DoD Cost of War Reporting of Supplemental Funds Provided for Procurement and Research, Development, Test, and Evaluation

We reviewed the processes that comptroller personnel in the Office of the Secretary of Defense, Army, Navy, Air Force, Marine Corps, and Defense Finance and Accounting Service-Indianapolis (DFAS-IN) used to prepare sections of the cost of war report pertaining to procurement and research, development, test, and evaluation funds to determine whether management effectively prepared those reports. We determined that the Office of the Under Secretary of Defense (Comptroller)/DoD Chief Financial Officer [USD(C)/CFO] needs to improve its controls over the DoD Components' cost of war reporting process to provide reasonable assurance regarding the reliability of obligation information reported in the "Department of Defense (DoD) Supplemental and Cost of War Execution Report" for procurement and research, development, test, and evaluation funds. Specifically, the USD(C)/CFO did not ensure that the DoD Components and subordinate reporting entities developed and issued standard operating procedures and other supplemental guidance on contingency cost reporting, verified reported cost data, and submitted affirmation statements. We recommend that the USD(C)/CFO verify that the DoD Components and subordinate reporting entities have developed and issued standard operating procedures and ensure that the standard operating procedures reiterate the requirement to include affirmation statements with their cost of war data; require the DoD Components and subordinate reporting entities to verify that their cost data are accurate, complete, supportable, and properly affirmed; and require DFAS-IN to ensure the submission of affirmation statements that accompany the monthly cost statements and associated analysis.