1 American Society of Military Comptrollers Theodore J. Williams Air Force Auditor General 3 June 2010 Auditing: It’s Not Just About the Dollars

I n t e g r i t y - S e r v i c e - E x c e l l e n c e Overview 2 Audit Guidance Internal Controls Types of Audits Financial Performance (Operational) Performance Audit Examples

I n t e g r i t y - S e r v i c e - E x c e l l e n c e Audit Guidance 3 Government Auditing Standards (The Yellow Book) Generally Accepted Government Auditing Standards (GAGAS) DoD Instruction , Audit Policies

I n t e g r i t y - S e r v i c e - E x c e l l e n c e Reasonable assurance objectives are being achieved: Effectiveness and efficiency of operations Reliability of financial reporting Compliance with applicable laws and regulations Internal Control Structure (5 Components) Control Environment Risk Assessment Control Activities Information and Communication Monitoring Internal Controls 4

I n t e g r i t y - S e r v i c e - E x c e l l e n c e Financial vs Performance (Operational) Internal Controls Review PerformancePerformance Program Efficiency & Effectiveness Condition, Cause, & Effect Findings & Recommendations Objectives (Risk) TestsReportAudit FinancialFinancial Numbers Properly Stated/Presented Completeness, Accuracy, etc. Opinion on Financial Presentation Types of Audits 5

I n t e g r i t y - S e r v i c e - E x c e l l e n c e Financial Audits Objective (Risk): Assess whether financial information is: Stated in accordance with Generally Accepted Accounting Principles (GAAP) Reliable Benefits: Primarily nonmonetary; mitigate risk Data accuracy/completeness Compliance with laws and regulations 6 If not, Why? (Internal Control Process) If not, Why? (Internal Control Process)

I n t e g r i t y - S e r v i c e - E x c e l l e n c e Performance Audits Objective (Risk): Assess whether the entity: Acquires/uses resources effectively/efficiently Programs are achieving intended results Complies with applicable laws and regulations Benefits: Monetary and nonmonetary; mitigate risk Streamline processes Cost avoidances Operational readiness Personnel safety 7 If not, Why? (Internal Control Process) If not, Why? (Internal Control Process)

I n t e g r i t y - S e r v i c e - E x c e l l e n c e Performance Audits Remotely Piloted Aircraft 88 Objective. Evaluate whether Air Force’s training program produced number of RPA pilots necessary to meet contingency requirements Effect. Manned aircraft pilots temporarily assigned to meet RPA requirements…training plan not sustainable or efficient…disjointed career paths for both Recommendation. Create specific RPA career path to improve Air Force’s ability to provide this critical weapon system Air Force currently implementing RPA-specific career path

I n t e g r i t y - S e r v i c e - E x c e l l e n c e Performance Audits Hurricane Disaster Planning 99 Objective. Evaluate whether Air Force’s Emergency Management program included adequate protection and preparation measures to respond to disasters Effect. Gaps and inconsistencies in processes to protect installation assets, ensure personnel security and allow necessary communication operability Recommendation. Update hurricane planning checklists & develop standard operating procedures for communication frequency management Audit provided installation commanders complete readiness picture

I n t e g r i t y - S e r v i c e - E x c e l l e n c e Performance Audits AOR Aerial Port Operations 1010 Objective. Evaluate whether U.S. Air Forces Central Area of Responsibility (AOR) personnel efficiently used airlift capacity to manage wartime contingency cargo and passenger movement Effect. 40% of cargo missions flew at less than 50% capacity, 20% flew empty…inadequate metrics/processes for identifying and minimizing unused capacity Recommendation. Implement aerial port process improvements for better coordination between airlift planners and management of contracted commercial airlift Audit helped identify and develop controls to increase airlift efficiency

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