Financial Improvement and Audit Readiness (FIAR) infographic. A synposis of FIAR guidance with added insights from USAF expert on the importance of maintenace, repair and overhaul, military logistics, sustainment and other underappreciated elements of FIAR.

1. AEROSPACE AND DEFENSE SOFTWARE VENDOR IFS HAS PUBLISHED
A WHITEPAPER ON FIAR COMPLIANCE. HERE IS A QUICK PREVIEW.
FIAR COMPLIANCE
AT A GLANCE
The Federal Improvement and Audit Readiness Program requires the
Department of Defence to be auditable by 2017. Here’s advice from
retired USAF executive Greg Stanley and below, a simplified look at
steps to compliance.
5 TIPS TO REACH FIAR COMPLIANCE
Tips from Greg Stanley, Retired Deputy USAF A4L in
charge of FIAR Compliance:
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GREG STANLEY
I
dentify Functional Gaps left by existing ERP systems.
ay special attention to MRO, sustainment, logistics, enterprise
P
asset management (EAM) and asset lifecycle management (ALM).
dentify supplemental systems that can be used to fill functional
I
gaps to arrive at auditability.
nsure systems can be implemented in weeks and days rather
E
than years or decades. Check references.
earn about and consider emulating systems used by private
L
PBL contractors.
$60B
Don’t focus only on
procurement expenditures
because they are only a sixth
of the total DoD budget. The
rest is related to operations
and maintenance.
DISCOVERY
CORRECTIVE
ACTION
$10B
ASSERTION,
EVALUATION
VALIDATION
AUDIT
PHASE 01: COMMON CHALLENGES
Support the completeness of funds distributed to the
major commands or equivalent.
Demonstrate completeness of funds distribution by
reconciling the current year budget authority apportioned
and allotted to U.S. Standard General Ledger accounts
4510 and 4610 to the fund distribution system.
The reconciliation must identify current year budget
authority as an element of the entire balance, include
beginning balances, reductions for executed funds,
and upward / downward adjustments, recorded in
these accounts.
DISCOVERY
CORRECTIVE
ACTION
ASSERTION,
EVALUATION
VALIDATION
AUDIT
PHASE 02: COMMON CHALLENGES
Entities must keep a minimum of 6 to 10 years of
documentation to support all funding, collections,
disbursements, adjustments, and reconciliation activity
(note: audit requirements are different from National
Archives and Records Administration (NARA) requirements).
Reporting entities sharing Treasury accounts must work
with their service provider to ensure internal controls and
supporting documents are in place to support an SBR
audit, and that suspense account items are assigned to the
correct entity.
Reconciliation and traceability of interagency agreements,
including Military Interdepartmental Purchase Requests
(MIPR).
Accounts Payable Accruals.
Dependencies on service provider(s) processes and controls
for efficient and effective execution of its end-to-end
business processes.
DISCOVERY
CORRECTIVE
ACTION
ASSERTION,
EVALUATION
VALIDATION
AUDIT
PHASE 03: COMMON CHALLENGES
Document Rights to Assets including co-located
facilities (joint basing) and assets purchased by others
(e.g. USMC aircraft).
Formalize Reworked Assets tracking, including assets
that are removed from a larger asset, reworked or
otherwise modified and then integrated into a different
asset (e.g. aircraft engines).
Implement techniques and methods for demonstrating
the existence of assets that are not easily inspected
(e.g. assets located in space or underwater).
Dependencies on service provider(s) processes
and controls for efficient and effective execution of its
end-to-end business processes.
DISCOVERY
CORRECTIVE
ACTION
ASSERTION,
EVALUATION
VALIDATION
AUDIT
PHASE 04: COMMON CHALLENGES
Reporting value of existing assets and report new asset
acquisitions. This requires implementation of new
acquisition processes, and controls for contract structure
for cost accumulation. The Federal accounting standard
has changed, so capital assets like ships, aircraft and
combat vehicles can no longer be expensed, but rather
must be capitalized and depreciated.
Other challenges that must be addressed in coordination
with leading OSD offices are:
Valuing reworked property, plant and
equipment (PPE)
Establishing an infrastructure to support
a full-scope financial statement audit
In its new publication “Enterprise Asset Management and Field Service Management,
Market Analysis and Forecast through 2017,” ARC Advisory Group recognizes IFS as
the leading supplier to the global aerospace defense industry.
IFS is a leading global enterprise software vendor to industries where asset management,
manufacturing, field service management, supply chain management, or project management are
core disciplines. More than 2,100 companies in over 60 countries rely on IFS Applications™, a
component-based suite for product asset lifecycle management that can be configured for ERP,
EAM, project-based ERP, field service management, or a combination of all four. IFS Applications has
been evolving to meet changing customer needs since 1983 and is configured for agility, usability,
and low total cost of ownership in its targeted industries. IFS employs 2,800 worldwide.
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