DEPARTMENT OF DEFENSE AUDIT AND INTERNAL CONTROLS: EVIDENCE FROM THE DEFENSE FINANCE AND ACCOUNTING SERVICE

The purpose of this thesis is to investigate the Department of Defense (DOD) annual audit through analysis of the Defense Finance and Accounting Service (DFAS). This study addresses material weaknesses detailed in the FY 2020 DOD Inspector General (IG) audit by applying internal control standards to the policies and accounting practices of DFAS. The author finds that monitoring and control procedures implemented by DFAS do not meet objectives for producing accurate and auditable financial information. Analysis of the history of audits, GAO reports, and DOD IG inspections reveals patterns of insufficient corrective action that require remediation. Furthermore, antiquated IT systems, unclear accounting policies, and misaligned quality assurance monitoring programs contributed to numerous FY 2020 material weaknesses. Based on major findings, the author makes corrective policy recommendations for the consideration of DFAS and DOD leadership.Outstanding ThesisLieutenant, United States NavyApproved for public release. Distribution is unlimited