Financial Improvement and Audit Readiness Methodology Assertion Work Product Example

Process Inventory

Detailed Activity 1.1.1 – Prepare Inventory of Processes and Systems (Service Providers) NOTE: The Tool/Template/Work Product below is an example process inventory.

Table of Contents Process Inventory – Example

Example Process Inventory – Contract Pay Service Provider End-to-End Process Overview and Detailed Processes and Process Outputs ................................................................................................... 1

Contract Pay End-to-End Process

Invoice Entitlement

Pre-Validation Disbursing &

Posting Expenditure

Receipt & Acceptance

Commitment & Obligation

Reconciliation & Contract Closeout

Reporting & Accounting

Service Provider 3 / Service Provider 2

Pro

cess

S

ub-P

roce

ss

Distribute Funding

Purchase Requisition

Receive & Obligate Funding

Contract Input

Issue Orders & Adjustments

Contract Award

Validate Funds

Receive/Accept Goods/Srvcs at

Destination

Tri-Annual Review

Authorize Disbursement

Processing

Payment Authorization

EOM Reporting

Treasury Reporting

Debt Management

Calculate EOM Payable

Payment File Generation &

Release

Erroneous Payment Check

Resolve Payment

Discrepancies

Certification & Balancing

Planned Disbursement

Matched to Recorded Obligation

Disbursing Reporting &

Reconciliation

Commercial Invoices

Research & Resolve

NULOs/UMDs

Adjustments

Funds Reconciliation-

System 1

Erroneous Payment Check

Calculate EOM Accrual

Disallow Costs

Receive/Accept Goods/Srvcs at

Source

EOM Payable GL Posting

EOM Accrual GL Posting &

Reversal

Commitments & Obligations

Financial Reporting

Deobligate Excess/

Remaining Funds

Full Termination Settlement

Partial Termination Settlement

Funds Reconciliation-

Component

GL Posting

Demand/ Recoup Funds

Contract Financing

Key: Service Provider 1

Component

Roles/control activities principally performed by one organization: Roles/control activities shared by multiple organizations: Service Provider 3 / Service Provider 1 / Component

Service Provider 2 / Component

Service Provider 3 / Service Provider 2 / Component

Service Provider 3 / Component

Disbursements/Expenditures

GL Posting

Contract Closeout

Invoice Processing

Validate Inputs & Funding

Erroneous Payment Check

Notice of Last Action Process

Service Provider 2’s involvement in this role varies depending on the Component being supported.

This role is shared by Components and Service Provider 2, except for certain Components. Some Components are responsible for recording commitments and obligations in the system of record.

Service Provider Systems Relevant to the End-to-End Process

Service Provider 2 Service Provider 3 Service Provider 4

• System 1

• System 2

• System 3

• System 4

• System 5

• System 6

• System 1

• System 7

• System 8

• System 9

Service Provider 4

Service Provider 2

Service Provider 3

1

EXAMPLE

EXAMPLEDetailed Process Information Has Been Removed for the Purposes of this Example

If Working with a DoD Organization Implementing the FIAR Guidance, Please Contact the OUSD(C) FIAR Directorate for a Completed Example

Example – Prepare Inventory of Processes and Systems – 1.1.1 (Service Provider) Process Alignment (Service Provider 1) - 1

Contract Pay E2E Process OverviewService Provider Process Mapping – Detail

Process Name Sub-process Activity Name Sub-Activity Name Process Description/SummaryOutputs from Service Provider 1

Activityto Service Provider 3 Processes

Outputs from Service Provider 1 Activity

to Service Provider 2 Certifying Processes

Outputs from Service Provider 1 Activity

to Reporting Entities Processes

Distribute FundingPurchase RequisitionValidate FundsContract AwardReceive & Obligate FundingIssue Orders & AdjustmentsContract Input

Validate Inputs & Funding

Receive/Accept Goods/Srvcs at DestinationReceive/Accept Goods/Srvcs at SourceDisallow CostsCalculate EOM Accrual

Commercial InvoicesContract Financing Advisory Audit ServicesContract Financing Advisory Audit Services

ErroneousPayment CheckPlanned Disbursement Matched to Recorded ObligationPayment AuthorizationAuthorize Disbursement ProcessingErroneousPayment Check

Pre-Validation

Details of Service Provider 1 Sub-ProcessesOverview E2E

Invoice Entitlement

Receipt and Acceptance

Commitment & Obligation

Invoice Processing

Contract Financing

N/A

EXAMPLE

EXAMPLEDetailed Process Information Has Been Removed for the Purposes of this Example

If Working with a DoD Organization Implementing the FIAR Guidance, Please Contact the OUSD(C) FIAR Directorate for a Completed Example

Example – Prepare Inventory of Processes and Systems – 1.1.1 (Service Provider) Process Alignment (Service Provider 1) - 2

Contract Pay E2E Process OverviewService Provider Process Mapping – Detail

Process Name Sub-process Activity Name Sub-Activity Name Process Description/SummaryOutputs from Service Provider 1

Activityto Service Provider 3 Processes

Outputs from Service Provider 1 Activity

to Service Provider 2 Certifying Processes

Outputs from Service Provider 1 Activity

to Reporting Entities Processes

Details of Service Provider 1 Sub-ProcessesOverview E2E

Certification &BalancingErroneousPayment CheckPayment File Generation & ReleaseCalculate EOMPayableDebt ManagementTreasury ReportingEOMReportingResearch & Resolve NULOs/UMDsTri-AnnualReviewGL PostingCommitments & ObligationsEOM Accrual GL Posting & ReversalEOM PayableGL PostingDisbursements/ExpendituresAdjustmentsDisbursing Reporting & ReconciliationFinancialReportingResolvePaymentDiscrepanciesNotice of Last Action Process

Reconciliation & Contract Closeout

Reporting & Accounting N/A

Disbursing & Posting Expenditure

EXAMPLE

EXAMPLEDetailed Process Information Has Been Removed for the Purposes of this Example

If Working with a DoD Organization Implementing the FIAR Guidance, Please Contact the OUSD(C) FIAR Directorate for a Completed Example

Example – Prepare Inventory of Processes and Systems – 1.1.1 (Service Provider) Process Alignment (Service Provider 1) - 3

Contract Pay E2E Process OverviewService Provider Process Mapping – Detail

Process Name Sub-process Activity Name Sub-Activity Name Process Description/SummaryOutputs from Service Provider 1

Activityto Service Provider 3 Processes

Outputs from Service Provider 1 Activity

to Service Provider 2 Certifying Processes

Outputs from Service Provider 1 Activity

to Reporting Entities Processes

Details of Service Provider 1 Sub-ProcessesOverview E2E

Contract Closeout

Contract Close-out Advisory Audit Services

FundsReconciliation-System 1Deobligate Excess/Remaining FundingFull TerminationSettlementPartialTerminationSettlementFundsReconciliation-ComponentDemand/Recoup FundsGL Posting

N/A

EXAMPLE

EXAMPLEDetailed Process Information Has Been Removed for the Purposes of this Example

If Working with a DoD Organization Implementing the FIAR Guidance, Please Contact the OUSD(C) FIAR Directorate for a Completed Example

Example – Prepare Inventory of Processes and Systems – 1.1.1 (Service Provider) Process Alignment (Service Provider 2) - 4

Contract Pay E2E Process OverviewService Provider Process Mapping – Detail

Process Name Sub-Process Process Name Sub-Process Name Process Description/SummaryOutputs from Service Provider 2 Processes

to Service Provider 3 ProcessesOutputs from Service Provider 2 Processes

to Reporting Entity Processes

In Scope of SSAE No. 16

Examination?

Assertion SupportCompletion Date

Distribute FundingPurchase RequisitionValidate FundsContract AwardReceive & Obligate FundingIssue Orders & Adjustments

Contract InputCommitment & Obligation

Contract Input

Validate Inputs & Funding

Commitment & Obligation

Validate Inputs and Funding

Receive/Accept Goods/Srvcs at DestinationReceive/Accept Goods/Srvcs at SourceDisallow Costs

Calculate EOM Accrual Receipt and Acceptance Calculate EOM Accrual

Invoice Processing Invoice Entitlements Invoice ProcessingCommercial Invoices Invoice Entitlements Commercial InvoicesContract FinancingErroneousPayment Check

Invoice Entitlements Erroneous Payment Check

Planned Disbursement Matched to Recorded Obligation

Pre-ValidationPlanned Disbursement Matched to Record Obligation

Payment Authorization

Pre-Validation Payment Authorization

Authorize Disbursement Processing

Pre-Validation Authorize Disbursement Processing

ErroneousPayment Check

Pre-Validation Erroneous Payment Check

Certification &Balancing

Disbursing & Posting Expenditure

Certification & Balancing

ErroneousPayment Check

Disbursing & Posting Expenditure

Erroneous Payment Check

Payment File Generation & Release

Disbursing & Posting Expenditure

Payment File Generation & Release

Calculate EOMPayable

Disbursing & Posting Expenditure

Calculate EOM Payable

Debt ManagementDisbursing & Posting Expenditure

Debt Management

Pre-Validation

Invoice Entitlement

N/A

Disbursing & Posting Expenditure

Receipt and Acceptance

Commitment & Obligation

Overview E2E Details of Service Provider 2 Sub-Processes

N/A

N/A

EXAMPLE

EXAMPLEDetailed Process Information Has Been Removed for the Purposes of this Example

If Working with a DoD Organization Implementing the FIAR Guidance, Please Contact the OUSD(C) FIAR Directorate for a Completed Example

Example – Prepare Inventory of Processes and Systems – 1.1.1 (Service Provider) Process Alignment (Service Provider 2) - 5

Contract Pay E2E Process OverviewService Provider Process Mapping – Detail

Process Name Sub-Process Process Name Sub-Process Name Process Description/SummaryOutputs from Service Provider 2 Processes

to Service Provider 3 ProcessesOutputs from Service Provider 2 Processes

to Reporting Entity Processes

In Scope of SSAE No. 16

Examination?

Assertion SupportCompletion Date

Overview E2E Details of Service Provider 2 Sub-Processes

Treasury Reporting

Reporting & AccountingTreasury Reporting

EOMReporting

Reporting & AccountingEOMReporting

Research & Resolve NULOs/UMDs

Reporting & AccountingNULOsUMDs

Tri-AnnualReview

Reporting & Accounting Tri-Annual Review

GL Posting Reporting & Accounting GL Posting

Commitments & Obligations

Reporting & Accounting Commitments & Obligations

EOM AccrualGL Posting & Reversal

Reporting & AccountingEOM AccrualGL Posting & Reversal

EOM PayableGL Posting

Reporting & AccountingEOM PayableGL Posting

Disbursements/Expenditures

Reporting & Accounting Disbursements/Expenditures

Adjustments Reporting & Accounting Adjustments

Disbursing Reporting & Reconciliation

Reporting & AccountingDisbursingReporting &Reconciliation

FinancialReporting

Reporting & AccountingFinancialReporting

ResolvePaymentDiscrepancies

Reconciliation & Contract Closeout

ResolvePaymentDiscrepancies

Notice of Last Action Process

Reconciliation & Contract Closeout

NLA Process

Contract Closeout

Reconciliation & Contract Closeout

Contract Close-out

FundsReconciliation-System 1

Reconciliation & Contract Closeout

Funds Reconciliation-System 1

Deobligate Excess/Remaining FundingFull TerminationSettlementPartialTerminationSettlementFundsReconciliation-Component

Demand/Recoup FundsReconciliation & Contract Closeout

Demand/Recoup Funds

Reconciliation & Contract Closeout

Reporting & Accounting

N/AEXAMPLE

EXAMPLEDetailed Process Information Has Been Removed for the Purposes of this Example

If Working with a DoD Organization Implementing the FIAR Guidance, Please Contact the OUSD(C) FIAR Directorate for a Completed Example

Example – Prepare Inventory of Processes and Systems – 1.1.1 (Service Provider) Process Alignment (Service Provider 2) - 6

Contract Pay E2E Process OverviewService Provider Process Mapping – Detail

Process Name Sub-Process Process Name Sub-Process Name Process Description/SummaryOutputs from Service Provider 2 Processes

to Service Provider 3 ProcessesOutputs from Service Provider 2 Processes

to Reporting Entity Processes

In Scope of SSAE No. 16

Examination?

Assertion SupportCompletion Date

Overview E2E Details of Service Provider 2 Sub-Processes

GL PostingReconciliation & Contract Closeout

GL Posting

Service Provider 2 Systems Relevant to the End-to-End ProcessSystem Name

In Scope of SSAE No. 16 Examination?

System 1System 2System 3System 4System 5System 6

EXAMPLE

EXAMPLEDetailed Process Information Has Been Removed for the Purposes of this Example

If Working with a DoD Organization Implementing the FIAR Guidance, Please Contact the OUSD(C) FIAR Directorate for a Completed Example

Example – Prepare Inventory of Processes and Systems – 1.1.1 (Service Provider) Process Alignment (Service Provider 3) - 7

Contract Pay E2E Process OverviewService Provider Process Mapping – Detail

Process Name Sub-Process Sub-Process Name Process Description/SummaryOutputs from Service Provider 3 Processes

to Service Provider 2 ProcessesOutputs from Service Provider 3 Processes

to Reporting Entity Processes

In Scope of SSAE No. 16

Examination?

Assertion SupportCompletion Date

Distribute FundingPurchase RequisitionValidate FundsContract AwardReceive & Obligate Funding

Contract Modification

Issue Orders & Adjustments

Order Issuance & Contract Modification

Contract Input -Validate Inputs & Funding

Contract Receipt and Review

Receive/Accept Goods/Srvcs at DestinationReceive/Accept Goods/Srvcs at Source

Product Acceptance & Release

Contractor Business Systems (implementing withholds)

General Payment SupportCalculate EOM AccrualInvoice Processing Commercial Invoices -

Contract Financing - Advance Payments

Contract Financing - Performance Based Payments

Contract Financing - Progress PaymentsContract Financing - Public Vouchers (Final)

ErroneousPayment CheckPlanned Disbursement Matched to Recorded ObligationPayment AuthorizationAuthorize Disbursement Processing

Overview E2E Details of Service Provider 3 Sub-Processes

Commitment & Obligation N/A

Pre-Validation

Invoice Entitlement

N/A

Contract Financing

N/A

Receipt and Acceptance N/A

Disallow Costs

EXAMPLE

EXAMPLEDetailed Process Information Has Been Removed for the Purposes of this Example

If Working with a DoD Organization Implementing the FIAR Guidance, Please Contact the OUSD(C) FIAR Directorate for a Completed Example

Example – Prepare Inventory of Processes and Systems – 1.1.1 (Service Provider) Process Alignment (Service Provider 3) - 8

Contract Pay E2E Process OverviewService Provider Process Mapping – Detail

Process Name Sub-Process Sub-Process Name Process Description/SummaryOutputs from Service Provider 3 Processes

to Service Provider 2 ProcessesOutputs from Service Provider 3 Processes

to Reporting Entity Processes

In Scope of SSAE No. 16

Examination?

Assertion SupportCompletion Date

Overview E2E Details of Service Provider 3 Sub-Processes

ErroneousPayment CheckCertification &BalancingErroneousPayment CheckPayment File Generation & ReleaseCalculate EOMPayable

Contract Debt Voluntary Refunds

Treasury ReportingEOMReportingResearch & Resolve NULOs/UMDsTri-AnnualReviewGL PostingCommitments & ObligationsEOM AccrualGL Posting & ReversalEOM PayableGL PostingDisbursements/ExpendituresAdjustmentsDisbursing Reporting & ReconciliationFinancialReportingResolvePaymentDiscrepanciesNotice of Last Action ProcessContract Closeout

Contract Closeout

Reconciliation & Contract Closeout

N/A

Disbursing & Posting Expenditure

Debt Management

Reporting & Accounting

EXAMPLE

EXAMPLEDetailed Process Information Has Been Removed for the Purposes of this Example

If Working with a DoD Organization Implementing the FIAR Guidance, Please Contact the OUSD(C) FIAR Directorate for a Completed Example

Example – Prepare Inventory of Processes and Systems – 1.1.1 (Service Provider) Process Alignment (Service Provider 3) - 9

Contract Pay E2E Process OverviewService Provider Process Mapping – Detail

Process Name Sub-Process Sub-Process Name Process Description/SummaryOutputs from Service Provider 3 Processes

to Service Provider 2 ProcessesOutputs from Service Provider 3 Processes

to Reporting Entity Processes

In Scope of SSAE No. 16

Examination?

Assertion SupportCompletion Date

Overview E2E Details of Service Provider 3 Sub-Processes

Funds Reconciliation-System 1

Funds Reconciliation

Deobligate Excess/Remaining Funding

Deobligate Excess/Remaining Funding

Full Termination Settlement

Termination Settlement

PartialTerminationSettlement

Termination for Convenience

FundsReconciliation-ComponentDemand/Recoup Funds Contract DebtGL Posting

Service Provider 3 Systems Relevant to the End-to-End ProcessSystem Name

In Scope of SSAE No. 16 Examination?

System 1System 7

N/A

N/A

EXAMPLE

EXAMPLEDetailed Process Information Has Been Removed for the Purposes of this Example

If Working with a DoD Organization Implementing the FIAR Guidance, Please Contact the OUSD(C) FIAR Directorate for a Completed Example

Example – Prepare Inventory of Processes and Systems – 1.1.1 (Service Provider) Process Alignment (Service Provider 4) - 10

Contract Pay E2E Process OverviewService Provider Process Mapping – Detail

Overview E2E

Process Name Process Name Sub-Process Name Process Description/SummaryOutputs from Service Provider 4 Processes to Service Provider 3 or Service

Provider 2 ProcessesOutputs from Service Provider 4 Processes

to Reporting Entity ProcessesIn Scope of SSAE No. 16 Examination?

Assertion Support

Completion Date

Commitment & ObligationReceipt and AcceptanceInvoice EntitlementPre-ValidationDisbursing & Posting ExpenditureReporting & AccountingReconciliation & Contract Closeout

Service Provider 4 Systems Relevant to the End-to-End ProcessSystem Name

In Scope of SSAE No. 16 Examination?

System 8System 9

N/A

Details of Service Provider 4 Sub-Processes

EXAMPLE

EXAMPLEDetailed Process Information Has Been Removed for the Purposes of this Example

If Working with a DoD Organization Implementing the FIAR Guidance, Please Contact the OUSD(C) FIAR Directorate for a Completed Example

Example – Prepare Inventory of Processes and Systems – 1.1.1 (Service Provider) Process Alignment (Integrated) - 11

Contract Pay E2E Process OverviewService Provider Process Mapping – Detail

Process Name Sub-Process Process Name Sub-Process NameOutputs from Service Provider 3

Processes to Service Provider 2 ProcessesOutputs from Service Provider 3

Processes to Reporting Entity ProcessesProcess Name Sub-Process Name

Outputs from Service Provider 2 Processes to Service Provider 3 Processes

Outputs from Service Provider 2 Processes to Reporting Entity Processes

Process / Activity Name

Sub-Process / Activity NameOutputs from Service Provider 1 Activity

to Service Provider 3 ProcessesOutputs from Service Provider 1 Activityto Service Provider 2 Certifying Processes

Distribute FundingPurchase RequisitionValidate FundsContract AwardReceive & Obligate Funding

Contract Modification

Issue Orders & Adjustments

Order Issuance & Contract Modification

Contract Input -Commitment & Obligation

Contract Input

Validate Inputs & Funding

Administer Procurement Instrument

Contract Receipt and ReviewCommitment & Obligation

Validate Inputs and Funding

Receive/Accept Goods/Srvcs at DestinationReceive/Accept Goods/Srvcs at Source

Perform Receipt, Acceptance, Return

Product Acceptance & Release

Contractor Business Systems (implementing withholds)

General Payment Support

Calculate EOM Accrual Receipt and Acceptance Calculate EOM Accrual

Invoice Processing Invoice Entitlements Invoice ProcessingCommercial Invoices - - Invoice Entitlements Commercial Invoices

Contract Financing - Advance Payments

Contract Financing - Performance Based Payments

Contract Financing - Progress PaymentsContract Financing - Public Vouchers (Final)

ErroneousPayment Check

Invoice Entitlements Erroneous Payment Check

Planned Disbursement Matched to Recorded Obligation

Pre-ValidationPlanned Disbursement Matched to Record Obligation

Payment Authorization

Pre-Validation Payment Authorization

Authorize Disbursement Processing

Pre-ValidationAuthorize Disbursement Processing

ErroneousPayment Check

Pre-Validation Erroneous Payment Check

Certification &Balancing

Disbursing & Posting Expenditure

Certification & Balancing

ErroneousPayment Check

Disbursing & Posting Expenditure

Erroneous Payment Check

Payment File Generation & Release

Disbursing & Posting Expenditure

Payment File Generation & Release

Calculate EOMPayable

Disbursing & Posting Expenditure

Calculate EOM Payable

Contract Debt Voluntary Refunds

Treasury Reporting

Reporting & AccountingTreasury Reporting

EOMReporting

Reporting & AccountingEOMReporting

Research & Resolve NULOs/UMDs

Reporting & AccountingNULOsUMDs

Tri-AnnualReview

Reporting & Accounting Tri-Annual Review

GL Posting Reporting & Accounting GL Posting

Commitments & Obligations

Reporting & Accounting Commitments & Obligations

EOM Accrual GL Posting & Reversal

Reporting & AccountingEOM AccrualGL Posting & Reversal

N/A

N/A

Advisory Audit ServicesContract Financing

Debt ManagementDisbursing & Posting Expenditure

Reporting & Accounting

Pre-Validation

Outputs from Service Provider 1 Sub-Processes

N/A

Award Procurement Instrument

Commitment & Obligation

Overview E2E Outputs from Service Provider 3 Sub-Processes Outputs from Service Provider 2 Sub-Processes

N/A

N/A

Invoice Entitlement

Advisory Audit ServicesContract Financing

Manage Procurement Instrument Entitlement

Other Third Party Organizations

Manage Procurement Instrument Entitlement

Disallow Costs

Debt Management

Disbursing & Posting Expenditure

N/A

Manage Procurement Instrument Entitlement

N/AReceipt and Acceptance

N/A

SSAE 16 Service Providers

Contract Financing

N/A

EXAMPLE

EXAMPLEDetailed Process Information Has Been Removed for the Purposes of this Example

If Working with a DoD Organization Implementing the FIAR Guidance, Please Contact the OUSD(C) FIAR Directorate for a Completed Example

Example – Prepare Inventory of Processes and Systems – 1.1.1 (Service Provider) Process Alignment (Integrated) - 12

Contract Pay E2E Process OverviewService Provider Process Mapping – Detail

Process Name Sub-Process Process Name Sub-Process NameOutputs from Service Provider 3

Processes to Service Provider 2 ProcessesOutputs from Service Provider 3

Processes to Reporting Entity ProcessesProcess Name Sub-Process Name

Outputs from Service Provider 2 Processes to Service Provider 3 Processes

Outputs from Service Provider 2 Processes to Reporting Entity Processes

Process / Activity Name

Sub-Process / Activity NameOutputs from Service Provider 1 Activity

to Service Provider 3 ProcessesOutputs from Service Provider 1 Activityto Service Provider 2 Certifying Processes

Outputs from Service Provider 1 Sub-Processes

Overview E2E Outputs from Service Provider 3 Sub-Processes Outputs from Service Provider 2 Sub-ProcessesOther Third Party OrganizationsSSAE 16 Service Providers

EOM PayableGL Posting

Reporting & AccountingEOM PayableGL Posting

Disbursements/Expenditures

Reporting & Accounting Disbursements/Expenditures

Adjustments Reporting & Accounting Adjustments

Disbursing Reporting & Reconciliation

Reporting & AccountingDisbursingReporting &Reconciliation

FinancialReporting

Reporting & AccountingFinancialReporting

ResolvePaymentDiscrepancies

Reconciliation & Contract Closeout

ResolvePaymentDiscrepancies

Notice of Last Action Process

Reconciliation & Contract Closeout

NLA Process

Contract Closeout

Contract CloseoutReconciliation & Contract Closeout

Contract Close-out

Contract Close-out Advisory Audit Services

FundsReconciliation-System 1

Funds ReconciliationReconciliation & Contract Closeout

Funds Reconciliation-System 1

Deobligate Excess/Remaining Funding

Deobligate Excess/Remaining Funding

Full TerminationSettlement

Termination Settlement

PartialTerminationSettlement

Termination for Convenience

FundsReconciliation-Component

Demand/Recoup FundsPerform Procurement Instrument Closeout

Contract DebtReconciliation & Contract Closeout

Demand/Recoup Funds

GL PostingReconciliation & Contract Closeout

GL Posting

N/A

N/A

N/A

N/A

Reconciliation & Contract Closeout

Perform Procurement Instrument Closeout

N/A

EXAMPLE