Appendix C NFR and Conditions.xlsx
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This document is an audit findings file detailing numerous financial control and reporting deficiencies within the Department of the Air Force (DAF) Working Capital Fund and General Fund for fiscal years 2018-2023. The file contains 190+ specific audit findings across multiple financial assessable units, including inventory management, revenue recognition, expense tracking, property accounting, and financial reporting processes. Key recurring issues include lack of effective internal controls, insufficient reconciliation procedures, improper transaction recording, inadequate system interfaces, ineffective oversight of service providers, and incomplete documentation of financial transactions.
Major areas of concern span inventory valuation, trading partner adjustments, undistributed journal vouchers, system posting logic non-compliance with accounting standards, incomplete population tracking for assets, inadequate review of cost estimates, and weak controls over financial reporting processes. Many findings highlight systemic problems such as manual data entry errors, lack of segregation of duties, insufficient evidence retention, incomplete system reconciliations, and ineffective monitoring of financial transactions across multiple accounting systems like GAFS-R, DIFMS, ILS-S, and DEAMS. The findings require comprehensive corrective action plans to address material weaknesses in financial management and reporting across the Department of the Air Force.
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| Key | NFR Title | IPA NFR Reference | OPR | Status | CAP ECD | Condition Description | Contributing Command/Organization | Active Linked CAP | CAP LINK | Parent key | ||||||||
| AF-5243 | Lack of Monitoring over Transactions Not Flowing to the General Ledger | GF-FIN-2018-001(R5) | SAF/FM | Open | 7/21/28 | LegacyBased on a review of the DAF University of Transaction Memo and Population Completeness walkthroughs, EY identified the following reconciliation points where DAF could have unposted transactions:1. Statement of Budgetary Resources – Automated Reconciliation Tool (SBR-ART)2. Alternative Reconciliations that fall outside the scope of SBR-ART (i.e., MOCAS to GAFS-R and IAPSto GAFS-BQ)For systems reconciling through SBR-ART, EY identified that although the SBR-ART process identifies unmatched transactions (both researched and not researched), there is no management review over the potential financial statement impact of the unmatched population. The DAF does not perform an analysis to determine the impact of the unposted transactions on the financial statements and if a period-end adjustment to the financial statements is required.For systems reconciling through alternative reconciliations, EY performed procedures over four feeder systems: MOCAS, IAPS to BQ (F50), Interfund and Funds Distribution. During prior year testing, EY identified 3,234 unmatched transactions between the two systems aggregating to $909 million. Upon inquiry into the variance, DFAS stated that mismatches are identified as part of the DFAS MOCAS to GAFS-R reconciliation, however a JV is not recorded at period-end to account for the variances. After concluding on procedures over the remaining three reconciliations, EY determined that DAF does not perform an analysis to determine the total impact of unmatched transactions and whether a period-end adjustment to the financial statements is required.DEAMSDuring the prior year walkthrough of the DEAMS Universe of Transactions, EY walked through the following key DEAMS reconciliations: DIMES feeder systems to DEAMS SL, DEAMS SL to GL (DEAMS Measure of Effectiveness (MOE) 2.4), and DEAMS to GAFS-R. During each period, DFAS identifies unposted transactions, such as from the aforementioned reconciliation points. Similar to the legacy SBR-ART, there is no management review performed by DAF to determine if a period-end adjustment is required to account for the impact of these unposted transactions. | Air Force General Fund | True | AFIPACAP-6496 | AF-5089 | ||||||||
| AF-5634 | Off-Site Contractor Managed Spare Engines and Munitions not Updated Timely in APSR | GF-FIN-2018-002(R5) | A4 | Open | 12/2/24 | Spare EnginesDuring existence and completeness (E&C) testing at Tinker AFB, EY noted three contractors managed SRANs did not timely update CEMS for financially reportable events. These three SRANS had engines located off-site. 1.For SRAN 8371, KC-10 Aircraft Engines, the AF engine manager did not update spare engines in CEMS in 2018 until April 17-18, after the count sheet date. In a June 9th inventory listing, 22 of the 28 spare engines updated on April 17-18 were not in the April 9th count sheet. The appointment letter provided was effective April 17, 2018, after the count sheet date. SRAN 8371 had 28 engines in CEMS. 2.The following SRANs used CEMS to update spare engine transactions but had a lag in timely reporting: a.SRAN 20LK, Contractor Logistics Support, has a contract that required monthly communication from the contractor to the AF engine manager to record spare engine transactions. SRAN 20LK had 43 engines recorded in CEMS. b.SRAN 20T1, T-1 aircraft engines, had 25 engines.Between SRANs 20LK and 20T1, EY could not confirm existence or completeness for 11 engines. EY physically observed 6 spare engines not recorded in CEMS as spares. Five engines listed as spares on the count sheet were installed prior to the count sheet date and did not exist as spare engines.MunitionsDuring our site visit to GACP, Mr. Stanley Hale, GACP; stated that most munitions held by contractors are undergoing repair and USAF has limited visibility on contractor transactions beyond shipping and receiving from the contractor locations. USAF cannot substantiate contractor transactions. Air Force program teams are required to validate, and update munitions inventory records every 30 days. As a result, transactions at contractor locations are not updated timely. | Air Force General Fund | True | AFIPACAP-52 | AF-5514 | ||||||||
| AF-5244 | Improper Recording of Advance Payments | GF-FIN-2018-008(R5) | SAF/FM | Open | 6/30/25 | During EY’s PY RBA&E 4221 and 4252 Internal Control testing, EY noted that various samples were identified as an advance by the Air Force but were incorrectly recorded in USSGL 4252 “reimbursements and other income earned – collected”. During internal controls testing for RBA&E, EY noted that several samples included cash collection vouchers for advances instead of normal voucher supporting documentation (i.e. SF 1080). The advances related to unearned revenue from goods/services, dining hall transactions and landing fees. DAF provided documentation from DFAS indicating the transfer of advanced collections to the current fiscal year. The “transfer” was occurring for the portion of the original advance that remained unearned at the end of the fiscal year. DAF provided the guidance and policy regarding these transactions as supporting documentation along with cash collection vouchers.For these specific transactions, DAF posted the advanced collection to USSGL 4252, collected and earned instead of USSGL 4222 collected and unearned. | Air Force General Fund | True | AFIPACAP-9513 | AF-5090 | ||||||||
| AF-5245 | DAF internal re-classifications are not easily identifiable within GAFS-R | GF-FIN-2018-010(R5) | SAF/FM | Open | 3/31/24 | Based on EY’s understanding of the GAFS-R data and DFAS guidance DFAS-DE 7077.2-M, any transaction that has an action code beginning with “Q” is an internal re-classification that does not have an impact to the DAF financial statements. Additionally, based on discussions with DFAS and DAF, any transaction that contains “JV” in the MAFR DOV column is an internal re-classification transaction.However, during substantive testing for GLACs 4221 and 4252 EY identified the following samples that did not have the above-mentioned criteria for internal re-classifications:• 1 sample for GLAC 4221• 11 samples for GLAC 4252Based on further discussions with DAF, these selected internal re-classifications are entered into GAFS-BQ at the base level and do not have the identifiers above. To identify the re-classifications DAF provided the following criteria:• AFMC 277 forms that have a “K” in the 11th position of the document number• AFTC DOV re-classifications in JOCAS have document numbers to begin with “4Q0J”In addition to the internal classification transactions that were identified in prior years, EY identified various instances of transactions in the FY19 GAFS-R UoT that potentially do not impact the financial statements and were not easily identifiable by DAF:1. Source files that were posted, reversed, and subsequently re-posted. Per conversation with DAF, thisis identified by the transactions containing the same Source file (Src_File).2. The existence of identical transactions in the UoT that lack any uniquely identifying data element. EYis unable to determine if these transactions are internal re-classifications or valid transactions.3. EY identified 51 GAFS-R posting rules with the same DR/CR GLAC that were not flagged as “InternalUse” by DAF. EY identified 1,752 transactions totaling $14,144,903,875.45 that posted on these potential internal reclass posting rules. | Air Force General Fund | True | AFIPACAP-12924 | AF-5091 | ||||||||
| AF-5656 | D to O Balancing Transactions are unsupported and unidentifiable within GAFS-R | GF-FIN-2018-013(R5) | SAF/FM | Open | 6/30/25 | During the RBAE site visits, USAF personnel explained how they tracked their authority and obligations using spreadsheets and Commanders’ Resource Integration System (CRIS) reports before creating journal vouchers reclassifying BIDs. Based on discussions with USAF, when performing D to O balancing at the base level, the accountants only utilize CRIS reports to adjust the reimbursable obligations and unfilled customer orders and do not obtain the underlying supporting documentation to determine the general ledger entries that are required. Additionally, USAF indicated that the D to O entries that are made directly in GAFS are not identifiable from other general ledger entries.As described in the Overview above, if the base does not perform the necessary adjustments, DFAS - Columbus records Journal Vouchers (JV) by querying GAFS-R at the fiscal year and appropriation level to determine the required adjustments to balance reimbursable obligations to unfilled customer orders. As noted in the GAFS-R JV log, DFAS describes the D to O JVs as “Forced Balancing.” Similar to the base level transactions, DFAS does not obtain supporting documentation, other than data pulls, to support the movement of funds between general ledger accounts. EY identified 10 unsupported “Forced Balancing” JVs recorded by the USAF on the FY17 Q4 GAFS-R JV log. | Air Force General Fund | True | AFIPACAP-377 | AF-5536 | ||||||||
| AF-5259 | Improper Recording of Air Force to Air Force Reimbursable Agreements | GF-FIN-2018-014(R5) | SAF/FM | Open | 7/15/25 | In FY19, EY received no evidence of USAF performing reconciliations that sufficiently and adequately identify and remove Air Force to Air Force (intra-AF) transactions from the financial statements. Based on the requirements of the outstanding Defense Audit Remediation Working Group (DARWG) paper, Research and Recommendation Paper: Issue 14, Recording Reimbursable Orders within the Same General, USAF is allowed to perform intra-AF transactions within the same appropriation but, as of now, they cannot support the performance of reconciliations that eliminate those transactions.In FY18, EY included this update to reflect the Defense Audit Remediation Working Group (DARWG) paper identifying the intra-AF obligation as acceptable so long as the transaction is not reflected in the financial statements. The following sentence was removed:“These transactions do not meet the definitions of an obligation, disbursement or collection as defined in OMB A-11.” In FY17, as part of EY’s review of Miscellaneous Obligation/Reimbursement Documents (MORDs), MORD F2E0FM6252MW02 was selected for testing. Based on the support package received for the MORD and discussions with Headquarters Air Combat Command (HQ ACC), the MORD was established by HQ ACC for the purpose of transferring money to the 49th Civil Engineering Squadron (CES), a squadron within ACC at Holloman Air Force Base (AFB), for construction costs. Based on a review of the General Accounting and Finance System – Re-engineered (GAFS-R) transaction data, HQ ACC recorded obligations and disbursements and the 49th Civil Engineering Squadron (CES) established an unfilled customer order and cash collections on the MORD. Based on discussions with USAF, the CES used the money transferred via the MORD to fund a contract with a third party to perform the construction services on behalf of HQ ACC.Additionally, EY tested aged Unfilled Customer Orders Without Advance (General Ledger Account Code (GLAC) 4221) and Reimbursements and Other Income - Earned (GLAC 4251) and identified 14 Military Interdepartmental Purchase Requests (MIPRs) citing the Economy Act and 2 Project Orders entities were both the receiving and performing entity and the same appropriation was utilized. By recording intra-USAF transactions as reimbursable orders, either on Category I (Reimbursable) MIPRs or reimbursable MORDs, USAF records entries in GLACs 4221, 4252, 4801 and 4902 for transactions that merely transfer funds from one USAF organization to another. | Air Force General Fund | True | AFIPACAP-138 | AF-5105 | ||||||||
| AF-5260 | Lack of Timely Action to Resolve Open Reimbursable Orders | GF-FIN-2018-015(R5) | SAF/FM | Open | 6/16/25 | As part of FY17 Aged GLAC 4221 and 4251 testing, EY identified exceptions for which USAF did not update the order status to filled customer orders after service was performed, bill the customer upon filling the order, collect on filled orders and withdraw unused reimbursable authority in a timely manner:• Lack of timely postings from unfilled to filled customer orders: EY identified two completed GLAC 4221orders from FY15 for which USAF did not post the filled customer order through FY17.• Lack of timely billing and, as a result, collections on two filled customer orders:• Collections on a filled customer order: EY identified one GLAC 4251 sample with a filled customer orderand a billing event for which USAF did not collect from the customer for at least 90 days.• Withdrawing reimbursable authority: EY identified one GLAC 4221 sample with an unfilled customer orderin Q1 that was not withdrawn until 9/30/2017. | Air Force General Fund | True | AFIPACAP-140 | AF-5106 | ||||||||
| AF-5638 | Accountable Property System of Record (APSR) does not reflect a complete or accurate transfer of data related to joint basing activities | GF-FIN-2018-018(R5) | AFCEC | Open | 5/31/24 | As part of our existence and completeness (E&C) site visit procedures, EY selected a sample of facilities to test the accuracy of key data fields within the APSR through review of the associated facility folders (“Jacket File”). At installations that underwent joint basing activities in which Air Force was the gaining installation, EY noted instances (i.e. Charleston, McGuire-Dix-Lakehurst, Elmendorf-Richardson, Langley-Eustis where key facility inputs (e.g., Placed-in-Service Date (PISD)) within the APSR were either not supported by key supporting documents (KSDs) or inaccurately reflected the KSD information received from the losing base | Air Force General Fund | True | AFIPACAP-555 | AF-5518 | ||||||||
| AF-5639 | GIS maps are incomplete and are not updated timely and/or accurately to identify all facilities | GF-FIN-2018-019(R5) | AFCEC | Open | 5/31/24 | In conjunction with the execution of E&C site visit procedures, EY identified instances of inaccurate and/or incomplete GIS maps, including untimely updates to GIS Maps (i.e., missing facilities) or inappropriate/inconsistent labeling of RP assets within GIS Maps. EY also identified instances where GIS maps did not agree with the APSR. While updated guidance has been provided to the installations and progress has been made to reconcile the GIS maps to the APSR, reconciliation procedures have not yet been completed. | Air Force General Fund | True | AFIPACAP-382 | AF-5519 | ||||||||
| AF-5630 | APSR does not reflect the complete or accurate population of facilities within the installation | GF-FIN-2018-020(R5) | AFCEC | Open | 10/15/23 | In conjunction with our existence and completeness procedures, further inquiries of base-level personnel, and inspection of facility records, we identified instances in which buildings or structures : 1)Have been physically demolished but remain reported within the APSR with an Operating Status Code of active (“ACT”). 2)Have been removed from the APSR without proper receipt of the AF IMT Form 300, Facility Disposal, and DD Form 1354, Transfer and Acceptance of Military Real Property, and, while slated for demolition, remain physically intact on an installation. 3)Physically exist on the installation but have not been added to the APSR within a timely manner. | Air Force General Fund | True | AFIPACAP-383 | AF-5510 | ||||||||
| AF-5669 | Linear structures are not accounted for properly within the Accountable Property System of Record (APSR). | GF-FIN-2018-021(R5) | AFCEC | Open | 5/31/24 | During prior year procedures, and as a result of inquiries with Air Force Civil Engineer Center (AFCEC) representatives and various base personnel, EY was informed of the following:1) Despite ongoing corrective actions to reconcile APSR data to GIS maps, the RP data within the APSR does not reflect the complete and accurate population of linear structure assets. 2) DAF has not completed efforts to sufficiently identify and report linear asset segmentation records to facilitate sufficient APSR reconciliation activities. | Air Force General Fund | True | AFIPACAP-544 | AF-5549 | ||||||||
| AF-5640 | Facility records or “Jacket Files” were not maintained for all facilities. | GF-FIN-2018-023(R5) | AFCEC | Open | 5/31/24 | As part of EY’s E&C site visit procedures, EY selected a sample of facilities (i.e., Buildings and Structures) to review whether the associated Jacket Files contained the required key supporting documents (KSD). As a result of these procedures, we identified limited instances across a subset of installations visited in which the RPO was unable to provide the requested Jacket File or the provided file or the appropriate KSDs were not maintained. However, we did identify significantly more instances at Travis Air Force Base (AFB) where EY noted just over 100 instances where the RPO was unable to provide the Jacket File. In addition to the missing Jacket Files, there were approximately 80 Jacket Files at Travis AFB that were missing critical KSDs. | Air Force General Fund | True | AFIPACAP-379 | AF-5520 | ||||||||
| AF-5641 | All Construction in Progress (CIP) is not appropriately recorded within the APSR | GF-FIN-2018-025(R5) | AFCEC | Open | 9/30/24 | Based on the existing process and evidence provided through inquiry, EY noted the following as it pertains to the recording of CIP within the APSR:1) Insufficient or inconsistent data was being provided by the CAs in support of ongoing MILCON CIP projects. Based upon inquiries with AF/A4CA, and consistent with DAF self-identified deficiency (SID), it was determined that internally managed CIP data does not reconcile with the CA’s data; thus, the exception impacted the auditability of the completeness and accuracy of amounts as disclosed within the financial report.2) DAF has not yet commenced the appropriate procedures to evaluate the completeness and accuracy CIP categories other than MILCON.3) While DAF MILCON sub-allotted to USACE is posted to DAF’s financial statements through a RWA in DDRS-B as opposed to through the APSR, if the MILCON was related to a reimbursable agreement with USACE, the transaction would be reported through the APSR and not DDRS-B. DAF did not provide sufficient evidence of review over the completeness and accuracy of the CIP reported and further self-identified that duplicates of activity posted to the APSR and through the RWA have been identified. a)This lack of monitoring also extends to the CIP amount recorded by USACE in CEFMS, the associated projects used to support and validate the CIP entries made, the amount relieved from CIP and corresponding assets placed-in-service, and the corresponding review of the entries to validate the completeness and accuracy of amounts recorded (refer to for the RP cycle memoranda received). 4 )CIP activity related to NAVFAC and in-house projects continues to report through only the APSRs. As a result of the DAF reversal of all FY20 RP activity from the APSRs, DAF is reporting an incomplete CIP balance for assets constructed through other mechanisms (i.e., NAVFAC and in-house CIP) (refer to JVs entered reversing year-end General Ledger Account Code (GLAC) 1720 balances. a)Due to a DAF identified technology migration issue currently ongoing with the NAVFAC reporting system, DAF has been unable to report NAVFAC CIP activity for over two years. | Air Force General Fund | True | AFIPACAP-546 | AF-5521 | ||||||||
| AF-5657 | Lack of Valuation Documentation over OM&S SE | GF-FIN-2018-026(R5) | A4 | Open | 3/31/24 | The Spare Engine valuation package indicates that EY found exceptions for 94 engine TMSMs and 3,365 total engines with an absolute misstatement amount of $6 billion:1.No source documents exist for 30 TMSMs and 881 total engines. a.For 24 TMSMs and 976 total engines, the USAF provided an MFR stating that the USAF cannot find documentation related to these TMSMs and engines. b.For 6 TMSMs and 12 total engines, the USAF did not provide documentation.2. The documentation provided either did not match TMSM in CEMS or that the documents provided were not valid source documents for 40 TMSMs and 1,023 total engines.3.The documentation provided was not detailed enough to establish modification for 18 engine types and 973 total engines.4.There are price discrepancies between the source document and CEMS for 6 TMSMs and 488 total engines. | Air Force General Fund | True | AFIPACAP-380 | AF-5537 | ||||||||
| AF-5658 | USAF Managed Spare Engines are not Updated Timely in the Accountable Property System of Record (APSR) | GF-FIN-2018-027(R5) | A4 | Open | 3/31/24 | EY made the following observations at Tinker AFB, Creech AFB, and Cannon AFB:USAF was unable to establish completeness for 8 spare engines:• 4 spare engines were physically observed in SRAN 2336 at Tinker AFB that were uninstalled before the count sheet date and not classified as spare engines.• 4 spare engines were not listed in the count sheet but were recorded in the CEMS asset posture as of March 31, 2018. USAF was unable to provide shipping documents showing a change of possession. These engines are for an MQ-9 aircraft.o 1 engine in SRAN 4855 at Cannon AFBo 3 engines in SRAN 7440 at Creech AFBUSAF was unable to establish existence for 20 engines: • 6 engines in SRAN 2336 at Tinker AFB were installed on aircraft before the count sheet date that were classified as spare engines. These 6 engines should have been classified as installed and reported as part of the aircraft. • 2 engines in SRAN 4855 at Cannon AFB were shipped before the count sheet date but were still recorded as possessed by SRAN 4855.• 12 engines in SRAN 4855 at Cannon AFB were not physically observed, and USAF did not provide alternate evidence of existence. 7 of these engines are for MQ-9 aircraft. In all, USAF was unable to establish existence and completeness for 11 of the 73 MQ-9 spare engines observed at Cannon and Creech AFB. | Air Force General Fund | True | AFIPACAP-505 | AF-5538 | ||||||||
| AF-5262 | Excess, Obsolete, Unserviceable (EOU) Inventory Net Realizable Value Does Not Reflect Economic Value of Recoveries | GF-FIN-2018-029(R5) | SAF/FM | Open | 9/30/23 | The Air Force recognizes excess, obsolete, and unserviceable OM&S at a net realizable value of zero (2018 AF Financial Statements, Note 1.N). The Air Force asserts, “We value EOU OM&S at zero NRV because the FMR (Volume 040403.B) instructs us to do so”. However, the revaluation allowance does not reflect the recoveries from disposing of the item less the estimated costs of completion, holding, and disposal as the FMR requires. The Air Force does not estimate the revaluation allowance based on prior disposal proceeds for comparable EOU, buyer quotes or other reasonable means (2018 AF Financial Statements Note 1.N). The Air Force has parts reclamation programs and other disposal activities that result in economic benefit, such as parts/reclamation losses of spare engines. Documentation supporting the NRV calculation of the EOU is not prepared and retained by the Air Force.FY 19 UpdateEY walked through the Spare Engines parts reclamation loss process at Tinker AFB SRAN 2335 and the CEMS PMO to corroborate the existence of reclamation activities. | Air Force General Fund | True | AFIPACAP-123 | AF-5108 | ||||||||
| AF-5635 | Lack of Complementary User Entity Controls to Prevent and Detect Misstatements in OM&S Balances | GF-FIN-2018-030(R5) | SAF/FM | Open | 9/30/23 | 1.The CEMS PMO does not have complementary user entity controls in place to prevent and detect misstatements in the spare engine balance for each GLAC reported in GAFS-R by DFAS, a service provider. The CEMS PMO submits a monthly report via the File Transfer Protocol (FTP) to be transferred to GAFS-R for financial reporting of the spare engine balance.2.The GACP does not have complementary user entity controls in place to prevent and detect misstatements in the Munitions balance reported for each GLAC in GAFS-R by DFAS, a service provider. GACP relies on the transmission of the monthly journal voucher to ensure the accuracy of the munitions balance. Once DFAS processes the CFO report there is no reconciliation or review between GAFS-R and CAS, instead, USAF relies on what is sent by GACP.3.Each quarter, USAF manually enters the CAS stated balance amount via the JV process. Refer to the FSCR process narrative for additional information on the JV process. In FY18 Q1, EY observed a variance between the CAS AMMOWEB detail data and the CAS Asset Posture summary data. In the FY18 Q1 CAS reconciliation, USAF labeled the variance as “Variance (plug)”. Per discussion with CAS PMO, the variance is between the AMMOWEB detail transactions and Asset Posture summary balance, of the on hand inventory. In addition, during EY’s walkthrough of the CAS summary reconciliation, USAF was unable to provide any additional documentation over the variance. | Air Force General Fund | True | AFIPACAP-504 | AF-5515 | ||||||||
| AF-5263 | Lack of Operating Materials and Supplies Repair Allowance | GF-FIN-2018-034(R5) | SAF/FM | Open | 3/31/26 | Although the Air Force asserts that DOD FMR Volume 4 Chapter 4 Paragraph 040303.D is the basis for valuing Air Force held for repair OM&S, the Air Force does not report a repair allowance for Held for Repair OM&S in the financial statement note. The Air Force does not report Inventory and Related Property net of an allowance for repairs on the balance sheet.EY requested an update for the Air Force’s held for repair OM&S accounting policies on August 28, 2018 but had not received a response by September 14, 2018. | Air Force General Fund | True | AFIPACAP-2885 | AF-5109 | ||||||||
| AF-5246 | Trading Partner Adjustments are Unsupported | GF-FIN-2018-036(R5) | SAF/FM | Open | 6/27/25 | EY obtained support for the DAF’s trading partner adjustments and walked through the process utilized to calculate and support the adjustments with DAF and Defense Finance and Accounting Service (DFAS) personnel. DFAS personnel stated that that they follow the Department of Defense (DoD) Financial Management Regulation (FMR) guidance (DoD FMR Vol. 6b, Ch. 13) that states: “DoD reporting entities reconcile with their trading partners at the detail transaction level. Detail transactions provide support for reported balances requiring elimination with trading partners. The reporting entity is ultimately responsible for the accuracy of its trading partner data; therefore, it is responsible for initiating actions to reconcile balances with its trading partners. DoD buy/sell eliminations include detailed transactions and should be supported by a Military Interdepartmental Purchase Request, sales order, customer bill, purchase order, contract, voucher, or the seller/buyer’s line of accounting, and be readily available upon request. Include similar detail supporting documentation for other reciprocal categories identified in TFM 2-4700. A DoD reporting entity unable to provide detail transactions at the appropriate time of the financial statement reporting cycle must adjust its balance to match the seller’s or buyer’s supportable data.” In accordance with DoD guidance, DFAS-Indianapolis obtains the seller-side data from the DAF’s trading partners in order to make their adjustments. DFAS-Columbus compares the seller-side data obtained from DFAS-Indianapolis and compares it to the GAFS trial balance data at the appropriation level by trading partner. That difference is the basis for the adjustments. EY noted that there is no reconciliation at the agreement or document level to the trading partner adjustments that are being made. Trading partner adjustments are recorded in DDRS-AFS as “top-side” adjustments and are identified as “unsupported” by DFAS. | Air Force General Fund | True | AFIPACAP-469 | AF-5092 | ||||||||
| AF-5659 | Improper use of Logistic Supply Condition Codes for Uninstalled Missile Motors (UMM) | GF-FIN-2018-037(R5) | A4 | Open | 11/30/23 | During our site visit to Hill AFB, EY noted that the supply condition codes tagged on the uninstalled missile motors did not correspond with the condition codes recorded in IMDB:1. 6 UMMs were tagged as “supply condition code J: suspended (in stock)” while IMDB recorded them as “condition code A: serviceable issuable without qualification”. The 6 UMMs were awaiting the final decisions from the engineers as the USAF was unable to determine what was needed to be performed on UMMs to bring them back to service. The issue was noted on structures HAFB – 1803 and 1804, which were the maintenance shops. 2. 7 UMMs were tagged as “supply condition code - A: serviceable issuable without qualification” while IMDB recorded them as “condition code F: unserviceable reparable”. The statuses of those 7 UMMs were not updated on a timely manner ranging from several days to months in IMDB after maintenance was completed. 3. 58 UMMs were tagged as “supply condition code - F: unserviceable reparable” while IMDB recorded them as “condition code A: serviceable issuable without qualification” in IMDB. The statuses of those 58 UMMs were not updated on a timely manner ranging from several days to months in IMDB after identifying them as assets that required repair, overhaul or reconditioning. | Air Force General Fund | True | AFIPACAP-119 | AF-5539 | ||||||||
| AF-5676 | Mechanization of Contract Administration Services (MOCAS) Allocation of Payments on Multi-Service Contracts Is Not Supported as Being Generally Accepted Accounting Principles (GAAP) Compliant | GF-FIN-2018-040(R5) | SAF/FM | Open | 12/31/24 | FY18During the Financial Statement Compilation and Reporting walkthrough at DFAS-Columbus, the DAF did not provide any evidence that for multi-service contracts, they monitor that payment instructions reflect the actual work being performed. DAF was also unable to provide analysis of materiality related to this weakness.During the Financial Statement Compilation and Reporting walkthrough at DFAS-Columbus, DAF was unable to provide evidence that they performed oversight and monitoring to ensure the current MOCAS process for the allocation of progress payments and recoupments on multi-service contracts is GAAP compliant or in accordance with contract terms.FY19 UpdateIn FY19, EY determined 1 out of 20 MOCAS documents tested were disbursed out of the incorrect appropriation because there were multiple invoices on various ACRNs that were paid out of a different LOA . | Air Force General Fund | True | AFIPACAP-343 | AF-5556 | ||||||||
| AF-5247 | Recoveries are Improperly Identified and Recorded in GAFS-R | GF-FIN-2018-048(R5) | SAF/FM | Open | 6/30/24 | The DAF records Recoveries (USSGL Accounts 4871 and 4971) using GAFS-R system adjustments at the document level. To record a recovery, GAFS-R groups transactions by document number and the other elements such as Operating Agency Code (OAC), Operating Budget Account Number (OBAN), and the Project Element (PE) and generates tables and balance identifiers (BIDs) for a recovery if the net activity of the document is less than zero (negative). The GAFS-R table and table history detailing how the system calculated the recovery are maintained for all recoveries.Between FY16-18, EY judgmentally selected GLAC 4871 and GLAC 4971 recoveries for substantive testing and identified multiple instances of exceptions. Exceptions included, but are not limited too:• | Recoveries that were improperly generated by the GAFS-R posting logic.• | GAFS-R script for identifying recoveries improperly generated a recovery based on transactions that do not have an impact on GLAC 4801• | Understatement and overstatement of GLAC totals caused by downward adjustments included an administrative change, transfer of funding between documents and authorities, or a cost accounting transaction which triggered the recoveries posting logic.Based on discussions with the Defense Finance and Accounting Service (DFAS), EY learned that DFAS performed an analysis to determine whether to maintain or remove the script to identify recoveries in the General Accounting and Finance System – Reengineered (GAFS-R) in FY18 Q1 and Q2 to address the prior year conditions described below. Based on the analysis, DFAS identified abnormal balances and was not able to manually identify recoveries, so the script was maintained in GAFS-R. However, because they originally anticipated removing the script, DFAS discontinued an implemented control designed to review recoveries greater than $10 million, request supporting documentation from the base, and determine whether the recovery is supported by the underlying documentation. EY requested the FY18 Q3 recoveries review workbook from DFAS but did not receive the workbook because the control was not implemented for FY18. | Air Force General Fund | True | AFIPACAP-358 | AF-5093 | |||||
| AF-5261 | Lack of Effective Review Performed over Receipt and Acceptance of Goods and Services Related to Reimbursable Orders | GF-FIN-2018-054(R5) | SAF/FM | Open | 5/30/25 | FY19 Update:DFAS-COIn FY19, EY completed a site visit to DFAS-CO during which the site’s accounts receivable and intragovernmental accounts payable representatives explained their processes for posting Standard Forms 1080, Voucher for Transfers Between Appropriations and/or Funds (SF1080s), and SF 1081, Voucher and Schedule of Withdrawals and Credits (SF 1081s), to the general ledger (GL). During the discussion, DFAS-CO stated that they do not review evidence or request verification of receipt and acceptance from the agency requesting the services (the Grantor) prior to manually posting the receivable and collection or the payable and disbursement. As noted in the Air National Guard (ANG) example in the FY18 Condition under Grantor, DFAS-CO did not require their review prior to recording a disbursement from ANG.AcceptorIn addition to the FY18 Condition’s Acceptor section, EY is including an update regarding the evidence required for receipt and acceptance. In RBAE transactions for which USAF is the acceptor, EY noted that they may provide the customer evidence of the costs incurred but do not require evidence of receipt and acceptance prior to requesting DFAS-CO post the receivable and corresponding collection. For example, an organization at Robins AFB did not notify the customer, the USAF Working Capital Fund (WCF), of the civilian payroll charges incurred prior to the base submitting the SF1080s/1081s to DFAS-CO to process the collection. EY noted similar processes of creating the SF1080s at WPAFB in the Comprehensive Cost and Requirements System (CCaR) and Headquarters – Air Force (HAF) for the Defense Enterprise Accounting and Management System (DEAMS) in which the customers did not provide validation of the costs prior to submission to DFAS. As noted in the DFAS-CO section, DFAS-CO does not perform its own verification of the customer’s receipt and acceptance prior to posting the SF1080/1081; additionally, in other instances, there is an automated process for posting collections from the Job Order Cost Accounting System II (JOCAS). EY performed the walkthroughs over JOCAS as noted in the FY18 Condition. Without sufficient evidence of receipt and acceptance from the customer, USAF is unable to support a completed order to satisfy the collection to the GL.FY18 Condition:In FY18, EY noted conditions in which the USAF, as either grantor or acceptor, was unable to support receipt and acceptance of reimbursable orders.GrantorIn USAF’s RBAE grantor process narrative, USAF identified a control gap over the receipt and acceptance of goods and/or services received in the reimbursable process. USAF does not have procedures in place to document and support whether goods and/or services were both received from the performing entity and satisfied the criteria in the order prior to recording the accounts payable and disbursement to the GL as stated in the Department of Defense (DoD) Financial Management Regulation (FMR) Volume 4 Chapter 9.In FY18, EY walked through the process of a grantor-side receipt and acceptance in DEAMS at Joint Base Andrews (JBA) with the Air National Guard (ANG). For the order, ANG stated their role ends with the completion of the DD Form 448-2, Acceptance of a Military Interdepartmental Purchase Request (MIPR). The performing agency submits the bill to the DFAS for disbursement without ANG’s review.AcceptorUSAF states that an approved SF1080 evidences the customer’s acknowledgement of the receipt and acceptance of goods and/or services, but the narrative states this occurs only after USAF has disbursed to the vendor. EY performed walkthroughs and substantively tested samples regarding the acceptor process, from which EY noted two instances where USAF performed services for another intragovernmental entity but did not adequately document the receipt and acceptance of the goods and/or services provided:• For FY18 Q1 MIPR testing, EY substantively tested 35 samples and requested documentation to support that receipt and acceptance of goods and/or services occurred prior to USAF’s disbursement to the vendor (e.g. Wide Area Work Flow/Invoicing, Receipt, Acceptance, and Property Transfer (WAWF/iRAPT) invoice). Of the 35 samples, USAF did not provide sufficient evidence to support the receipt and acceptance process for 18 samples.• At Patrick Air Force Base (AFB), EY walked through and substantively tested RBAE transactions in JOCAS. To verify whether USAF could support receipt and acceptance prior to disbursement to the vendor, EY requested and received the iRAPT invoices. EY only received this documentation becauseeither base personnel had access to WAWF or obtained the invoices from DFAS. However, based on discussions with USAF, EY noted USAF obtains the General Accounting and Finance System (GAFS) or contractor post files and not the corresponding invoice. | Air Force General Fund | True | AFIPACAP-489 | AF-5107 | ||||||||
| AF-5248 | Use of Assumption Accounting Not Compliant with USSGL | GF-FIN-2018-058(R5) | SAF/FM | Open | 3/31/24 | Based on discussions with DAF and DFAS, the DAF posting logic utilizes non-compliant TFM entries (known as assumption accounting) to post certain reimbursable transactions. DAF indicated that some systems do not have the ability to distinguish between direct and reimbursable obligations. For these transactions, DAF operates under the assumption that when cash is received, a corresponding disbursement has already been recorded in GAFS utilizing direct budget authority. As such, the DAF utilizes a non-compliant TFM entry to reclassify the disbursement from direct budget authority to reimbursable. For example, the posting logic debits GLAC 4252 and credits GLAC 4902 reimbursable within the same entry. Additionally, the GAFS posting logic will debit GLAC 4902 direct and credit 4610.This process is not compliant with the TFM due to the process of debiting a cash collection (4252) and crediting a disbursement (4902) within the same entry.DFAS provided a list of Posting Rule Identifiers (PR_IDs) allocated to these assumption accounting transactions. These PRIDs debit GLAC 4252 and credit GLAC 4902, which is a non-compliant TFM entry. EY ran a query as of FYE 17 to determine the materiality of these transactions and noted $524M in assumption accounting activity during FY17. | Air Force General Fund | True | AFIPACAP-356 | AF-5094 | ||||||||
| AF-5626 | Air Force Posting Logic is Not Compliant at the Transaction Level with the United States Standard General Ledger (USSGL) | GF-FIN-2018-060(R5) | SAF/FM | Open | 12/30/25 | As a result of various prior year testing procedures, EY identified numerous instances where GAFS-R posting logic rules were inappropriate mapped to the TFM, had not yet been mapped to the TFM by DAF, or did not contain underlying debit or credit GLACs. In addition to these testing exceptions, EY noted that DAF had activity for recovery GLACs 4871 and 4971 but that for the upward adjustment obligation GLACS (4881, 4981, and 4982), the only activity was a result of JVs and not a result of being posted within the UoT. Further, in prior years, EY reviewed the GAFS-R posting rules and confirmed that posting rules for the upward adjusting obligation GLACs still do not exist. Based on the DAF posting rules, the upward adjustment transactions can only post to GLACs 4801, 4901 and 4902.The DAF posting logic utilizes postings that are not compliant with the United States Standard General Ledger (USSGL) and Standard Financial Information Structure (SFIS) posting logic. For example, •Transactions within GLAC 4221 have been identified as advanced collections as DAF records multiple general ledger entries for a single transaction. More specifically, first a BID D transaction posts the advanced order to GLAC 4221 – Unfilled Customer Order, without advance followed by a BID R transaction posts the advanced order to GLAC 4252 - Earned Revenue, Collected. Finally, a BID F transaction reverses the previously recorded entries to GLAC 4221 and 4252 (BIDs D and R) and posts the transaction to GLAC 4222 – Unfilled Customer Order, with advance. •The recording of a delivered order, unpaid (USSGL Account 4901) should be posted utilizing USSGL entry B 402 - Debit 4801 Credit 4901, however the DAF posting logic would Debit 4801 Credit 4610 then Debit 4610 Credit 4901. This means that DAF posts two general ledger entries when they only require one general ledger entry. •The DAF’s posting logic contains posing scenarios that are not approved under USSGL posting rules. For example, PR ID 10,851 posts a Debit to 4252 and a Credit to 4901. This posting logic does not have a USSGL or SFIS posting code, which increases the risk of transactions being posted incorrectly in the GL. •Budgetary and proprietary transactions are not posted utilizing single lines of the posting logic. Each transaction is posted by separate posting logic lines for budgetary and proprietary accounting. This is non-compliant with SFIS and USSGL transaction level posting guidance and impedes the ability to perform a budgetary to proprietary reconciliation at the transaction level. | Air Force General Fund | True | AFIPACAP-490 | AF-5506 | ||||||||
| AF-5249 | Lack of Data Elements to Reconcile Feeder System to GAFS-R (ILS-S & SMAS) | GF-FIN-2018-061(R5) | SAF/FM | Open | 6/23/25 | Per discussions with DFAS and DAF, during FY18 Q4 additional fields such as ADSN, PC, source system indicator, and fiscal year, began production within various systems. These fields are needed to reconcile transactional data to GAFS-R. DFAS has proposed a System Change Request to include these fields for the following systems: ILS-S and SMAS. • | ILS-S to GAFS-R: The scripts to perform the ILS-S reconciliation during FY18 were completed. DAF had to delay performing the reconciliation until the current version of ACL is approved and implemented for use. EY did not receive the reconciliation. Therefore, progress on this implementation could not be verified and the data element could not be identified. • | SMAS to GAFS-R: During FY18 a Standard Material Accounting System (SMAS) report was developed and implemented for one month. However, DFAS found the results were not adequate to provide assurance over the full populationDuring prior years substantive testing, EY identified that DAF was unable to trace transactions from GAFS-R or DEAMS to the subsidiary systems at the base level. For General Ledger Account Code (GLAC) 4801, EY identified the following examples:• | Various Mechanization of Contract Administration Services (MOCAS) and Vendor Pay – Contracts samples were missing the Contract Line Item Number (CLIN) as a unique identifier within the sample transaction data. The CLIN identifies the contract line item number within the broader contract that is specific to the sample transaction.• | Various MILSTRIP credit samples had a Document Number of IE or SMAS, rendering the base unable to identify the transactions or provide supporting documentation. For these transactions, it was identified that the GAFS data is summarized and the base is unable to identify the detail transactions.• | Numerous samples contained no Document Number in order to trace the transaction to the base subsidiary system.For GLAC 4902, EY identified the following examples:• | EY received Memorandums for Record (MFRs) from the bases stating they were unable to identify the underlying MILSTRIP and CivPay transactions selected for testing within the base subsidiary systems based on the transaction data given. For these transactions, it was identified that the GAFS data is summarized and the base is unable to identify the detail transactions.• | Various MILSTRIP samples with the Document Number of IE, IE-X, MAT ISS, MAT DIST or SMAS, rendering the base unable to identify the transactions or provide supporting. For these transactions, it was identified that the GAFS data is summarized and the base is unable to identify the detail transactions.• | Numerous samples contained no Document Number in order to trace the transaction to the base subsidiary systems. | Air Force General Fund | True | AFIPACAP-7826 | AF-5095 |
| AF-5797 | Lack of Sufficient Oversight over DIMES Reports | GF-FIN-2018-064(R5) | SAF/FM | Open | 6/30/24 | EY identified the following conditions: 1. Based on prior year and current year discussions, DAF does not have a process in place to appropriately monitor and review various DIMES reports (e.g., DIMES DNP, DIMES Open Inventory Report). 2. Not all transactions in the DIMES Open Inventory reports are cleared each month. Any unresolved errors will carry over to the next month for continued work toward resolution; however, per discussion, DAF does not record a period-end adjustment to the financial statements to reflect the value of unresolved transactions that should have posted to DEAMS. a. During inspection of the June FY22 DIMES Open Inventory table, EY identified that a material amount of DIMES transactions continues to not be remediated and cleared in a timely manner. 3. Per discussion with DAF, reports produced by DFAS-LI for DIMES transactions include non-Air Force related activity. Specifically, transactions with a Treasury Index (TI) not 57 (DAF). DAF is currently unable to filter the data received from DEAMS for Air Force specific DIMES errors, as such, DAF is unable to validate the activity within the DIMES reports. | Air Force General Fund | True | AFIPACAP-8704 | AF-5736 | ||||||||
| AF-5670 | Land is not accounted for properly within the Accountable Property System of Record (APSR). | GF-FIN-2018-073(R5) | AFCEC | Open | 4/30/24 | 1) DAF has not completed its audit readiness efforts for land. As such, the incomplete assessment of land assets and related acreage impacts the auditability of the completeness and accuracy of information as disclosed within the financial report.2) As a result of inquiries with representatives from both Air Force Asset Management Division (A4CA)/Air Force Civil Engineering Center (AFCEC) level as well as individuals at the RPO installation level, it was determined that official RPI processes and controls have not been finalized, communicated or implemented at the installation level resulting in inconsistent and unmonitored reconciliation procedures to account for land within the APSR. 3) In the Prior Year Agency Financial Report (AFR), DAF was unable to accurately categorize land between General PP&E Land and Stewardship Land. EY inquired during the virtual site visit in the prior year noting DAF was still developing a response to support an adequate disclosure for Stewardship Land acreage. | Air Force General Fund | True | AFIPACAP-501 | AF-5550 | ||||||||
| AF-5240 | The Population of Environmental Disposal for Military Equipment/Weapons Programs is incomplete or not readily available | GF-FIN-2018-074(R5) | SAF/FM | Open | 1/30/24 | FY20 ConditionUpon review of the ME/WP Environmental and Disposal Liabilities Cost Model, EY noted inconsistencies in DAF’s assessment of the applicability of estimated clean-up costs reported as a liability across Military Equipment and OM&S asset classes. More specifically, In FY20, DAF applied the per unit clean-up cost to all ICBM rocket components noted within the Reliability and Maintainability Information System (REMIS) 4630 Report (Minuteman III), including those assets designated as in storage with an assigned purpose code of“XV”. These assets are not reported as Military Equipment but rather as OM&S. Thus, DAF includes estimated clean-up costs for only these specific instances OM&S assets as part of the ME/WP estimate. DAF has not sufficiently documented their judgments/assessments for these specific instances, nor have they adequately considered the applicable guidance for recording and reporting clean-up costs for all Assessable Units (AUs) (including the broader population of OM&S).FY18 ConditionDuring FY18 procedures, EY was informed that DAF has not yet completed their assessment to appropriately estimate the liability associated to the major military equipment asset categories. | Air Force General Fund | True | AFIPACAP-14570 | AF-5086 |
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