FINANCIAL AUDIT - IMPROVING NAVY READINESS:

CLASSIFICATION: UNCLASSIFIED// 
ROUTINE 
R 041653Z NOV 24 MID180000036186U 
FM CNO WASHINGTON DC 
TO NAVADMIN 
INFO CNO WASHINGTON DC 
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NAVADMIN 225/24 
 
MSGID/NAVADMIN/CNO WASHINGTON DC 
 
SUBJ/FINANCIAL AUDIT - IMPROVING NAVY READINESS// 
 
RMKS/1.  The Fiscal Year 2024 National Defense Authorization Act requires the 
Department of Defense to achieve an unqualified opinion on its financial 
statements (a clean report) by December 31, 2028. 
 
2.  The plan for the Navy to achieve a clean audit in 2028 is aggressive and 
audacious, but also achievable.  It will take all our efforts across the 
uniform, civilian, Fleet and Secretariat levels to get there.  This audit 
goes beyond just examining financial management or supply inventory.  It 
involves reviewing all business processes that contribute to figure in the 
year-end financial statements.  The audit assesses the existence, quality, 
location, completeness, valuation and condition of military equipment, real 
property, and inventory, as well as travel claims, Permanent Change of 
Station orders, Operating Materials and Supplies (OM&S) and galley meal 
receipts. 
 
3.  Achieving a clean audit by 2028 is a team effort.  Ernst and Young (EY), 
a private accounting firm, was hired to conduct the audit for Navy.  These 
civilian auditors have and will continue to interact directly with our 
commands at every level to gather documentation to support achieving the 
clean audit.  In this record, each one of us are critical to the success of 
the audit effort to ensure we account for every dollar, track OM&S and other 
asset inventory, and document financial transactions. 
 
4.  I will periodically meet with the Assistant Secretary of the Navy 
(Financial Management and Comptroller), OPNAV Staff, EY auditors, and 
selective Budget Submitting Officers (BSOs) to review our progress.  These 
meetings will include metrics on performance (e.g. timelines, accuracy, etc.) 
and corrective actions required across Navy commands to meet the clean audit 
goal.  This effort requires ruthless transparency and a mindset to critically 
evaluate data and metrics to determine whether we on track to meet our 
goals.  And when not on track, we must be ready to adjust our processes or 
implement new processes to achieve a different result. 
 
5.  Most importantly, achieving a clean audit by 2028 demonstrates to the 
American taxpayers and Congress that we are managing the country's business 
and funds responsibly.  While we have made some progress toward this goal 
over the last few years, the most difficult part of the journey lies 
ahead.  We must proceed with focus and urgency, leveraging lessons learned 
from ourselves and other Services to improve our audit readiness and mission 
effectiveness.  This is a whole of Navy task and will take a whole of Navy 
effort to achieve the clean audit. 
 
6.  Released by ADM J. W. Kilby, Vice Chief of Naval Operations.// 
 
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