Mr. Luther Bragg

Auditor General of the Navy (Acting)

28 May 2015

Naval Audit ServiceCurrent Audit Topics

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Agenda

• Resources

• Workload Distribution

• Real Property

• Personal Property

• Funeral Honors

• Overtime Pay

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Budget Cuts…

4

$30

$35

$40

$45

$50

$55

Navy Funding & NAVAUDSVC End Strength

($

in

mil

lio

ns)

FY1994 – 2014 Navy Funding

NAVAUDSVC End Strength (as of April 2015)

Location #

Washington, DC 253

Norfolk, VA 27

San Diego, CA 34

Total On Board 314

• Currently hiring to replenish resources

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Distribution of FY14 Resources by Functional Area

Contracting & Procurement

12%

Anti-Terrorism/Force Protection

1%

Environmental Protection &Safety

6%

Facilities & Real Property Management

10%

Force Readiness & Fleet Operations

2%Financial Management

16%

General & Miscellaneous1%

Healthcare & Member/Family Support

Services4%

Manpower & Personnel

15%

Logistics, Supply & Maintenance Operations

3%

IT Management & Deployment

8%

Intelligence & Classified Programs

1%Assists

16%

Systems Acquisition & Acquisition Logistics

5%

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Real Property Inventory

• Audits conducted in Marianas, Hawaii, multiple Atlantic regions

• Results

– Inaccurate and incomplete data

• 65% accurate; 21% inaccurate; 13% could not be verified

– Systemic Issues

• Unclear roles and responsibilities for real property inventory

management and oversight

• No standardized training program

• No tracking public private housing inventory

• No method for valuation

– Impact to the Navy’s facility sustainment requirement for budget

projections

– Per SECDEF, increased emphasis on the accountability of assets

is necessary to achieve full audit readiness

– Recommendations addressed the systemic issues

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Personal Property Accountability

• Findings

– Policies and Standard Operating procedures were not

comprehensive enough to provide adequate guidance

– Unclear reporting requirements

• Results

– Lack of accountability over personal property

• Areas for improving Personal Property accountability

– Increasing HQ, Echelons III & IV oversight and monitoring;

– Conducting proper inventory reconciliations, including

independent (not by custodians) and timely verification;

– Ensuring delegation letters are signed and current, and improving

communication between Personal Property Personnel; and

– Identifying sensitive, pilferable, and mission-critical assets

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Funeral Honors Duty for Navy Reservists

• Funeral honors signifies the United States’ gratitude

for veterans’ honorable service and consists of a

detail of at least two or more for the funeral

• Improper payments to reservists of $1 million for

claimed travel associated with funeral honors duty

– Lack of supporting documentation for payments (travel,

duty, and training)

– No attestation requirements for drills

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Overtime Pay*

• Location 1: $149.5M (FY 2011-2012)

– 83% of employees received overtime pay

– 14 employees earned over $100,000 in overtime pay

for selected time period

– 2 employees earned over $150,000 in overtime pay for

selected time period

• Location 2: $76.5M (FY 2011-2012)

– 86% of employees received overtime pay

– 7 employees earned over $100,000 in overtime pay for

selected time period

– 1 employee earned over $150,000 in overtime pay for

selected time period

*Based on pay data from 10 October 2010 – 22 September 2012

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Overtime Pay, cont.

• Internal Control Weaknesses

– Insufficient audit trail for overtime approval

– Employees exceeded limits for consecutive days and

cumulative hours worked

– Inappropriate employee time and attendance attestation

procedures

– Time and attendance personnel not trained or certified

– Potentially invalid Collective Bargaining Agreements