In these times of budget cutbacks and sequestration, knowing how each tax dollar is spent is more important than ever. Agencies can use audits to ensure the American people that their tax dollars are accounted for and being used wisely. After years on the Government Accountability Office’s (GAO) High Risk List, the Department of Defense (DOD) is making progress toward auditability.
Within the DOD, the Marine Corps has made substantial progress in moving toward auditability and the goal of receiving an unqualified opinion from independent auditors. The leadership within the Marine Corps is committed to preparing for an audit and has implemented several strategies — including improved communication — to put the Corps on the path toward greater financial accountability.
Clear and open communication is critical to the success of any project as large and complex as the Marine Corps audit. Agencies, by nature and by structure, are not designed to facilitate communication and collaboration, so initiating this culture change was critical for the audit’s future.
Marine Corps officials spoke daily with the auditors from the DOD’s inspector general’s office and Grant Thornton LLP — an essential step to ensure everyone understood their roles, responsibilities, requests and deadlines. Increased communication and clarity led to consistent, accurate documentation from the Marine Corps as well as better response times. Bringing the GAO into the process also ensured the oversight agency was aware of the plan and progress being made.
Simply put: When communication improved, so did the Marine Corps’ audit.
Improved communication helped address and solve another hurdle to auditability — organizing the Marine Corps’ financial records. Auditors at first were unable to reach an opinion because the Corps’ records were in such disarray, due in part to the sheer size of the organization. This made tasks like getting documentation to validate spending on contracts three to five years old much more difficult. Opening up channels of communication helped auditors and agency employees alike sort through these records and better define what was needed to help achieve auditability.
The Marine Corps also put itself on a path to success by creating, and sticking to, a new audit plan. In collaboration with auditors, the Corps designed and implemented a plan to audit its books incrementally, setting itself up to demonstrate and build on year-to-year progress. Creating a plan puts everyone on the same page and creates a template to refer to when questions arise.
Should the Marine Corps stick to this plan, the portion of the Corps finances that will be adequately documented will grow every year, snowballing so that eventually few finances will lack adequate documentation. In just a few short years, thanks to this plan and the commitment to communication and teamwork, the Corps will be able to produce statements that accurately depict what it has spent and what it has left at its disposal.
Since devising its audit plan, the Marine Corps has made substantial progress in other areas. Marine Corps leaders are more frequently reviewing financial data to identify and fix financial management irregularities. Auditors are identifying systemic financial management issues and making real-time recommendations to fix them, preventing problems from compounding over years. The Corps is working more closely with its service providers, such as the Defense Finance and Accounting Service, to ensure financial management responsibilities are clear to everyone. Internal controls are being monitored more closely to be certain programs and activities are operating as intended. And the Corps is providing greater audit support documentation than ever before.
None of this progress would have happened without the commitment of the Marine Corps’ leadership to changing the culture and adopting an audit plan. Their commitment to ensuring the success of this project demonstrates the progress other agencies and departments can make if they adopt similar approaches and spirit of teamwork.
The Marine Corps has shown a genuine dedication to achieving auditability. As other branches within the DOD move toward auditability, we encourage them to prepare to draft their own audit plans and look at how interdepartmental communications can be improved. The DOD does still have a long way to go toward achieving full department-wide auditability, but the leadership’s commitment to getting its financial house in order will be essential to success.

Greene, a certified public accountant in Virginia and the District of Columbia and a certified government financial manager, is a partner with the Global Public Sector practice of Grant Thornton LLP.