R 162038Z NOV 12

ALCGFINANCE 051/12
SUBJ: MONTHLY FINANCIAL AUDIT STATUS UPDATE - NOVEMBER 2012
A. COMDT COGARD WASHINGTON DC 191645Z NOV 12/ALCOAST 486/12
B. COMDT COGARD WASHINGTON DC 231943Z MAR 12/ALCGFINANCE 011/12
C. COMDT COGARD WASHINGTON DC 201615Z DEC 11/ALCGFINANCE 046/11
D. U.S. COAST GUARD INFORMATION AND LIFE CYCLE MANAGEMENT MANUAL,
COMDTINST M5212.12
E. U.S. COAST GUARD PAY AND PROCEDURES MANUAL, PPCINST M1000.2A
1. This is the fourteenth in a monthly series of ALCGFINANCE messages
intended to improve financial audit communications and information
sharing throughout the Coast Guard.
2. Current Status:
a. As Admiral Papp noted in reference A, the Coast Guard received a
qualified opinion on the accuracy of our account balances from the
independent auditor on November 15, 2012. Building on the success of
the Fiscal Year (FY) 2011 audit when the Balance Sheet and Statement
of Custodial Activity were audited, the Coast Guard has continued its
long standing commitment to fiscal accountability in FY 2012. The
scope of the audit was expanded this year to include all five of our
financial statements, adding the Statement of Net Cost, Statement of
Net Position, and the Statement of Budgetary Resources.
b. We achieved great things in the FY 2012 financial audit, including
reducing our material weaknesses from five areas to three, decreasing
the severity of our control deficiencies in Budgetary Accounting,
Funds Balance with Treasury, and Information Technology General
Controls. Especially noteworthy, we received a vote of confidence
from the independent auditor on our Statement of Budgetary Resources,
Environmental and Disposal Liabilities, and tremendous progress made
with inventory and valuation of Real Property assets. We also
continued expanding the use of our data analytics software (Audit
Command Language or ACL) to provide greater support with Coast Guard
financial reporting remediation, analytics, internal controls, and
continuous monitoring.
c. With each successful financial audit, the independent auditors dig
deeper and look into new areas. We have already transitioned to
focusing on the tasks we have ahead. FY 2013 remediation work is
underway and we will continue to build on our successes and further
improve Coast Guard financial and business practices. In addition, we
have started preparing for the FY 2013 financial audit as the
independent auditor is scheduled to return in January 2013 to
continue work over our property. More than ever before, the success
of the FY 2013 audit will rest in large part on your hard work - we
need to maintain our efforts to improve property recordkeeping to
include cost documentation and invoices, as well as complying with
inventory procedures. I have no doubt you will rise to this ambitious
challenge.
d. As the Coast Guards financial management community, the full scope
audit over the past year has impacted all of you. Your patience,
perseverance, and diligence have resulted in an unprecedented level
of coordination from field units to service and logistics centers and
headquarters elements - the remarkable progress and successful audit
opinion for FY 2012 is the direct result of your hard work and would
not have been possible without you. Thank you and well done.
3. Audit 101
a. In reference B, we explained some of the basics of open
obligations. This month, we will examine the general procedures for
obligating official temporary duty (TDY) travel (document types 11
and 13) from the perspective of financial managers (Authorizing
Officials, Funds Managers, Reconcilers). There are three primary
stages for obligating official travel, which begins when the travel
requirement is identified and ends with liquidating/de-obligating
residual balances after the expenditure or payment for travel is
made.
b. The first step is recording the obligation for travel. This occurs
when the traveler identifies a need to travel and requests funds to
travel through the appropriate Approving Official (AO). When the
travel request is approved and funds are obligated, the unit Funds
Manager must ensure that the travel request is properly recorded, the
estimated cost is supported by documentation, and that the requested
funds are available. The Funds Manager will enter the funds
obligation into the applicable system of record, Financial and
Procurement Desktop (FPD), and provide the AO with the necessary
Travel Order Numbers (TONO's) and Lines Of Accounting (LOA's).
c. The second step is the monitoring and validation of the travel
obligation in the Open Obligation Validation Application (OOVA). The
reconciler must ensure the obligation is valid, accurate, and
supported by the appropriate documentation. Within three working days
of completion of TDY travel, the traveler must file a Travel Voucher
or Subvoucher (DD 1351-2) in TPAX or manually submit the claim to
PPC. After the DD 1351-2 is filed and routed to the AO, the AO must
verify that there are sufficient funds obligated to cover the
expenditure.
d. The third step is the liquidation of the travel obligation.
Throughout this process, it is the Funds Managers responsibility to
monitor the status of the obligation in OOVA to ensure no negative
balances occur and that residual funds (positive balances) are
removed when travel is complete. When travel is complete, payment has
occurred, and the determination has been made that the obligation is
no longer needed, the Funds Manager should zero out the documents, or
in the case of a residual balance, de-obligate/liquidate the funds.
When a residual balance remains after a payment or a UDO has a
validation status of anything other than 'Still Needed,' it is
usually necessary to de-obligate the remaining funds from the
specific account.
e. Financial managers and their originating offices must follow the
procedures outlined in the Obligation Procedure Manual
(http://cfotools/oova/Docs/ObligationProcedures.pdf)
4. Audit Tips
a. Redundancies of similar independent duties among financial
managers at different levels outlined in the Audit 101 section above,
are intentional and serve as checks and balances towards assuring the
Coast Guards internal controls over its finances.
b. Per reference C, internal controls are critical for preventing
waste, fraud, or abuse of the taxpayer funds entrusted to the Coast
Guard. It is crucial that AOs, Funds Managers, and Reconcilers all
communicate during the travel obligation process while independently
performing their required checks, to ensure that these internal
controls are effectively implemented. This includes:
(1) Determining that sufficient travel funds are available in order
to prevent a negative balance or over obligation.
(2) Ensuring the travel is for legitimate purposes and has been
properly authorized.
(3) Verifying that all necessary documentation is collected and
stored for the appropriate amount of time in the event of an audit.
c. As per reference D, the unit controlling the authorization of
travel must maintain copies of records relating to reimbursing
individuals (e.g., travel orders, vouchers, and all supporting
documents relating to official travel) for a period of six years. For
information on the specific support documents you need to retain,
reference the documentation support matrix
(https://collab.uscg.mil/lotus/myquickr/cg-85-office-of-financial-tra
nsformation/documentation-support-matrix).
Per reference E, the traveler is required to maintain complete and
accurate records of all travel claims for six years and three months.
5. Ms. Margo Sheridan, Director of Financial Operations/Comptroller,
sends.
6. Internet release authorized.