Resolving FAA’s PP&E Material Weaknesses

Issue: Federal Aviation Administration auditors could not determine if the agency’s construction-in-process account and related Property, Plant, and Equipment (PP&E) accounts were accurately stated in accordance with generally accepted accounting principles.

Solution: The FAA contracted with AOC in 2007 to correct the PP&E accounts and resolve the material weakness. Over a 10-month period, AOC created and implemented a remediation plan that resulted in FAA earning unqualified opinions on its 2007 and restated 2006 financial statements.

Remediating TSA’s Accounting and Reporting Material Weakness

Issue: In 2003, the Transportation Security Administration (TSA) was transferred from the Department of Transportation to the Department of Homeland Security. The transfer required the adoption of a new funding structure and a conversion to a new central accounting system. The TSA’s converted trial balance carried unsupported and unreconciled balances. Coupled with TSA’s weak internal controls, auditors declared TSA accounting and financial reporting as a material weakness from 2004-2006. TSA contracted with AOC in 2007 to assist in resolving this material weakness.

Solution: AOC delivered quantitative and qualitative measurable results. Our reconciliations eliminated $8.4 billion of unsubstantiated migrated balances, reduced the suspense account balances from more than $1 billion to less than $5 million, and ensured that the general ledger was in agreement with key subsidiary ledgers by the end of 2007. This accomplishment allowed the downgrade of the material weakness to a significant deficiency in the 2007 audit.

Integration of DIA Stand-Alone Accounting Systems 

Issue: As part of a realignment of financial management functions within the intelligence community, the Defense Intelligence Agency’s (DIA) financial management activities were expanded to include servicing Combatant Commands and other entities. The realignment involved dealing with several stand-alone accounting systems. AOC was hired to develop a methodology for integrating this accounting data into DIA’s legacy accounting system, Rosedust.

Solution: AOC developed specifications, employing the system development life cycle, for translators that would interface transactions into Rosedust from three source accounting systems – Army, Navy and Air Force – for each of the nine COCOMS, Missile and Space Intelligence Center, and another intelligence entity. AOC then developed customized solutions for each, prepared a test plan and executed the interface. In 2008, following DIA’s migration to its new core accounting system (FACTS), AOC upgraded these interfaces with a new, centralized, web-based translator that today provides DIA with an automated interface from each feeder system into FACTS. A web-based interface also was developed by AOC to integrate source accounting data from the Department of State into FACTS for the Defense Attaché. As a result of AOC’s efforts, DIA has the data necessary to facilitate more detailed reconciliation, analysis, and decision making.

Transitioning FTC from a Legacy Financial System to COTS

Issue: In 2007, the Federal Trade Commission (FTC) was converting from a mainframe-based COBOL financial system to the new Oracle Federal Financials. Because FTC has unique business functions, such as redress payments to injured consumers, there was concern that the new system’s available transactions would not address all of FTC’s requirements.

Solution: AOC was hired to ensure that the transition of accounting functionality from the legacy system to Oracle Federal Financials fully supported FTC’s business process and enabled FTC to continue to earn “clean” audit opinions on its financial statements. AOC’s work as part of the overall system implementation was a major contributing factor in FTC’s successful transition to Oracle in October 2007.