U.S. Consolidated Financial Statements: Key Issues for the Department of Defense , August 21 , 2025
U.S. Consolidated Financial Statements: Key Issues for the Department of Defense , August 21 , 2025
From the document: "The Department of Defense's (DOD) strong and sustained commitment is critical to addressing key issues that affect the U.S. government's consolidated financial statements. These include addressing the issues that caused DOD to be unable to obtain an opinion on its fiscal year 2024 financial statements, providing reliable intragovernmental activity and balances data, accurately preparing budget and accrual reconciliation information, providing more detailed information for Fund Balance with Treasury activity, and effectively implementing new processes related to treaties and other international agreements.
DOD continues to face long-standing financial management problems. After many years of working toward financial statement audit readiness, DOD underwent full financial statement audits for fiscal years 2018 through 2024. These audits resulted in disclaimers of opinion, identification of material weaknesses in internal control over financial reporting, and thousands of audit findings. For fiscal year 2024, DOD's auditor reported 28 material weaknesses related to DOD's internal controls over financial reporting, which contributed to DOD's inability to obtain an audit opinion. These weaknesses limit the reliability of DOD's financial reporting. DOD's auditors made a number of recommendations to help address these weaknesses.
DOD's inability to obtain an audit opinion contributed to GAO being unable to express an opinion on the consolidated financial statements. It is important that DOD address the issues causing the disclaimers of opinion to support accurate reporting for the consolidated financial statements. The National Defense Authorization Act for Fiscal Year 2024 also requires the Secretary of Defense to ensure that DOD receives an unmodified audit opinion on its financial statements by no later than December 31, 2028."
Authors - Government Accountability Office (GAO)Related Resources
