Explained: $6.5 Trillion unsupported and undocumented in 2015 financial statement

LindaI

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The Office of the Inspector General released the following on July 26th, 2016.
https://media.defense.gov/2016/Jul/26/2001714261/-1/-1/1/DODIG-2016-113.pdf

"Finding

The Office of the Assistant Secretary of the Army (Financial Management & Comptroller) (OASA[FM&C]) and the Defense Finance and Accounting Service Indianapolis (DFAS Indianapolis) did not adequately support $2.8 trillion in third quarter journal voucher (JV) adjustments and $6.5 trillion in year end JV adjustments1 made to AGF data during FY 2015 financial statement compilation.2 The unsupported JV adjustments occurred because OASA(FM&C) and DFAS Indianapolis did not prioritize correcting the system deficiencies that caused errors resulting in JV adjustments, and did not provide sufficient guidance for supporting system‑generated adjustments.

In addition, DFAS Indianapolis did not document or support why the Defense Departmental Reporting System‑Budgetary (DDRS-B), a budgetary reporting system, removed at least 16,513 of 1.3 million records during third quarter FY 2015. This occurred because DFAS Indianapolis did not have detailed documentation describing the DDRS-B import process or have accurate or complete system reports.

As a result, the data used to prepare the FY 2015 AGF third quarter and yearend financial statements were unreliable and lacked an adequate audit trail. Furthermore, DoD and Army managers could not rely on the data in their accounting systems when making management and resource decisions. Until the Army and DFAS Indianapolis correct these control deficiencies, there is considerable risk that AGF financial statements will be materially misstated and the Army will not achieve audit readiness by the congressionally mandated deadline of September 30, 2017.
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Clearly shown on the Office of the Inspector General's website:
-$2.8 trillion in third quarter journal voucher
-$6.5 trillion in year end
-data during FY 2015 financial statement
-the Defense Departmental Reporting System‑Budgetary (DDRS-B), a budgetary reporting system, removed at least 16,513 of 1.3 million records during third quarter FY 2015.


Can anybody debunk the above statements taken directly from the Office of the Inspector General? How is it $6.5 Trillion is shown unsupported and undocumented on a single year's (2015) statement?

I'm trying to determine if this is truth or bunk.
 
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Can anybody debunk the above statements taken directly from the Office of the Inspector General? How is it $6.5 Trillion is shown unsupported and undocumented on a single year's (2015) statement?

It's the total of all the Journal Vouchers, a JV is not a record of money spent. JVs are made for all kind of accounting entries, including transfers from one account to another,or even just reclassifications of a transactions. There may be multiple JVs for each stage of a transaction. See:

http://www.state.ky.us/agencies/adm/mars/advantage/users/Mug09General.htm
There are three types of Journal Voucher in MARS; The Journal Voucher Master (JVM), Journal Voucher Transfer (JVT), and Journal Voucher Correction (JVC). They are discussed in detail in the User's Reference . Journal vouchers record accounting events that cannot be recorded on any other MARS document; they can be used to close accounts, move money, adjust balances. In some instances, the journal voucher is used to record adjustments to previously entered transactions. In other instances, such functions are recorded as modification actions using the same transaction type that was used for the original transaction. For example, to adjust a previously entered purchase order, you would simply modify that purchase order.
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Thank you, Mick. As my confusion is accounting procedure related, not transaction related, I have emailed all to a trusted long time friend and CPA. She may be able to shed light on why accounting procedural errors (unsupported and undocumented entries) might be occurring on such a large scale within the DoD.
 
Thank you, Mick. As my confusion is accounting procedure related, not transaction related, I have emailed all to a trusted long time friend and CPA. She may be able to shed light on why accounting procedural errors (unsupported and undocumented entries) might be occurring on such a large scale within the DoD.

The report identifies 46 root causes, it's quite complicated, but basically thier account systems are messed up.
https://media.defense.gov/2016/Jul/26/2001714261/-1/-1/1/DODIG-2016-113.pdf
Archived: https://web.archive.org/web/20160817204041/http://www.dodig.mil/pubs/documents/DODIG-2016-113.pdf
Page 48 on. (first page here)
20160817-133846-4flpt.jpg
 
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Quite messed up indeed, Mick. In reading page 14 of the 74 pages the Office of the Inspector general determined
that 236, totaling $2 trillion, of the 263 third quarter JV adjustments in their sample and 170, totaling $2.1
trillion, of the 194 year end JV adjustments in their sample, were in fact unsupported because the adjustments:

forced general ledger amounts to agree with other data sources without reconciling the differences or determining which data source was correct;
corrected errors or reclassified amounts to other accounts without adequately documenting why the adjustments were needed; or
changed general ledger data without adequate documentation to support the adjustments.

My long time friend and CPA said she'd be fired for such incompetence.

At least we know this is not an issue for debunking...employee termination maybe...but not debunking.

Thank you again, Mick.
 
How can there be a 6.5 trillion dollar year end deficit when the entire national budget is around half that amount? The entire 2015 defense budget was about 690 Billion. I don't see how this adds up?
 
How can there be a 6.5 trillion dollar year end deficit when the entire national budget is around half that amount? The entire 2015 defense budget was about 690 Billion. I don't see how this adds up?

There wasn't a deficit, that's the total of all improperly accounted for transactions, not lost money.
 
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