Printer Friendly
The Free Library
22,728,043 articles and books

Auditors don't inspect and inspectors don't audit: comparison of the Naval Audit Service and Naval Inspector General functions.



With an annual budget of over $120 billion and an active workforce of more than 700,000 military and civilian personnel spread around the world, the Department of the Navy needs a system of oversight that addresses the complexity and magnitude of the organization. This oversight is provided through the work of the Naval Audit Service and the Office of the Naval Inspector General.

Though their missions differ, the two organizations share similar goals. Both work to assure that Department of the Navy resources are used efficiently and effectively and that DoN actions comply with laws and regulations. Both organizations support the DoN's mission and the people who carry it out. Both are oversight organizations, but each has unique roles and provides different--but complementary--services to Department leadership. However, because their goals are similar, the differences between management approaches, methodologies, and outputs of the two organizations sometimes become blurred, even in the eyes of senior DoN officials.

[ILLUSTRATION OMITTED]

What's the Same and What's Different

So what are the similarities and differences? The unique role of each organization is established by public law. Title 10 U.S. Code A multivolume publication of the text of statutes enacted by Congress.

Until 1926, the positive law for federal legislation was published in one volume of the Revised Statutes of 1875, and then in each sub-sequent volume of the statutes at large.
, section 5014, requires that the Office of the Secretary of the Navy have sole responsibility for auditing within its own office, the Office of the Chief of Naval Operations chief of naval operations
n. pl. chiefs of naval operations Abbr. CNO
The ranking officer of the U.S. Navy, responsible to the secretary of the Navy and to the President.
, and the Headquarters, Marine Corps. The Naval Audit Service is entrusted by the secretary of the Navy to provide independent, professional internal audit services that assist Navy leadership in improving efficiency, accountability, and program effectiveness. Title 10 specifies that the head of the office established by the secretary to conduct the auditing function (the auditor general Auditor general may refer to,
  • Comptroller and Auditor-General
  • Auditor General for Scotland
  • Auditor General of Canada
  • Auditor General of Pakistan
 of the Navy) have at least five years of professional experience in accounting or auditing. The auditor general is considered to be a career-reserved position as defined in section 3132 (a)(8) of Title 5, U.S. Code, and the law prohibits members of the armed forces on active duty from holding any supervisory positions in auditing.

The Naval Audit Service accomplishes its mission by performing internal audits of Department of the Navy organizations, programs, activities, systems, functions, and funds. These audits evaluate whether:

* Navy information is reliable

* Resources have been safeguarded

* Funds have been expended ex·pend  
tr.v. ex·pend·ed, ex·pend·ing, ex·pends
1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend.

2.
 consistent with laws, regulations, and policies

* Resources have been managed economically and efficiently

* Desired program performance has been achieved.

The Office of the Naval Inspector General is also cited in the same section of Title 10 as a unique function within the Office of the Secretary of the Navy charged with:

* Inquiring inquiring,
v to draw information from a client—whether by verbal questioning or physical examination—to assess the person's state of health.
 and reporting on matters affecting military efficiency or discipline

* Proposing a program of inspections

* Making inspections, investigations, and reports as directed by the secretary of the Navy or the chief of Naval Operations

* Cooperating fully with the inspector general of the Department of Defense.

The Naval Audit Service

The Naval Audit Service is a professional audit organization. By law, the auditor general is a career civil servant who reports directly to the under secretary of the Navy in order to establish and maintain impartiality. The Naval Audit Service's main products are the services represented by its audit and other reports. Its work is held to professional standards equivalent to those required of private-sector auditing firms. Government auditing standards are issued by the comptroller general of the United States The Comptroller General of the United States is the director of the Government Accountability Office (GAO, formerly known as the General Accounting Office), a legislative branch agency founded by Congress in 1921 to ensure the accountability of the federal government.  in what is commonly referred to as the "Yellow Book." The standards impose a quality discipline on audit products to ensure that results are accurately reported and that audits are conducted in such a manner that their conclusions can be duplicated by an impartial third party following professional accounting standards. The audit culture is driven by the desire to provide DoN leadership with the most reliable information, including disclosing information or situations of which leadership may not have been aware so that informed decisions can be made.

There are 350 professional staff in the Naval Audit Service, all of whom hold recognized professional qualifications for education and experience, including a bachelor's degree (or higher) and accounting and business training. Many hold one or more external professional certifications Professional certification, trade certification, or professional designation, often called simply certification or qualification, is a designation earned by a person to assure that he/she is qualified to perform a job or task.  and DoD auditor certifications. All auditors must maintain the currency of their skills through required annual continuing professional education.

Audits

An average audit is planned to take approximately nine months with a staff of four or five auditors and consists of an intense examination of processes, policies, and outcomes. Audit reports document the services provided by the Naval Audit Service. Each report summarizes a situation that requires leadership's attention, explains the root cause(s) of the situation, and recommends potential solutions. The report also discusses the criteria against which the situation was examined. The service provided by the auditors is the sum of the professional rigor rigor /rig·or/ (rig´er) [L.] chill; rigidity.

rigor mor´tis  the stiffening of a dead body accompanying depletion of adenosine triphosphate in the muscle fibers.
 associated with the design of the audit approach; the collection, organization, and analysis of data; and the impartial reporting of significant information and formulation of recommendations to the level of management that is best able to take effective action.

Auditors' primary approaches to obtain supporting evidence for audit results, conclusions, and recommended solutions are to test documentary files and records, analyze management and program data, and make direct observations. The report is supported by work papers Noun 1. work papers - a legal document giving information required for employment of certain people in certain countries
work permit, working papers
 that describe the approach, contain the information and its sources, document the data collected, and describe the analyses performed in such a manner that a third party could verify the information and would likely arrive at the same conclusions based on the evidence.

Based on their work, auditors may certify or attest To solemnly declare verbally or in writing that a particular document or testimony about an event is a true and accurate representation of the facts; to bear witness to. To formally certify by a signature that the signer has been present at the execution of a particular writing so as  to the accuracy of data or to the assertions of management. The work and opinion of auditors, within the bounds of their profession and, when appropriate, in court proceedings, carry recognized legal weight.

The Office of the Naval Inspector General

Title 10, USC An abbreviation for U.S. Code. , establishes the Naval inspector general as "the senior investigative official in the Department of the Navy (DON) and the principal advisor to the Secretary, Chief of Naval Operations (CNO CNO
abbr.
chief of naval operations
), and Commandant of the Marine Corps The Commandant of the United States Marine Corps is the highest ranking officer of the United States Marine Corps and a member of the Joint Chiefs of Staff, reporting to the Secretary of the Navy but not to the Chief of Naval Operations.  (CMC (Common Messaging Calls) A programming interface specified by the XAPIA as the standard messaging API for X.400 and other messaging systems. CMC is intended to provide a common API for applications that want to become mail enabled.

1.
) on all matters concerning inspections and audit followup with particular emphasis on those matters relating to relating to relate prepconcernant

relating to relate prepbezüglich +gen, mit Bezug auf +acc 
 DON integrity, ethics, efficiency, discipline, or readiness, afloat or ashore." This flag officer is assigned by the secretary of the Navy to inquire and report on matters affecting military efficiency or discipline, propose programs of inspection, and conduct inspections and investigations as directed by the secretary or the chief of Naval Operations.

The functions of the Office of the Naval Inspector General include investigations that result from hundreds of hotline complaints and congressional inquiries. Inspections are a combination of area visits that cut horizontally across all commands in a geographic area, command assessments on Echelon II commands, and special focus studies that delve into specific areas of interest/concern to Department leadership. Oversight responsibilities include review of Judge Advocate General judge advocate general (J.A.G.) n. a military officer who advises the government on courts-martial and administers the conduct of courts-martial. The officers who are judge advocates and counsel assigned to the accused come from the office of the judge advocate  Manual investigations as well as intelligence and special program oversight reviews. Additionally, the Naval Inspector General Office is tasked with conducting audit evaluation and follow-up, and other support efforts. The Office of the Naval Inspector General is staffed by 29 military and 49 civilian employees.

The Naval Inspector General Inspections Division is the lead directorate for the assessment and inspections processes, and is composed of fleet-experienced officers from each warfare area--aviation, submarines, surface warfare That portion of maritime warfare in which operations are conducted to destroy or neutralize enemy naval surface forces and merchant vessels. Also called SUW. , aviation maintenance, information technology, and manpower--bringing an operational perspective to the assessment process that requires minimal time to ramp up Ramp Up

To increase a company's operations in anticipation of increased demand.

Notes:
A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product.
See also: Demand, Economies of Scale
 on issues before an inspection.

Inspections

Naval Inspector General Command Inspections are conducted on 31 Echelon II commands (e.g., commander, U.S. Pacific Fleet and commander, Naval Air Systems Command The Naval Air Systems Command, or NAVAIR, is the part of the United States Navy which provides materiel support for naval aircraft and airborne weapon systems, such as guided missiles. NAVAIR was established in 1966 as the successor to the Navy's Bureau of Naval Weapons (BuWeps). ) on a periodic cycle with a goal of inspecting all Echelon II commands every four years.

Command inspections begin with a command-generated self-assessment. The self-assessment is a compilation of the command's mission (all processes), how process effectiveness is measured (metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. ), and a discussion of specific risks/material weaknesses. The Naval Inspector General is currently implementing an electronic self-assessment tool for commands to tailor to their mission/processes. Once the self-assessment is reviewed, the Naval Inspector General team will conduct an extensive on-site visit (as necessary) to further assess the command's processes/risks.

Area visits generally cover a specific geographical area and focus on evaluating specific functions within the Department of the Navy, cutting across claimancy, fleet, and command lines to identify systemic DoN-wide issues and evaluate selected risks to the Department. These assessments look at a variety of areas including mission readiness; anti-terrorism/force protection; quality of life/service; morale, welfare, and recreation; facilities; housing; environmental, safety/occupational health, medical/dental; safety; Commissary/Navy Exchange; and command climate. A typical visit will entail a wide-ranging command climate survey, focus groups, and leadership interviews. Ultimately, the team will assess the major issues and risks present across the area.

Special focus studies are done at the request of the chief of Naval Operations/vice chief of Naval Operations on an emergent emergent /emer·gent/ (e-mer´jent)
1. coming out from a cavity or other part.

2. pertaining to an emergency.


emergent

1. coming out from a cavity or other part.

2. coming on suddenly.
 basis. They are an in-depth review of a particular issue or concern. The Office of the Naval Inspector General will typically conduct two or three special studies per year. Recent studies include the Navy-wide drug abuse and prevention, and sexual assault studies. These studies are typically conducted by three- to five-person teams and often take from three to five months to complete.

Naval Inspector General methodology for command inspections and area visits is to gather information based on personal interviews, surveys, focus groups, and command self-assessments; and to assess the information based on staff knowledge of the Navy and personal experience. By this method, the Inspector General develops issues for reporting and correction. It is important to recognize that there is no set "standard" assessment or area visit. The inspections and area visits are broad and gather information in the context of the command or area. The process relies on a comparison of existing policy/data and testimonial evidence (although not exclusively so) and often upon the integrity and forthrightness forth·right  
adj.
1. Direct and without evasion; straightforward: a forthright appraisal; forthright criticism.

2. Archaic Proceeding straight ahead.

adv.
1.
 of Naval officials and personnel. It is an expedient ex·pe·di·ent  
adj.
1. Appropriate to a purpose.

2.
a. Serving to promote one's interest: was merciful only when mercy was expedient.

b.
 and relatively fast method for identifying systemic Navy problems and invariably in·var·i·a·ble  
adj.
Not changing or subject to change; constant.



in·vari·a·bil
 identifies issues that turn out to be significant.

The Inspections Division at the Office of the Naval Inspector General has a staff of 10 Naval officers NAVAL OFFICER. The name of an officer of the United States, whose duties are prescribed by various acts of congress.
     2. Naval officers are appointed for the term of four years, but are removable from office at pleasure. Act of May 15, 1820, Sec. 1, 3 Story, L.
 with broad fleet experience. Their knowledge and military experience is at the core of an inspection or area visit. Core staff are augmented with additional personnel from other divisions or commands, so an inspection or assessment team may eventually involve 20 to 30 people who may spend as long as two weeks on-site.

Special studies are different in that detailed fact gathering and analysis may be required to determine the scope and root causes associated with issues. Naval Inspector General special studies normally focus on examining specific issues and providing senior Department of the Navy leadership with findings and recommendations from an operational perspective. The investigative nature of Naval Inspector General reports calls for a wide latitude in the method of conduct for each study.

In conclusion, the Office of the Naval Inspector General is the "conscience of the Navy," making a difference and adding value at all levels through assistance, advice, and advocacy.

Different Organizations, Common Goals

Auditors interview, but they use documentary data as the primary source of information on narrowly focused reportable issues. Audits verify and test documents, files, and records for accuracy. Auditors analyze data and make direct observations. Their reports are backed up by independently verifiable documentary evidence A type of written proof that is offered at a trial to establish the existence or nonexistence of a fact that is in dispute.

Letters, contracts, deeds, licenses, certificates, tickets, or other writings are documentary evidence.
 and analyses. Audit reports contain enough detail to identify and address root causes and to allow management to make informed decisions.

Inspectors also interview and look at data, but the primary source of their reports is human input on an all-inclusive range of issues. Their reports are backed up by their military experience and the integrity of their people. While inspectors can provide a quick look with broad coverage, they don't have the resources to go into great depth. Inspectors raise issues and concerns from all levels up the chain of command, serving as an early-warning system that allows the Department to spot trends and address issues and problems early.

The Naval Audit Service and the Office of the Naval Inspector General are very dissimilar organizations and use different methodologies--but both pursue similar organizational goals: to ensure that the Department of the Navy's people and resources have the best stewardship.

Richard Leach * Vice Adm. Ronald Route, USN

Leach has served as auditor general of the Navy since May 2000. He served in the Navy from 1968 to 1972, receiving the Navy Achievement Medal The Achievement Medal is the lowest of the United States military’s meritorious service medals. The Achievement Medal was first proposed as a means to recognize the contributions of junior officers and enlisted personnel who were not eligible to receive the higher . He has over 30 years' civilian service Civilian service is service to a government made as a civilian, particularly such service as an option for anti-militarists and pacifists who object to military service. Examples of countries with thriving civilian service programmes are Switzerland (Swiss Civilian Service),  with the Audit Service and the DoD Office of the Inspector General Office of the Inspector General (or OIG) is a common sub-agency within cabinet-level agencies of the United States federal government and serves as auditing and investigative arm of the agency's programs focused on identifying waste, fraud and abuse. . Route is the Naval inspector general. He is a 1971 United States Naval Academy United States Naval Academy, at Annapolis, Md.; for training young men and women to be officers of the U.S. navy or marine corps. George Bancroft, Secretary of the Navy, founded and opened (1845) it as the Naval School at Annapolis.  graduate. Route commanded George Washington (CVN (Card Verification Number) See CSC.  73) Battle Group. Navy Warfare Development Command, and served as the president of the Naval War College.

The authors welcome comments and questions, which can be addressed to richard.leach@navy.mil An Internet address domain name for a military agency. See Internet address.

(networking) mil - The top-level domain for entities affiliated with US armed forces.
.
COPYRIGHT 2005 Defense Acquisition University Press
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2005, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:ACQUISITION OVERSIGHT
Author:Route, Ronald
Publication:Defense AT & L
Geographic Code:1USA
Date:May 1, 2005
Words:2141
Previous Article:Revitalizing systems engineering: how six components are meeting the acting USD (AT & L) imperatives.
Next Article:RFID vision in the DoD supply chain.
Topics:



Related Articles
PANEL URGES NEW TERM FOR INDEPENDENT AUDITOR.
LAUSD WATCHDOG ROLE EYED BILL WOULD EXPAND INSPECTOR GENERAL'S POWERS OVER CONSTRUCTION SPENDING.
TOP SCHOOL WATCHDOG SAYS HE'S FENCED OUT.
AUDIT CALLS ATTENTION TO MTA REPORT FINDS FAULT - AND MONEY LOSS - WITH 500 MORE CELL-PHONE ACCOUNTS.
DOB rapped over scaffold permits.
AUDITOR CRYING FOUL MTA WATCHDOG SAYS PROBES LED TO FORCED RETIREMENT.
Changes in Board staff.
LAUSD COULD LEARN FROM WILE E. COYOTE.
Taking stock at the PCAOB: in an interview, the PCAOB's chief auditor, Douglas R. Carmichael, reviews the agency's recent actions and the evolving...
Just how independent are internal auditors in DoN? The Naval Audit Service.

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters