As expected, the independent auditors have issued a disclaimer on the financial statements of the DON Working Capital Fund for the fiscal year 2022 and the Navy General Fund. “We are firmly focused on evaluating and improving operations and increasing transparency, in line with the Chief of Naval Operations’ Get Real, Get Better campaign,” said Ms. Alaleh Jenkins, Acting Assistant Secretary of the Navy (financial management and comptroller).
The DON has made substantial progress on its audit roadmap. The audit roadmap highlights the interdependencies between business processes and necessary system improvements, and documents the path to obtaining an audit opinion. The Navy has downgraded a significant audit finding, known as Material Weakness, representing over 60% of Navy General Fund liabilities. DON further demonstrated financial excellence by maintaining six downgrades of material weaknesses from the prior year and doubling the number of closed audit findings, ending fiscal year 2022 with 15% fewer findings. than fiscal year 2021.
In FY2022, DON articulated its vision for transformation in the DON Financial Management (FM) Strategy, which fully aligns with the Department of Defense’s FM strategy and Secretary Del Toro’s enduring priorities. Executing this strategy will better support the workforce, foster accountability and fiscal discipline, and further demonstrate the business value of auditing. The gift:
- Improved financial management career development through new data analytics training, leadership development programs and the launch of a new one-stop online human capital portal.
- Automated manual tasks to allow FM staff to focus on more complex, high-value analytical tasks. To date, DON has deployed 176 bots, redirecting 150,000 man hours to higher value tasks.
- Standardized inventory processes and controls across Naval Supply Systems Command-managed warehouses, improving the inventory accuracy rate to 98%, as evidenced by internal testing, and giving warfighters even greater mastery of inventory and operational readiness.
- Strengthened cybersecurity by automating Navy Enterprise Resource Planning system account provisioning, account deletion, and access reviews for over 83,000 users.
- Maintaining irregular payment rates of military salaries and the lowest civilian salaries in the Department of Defense, reflecting the DON’s commitment to caring for its personnel.
- Remained agile and responsive to emerging budget supplements and changes, including Afghan evacuees, Ukraine assistance, disaster relief, and Red Hill fuel spill support to affected families across all departments .
- Continued dismantling of legacy general ledger systems and migrating orders to modern systems. To date, the Navy has decommissioned eleven audit-relevant legacy systems, averting millions in costs from fiscal year 2020 to fiscal year 2026 and resolving audit findings.
- Intensified governance with real-time data analytics tools to give decision makers timely insight into budget issues and drive purchasing power back into the year of execution.
These achievements push the DON to address long-standing challenges in its business operations. The DON remains committed to auditing corrective actions and improving internal controls to ensure sound financial management.
“We will build on the findings of the annual audit to foster a culture that encourages innovation, solves problems and achieves results to increase our lethality, improve preparedness and get the most out of every dollar entrusted to us. In fiscal year 2023, DON’s strategy will continue to advance the Secretary of Defense’s audit priorities, including reporting a complete and accurate cash balance to the Department of Treasury and enhancing user access to our financial systems,” Jenkins said. “It’s an honor to do this.”
For more information, see the Financial report of the agency DON FY 2022.