1. DLA Eliminations Bruce Stahmer, CPA Chief, Defense Agencies WCF BE/AFS Reporting Branch Defense Finance and Accounting Service November 17, 2010

2. 11/13/2015 Integrity - Service - Innovation 2 Eliminations Eliminations remove the effect of transactions between entities of the Federal government. Are required by GAAP to ensure that financial statement data is not inflated by self-dealing transactions. Identified as a major impediment in both DoD and DLA audit. Without accurate transaction-level trading partner data, clean audit opinion is not possible. Seller-side eliminations reflect activity where we are the seller of goods or services. Buyer-side eliminations reflect activity where we are the buyer of goods or services.

3. 11/13/2015 Integrity - Service - Innovation 3 DLA Elimination Status Legacy accounting systems did not produce reliable, transaction level data for eliminations. Most legacy accounting systems are being transitioned into Enterprise Business Management (EBS) system. After this fiscal year, only remaining legacy accounting system affecting eliminations is BSM-E (Fuels Accounting System).  BSM-E produces seller-side data based on General Ledger information.  Some allocation of data where GL does not produce information.  Most sales can be traced back to underlying documents.  Energy convergence (Energy into EBS) scheduled for FY2014.

4. 11/13/2015 Integrity - Service - Innovation 4 EBS Eliminations – Current Status EBS is designed to produce transaction level eliminations data for both Interfund and other transactions. Seller-side does currently produce a report of eliminations  Over 2 million lines of transaction data per month for sales.  All Interfund transactions automatically match to trading partner.  Most Non-Interfund transactions must be matched in off-line database.  Some issues are being worked through remedy tickets. Buyer-side has serious issues  A/P and Inventory purchases data is questionable.  Expense report does not work.  Some data is received by data call. Transfer information is obtained by data-call.

5. 11/13/2015 Integrity - Service - Innovation 5 DLA Eliminations – Moving Forward As remedy tickets are worked in EBS, reports should begin to produce more accurate data. As reports are fixed in EBS, DLA and DFAS will work with trading partners to improve accuracy. Energy convergence will move Fuels accounting into EBS environment, allowing transaction-level eliminations.

6. 11/13/2015 Integrity - Service - Innovation 6 Questions? Point of contact: Bruce Stahmer, CPA 614-693-0893 bruce.stahmer@dfas.mil

7. BACK UP 11/13/2015 Integrity - Service - Innovation 7

8. 11/13/2015 Integrity - Service - Innovation 8 Transactions between buyers and sellers of same agency Transactions between buyers and sellers of DoD agencies Transactions between agencies and private sector DoD AgenciesArmyNavyAFFed Agencies ArmyNavyAF Fed AgenciesDoD Federal Government Federal Government financial statement level DoD financial statement level Federal to Federal agency eliminations Department financial statement level DoD to DoD agency eliminations Agency financial statement level Within agency eliminations Transactions between DoD and other Fed agencies Fed Agencies DoD Agencies

9. 11/13/2015 Integrity - Service - Innovation 9 Sample EBS Eliminations Report – Summary Section

10. 11/13/2015 Integrity - Service - Innovation 10 Sample EBS Eliminations Report – Detail Section