FIAR: The New Normal

May 17, 2017 | By kgabel

Financial Improvement and Audit Readiness (FIAR) should be a familiar term to the Supply Corps community. But exactly what is FIAR, and how is it relevant to the Supply Corps?


FIAR first took roots in November 1990 when President George H.W. Bush signed Public Law 101-576 establishing the Chief Financial Officers Act (CFO Act). The purpose of the CFO Act was to address congressional interest in improving fiscal accountability within the Federal government. In 2002, Congress inserted requirements into the National Defense Authorization Act (NDAA) which elevated improved financial management as a DoD priority. Some progress was made over the next eight years. However, a new urgency was placed upon the DoD’s financial improvement efforts with the enactment of the fiscal year (FY) 2010 NDAA, which established a clear deadline for achievement of auditability. In FY 2012, Secretary of Defense Leon Panetta set an internal deadline of September 30, 2014 for completion of audit readiness of the Statement of Budgetary Resources. In FY 2014, Congress continued to leverage the NDAA to mandate audit readiness and ensure that DoD’s financial statements are validated as ready for audit no later than September 30, 2017. Military services are currently undergoing audits of mission-critical asset existence and completeness.


As Supply Corps officers, we are entrusted with the safekeeping of taxpayer dollars. Taxpayer dollars are represented by appropriated and NAVSUP working capital fund – supply management (NWCF-SM) inventory retained at shore facilities, on ships, subs, aircraft, and at commercial vendors. It is our duty and responsibility to manage these assets and ensure we have the processes, procedures, and supporting documentation in place to verify and validate what we have on the floor matches with what we have in our books (existence and completeness). Former Secretary of Defense Chuck Hagel summed it up when he addressed the House Armed Services Committee in April 2013. “We need auditable statements, both to improve the quality of our financial information and to reassure the public, and the Congress, that we are good stewards of public funds.” This seems like a reasonable task. Nonetheless, we have some work to do. Some of the challenges we have experienced along the way have been:
  • reconciliation of all feeder systems (RSupply, Ship Clip, Commercial Asset Visibility, etc.) to our accountable property system of record Navy Enterprise Resource Planning;
  • ability to store and retrieve supporting documentation in a timely manner;
  • ability to sustain internal controls (follow policies and procedures consistently);
  • identification of complete end-to-end processes to include service provider controls and processes; and
  • reliance on IT general and business process controls.
To combat these challenges, the Office of Financial Management has contracted a team of independent public accountants, “audit coaches,” to assist us with our audit preparation. Part of this preparation involves performing “book-to-floor” and “floor-to-book” inventories at sites holding NWCF- SM inventory across the enterprise. Be conscientious and responsible for your part when it comes to FIAR as a NAVSUP inventory accuracy team is coming to a location near you.
VIRIN: 170517-N-ZZ219-6085
March/April 2017