BALANCED FINANCES: Commissaries receive clean audit for FY 2021

FORT LEE, Va. – When it comes to the Defense Commissary Agency’s financial statements, everything balanced properly as independent auditors gave the agency an unmodified opinion for fiscal 2021.

An unmodified opinion means a third-party examination found no substantial discrepancies in the agency’s finances. For DeCA this certifies how the agency manages its finances as it delivers the commissary benefit, said Bill Moore, DeCA’s director and CEO.

“We provide a valuable benefit to the military community, and the clean audit opinion instills trust in our patrons that their commissary has their best interests at heart,” Moore said. “It also shows we are performing our mission effectively, efficiently, and in a financially sound manner to ensure their benefit is maximized.”

The following is a snapshot of DeCA’s financial highlights for fiscal 2021:

• Commissaries generated more than $4 billion in annual sales

• DeCA operations cost $1.3 billion

• The agency also processed more than 62 million transactions in its stores

• DeCA spent $21.8 million to implement COVID-19 safety protocols

• Natural disasters such as hurricanes, earthquakes, wildfires, typhoons, winter storms and tropical storms cost the agency $5 million

• DeCA generated nearly $900,000 in surcharge revenue from recycling

The agency’s unmodified opinion and its ability to balance its finances was a testament to the efforts of every DeCA employee, said Cynthia Morgan, the agency’s chief financial officer.

“Obtaining a clean audit opinion is a team effort,” Morgan said. “It takes top down emphasis on being accountable and auditable. It also requires constant vigilance on the part of every DeCA employee to ensure what duties they perform are timely, accurate and in accordance with all policies and regulations.”

The independent auditor, CliftonLarsonAllen (CLA), looks at about 500 actions that demonstrate the integrity of DeCA’s internal financial processes and controls and its interactions with external partners, the Defense Finance and Accounting Service (DFAS) and the Defense Logistics Agency.

CLA conducted portions of its audit of DeCA virtually to adhere to COVID-19-related restrictions, said Linda Randall, accounting director in the resource management directorate.

 “Like everyone else in society we had to adjust and overcome the inherent challenges that COVID-19 presented,” Randall said. “And despite the pandemic’s physical restrictions, CLA performed a full-scope financial statement audit of our finances in accordance with generally accepted government auditing standards,” Randall said. 

DeCA joined seven other defense agencies in receiving an unmodified opinion: U.S. Army Corps of Engineers – Civil Works, the Military Retirement Fund, the Defense Contracting Audit Agency, the Defense Finance and Accounting Service – Working Capital Fund, DOD Inspector General and the Defense Health Agency – Contract Resource Management.

As with all defense agencies, DeCA is included in the DOD Consolidated Financial Statement Audit. This means the commissary agency’s financial wellbeing feeds into the Defense Department’s process, and subsequently DeCA works with DOD to provide requested data to meet the Department’s own audit suspense dates.

For DeCA the official audit process begins when CLA auditors look through financial statements and all related internal controls and transactions at commissaries and the agency headquarters at Fort Lee, Virginia. However, the agency is expected to operate as if every day is an audit day, Randall said.

“No matter what function our employees perform there is financial implication, direct or indirect, and it will ultimately impact our budget and ability to accurately reflect our financial posture,” she added. “The culmination results in a clean audit opinion.” 

CLA auditors test and evaluate the following key areas:

• Ordering and accounting for resale products

• Processing customer transactions at the stores

• Accounting for property, plant and equipment

• Properly certifying time and attendance

• Compliance with laws and regulations

• Funds balance with treasury, payroll, property, revenue/accounts, receivable/non-exchange revenue, appropriations and budgetary accounts

• The financial reporting and compilation process 

• Information technology, especially those areas of the agency’s ongoing deployment of its Enterprise Business System (EBS) that impact inventory and pricing

Being consistent, transparent and dedicated to engaging in what’s necessary for a clean audit is the key to DeCA’s success, said Robert B. Strimple, chief of the agency’s compliance and reporting.

“The policies and regulations we follow ensure that all our assets, overhead and transactions are properly reflected in the agency’s financial reports,” he said. “Ultimately our ability to properly manage our finances helps us better deliver the best commissary benefit possible to our customers.”

-DeCA-

About DeCA: The Defense Commissary Agency operates a worldwide chain of commissaries providing groceries to military personnel, retirees and their families in a safe and secure shopping environment. Commissaries provide a military benefit, saving authorized patrons thousands of dollars annually on their purchases compared to similar products at commercial retailers. The discounted prices include a 5-percent surcharge, which covers the costs of building new commissaries and modernizing existing ones. A core military family support element, and a valued part of military pay and benefits, commissaries contribute to family readiness, enhance the quality of life for America’s military and their families, and help recruit and retain the best and brightest men and women to serve their country.