Oversight · financial statement audit
Audit posture
What the Department's own Agency Financial Report says about the reliability of its financial statements. These are reported findings read from the document, not counts of files in a folder.
- Source
- DoD FY2025 Agency Financial Report; DoD OIG
- Grain
- Reported metric
- Vintage
- 2026-09-08
- Rows loaded
- 21
Path knowledge-bank/DOD-FM-Knowledge-Bank/07-Financial-Statements-and-Audit-Reports · extracted 2026-09-19 04:55 · refresh annual
Limitations Read via the curated wiki summary of the AFR, which is a secondary read of a primary document. Each row records which it is.
Read via a curated summary of the Agency Financial Report — a secondary read of a primary document. Each figure below records which it is, and the primary document is the citation.
FY2025 position
The previous version of this page displayed “Material Weaknesses: 0” in large red type. That figure was a literal zero written by the extract for every year, and it contradicted both the disclaimer of opinion carried in the same file and the Department’s own reporting. It has been replaced with what the Agency Financial Report actually states.
The independent auditor's FY2025 report
A separate framework from the FMFIA self-assessment above: these are the material weaknesses the DoD OIG's independent auditor identified in testing the FY2025 statements (DODIG-2026-032), not the Department's own FMFIA count. The two are not comparable and are shown separately for that reason.
The 26 material weaknesses named in the FY2025 audit
As categorized by the independent auditor's report, in the order given there. A category is not a dollar figure or an estimate of misstatement — it names where the auditor could not obtain sufficient evidence.
| # | Material weakness | Citation |
|---|---|---|
| 1 | Financial Management Systems Modernization | DoD OIG report DODIG-2026-032 |
| 2 | Configuration Management | DoD OIG report DODIG-2026-032 |
| 3 | Security Management | DoD OIG report DODIG-2026-032 |
| 4 | Access Controls | DoD OIG report DODIG-2026-032 |
| 5 | Segregation of Duties | DoD OIG report DODIG-2026-032 |
| 6 | Interface Controls | DoD OIG report DODIG-2026-032 |
| 7 | Universe of Transactions | DoD OIG report DODIG-2026-032 |
| 8 | Fund Balance with Treasury | DoD OIG report DODIG-2026-032 |
| 9 | Inventory and Stockpile Materials | DoD OIG report DODIG-2026-032 |
| 10 | Operating Materials and Supplies | DoD OIG report DODIG-2026-032 |
| 11 | General Property, Plant, and Equipment | DoD OIG report DODIG-2026-032 |
| 12 | Real Property | DoD OIG report DODIG-2026-032 |
| 13 | Government Property in the Possession of Contractors | DoD OIG report DODIG-2026-032 |
| 14 | Joint Strike Fighter Program | DoD OIG report DODIG-2026-032 |
| 15 | Accounts Payable | DoD OIG report DODIG-2026-032 |
| 16 | Environmental and Disposal Liabilities | DoD OIG report DODIG-2026-032 |
| 17 | Leases | DoD OIG report DODIG-2026-032 |
| 18 | Unsupported Accounting Adjustments | DoD OIG report DODIG-2026-032 |
| 19 | Intragovernmental Transactions and Intradepartmental Eliminations | DoD OIG report DODIG-2026-032 |
| 20 | Gross Costs | DoD OIG report DODIG-2026-032 |
| 21 | Earned Revenue | DoD OIG report DODIG-2026-032 |
| 22 | Reconciliation of Net Cost of Operations to Outlays | DoD OIG report DODIG-2026-032 |
| 23 | Budgetary Resources | DoD OIG report DODIG-2026-032 |
| 24 | Service Organizations | DoD OIG report DODIG-2026-032 |
| 25 | Component Entity-Level Controls | DoD OIG report DODIG-2026-032 |
| 26 | DoD-Wide Oversight and Monitoring | DoD OIG report DODIG-2026-032 |
The 2027-2028 strategy shift
In 2026 the Department moved from decentralized FIAR control-remediation toward a centralized, substantive-testing effort. GAO's report on the change (GAO-26-109115) is the citation for this section.
These three figures are one year of a record that runs to FY2018. Findings and NFRs carries the whole series, the per-entity tables behind it, which material weaknesses never left the roster, and a ten-element audit-risk object for each one still on it.
The new approach validates account balances directly with supporting documentation rather than working primarily through remediated internal controls, and reduces the number of standalone financial statements produced department-wide. GAO’s own review of the shift raises open questions it has not resolved: whether fewer standalone statements narrow oversight, whether deprioritizing the scope-limiting material weaknesses above for multiple years delays the root-cause fixes those weaknesses represent, whether fraud-risk controls keep pace under compressed timelines, and whether the substantive-testing approach that produced a clean opinion for the Marine Corps — a component holding roughly one percent of Department assets — scales to the much larger Army, Navy, and Air Force. None of that is resolved by this page; it is recorded here because it is the citation-bearing context for the FY2027 and FY2028 targets above.
Every reported figure, with its citation
Nothing on this page is inferred from a filename or a file count.
| Metric | FY | Value | Citation |
|---|---|---|---|
| Audit opinion on the agency-wide financial statements | 2025 | Disclaimer of opinion | DoD FY2025 Agency Financial Report; DoD OIG report DODIG-2026-032 |
| Material weaknesses in financial reporting controls | 2025 | 69 | DoD FY2025 Agency Financial Report, FMFIA assurance statement |
| Material weaknesses in operational controls | 2025 | 39 | DoD FY2025 Agency Financial Report, FMFIA assurance statement |
| Share of total assets affected by scope limitations | 2025 | 43% | DoD OIG report DODIG-2026-032 |
| Share of budgetary resources affected by scope limitations | 2025 | 64% | DoD OIG report DODIG-2026-032 |
| Building Partner Capacity funding error identified | 2025 | $18.9B | DoD OIG report DODIG-2026-032 |
| Discretionary appropriations reported in the AFR | 2025 | $861.5B | DoD FY2025 Agency Financial Report |
| Reconciliation funds reported in the AFR | 2025 | $153.3B | DoD FY2025 Agency Financial Report |
| Departmental designation used in the FY2025 AFR | 2025 | Department of War, per Executive Order 14347 | DoD FY2025 Agency Financial Report; Executive Order 14347 |
| Material weaknesses identified by the independent auditor | 2025 | 26 | DoD OIG report DODIG-2026-032 (independent auditor's report on the FY2025 financial statements) |
| Material weaknesses identified by the independent auditor (FY2024, for comparison) | 2024 | 28 | DoD OIG report DODIG-2026-032, prior-year comparison as reported |
| Significant deficiencies identified by the independent auditor | 2025 | 2 | DoD OIG report DODIG-2026-032 |
| Standalone reporting entities receiving a disclaimer of opinion | 2025 | 11 | DoD OIG report DODIG-2026-032 |
| Consecutive fiscal years with a disclaimer of opinion | 2025 | 8 | GAO-26-109115, DOD Financial Management: Questions Associated with New Financial Audit Approach |
| Notices of Findings and Recommendations (NFRs) issued in FY2025 | 2025 | 2,473 | GAO-26-109115 |
| NFRs open at fiscal year-end | 2025 | 2,972 | GAO-26-109115 |
| NFRs closed by auditors during FY2025 | 2025 | 1,004 | GAO-26-109115 |
| Joint Task Force Audit | 2025 | Established March 2026 | GAO-26-109115 |
| Projected FY2027 audit remediation cost | 2025 | $1.7B | GAO-26-109115 |
| FY2027 opinion target | 2025 | Consolidated Defense Working Capital Fund | GAO-26-109115 |
| FY2028 opinion target | 2025 | DoD-wide consolidated financial statements | GAO-26-109115 |
Where a row is a secondary read, the note recorded with it says so; the citation always names the primary document.
Audit opinion on the agency-wide financial statements. Secondary read via the curated DoD-FM wiki page, last verified 2026-07-26.
Material weaknesses in financial reporting controls. Secondary read via the curated DoD-FM wiki page, last verified 2026-07-26.
Material weaknesses in operational controls. Secondary read via the curated DoD-FM wiki page, last verified 2026-07-26.
Share of total assets affected by scope limitations. Secondary read via the curated DoD-FM wiki page, last verified 2026-07-26.
Share of budgetary resources affected by scope limitations. Secondary read via the curated DoD-FM wiki page, last verified 2026-07-26.
Building Partner Capacity funding error identified. Named quantified misstatement. Secondary read via the curated DoD-FM wiki page.
Discretionary appropriations reported in the AFR. AFR presentation basis differs from the File A extract on this site; the two are not expected to tie.
Reconciliation funds reported in the AFR. Secondary read via the curated DoD-FM wiki page.
Departmental designation used in the FY2025 AFR. This is why the site uses Department of War in framing while retaining DoD wherever it names a data field or source system.
Material weaknesses identified by the independent auditor. Distinct from the FMFIA self-assessed counts above (mw_financial_reporting, mw_operational): this is the auditor's own material-weakness count from the FY2025 financial-statement audit, down from 28 in FY2024. The two frameworks are not comparable and must not be summed or substituted for one another. Secondary read of DODIG-2026-032, verified 2026-09-08.
Material weaknesses identified by the independent auditor (FY2024, for comparison). Carried here only to show the FY2025 auditor-identified count moved by −2 year over year. Verified 2026-09-08.
Significant deficiencies identified by the independent auditor. Below the material-weakness threshold but still reported by the auditor. Verified 2026-09-08.
Standalone reporting entities receiving a disclaimer of opinion. Of the Department's standalone reporting entities. See scope_assets and scope_resources above for their combined share of total assets and budgetary resources. Verified 2026-09-08.
Consecutive fiscal years with a disclaimer of opinion. FY2018 through FY2025. Read via GAO's report on DoD's revised audit approach, verified 2026-09-08.
Notices of Findings and Recommendations (NFRs) issued in FY2025. NFRs are the auditor's formal findings mechanism, issued against specific control or evidentiary gaps. Verified 2026-09-08.
NFRs open at fiscal year-end. Cumulative open items, not limited to FY2025 issuances; only 1,004 of these were closed by auditors during FY2025 (see nfr_closed). Verified 2026-09-08.
NFRs closed by auditors during FY2025. Of 2,972 open items. A closure rate under 35% in the year the count is drawn from. Verified 2026-09-08.
Joint Task Force Audit. A centralized, substantive-testing effort — validating account balances directly rather than relying primarily on remediated internal controls — that supersedes the prior decentralized FIAR remediation approach for this push toward a clean opinion. GAO's report raises open questions about this approach; see the strategy section on this page. Verified 2026-09-08.
Projected FY2027 audit remediation cost. Verified 2026-09-08.
FY2027 opinion target. Verified 2026-09-08.
FY2028 opinion target. Verified 2026-09-08.
What this site's own data contributes
The account-linkage gap measured on the reconciliation page is evidence in the same domain as the reported weaknesses: it concerns whether a contract obligation can be traced to a Treasury account.
Stated carefully: a low linkage rate is a completeness measure over two reporting chains, not an assertion that obligations are unsupported. It belongs on this page because traceability from a transaction to an account is the same evidence chain the financial statement audit tests — not because the two numbers are the same measure.
Oversight document inventory
Counts of documents held in the knowledge bank. A document is not a finding, and this table is labelled as an inventory for that reason.
- GAO reports, appropriations law, IG audits168
The prior build counted PDF files in the GAO folder and rendered the total as “Total Findings”. A GAO report is not a finding; a single report carries many.