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Enhancing Air Force Auditing Practices: Insights into Performance and Financial Evaluations

This document, presented by Theodore J. Williams, emphasizes the critical role of auditing in the Air Force beyond financial metrics. It explores various aspects of audit guidance, internal controls, and the diverse types of audits, including financial and performance audits. Through examples, such as remotely piloted aircraft training and hurricane disaster planning, the presentation highlights the importance of efficient resource utilization, compliance with regulations, and achieving intended results. Ultimately, it underscores the necessity for continuous improvement and operational readiness within the Air Force's auditing framework.

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Enhancing Air Force Auditing Practices: Insights into Performance and Financial Evaluations

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  1. Auditing: It’s Not Just About the Dollars Theodore J. Williams Air Force Auditor General 3 June 2010

  2. Overview • Audit Guidance • Internal Controls • Types of Audits • Financial • Performance (Operational) • Performance Audit Examples

  3. Audit Guidance • Government Auditing Standards (The Yellow Book) • Generally Accepted Government Auditing Standards (GAGAS) • DoD Instruction 7600.02, Audit Policies

  4. Internal Controls • Reasonable assurance objectives are being achieved: • Effectiveness and efficiency of operations • Reliability of financial reporting • Compliance with applicable laws and regulations • Internal Control Structure (5 Components) • Control Environment • Risk Assessment • Control Activities • Information and Communication • Monitoring

  5. Types of Audits Objectives (Risk) Report Tests Audit • Financial vs Performance (Operational) Internal Controls Review Financial Numbers Properly Stated/Presented Completeness, Accuracy, etc. Opinion on Financial Presentation Performance Program Efficiency & Effectiveness Condition, Cause, & Effect Findings & Recommendations

  6. Financial Audits • Objective (Risk): Assess whether financial information is: • Stated in accordance with Generally Accepted Accounting Principles (GAAP) • Reliable • Benefits: Primarily nonmonetary; mitigate risk • Data accuracy/completeness • Compliance with laws and regulations If not, Why? (Internal Control Process)

  7. Performance Audits • Objective (Risk): Assess whether the entity: • Acquires/uses resources effectively/efficiently • Programs are achieving intended results • Complies with applicable laws and regulations • Benefits: Monetary and nonmonetary; mitigate risk • Streamline processes • Cost avoidances • Operational readiness • Personnel safety If not, Why? (Internal Control Process)

  8. Performance AuditsRemotely Piloted Aircraft • Objective. Evaluate whether Air Force’s training program produced number of RPA pilots necessary to meet contingency requirements • Effect. Manned aircraft pilots temporarily assigned to meet RPA requirements…training plan not sustainable or efficient…disjointed career paths for both • Recommendation. Create specific RPA career path to improve Air Force’s ability to provide this critical weapon system • Air Force currently implementing RPA-specific career path 8

  9. Performance AuditsHurricane Disaster Planning • Objective. Evaluate whether Air Force’s Emergency Management program included adequate protection and preparation measures to respond to disasters • Effect. Gaps and inconsistencies in processes to protect installation assets, ensure personnel security and allow necessary communication operability • Recommendation. Update hurricane planning checklists & develop standard operating procedures for communication frequency management • Audit provided installation commanders complete readiness picture 9

  10. Performance AuditsAOR Aerial Port Operations • Objective. Evaluate whether U.S. Air Forces Central Area of Responsibility (AOR) personnel efficiently used airlift capacity to manage wartime contingency cargo and passenger movement • Effect. 40% of cargo missions flew at less than 50% capacity, 20% flew empty…inadequate metrics/processes for identifying and minimizing unused capacity • Recommendation. Implement aerial port process improvements for better coordination between airlift planners and management of contracted commercial airlift • Audit helped identify and develop controls to increase airlift efficiency 10

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