Marine Corps receives clean financial audit opinion, leading Pentagon

The Chief Financial Officers Act of 1990 was meant to revolutionize federal financial management by requiring government agencies to produce audited financial statements, led by a CFO responsible for budgeting, financial reporting, and internal controls agencywide. DOD remains the only federal agency unable to pass a full financial audit, but recent developments show signs of progress, reports Federal News Network. The Marines became the first military branch to achieve a clean audit in 2023, following an extensive two-year audit process.

“We have been in this disclaimer world for a while, and to see a larger component obtain a clean opinion, even if it was laborious — it’s inspiring,” Dr. Coralis Rodriguez, a financial management and reporting analyst who co-led the OIG’s latest summary report told me. “I think that people are looking to other components now and the lessons about the collaboration that took place in the Marine Corps … I think that if the tone is set and the commitment is made to work towards this, other components can also achieve it. It’s just going to take a lot of work, a lot of collaboration, and the understanding that financial management is everyone’s business.”

This success offers a blueprint for other DOD components, though replicating the Marine Corps’ labor-intensive approach may not be feasible for larger branches like the Army or Navy. Key challenges include outdated financial IT systems and weak internal controls, which hinder auditors’ ability to validate financial data. Nonetheless, the shift towards greater transparency and collaboration across DOD leadership is a positive.