R 291634Z OCT 14
MARADMIN 556/14
MSGID/MARADMIN 556/14//
SUBJ/DEPUTY COMMANDANT, INSTALLATIONS AND LOGISTICS INTERNAL CONTROLS AND AUDIT READINESS ASSURANCE PREPARATIONS FOR MILITARY EQUIPMENT, OPERATING MATERIALS AND SUPPLIES, AND INVENTORY//
REF/A/DOC/PUBLIC LAW 111-84/28 OCT 2009//
REF/B/MEMO/USD-C/11 AUG 2009//
REF/C/MEMO/USD-ATL/2 NOV 2009//
REF/D/DOC/SECDEF/13 OCT 2011//
REF/E/DOC/OMB CIRCULAR A-136/21 OCT 2013//
REF/F/DOC/OMB CIRCULAR A-123/DATE VARIES BY APPENDIX//
REF/G/DOC/DOD FIAR GUIDANCE/NOV 2013//
REF/H/DOC/FEDERAL ACCOUNTING STANDARDS ADVISORY BOARD (FASAB) HANDBOOK/JUN 2013//
REF/I/DOC/FASAB SFFAS 3/27 OCT 1993//
REF/J/DOC/FASAB SFFAS 6/30 NOV 1995//
REF/K/DOC/FASAB SFFAS 23/8 MAY 2003//
REF/L/DOC/FASAB SFFAS 35/14 OCT 2009//
REF/M/DOC/DOD 7000.14-R/ DATE VARIES BY VOLUME//
REF/N/DOC/DODI 5000.64/19 MAY 2011//
REF/O/DOC/DOD 4140.1-R/23 MAY 2003//
REF/P/DOC/DOD 4000.25-2-M//DATE VARIES BY VOLUME//
REF/Q/DOC/DOD 5100.76-M/17 APRIL 2012//
REF/R/DOC/MCO 4400.150/29 JAN 2014//
REF/S/DOC/MCO P4400.151/9 JUL 1992//
REF/T/DOC/MSG/CMC WASHINGTON DC L LP/DTG 271453Z APR 12//
REF/U/DOC/MSG/CMC WASHINGTON DC L LP/DTG 251701Z SEP 12//
REF/V/MCO 5200.24D/19 MAR 2008//
REF/W/MARADMIN 435/14/29 AUG 2014//
REF/X/NAVMC 4000.5/9 JULY 2014//
NARR/ REF A IS THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2010. REF B IS THE USD(C) MEMORANDUM FOR IMPROVING FINANCIAL INFORMATION AND PROCESSES AND ACHIEVING AUDIT READINESS. REF C IS THE USD (ATL) MEMORANDUM FOR IMPROVING FINANCIAL INFORMATION AND ACHIEVING AUDIT READINESS. REF D IS THE SECDEF MEMO ON IMPROVING FINANCIAL INFORMATION AND ACHIEVING AUDIT READINESS. REF E IS THE OFFICE OF MANAGEMENT AND BUDGET CIRCULAR ON FINANCIAL REPORTING REQUIREMENTS. REF F IS THE MANAGEMENT'S RESPONSIBILITY FOR INTERNAL CONTROLS. REF G PROVIDES INSTRUCTIONS FOR IMPLEMENTING A CONSISTENT, DEPARTMENT OF DEFENSE (DOD) WIDE PLAN FOR ACHIEVING FINANCIAL IMPROVEMENT AND AUDIT READINESS (FIAR) OBJECTIVES. REF H IS THE FEDERAL ACCOUNTING STANDARDS ADVISORY BOARD (FASAB) HANDBOOK OF FEDERAL ACCOUNTING STANDARDS AND OTHER PRONOUNCEMENTS, AS AMENDED. SPECIFICALLY, THIS DOCUMENT IS THE DEVELOPED AND PUBLISHED GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) FOR FEDERAL FINANCIAL REPORTING ENTITIES. REF I IS THE FASAB STATEMENT OF FEDERAL FINANCIAL ACCOUNTING STANDARDS 3: ACCOUNTING FOR INVENTORY AND RELATED PROPERTY. REF J IS THE FASAB STATEMENT OF FEDERAL FINANCIAL ACCOUNTING STANDARDS 6: ACCOUNTING FOR PROPERTY, PLANT AND EQUIPMENT (PPE). REF K IS THE FASAB STATEMENT OF FEDERAL FINANCIAL ACCOUNTING STANDARDS 23: ELIMINATING THE CATEGORY NATIONAL DEFENSE PPE. REF L IS THE FASAB STATEMENT OF FEDERAL FINANCIAL ACCOUNTING STANDARDS 35: ESTIMATING THE HISTORICAL COST OF GENERAL PPE: AMENDING STATEMENTS OF FEDERAL FINANCIAL ACCOUNTING STANDARDS 6 AND 23. REF M IS THE DOD FINANCIAL MANAGEMENT REGULATIONS; SPECIFICALLY, IT PROVIDES DEFINITIONS REGARDING THE CLASSIFICATION OF EQUIPMENT, INVENTORY AND RELATED PROPERTIES AS SPECIFIED IN THE FASAB SFFAS GUIDANCE. REF N IS THE ACCOUNTABILITY AND MANAGEMENT OF DOD EQUIPMENT AND OTHER ACCOUNTABLE PROPERTY; SPECIFICALLY, IT PROVIDES DETAILED REQUIREMENTS FOR THE ACCOUNTABILITY OF MILITARY EQUIPMENT. ADDITIONALLY, IT PROVIDES POLICY AND GUIDANCE FOR ACCOUNTABLE PROPERTY OFFICERS, APPROVING OR APPOINTING AUTHORITIES. REF O IS THE DOD SUPPLY CHAIN MATERIEL MANAGEMENT REGULATION; SPECIFICALLY, IT PROVIDES DETAILED REQUIREMENTS FOR THE ACCOUNTABILITY OF PRINCIPAL ASSEMBLIES, COMPONENTS, SECONDARY ITEMS, AND CONSUMABLES. REF P IS THE MILITARY STANDARD TRANSACTION REPORTING AND ACCOUNTING PROCEDURES(MILSTRAP) MANUAL; SPECIFICALLY THE MANUAL PRESCRIBES UNIFORM PROCEDURES, DATA ELEMENTS AND CODES, FORMATS, FORMS, AND TIME STANDARDS FOR THE INTERCHANGE OF LOGISTICS INFORMATION RELATING TO INVENTORY CONTROL. REF Q IDENTIFIES THE MINIMUM STANDARDS AND CRITERIA FOR THE PHYSICAL SECURITY OF DOD SENSITIVE CONVENTIONAL ARMS, AMMUNITION, AND EXPLOSIVES (AAE). REF R IS THE CONSUMER-LEVEL SUPPLY POLICY MANUAL. REF S IS THE INTERMEDIATE-LEVEL SUPPLY MANAGEMENT POLICY MANUAL. THIS DIRECTIVE IS UNDER REVISION TO ENSURE COMPLIANCE WITH REFS A THROUGH R AND WILL BE INCORPORATED WITH THE PROPERTY IN THE POSSESSION OF THE MARINE CORPS MANUAL. REF T PROVIDES INFORMATION ON THE MARINE CORPS' EFFORTS PERTAINING TO THE FIAR EXISTENCE AND COMPLETENESS (EC) FOR MILITARY EQUIPMENT ACCOUNTABILITY AND AUDIT READINESS IN SUPPORT OF THE HQMC FIAR TASK. REF U IS THE JOINT INSTALLATIONS AND LOGISTICS (IL/LPC) AND PROGRAMS AND RESOURCES (PR/RFA) WARNING ORDER PROVIDING INFORMATION REGARDING MARINE CORPS WIDE ACTIONS NEEDED TO ADDRESS FIAR REQUIREMENTS FOR THE ACCOUNTABILITY OF MISSION CRITICAL ASSETS. REF V IS THE MARINE CORPS MANAGERS' INTERNAL CONTROL (MCMIC) PROGRAM. THIS ORDER REQUIRES COMMANDERS, HEADS OF STAFF AGENCIES AND MANAGERS AT ALL LEVELS OF THE MARINE CORPS TO DEVELOP AND MAINTAIN EFFECTIVE INTERNAL CONTROLS OVER THE FUNCTIONS, PROGRAMS AND OPERATIONS UNDER THEIR AUTHORITY. REF W IS THE AVAILABILITY OF NAVMC 4000.5, SUPPLY OFFICER'S INTERNAL CONTROLS HANDBOOK. THIS MARADMIN REQUIRES COMMANDERS TO CONDUCT SEMI-ANNUAL INTERNAL CONTROLS SELF-ASSESSMENTS. REF X IN THE SUPPLY OFFICER'S INTERNAL CONTROL HANDBOOK. THE NAVMC PROVIDES THESUPPLY OFFICERS/ACCOUNTABLE PROPERTY OFFICERS THE RESOURCES REQUIRED TO CONDUCT SEMI-ANNUAL INTERNAL CONTROL SELF-ASSESSMENTS.//
POC/S. PEREZ/CIV/DC IL HEAD, INTERNAL CONTROLS AND AUDIT READINESS TEAM (ICART)/LOC: WASHINGTON, DC/TEL: 571.256.7113/DSN: 260/EMAIL: SAMUEL.PEREZ1(AT)USMC.MIL//
POC/C. GROOMS/CTR/DC IL INTERNAL CONTROLS AND AUDIT READINESS TEAM (ICART)/LOC: WASHINGTON, DC/TEL: 571-256-7135/DSN: 260/EMAIL: CHRIS.GROOMS.CTR(AT)USMC.MIL//
GENTEXT /REMARKS/1. PURPOSE. THIS MESSAGE ESTABLISHES THE PREPARATIONS REQUIRED FOR THE DEPUTY COMMANDANT, INSTALLATIONS AND LOGISTICS (DC, IL) TO MEET ESTABLISHED INTERNAL CONTROLS AND AUDIT READINESS MILESTONES AND FINANCIAL REPORTING OBJECTIVES FOR ASSERTION BY FISCAL YEAR (FY) 17.
2. SITUATION. INTERNAL CONTROLS, AUDIT READINESS AND FINANCIAL IMPROVEMENT AND AUDIT READINESS (FIAR) PRIORITIES REQUIRE THAT REPORTING ENTITIES FOCUS ON IMPROVING CONTROLS, PROCESSES, AND SUPPORTING INFORMATION. THIS IS MOST OFTEN USED TO MANAGE THE DEPARTMENT, WHILE ALSO CONTINUING TO WORK TOWARD FINANCIAL, INFORMATION TECHNOLOGY AND SUPPORTING DOCUMENTATION IMPROVEMENTS THAT FACILITATE THE ACHIEVEMENT OF UNQUALIFIED AUDIT OPINIONS ON THEIR FINANCIAL STATEMENTS. THE REFERENCES REQUIRE IMPLEMENTATION OF INTERNAL CONTROLS TO ENSURE EFFECTIVE, EFFICIENT AND RELIABLE REPORTING AND COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS. THEY ALSO REQUIRE THAT DOD ENSURE THAT INTERNAL CONTROLS SUPPORT EFFECTIVE, EFFICIENT AND RELIABLE REPORTING AND COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS.
2.A. REFS A-D, G AND T ESTABLISHED A DEADLINE OF FY 14 FOR THE MARINE CORPS TO COMPLETE ALL AUDIT READINESS PREPARATIONS FOR MILITARY EQUIPMENT (ME), OPERATING MATERIALS AND SUPPLY (OMS) AND INVENTORY. THIS EFFORT WAS INITIATED WITH THE UNDERSTANDING THAT THE MARINE CORPS FY14 BALANCE SHEET MUST BE FULLY AUDITABLE. SINCE THE RELEASE OF THE REFERENCES, ADDITIONAL GUIDANCE REGARDING THE AUDIT REQUIREMENT HAS BEEN PROVIDED.
2.B. THE MARINE CORPS IS CURRENTLY UNDER AUDIT FOR THE FY14 STATEMENT OF BUDGETARY ACTIVITIES AND IS CONCURRENTLY PREPARING FOR THE AUDIT OF THE FY17 BALANCE SHEET. DC, IL HAS RECOMMENDED, AND DC, PROGRAMS AND RESOURCES (PR) HAS CONCURRED, THAT AN INCREMENTAL APPROACH TO INTERNAL CONTROLS AND AUDIT READINESS PREPARATIONS WOULD BEST SUPPORT THIS EFFORT.
3. MISSION. NO LATER THAN (NLT) 31 MARCH 2016, DC, IL WILL ASSERT TO DC, PR THE FULL BALANCE SHEET AUDIT READINESS OF ME AND OMS ASSETS. A PHASED APPROACH WITH INTERIM MILESTONES HAS BEEN IMPLEMENTED IN ORDER TO (IOT) SUPPORT THE SECRETARY OF THE NAVY'S (SECNAV) AND COMMANDANT OF THE MARINE CORPS' (CMC) AUDIT READINESS EFFORTS AND FINANCIAL REPORTING OBJECTIVES.
4. EXECUTION.
4.A. INTENT. COMMANDERS AND STAFFS AT ALL LEVELS WILL ACTIVELY AND PERSONALLY SUPPORT EFFORTS TO ACHIEVE AUDIT READINESS ASSURANCE. PREPARATION FOR AN EXTERNAL AUDIT REQUIRES DISCIPLINED AND SUSTAINABLE PRACTICES BY PLACING ALL PROCESSES AND CONTROLS, NOT JUST FINANCIAL, UNDER CLOSE SCRUTINY. THESE EFFORTS WILL BE COORDINATED AND EXECUTED TO ENSURE THE MARINE CORPS CAN REASONABLY ACCOUNT FOR ALL MISSION CRITICAL ASSETS. DUE TO THE COMPLEXITY OF THE ACCOUNTS INVOLVED IN ME, OMS, AND INVENTORY, CONTINUED AND COORDINATED EFFORTS MUST BE CONDUCTED TO MEET DC, IL'S INTERNAL CONTROLS, AUDIT READINESS AND FINANCIAL REPORTING OBJECTIVES. BY 31 MARCH 2016, ALL ME, OMS AND INVENTORY ASSETS ON THE MARINE CORPS GENERAL LEDGER WILL BE CERTIFIED UTILIZING AN INCREMENTAL APPROACH WITH INTERIM AND REINFORCING OBJECTIVES FOR THE FINANCIAL STATEMENT ASSERTIONS IN REF (G).
4.A.1. CONTINUED SUPPORT OF DC, IL'S INTERNAL CONTROLS, AUDIT READINESS AND FIAR COMPLIANCE STRATEGY FOR THE MILSTRIP SCHEDULE OF BUDGETARY ACTIVITIES (SBA) EXAMINATION, PROPERTY CONTROL TESTING FOR MISSION CRITICAL ASSETS (ME OMS AND INVENTORY) AND FINANCIAL REPORTING REQUIREMENTS WILL NOT CONCLUDE IN FY16.THE FOCUS WILL BE TO ACHIEVE A CONSTANT STATE OF ACCOUNTABILITY WHICH WILL ALLOW THE MARINE CORPS TO BALANCE PROPERTY AND FINANCIAL RESOURCES TO THE GENERAL LEDGER AT ALL TIMES.
4.A.2. IDENTIFYING INTERNAL CONTROLS, AUDIT READINESS AND FIAR ROLES AND RESPONSIBILITIES WILL ENSURE EFFECTIVE EXECUTION OF OBTAINING DC, IL'S AUDIT READINESS AND FINANCIAL REPORTING OBJECTIVE BY:
4.A.2.A. ENSURING THE TIMELY EXECUTION OF AUDIT READINESS REQUIREMENTS AND MILESTONES.
4.A.2.B. EMPLOYING INTERNAL CONTROLS AND AUDIT READINESS TEAM (ICART) AND THE FIELD SUPPLY AND MAINTENANCE ANALYSIS OFFICE (FSMAO) TO ENSURE THAT INTERNAL CONTROLS ARE IN PLACE FOR MILSTRIP BUDGET EXECUTION, ME, OMS, AND INVENTORY CONTROL, ACCOUNTABILITY AND REPORTING.
4.A.2.C. ENABLING VALIDATION PROCESS CONTROL TESTING AND CORRECTIVE ACTION PLAN EXECUTION.
4.A.2.D. COMMANDERS AND STAFFS AT ALL LEVELS CONDUCTING INTERNAL CONTROLS SELF ASSESSMENTS AS REQUIRED IN REFS W AND X.
4.B. CONCEPT OF OPERATIONS.
4.B.1. DC, PR HAS THE AUTHORITY AND RESPONSIBILITY FOR OVERSIGHT OF THE MARINE CORPS' FIAR EFFORTS. AS SUCH, DC, PR WILL ASSERT AUDIT READINESS ON BEHALF OF THE MARINE CORPS FOR THE FULL FINANCIAL STATEMENT NLT 30 SEPTEMBER 2016.
4.B.2. ASSISTANT DEPUTY COMMANDANT (ADC), IL (LP) SERVES AS THE MARINE CORPS LEAD FOR THE FIAR MILSTRIP SBA, AND PROPERTY CONTROL ASSESSMENTS FOR MISSION CRITICAL ASSETS [ME AND OMS (INCLUDING AMMUNITION)].
4.B.3. ADC,IL (LP) WILL LEAD EFFORTS FOR ME, OMS AND INVENTORY ASSERTION BY PROVIDING GOVERNANCE AND CENTRALIZED MANAGEMENT OVERSIGHT OF DC, IL'S EQUITIES FOR INTERNAL CONTROLS AND AUDIT READINESS AS REQUIRED IN REFS A-X. ICART IS THE DRIVING FORCE IN TRANSFORMING THE MARINE CORPS TO MEET THE FINANCIAL AND MANAGERIAL REQUIREMENTS OF THE DIGITAL AGE, PRODUCING TIMELY, ACCURATE, AND RELEVANT BUSINESS INFORMATION THAT IS CONSISTENTLY AUDITABLE. ICART AND THE THREE FSMAO TEAMS, ARE THE AUDIT READINESS AND INTERNAL CONTROLS IMPLEMENTATION AND ENFORCEMENT MECHANISM OF THE ENTREPRISE GROUND EQUIPMENT MANAGER (EGEM) IN ORDER TO MEET DC, IL'S ASSERTION TIMELINES AND FINANCIAL REPORTING OBJECTIVES.
4.B.4. COMMANDERS AND THEIR STAFFS WILL CONDUCT INTERNAL CONTROLS AND AUDIT READINESS ACTIVITIES THROUGH SELF-ASSESSMENT EFFORTS, SCHEDULED ICART AND FSMAO ANALYSES AND OTHER SUPPLY MANAGEMENT EXAMINATIONS AS REQUIRED.
4.C. TASKS.
4.C.1. ADC, IL (LP) WILL:
4.C.1.A. ENSURE ACCURATE FINANCIAL REPORTING AND EFFECTIVE RESOURCE ALLOCATION.
4.C.1.B. INITIATE A COMPREHENSIVE REVIEW, EXAMINATION AND UPDATE OF POLICIES RELATED TO THE ACCOUNTABILITY OF MISSION CRITICAL ASSETS AND MILSTRIP REPORTING PROCEDURES.
4.C.1.C. ASSESS THE SUFFICIENCY AND RELIABILITY OF INTERNAL CONTROLS, SOURCE DOCUMENTATION, DATA RECONCILIATION AND DATA VALIDITY.
4.C.1.D. LIAISON WITH DC, PR, DEPARTMENT OF DEFENSE INSPECTOR GENERAL (DODIG), NAVAL AUDIT SERVICE (NAS) AND OTHER AUDIT AGENCIES AS REQUIRED IOT CENTRALLY MANAGE ALL AUDIT MATTERS RELATED TO DC, IL'S AUDIT READINESS AND FINANCIAL REPORTING EQUITIES.
4.C.2. COMMANDERS WILL CONDUCT INTERNAL CONTROLS AND AUDIT READINESS PREPARATIONS IN ACCORDANCE WITH THE REQUIREMENTS OUTLINED IN REFS W AND X.
5. ADMINISTRATION AND LOGISTICS. THIS MESSAGE IS APPLICABLE TO ALL MARINE CORPS COMMANDS, UNITS AND ACTIVITIES.
6. COMMAND AND SIGNAL
6.A. DIRECT ALL QUESTIONS CONCERNING THIS MESSAGE TO THE POCS LISTED ABOVE.
6.B. RELEASE AUTHORIZED BY C. C. CRENSHAW, BGEN, ASSISTANT DEPUTY COMMANDANT, INSTALLATIONS AND LOGISTICS (LP).//