Balanced finances: Commissaries receive clean audit for FY 2019

FORT LEE, Va. – Independent auditors recently gave the Defense Commissary Agency (DeCA) an unmodified opinion for its fiscal 2019 financial statements. An unmodified opinion means a third-party examination found no substantial discrepancies in the agency’s finances.

The ruling validates the transparency of DeCA’s finances as it delivers the commissary benefit to millions of customers worldwide, said Rear Adm. (retired) Robert J. Bianchi, DOD special assistant for commissary operations.

 “This opinion confirms the great job our people are doing as responsible caretakers of our appropriated funds,” Bianchi said. “It’s simple: We effectively balance our financial books which underlines our credibility as an efficient and effective agency.”

During fiscal 2019, DeCA received nearly $1.1 billion in appropriations and generated nearly $5 billion in annual sales. The agency also processed more than 77 million transactions in its stores, while delivering nearly $1.6 billion in patron savings.

DeCA’s ability to balance its finances was impacted by the due diligence of every agency employee, said Cynthia Morgan, the agency’s chief financial officer.

“Going from a modified opinion in 2018 to the highest level opinion in 2019 for our financial statement is a tremendous accomplishment that reflects well on our employees and industry partners,” Morgan said. “We had a run of 16 straight unmodified opinions before 2018, and we look forward to starting another trend.”

All commissary employees have a stake in how the agency’s finances are presented, Morgan said, because they impact them every day, whether it’s at the cash register, accounting for equipment and property, or properly registering time and attendance.

However, this accomplishment goes beyond the commissary agency. As a defense agency, DeCA is included in the DoD Consolidated Financial Statement Audit and as such is subject to further audit queries as its financial wellbeing feeds into the Department’s.

For DeCA the road to an unmodified audit starts as auditors from the CliftonLarsonAllen (CLA) auditing firm visit commissaries and the agency headquarters at Fort Lee, Virginia, where they pore through financial statements and all related internal controls and transactions. CLA evaluates and tests the following key areas: 

• Compliance with laws and regulations
• Inventory (valuation and site visits)
• Disbursements for accounts payable and undelivered orders
• Journal vouchers
• 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

“Audits require buy-in and support from all levels of management, so it is necessary to ensure they’re aware of how an audit benefits and affects our daily operations,” said Edna Willis, chief of the compliance and reporting branch in the resource management directorate. “This process requires timely communication, a smooth and accurate flow of documentation and consistent follow-up throughout the audit.

“Internal controls are continuously monitored, tested and updated to ensure that financial records are in the best condition possible prior to being tested by the external auditors,” she added. 

An audit’s reach touches every level of commissary operations, requiring auditors to delve through some 500 deliverables provided by DeCA employees that demonstrate the agency’s financial integrity.

Ultimately, DeCA emerged with an unmodified opinion because it was able to provide assurance over the recorded financial transactions and processes, Willis said. 

            “This year brought its own set of challenges with a new inventory system and perpetual inventory processes, but we performed successfully in light of the changes and we look forward to continual improvements in FY 2020,” Willis said. “We are proud to be able to demonstrate how important the commissary benefit is to our customers and especially to demonstrate this level of financial stewardship of taxpayer dollars.”

-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.