Slide1: Office of the Deputy Inspector General for Auditing AUDITING CAREER OPPORTUNITIES OFFICE OF THE INSPECTOR GENERAL OF THE DEPARTMENT OF DEFENSE November 2004 Richard B. Vasquez (703) 604-9174 rvasquez@dodig.osd.mil


DoD SIZE: DoD SIZE Largest enterprise in the world Budget authority FY 2005 - $524B, FY2004 - $403B (est.) Exceeds cost of running rest of GOV 10 times as great as any other nation $12B short over the last year paying for basics of warfighting in Iraq: troops, equipment maintenance, spare parts, and training Force structure Active military (1,431,964) DoD civilians (669,745)


DoD TOP PRIORITIES: DoD TOP PRIORITIES Successfully Pursue the GWOT Strengthen Combined/Joint Warfighting Capabilities Transform the Joint Force Optimize Intelligence Capabilities Counter Proliferation of WMD


DoD TOP PRIORITIES: DoD TOP PRIORITIES Improve Force Manning Develop New Concepts of Global Engagement Sustain Homeland Security Streamline DoD Processes Reorganize DoD and USG to Deal with Pre-War Opportunities and Post-War Responsibilities


Slide5: DEPARTMENT OF DEFENSE Secretary of Defense Chairman Joint Chiefs of Staff Inspector General Under Secretaries and Asst. Secretaries Military Departments Army Navy Air Force Defense Agencies IG reports to Secretary of Defense


Slide6: SELECTION OF INSPECTORS GENERAL Nominated by the President The Honorable Joseph E. Schmitz Inspector General Department of Defense Confirmed by the Senate


MISSION: MISSION Promote effective, efficient, and economical operations Prevent and detect fraud, waste, and abuse Provide policy for, and conduct, audits and investigations Receive and investigate complaints Keep the Secretary of Defense and Congress fully informed


Slide8: Inspector General OFFICE OF THE INSPECTOR GENERAL OF THE DEPARTMENT OF DEFENSE Deputy Inspector General for Auditing Deputy Inspector General for Inspections/Policy Deputy Inspector General for Investigations Deputy Inspector General for Intelligence


Slide9: OFFICE OF INSPECTOR GENERAL Allocation of Personnel Total strength as of September 2004: 1,271 personnel.


Slide10: ODIG-AUD ORGANIZATIONAL CHART


Slide11: LOCATION OF AUDIT OFFICES


AUDITING STANDARDS: AUDITING STANDARDS Apply Government Auditing Standards (commonly called the Yellow Book) developed by U.S. Government Accountability Office Government Auditing Standards incorporate applicable standards of the American Institute of Certified Public Accountants Key standards require independence, competent staff, adequate documentation of conclusions, and appropriate staffing and reporting of audit results


Slide13: PERFORMANCE FINANCIAL TYPES OF AUDITS


FINANCIAL AUDITS: FINANCIAL AUDITS Financial Statement Audits provide reasonable assurance about whether the financial statements present fairly: The financial position, Results of operations, and Cash flows in conformity with generally accepted accounting principles


FINANCIAL AUDITS: FINANCIAL AUDITS Financial related audits address: Problem disbursements Contractor payments General and application controls over financial systems


AUTOMATED FINANCIAL SYSTEMS GROUP: AUTOMATED FINANCIAL SYSTEMS GROUP In FY 2003, Defense finance and accounting systems: Disbursed over $416 billion in payments to people and businesses Processed over 12 million invoices Processed 121 million accounting transactions Managed over $197 billion in retirement trust funds Accounted for $13 billion in foreign military sales Made 6.8 million travel payments


AUTOMATED FINANCIAL SYSTEMS GROUP: AUTOMATED FINANCIAL SYSTEMS GROUP Systems audits address: Development and acquisition of finance and accounting systems General and application controls systems System’s ability to produce auditable financial statements


PERFORMANCE AUDITS: PERFORMANCE AUDITS Independent assessment of the performance of a government organization, program, activity or function Economy and efficiency whether an entity is acquiring, protecting, and using its resources in the most productive manner to achieve program objectives


PERFORMANCE AUDITS: PERFORMANCE AUDITS Program audits effectiveness of a program and measure the extent to which a program is achieving its goals and objectives Audit provides information to improve public accountability and facilitate DoD management decision making and corrective actions


Slide20: PERFORMANCE AUDITS DoD Audit Issue Areas Acquisition Program Base Realignment and Closure Construction and Installation Support Environment Finance and Accounting


Slide21: Health Care and Human Capital Information Technology Resources Intelligence Logistics Contracting Oversight PERFORMANCE AUDITS DoD Audit Issue Areas


Slide22: AUDITORS ADD VALUE BY HELPING TO CONTROL RISK Test controls in existing processes & systems Recommend corrections for control weaknesses Provide up-front advice on controls for new processes and systems in development Test validity of management risk assessments and accuracy of data/reports used by managers


Slide23: AUDITORS ADD VALUE BY PROMOTING CHANGE AND REFORM Identify opportunities for improvement Verify status and results of reforms Identify barriers to reform Help fine tune reforms to maximize benefits and control risks


AUDIT RELATED ACTIVITIES: AUDIT RELATED ACTIVITIES Auditors may perform services other than audits: Management consulting Participate in problem solving DoD management advisory teams Assist investigators and federal prosecutors


HOW WE WORK: HOW WE WORK Project Team Project Manager Team Leaders: 2 to 3 Staff Auditors: 2 to 9


HOW WE WORK: HOW WE WORK Supervision Junior staff auditors work under day-to-day supervision of, and normally travel with, a team leader or senior auditor Project Managers are official supervisors, who work closely with all members of the team, prepare performance evaluations, and are responsible for career development of team members


HOW WE WORK: HOW WE WORK Travel Staff auditors may expect up to 50% travel Usually 2 to 3 auditors travel together. Junior auditors are not expected to travel alone. Travel expenses are paid by the Government. Travel is typically from 1 to 3 weeks at one time. Policy is to return home at least every 3 weeks (except on occasional overseas trips). Amount of travel depends on audit assignment (i.e., number and location of audit activities, time sensitivity of issues being reviewed, etc.).


AUDITOR TRAVEL: AUDITOR TRAVEL From Most Offices Frequently throughout the United States Occasionally, audits in Europe (primarily Germany) Occasionally, audits in Pacific (primarily Hawaii, Japan, & Korea)


FREQUENT TRAVEL LOCATIONS: FREQUENT TRAVEL LOCATIONS Eglin AFB, FL San Diego, CA San Antonio, TX Tampa, FL


FREQUENT TRAVEL LOCATIONS: FREQUENT TRAVEL LOCATIONS Dayton, OH Omaha, NE Fort Monmouth, NJ Mechanicsburg, PA But not all in the Sun Belt


Slide31: CONTINUING EDUCATION REQUIREMENTS Minimum of 80 hours of training every 2 years Junior Auditor Training Course (for all new auditors) - 2 weeks (at IG Training Institute, in Rosslyn, VA) Intermediate and Advanced Auditor Training Courses


TRAINING: TRAINING IS software Report writing CPA/CIA coaching Defense Systems Management College Specialized subjects (e.g., systems acquisition, financial statements) OJT


Slide33: FEDERAL BENEFITS Salary: Commensurate with education and experience Advancement: Based on performance and demonstrated potential Training: Heavy emphasis on enhancing employee skills Vacation: Earn 13 days per year (Increases to 20 days after 3 years and 26 days after 15 years)


Slide34: Sick Leave -- earn 13 days per year Holidays -- 10 days per year Health/Life insurance Retirement/Thrift Savings Plan Equal Employment Opportunity Flexible Work Schedule Earn credit hours for overtime worked Transit subsidy for employees using mass transit or vanpools. FEDERAL BENEFITS


Slide35: AUDITOR INTERN PROGRAM Major duties: Work as a member of an audit team Research applicable laws, regulations Gather data and prepare analyses Prepare working papers Interact with clients Salary: Approximately $10.00 per hour Travel may be required Full-time employment opportunity


Global Defense Posture: Global Defense Posture Upcoming Changes in Force Structure Pre-August 2004 Main Locations and Troop Strengths Europe – About 100,000 Asia – Over 40,000 Southwest Asia – 10,000+ (?) Post-August 2004 Troop drawdowns announced for Europe and Asia


Global Defense Posture (cont’d): Global Defense Posture (cont’d) Freedom of Action (catchphrase) FROM - large concentrations of troops at permanent overseas bases TO – rotating troops for short tours at smaller outposts Rolling process over 10 years


Global Defense Posture (cont’d): Global Defense Posture (cont’d) Reduce U.S. installations abroad From 850 bases to 550 (35%) Withdrawal of 70,000 U.S. troops and 100,000 family members from bases in Germany and South Korea Europe – From 560 bases to 360 Asia – 12,500 U.S. troops off Korean peninsula CBO study - Initial costs of $7B, eventual annual savings of $1B


Global Defense Posture (cont’d): Global Defense Posture (cont’d) Foresees 3 types of oversees arrangements: Main operating bases Permanently stationed forces & family support structures Forward operating sites Limited number of military personnel & possibly stored equipment Rotational rather than permanently stationed forces Cooperative Security locations Little or no U.S. presence Maintained by contractor or host nation


Audit Impact of Force Structure Changes: Audit Impact of Force Structure Changes Base locations will change Operational concepts will change Support concepts will change


Examples of Prior Audit Coverage: Examples of Prior Audit Coverage HNS SWA CBD IPE IDP/CM AT/FP Y2K Don’t Ask, Don’t Tell


Slide42: OFFICE OF THE INSPECTOR GENERAL OF THE DEPARTMENT OF DEFENSE   http://www.dodig.osd.mil For more information visit us on the web at: 400 Army Navy Drive


Slide43: OFFICE OF THE INSPECTOR GENERAL OF THE DEPARTMENT OF DEFENSE