Case Studies

Transportation and Shipping Execution and Management Support

During the FY10, FY11, and FY12 SBR/SBA audits of the USMC the auditors identified the process of recording transportation and shipping costs as a high risk area of concern and wrote an official notice of finding and recommendation (NFR) identifying a lack of support and reconciliation, as well as overstated obligations.  In FY12 the USMC was, however, able to properly identify the universe of transactions and provide enough support to complete the SBA audit.  This support consisted of incorporating a unique adjustment methodology, developed by Sehlke Consulting, to account for the Transportation of Things population, which included high obligation rates among the household goods portion of Marine’s Permanent Change of Station (PCS) moving costs.

All DoD agencies will undoubtedly be required to fully reconcile all of their transportation and shipping costs for Military PCS to their associated accounting systems and will need to provide original supporting documentation to support any future audit requests.  The transportation and shipping process cuts across all of the service organizations and is a DoD wide issue.  The burn rate analysis, reconciliation and adjustment methodology Sehlke Consulting developed will help any agency accurately capture obligations and properly present them on the financial statements.  This solution is not utilized anywhere else in the DoD but can be applied as necessary and Sehlke Consulting is uniquely prepared to support the agencies attempts to improve their Military PCS processing and obligations.  Sehlke Consulting can also provide insight on overall future improvements to the entire process of transportation in the DoD.

Military Payroll Support

Sehlke Consulting was responsible for reconciling the Military Payroll detailed LES data from the USMC payroll system (MCTFS) to the Treasury (DCAS) to the USMC accounting system (SABRS) to the level that allowed the auditors to gain confidence over the population. One of the unique hurdles was the ability to identify and reconcile entitlements by appropriation and fiscal year. This had never been required prior to the audit and was only necessary due to the limited scope of the FY12 Statement of Budgetary Resources (SBR).  This reconciliation has not yet been successfully completed and audited anywhere else in the DoD.

Sehlke Consulting has the institutional knowledge and is uniquely positioned to assist all DoD agencies in developing this detailed reconciliation that could include new system requirements and data retention and retrieval techniques not currently in place.  Additionally, Sehlke Consulting can provide essential support across all aspects of the Military Payroll line of business as we have been the process lead at the USMC for MILPAY audit support, process documentation, ICOFR testing, reconciliation, data analysis, risk analysis, issue identification, corrective action development and implementation. Lastly, as a result of Sehlke Consulting’s comprehensive USMC Military Payroll audit knowledge, we bring to the table unique perspectives on how to shape agencies’ approaches to undergoing a Military Payroll audit which will minimize risk.

Bulk Obligation Support

Bulk obligations are a unique area of concern that resulted from the USMC audits. Bulk Obligations are complex from their definition to their support or lack thereof.  As of the FY12 USMC SBA audit Bulk Obligations have resulted in the largest findings and adjustments to the financial statement. Sehlke Consulting is responsible for working with the USMC and the auditors to define, identify, and support bulk obligations. Additionally, we developed the USMC Bulk Obligations Policy and Procedures Manual and trained the commands on how to properly manage and support bulk obligations.

All DoD agencies will also need to be able to accurately and efficiently identify their bulk obligation universe because it results in the auditors then being able to identify a judgmental sample and test them separately, thus limiting the impact of any findings and benefiting the agency. Sehlke Consulting can work with the agencies to identify the population, review for proper supporting documentation, and implement any necessary updates to management policy and procedures. Once this process is fully executed it will also result in decreased unsupported obligations in the year of execution, which will allow agency financial managers to make more efficient use of their funds.

Audit Response Center and Management Support

Sehlke Consulting assisted in the development and support of the USMC Audit Management Center.  This unique framework and organization policy was the platform for the Navy Audit Response Center (ARC) and our personnel continue to currently assist the ARC in its development from a USMC overview role.  Consistent management will be key to all DoD agencies future audit requests as samples increase in size from the current control testing/examination environment to the expected large substantive samples that will accompany any first year full scope audit.  All agencies will need experienced personnel to manage, provide quality assurance, and adapt to changing audit needs.  Sehlke Consulting was directly involved with the full implementation and support of the Marine Corps audit and is uniquely qualified to support future requirements across all DoD agencies.

Who We Are

Contact

Contact: Chad Sehlke, MBA, CDFM
Phone: 703-600-9626
Fax: 877-353-7172
Email: hqbdteam@sehlkeconsulting.com
Website: www.sehlkeconsulting.com