference – Entity Identification (Uo. T) First time identification of possible SOD impact to entities 10/24/2021 Integrity - Service - Innovation 11

Example of Management Analysis Package 10/24/2021 Integrity - Service - Innovation 12

Statement of Difference – Overview Analysis 10/24/2021 Integrity - Service - Innovation 13

Statement of Difference – Example of Uo. T (DSSN 8560 - Deposits) 10/24/2021 Integrity - Service - Innovation 14

Statement of Difference – CARS Report - 8560 10/24/2021 Integrity - Service - Innovation 15

ROOT CAUSE ANALYSIS 10/24/2021 Integrity - Service - Innovation 16

Statement of Difference – Root Cause Analysis Field Collections MOCAS Timing 10/24/2021 IPAC Quality of Data Integrity - Service - Innovation 17

Statement of Difference – Field Collections ISSUE: Field sites do not submit collection information timely to Disbursing Officers’ accountability records Collections by Field Sites 7/20/2019 Deposit at Bank/Credit Union 7/20/2019 Release the file to FRB 7/21/2019 Report to Treasury 8/5/2019 7/31/2019 Voucher 1219 Reported to Treasury Reporting 7/31/2019 Accountability EOM 1219 Excludes August Voucher IMPACT: Reduce inflow by $59. 2 M 10/24/2021 Treasury Integrity - Service - Innovation SOLUTION: Implement policy for daily submission for field collections 18

Statement of Difference – MOCAS Timing Issue ISSUE: Timing differences between Disbursing Officer’s accountability and FRB’s settlement date MOCAS Entitlement Disbursing 7/31/2019 Release the file to FRB 8/1/2019 Report to Treasury 7/31/2019 1219 Reported to Treasury 7/31/2019 Accountability Treasury Reporting EOM 1219 Submitted SOLUTION: Align accountability report and settlement date IMPACT: Reduce inflow by $645 M 10/24/2021 Integrity - Service - Innovation 19

Statement of Difference – IPAC Quality of Data ISSUE: Inaccurate or incomplete Data submitted. Treasury Reporting 8/30/2019 1219 Submitted IPAC Wizard 8/06/2019 ADS Treasury 7/29/2019 Buyer / Seller Transactions Reported to Treasury IPAC SOLUTION: Align accountability report and settlement date 10/24/2021 IMPACT: Eliminate aged SODs Integrity - Service - Innovation 20

Statement of Difference - Impact of Initiative DISA positive opinion hangs on the agency initiatives Setting precedence for agency way forward Extensive collaboration across sites Moving from reactive to proactive environment Standardizing sample packages and IPA products for all customers for FBw. T ü Extensive collaboration with all customers ü ü ü 10/24/2021 Integrity - Service - Innovation 21

Statement of Difference - Next Steps ü Standardize Trading Partner Agreements ü Update Do. D FMR Policies ü Develop a system to pull the Universe of Transactions for all DFAS Material DSSNs. 10/24/2021 Integrity - Service - Innovation 22

QUESTIONS? ? 10/24/2021 Integrity - Service - Innovation 23