FORT BELVOIR, Va. –
The Defense Logistics Agency received an unmodified, “clean” audit opinion on the fiscal year 2024 National Defense Stockpile Transaction Fund financial statements for the first time since assuming the mission in 1988. The fund includes more than $958 million in assets.
Independent auditors issued the unmodified opinion, meaning the financials were fairly stated and in compliance with generally accepted accounting principles, said Shawn Lennon, DLA’s deputy chief financial officer.
In comparison to the agency’s Working Capital Fund, which is normally budgeted for over $40 billion a year, the National Defense Stockpile Transaction Fund receives significantly less, usually $50-125 million each year. The transaction fund allows DLA to procure critical strategic materials necessary for U.S. national defense.
“The National Defense Stockpile Transaction Fund is more contained, enabling the agency to review all its contracts and intragovernmental agreements, unlike the Working Capital Fund, which is executed across multiple supply chains and many more systems, resulting in more complexity,” Lennon said.
The national defense stockpile’s importance makes it a No. 1 priority on DLA’s audit roadmap, he added.
The team prepared for the audit by tracking and reporting financial transactions, conducting inventories of material across the country and accounting for taxpayer dollars spent during fiscal years 2022-2024. Auditors reviewed and tested DLA business processes, key business systems and internal controls.
Stacy Son, deputy site director at Defense Finance and Accounting Service – Columbus, rallied her teammates and counterparts to fulfill auditors’ requests for documentation in a timely manner.
“DFAS and DLA closely aligned on priority and support to the audit,” she said. “Going into fiscal year 2024, we understood that the transaction fund audit was a great opportunity to gain a clean opinion, but we also knew that it would require a lot more leg work across both agencies.”
DLA Chief Financial Officer Susan Goodyear said she is proud of the team, noting that it worked long hours to address complex business challenges, and the lessons learned will help sustain audit efforts on the Working Capital Fund.
“This success is critical to DLA’s mission to support the warfighter and the nation,” she said. “We can now say with confidence that we have an accurate count of the nation’s defense stockpile items, know the value of the inventory, and can assure the public the financial balances are accurate and properly recorded.”
Members of DLA Acquisition and DLA Information Operations also helped review financial and inventory records and implemented improvements to enhance data accuracy.
DLA Acquisition Director Matthew Beebe congratulated the team and said achieving an unmodified audit opinion on the NDSTF financial statements is a big success for DLA.
“This accomplishment is huge, not only for the agency, but for the Defense Department as a whole,” he said. “Your collective efforts in this significant achievement demonstrate DLA’s commitment not only to the mission, but to financial accountability, and for that I thank each and every one of you.”
A clean financial audit is among DOD priorities, according to a recent message to the workforce from Secretary of Defense Pete Hegseth.
“DLA is fully aligned with this, and the success of the NDSTF demonstrates our commitment to financial excellence and our ability to produce accurate financial reports in support of this mission,” Lennon said. “Following the example of the U.S. Marine Corps, which became the first military service to achieve a clean audit opinion, showed us that it could be done and how to do it.
The auditor’s final report, enclosed in the DLA Fiscal Year 2024 Agency Financial Report, highlights areas in internal controls and inventory management where the agency can improve. Those recommendations and lessons learned will be used as the team works toward a clean audit opinion of the agency’s Working Capital Fund, Lennon added.