UNCLASSIFIED ROUTINE R 291748Z SEP 17 FM CNO WASHINGTON DC TO NAVADMIN INFO CNO WASHINGTON DC BT UNCLAS NAVADMIN 219/17 MSGID/NAVADMIN/CNO WASHINGTON DC/DNS/SEP// SUBJ/NAVY AUDIT LEADERSHIP ACCOUNTABILITY, ROLES, AND RESPONSIBILITIES (CORRECTED COPY) // REF/A/DOC/OMB/15DEC16// REF/B/DOC/DOD/30MAY13// REF/C/DOC/SECNAV/21JUL14// REF/D/NAVADMIN 088-17// NARR/REF A IS OMB CIRCULAR A-123 MANAGEMENT'S RESPONSIBILITY FOR ENTERPRISE RISK MANAGEMENT AND INTERNAL CONTROL. REF B IS DOD INSTRUCTION 5010.40, MANAGER'S INTERNAL CONTROL PROGRAM (MICP) PROCEDURES. REF C IS SECNAV INSTRUCTION 5200.35F, DEPARTMENT OF THE NAVY INTERNAL CONTROL PROGRAM. REF D IS NAVADMIN 088/17, LEADERSHIP PRIORITY AND ACCOUNTABILITY FOR EFFECTIVE INTERNAL CONTROLS.// RMKS/1. Within the next few weeks the Navy independent public auditor (IPA), Ernst and Young, will conduct site visits, beginning in the Hampton Roads area on 18 September 2017, to validate the Navy's inventories of our major assets (real property, ordnance, ships and vessels, aircraft, engines, satellites, etc.). Each of you will contribute and play a pivotal role in our success. 2. Commanding Officers are required to make preparations for the site visits. Property managers (Real and other) and subject matter experts must be ready and available to walk bases / flight lines / piers and demonstrate accountability for our asset categories. The IPA will focus on new and larger assets of greatest material impact first and then move on to older assets. Additionally, the IPA has planned site visits to San Diego, Patuxent River, Guam and Port Hueneme. 3. As leaders, I expect that every command has familiarized themselves with audit processes. Most business events that take place within your commands result in financial transactions. Regardless of duty station, we are all impacted by military entitlements, civilian payroll, travel and transportation, contracts, reimbursable work orders, Military Standard Requisitioning and Issue Procedures and many others. These may be more familiar to your sailors and civilians as ship repair, refueling, flying hours, Defense Travel System and supply purchases. Our preparedness in the areas of property, plant and equipment, Operating Materials and Supplies Inventory, accounts payable, accounts receivable and overall balances will influence auditor planning. A series of nine informative audit training videos has been developed to spotlight relevant audit processes and systems, and further educate what our personnel can do to support audit. The videos are available using your Common Access Cards enabled certificates online at https://portal.secnav.navy.mil/orgs /FMC/FMO/FMO-1/PagesMG/Training.aspx. 4. The auditors will be well trained and prepared to review and interview your commands and systems. Our success is largely dependent on having the appropriate people available beforehand to anticipate, identify problems, and prepare clear and concise explanations. Be honest and be consistent ? build and maintain your credibility. Ensure you fully understand the question being asked before your timely submission of documentation or responding to the auditor. 5. Since 2015 the process of preparing for audit has improved the culture of accountability, as every senior leader across the DoN embraces their role in developing and enforcing appropriate internal controls. Internal Controls are inextricably tied to audit. Each of you must understand references (a), (b), and (c) as well as understand risk management that both actively assesses day-to-day business processes and makes appropriate changes to ensure accountability. Vice Chief of Naval Operations recently released reference (d) stressing the importance of internal controls. Your internal controls supported by an effective Managers Internal Control Program are the foundation of our operations. They help ensure effective operations, safeguard our assets, produce reliable financial reports, and ensure compliance with laws and regulations. 6. Regular updates on audit progress, barrier removal and lessons learned will be scheduled and planned by the Office of the Assistant Secretary of the Navy (Financial Management and Comptroller) and results will be regularly reviewed by leadership and the Navy Inspector General. Vice Director, Navy Staff is available to provide additional guidance or assistance throughout the audit. For audit readiness questions contact Mr. Freddie Williams, Financial Management & Comptroller (FM&C) Audit Response Division (FMO-3) at commercial, (703) 602-8438 or via e-mail at freddie.e.williams(at)navy.mil. 7. Released by Vice Admiral Luke M. McCollum, Director, Navy Staff (Acting).// BT #0001 NNNN UNCLASSIFIED//