AUDIT

VALIDATION

VALIDATION

AUDITASSERTION,EVALUATION

ASSERTION,EVALUATION

Don’t focus only on procurement expenditures because they are only a sixth of the total DoD budget. The rest is related to operations and maintenance.

AEROSPACE AND DEFENSE SOFTWARE VENDOR IFS HAS PUBLISHED A WHITEPAPER ON FIAR COMPLIANCE. HERE IS A QUICK PREVIEW.

FIAR COMPLIANCE AT A GLANCE

PHASE 01: COMMON CHALLENGES

Support the completeness of funds distributed to the major commands or equivalent.

Demonstrate completeness of funds distribution by reconciling the current year budget authority apportioned and allotted to U.S. Standard General Ledger accounts 4510 and 4610 to the fund distribution system.

The reconciliation must identify current year budget authority as an element of the entire balance, include beginning balances, reductions for executed funds, and upward / downward adjustments, recorded in these accounts.

PHASE 02: COMMON CHALLENGES

Entities must keep a minimum of 6 to 10 years of documentation to support all funding, collections, disbursements, adjustments, and reconciliation activity (note: audit requirements are different from National Archives and Records Administration (NARA) requirements).Reporting entities sharing Treasury accounts must work with their service provider to ensure internal controls and supporting documents are in place to support an SBR audit, and that suspense account items are assigned to the correct entity.

Reconciliation and traceability of interagency agreements, including Military Interdepartmental Purchase Requests (MIPR).

Accounts Payable Accruals.

Dependencies on service provider(s) processes and controls for efficient and effective execution of its end-to-end business processes.

PHASE 03: COMMON CHALLENGES

Document Rights to Assets including co-located facilities (joint basing) and assets purchased by others (e.g. USMC aircraft).

Formalize Reworked Assets tracking, including assets that are removed from a larger asset, reworked or otherwise modified and then integrated into a different asset (e.g. aircraft engines).

Implement techniques and methods for demonstrating the existence of assets that are not easily inspected (e.g. assets located in space or underwater).

Dependencies on service provider(s) processes and controls for efficient and effective execution of its end-to-end business processes.

PHASE 04: COMMON CHALLENGES

Reporting value of existing assets and report new asset acquisitions. This requires implementation of new acquisition processes, and controls for contract structure for cost accumulation. The Federal accounting standard has changed, so capital assets like ships, aircraft and combat vehicles can no longer be expensed, but rather must be capitalized and depreciated.

Other challenges that must be addressed in coordination with leading OSD offices are:

Valuing reworked property, plant and equipment (PP&E)

Establishing an infrastructure to support a full-scope financial statement audit

The Federal Improvement and Audit Readiness Program requires the Department of Defence to be auditable by 2017. Here’s advice from retired USAF executive Greg Stanley and below, a simplified look at steps to compliance.

Tips from Greg Stanley, Retired Deputy USAF A4L in charge of FIAR Compliance:

1 Identify Functional Gaps left by existing ERP systems.

2 Pay special attention to MRO, sustainment, logistics, enterprise asset management (EAM) and asset lifecycle management (ALM).

3 Identify supplemental systems that can be used to fill functional gaps to arrive at auditability.

4 Ensure systems can be implemented in weeks and days rather than years or decades. Check references.

5 Learn about and consider emulating systems used by private PBL contractors.

DOWNLOAD THE FULL WHITEPAPER NOW

IFS is a leading global enterprise software vendor to industries where asset management, manufacturing, field service management, supply chain management, or project management are core disciplines. More than 2,100 companies in over 60 countries rely on IFS Applications™, a component-based suite for product & asset lifecycle management that can be configured for ERP, EAM, project-based ERP, field service management, or a combination of all four. IFS Applications has been evolving to meet changing customer needs since 1983 and is configured for agility, usability, and low total cost of ownership in its targeted industries. IFS employs 2,800 worldwide.

5 TIPS TO REACH FIAR COMPLIANCE

$10B

$60B

ASSERTION,EVALUATION

ASSERTION,EVALUATION

VALIDATION

VALIDATION

AUDIT

AUDIT

CORRECTIVE ACTION

CORRECTIVE ACTION

CORRECTIVE ACTION

CORRECTIVE ACTION

DISCOVERY

DISCOVERY

DISCOVERY

DISCOVERY

GREG STANLEY

In its new publication “Enterprise Asset Management and Field Service Management, Market Analysis and Forecast through 2017,” ARC Advisory Group recognizes IFS as

the leading supplier to the global aerospace & defense industry.