Audit Readiness: The Costs and Culture

  • Ms. Laura M. Crawford

Over the last 60 years, the Department of Defense (DoD) has demonstrated a lack of commitment toward achieving financial improvement, accountability, and audit readiness. The DoD has spent billions attempting to meet the Congressional mandate of audit ready financial statements by September 30, 2017. It does not appear the DoD will be able to make this deadline. In these fiscally constrained times, DoD leadership must work toward changing the culture in regards to financial management. One way to do this is to implement a clear concise vision and utilize Kotter’s eight steps for cultural change in conjunction with Schein’s embedding and reinforcing mechanisms to implement a lasting culture change. Now is the time for the DoD to implement change due to the reduction of financial resources in accordance with the Budget Control Act of 2011 and a new Secretary of Defense that actively supports financial improvement. Without changing the cost culture first, the expenditures towards achieving audit readiness will not be worth the cost.