Office of the Under Secretary of Defense Comptroller

Office of the Under Secretary of Defense (Comptroller) Audit and Data Analytics: Why Will It Work This Time? ASMC Washington Chapter Luncheon August 8, 2019

Key Financial Statement Audit Takeaways • Too Many Systems • Lack of Standardization • Poor Quality Data • Lack of Documentation (e. g. , Audit Evidence) • Inconsistent or Ineffective Controls (OMB A-123) • Lack of Entity-Level Controls 2

Do. D Long-Term Audit Strategy Monitor and refine internal controls going forward Align remediation to achieve unmodified opinions for Do. D Components *FY 2019 Sec. Def Operational Priorities • Real Property – Existence & Completeness • Inventory and Operating Materials and Supplies • Government Property in the Possession of Contractors • IT – Access Controls ✓ ✓ ✓ Initiate annual, full-scope financial statement audits ✓ Develop infrastructure to collect findings, prioritize remediation and monitor progress Establish baseline using first-year audit findings Align findings to operational priorities* and material weaknesses Complete remediation for operational priorities and material weaknesses 1. Collect Feedback from Audit Annual Audit Cycle 4. Monitor Implementation ✓= Completed 2. Align Findings to Priorities 3. Complete Remediation 3

Why Will It Work This Time? • Leadership Engagement • Annual Audit • Technology • We Are Actually Doing Things and Seeing Value • Reconciling Feeder Systems to GLS • Using Transaction-Level Detail for Analysis • Producing Automated Tools to Make Our Lives Easier The Key Will Be Changing the Culture of Our Organizations 4

Next Steps • Improve Data Quality • Improve Analytics Training • Expand Capabilities to Become an Analytics Shared Service Capability • Improve Data Automation • Focus on Change Management and User Adoption 5