The auditors are coming! The auditors are coming!If you're an acquisition professional who works with military equipment programs, you need to prepare for one of the biggest New Year's events in Department of Defense history. No, we're not having a huge party, but we are sending out a serious invitation. In early 2007, the inspector general is going to invite independent auditors to begin their audit of DoD's military equipment programs. And here's the good news: We'll be ready for the auditors, thanks to the Military Equipment Valuation (MEV) initiative. In case you haven't heard, MEV is a DoD-wide effort to capitalize, depreciate depreciate v. in accounting, to reduce the value of an asset each year theoretically on the basis that the assets (such as equipment, vehicles or structures) will eventually become obsolete, worn out and of little value. (See: depreciation) , properly account for, and report military equipment. Basically, we're treating military equipment as capitalized assets instead of expenses, prorating prorating (prōrā´ting), n a clause in a contract with participating dental professionals wherein they agree to accept a percentage reduction in their billings to offset the amount by which the total cost of their value over their useful life and recording those values on financial statements that are subject to audit. With the help of program management offices across the Department, the Property & Equipment (P & E) Policy Office has established the initial value of each item of military equipment in the DoD inventory, using a consistent approach that can be audited. Now we have to update that program information and ensure it's ready for audit. Updates in CAMS-ME CAMS-ME Capital Asset Management System-Military Equipment : Due September 30, 2006 The Capital Asset Management System-Military Equipment (CAMS-ME) is the system that the P & E Policy Office and the Space and Naval Warfare naval warfare Military operations conducted on, under, or over the sea and waged against other seagoing vessels or targets on land or in the air. The earliest naval attacks were raids by the armed men of a tribe or town using fishing boats or merchant ships. (SPAWAR SPAWAR Space & Naval Warfare Systems Command (US Navy) SPAWAR Space Warfare ) System Center-San Diego have developed to consolidate the average cost of assets, update total program expenditures, depreciate assets over their useful life, and record asset status. Points of contact who have already been designated in all of the Services will use the CAMS-ME portal Web-based tool to update their military equipment addition, disposal, and transfer data. Training on CAMS-ME for POCs is now being offered as a Web-based module, accessible from the Quick Links menu on our Web site: <www.acq.osd.mil/me>. Management Assertion for Audit Readiness: Due December 31, 2006 According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Section 1008 of the 2002 National Defense Authorization Act The National Defense Authorization Act is the name of a United States federal law that is enacted each fiscal year to specify the budget and expenditures of the United States Department of Defense. , the under secretary of defense comptroller The Under Secretary of Defense (Comptroller) is the Chief Financial Officer of the United States Department of Defense. The responsibilities of the Department of Defense's Chief Financial Officer include developing and implementing Department of Defense-wide financial policy, is responsible for ensuring that resources 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. on financial statement preparation are minimized until the reporting entity can demonstrate that it is ready for audit. Typically the financial management community would take care of this. But military equipment is unique. Information about military equipment must be obtained from the acquisition and logistics communities, so individuals in these communities are required to assert to the accuracy of the information they give to the financial management community. In fact, these communities are involved in four management assertions In a financial audit, management assertions are the set of information that the preparer of financial statements (management) is providing to another party. Financial statements represent a very complex and interrelated set of assertions. : * The Valuation Assertion, which verifies that the assets have been valued in accordance with federal accounting standards and generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting * The Completeness Assertion, which verifies that all the programs on the Property, Plant & Equipment (PP & E) line item of the balance sheet that should have been reported have been recorded and reported * The Rights and Obligations Assertion, which verifies that the Service reporting the item does in fact have the rights to and "owns" the equipment * The Existence Assertion, which verifies that the military equipment being reported does in fact exist. Working with the military departments and defense agencies, the P & E Policy Office developed a recommended approach for completing the assertions. To learn more about that approach, visit <www.acq.osd.mil/me>and click on "Management Assertion Training" in the Quick Links menu. Dotting the I's and Crossing the T's for Our Warfighters Preparing our military equipment programs for audit is the law. It also has tremendous benefits: It demonstrates renewed responsibility to the taxpayer, and it gives senior management officials the ability to approach Congress and the American people An American people may be:
Sylvester is deputy director for property & equipment policy within the Acquisition, Resources and Analysis Office, Office of the Under Secretary of Defense (AT & L). |
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