OFFICE OF INSPECTOR GENERAL
DEPARTMENT OF DEFENSE
4800 MARK CENTER DRIVE
ALEXANDRIA, VI
RGINIA 22350-1500
January 5, 2024
MEMORANDUM FOR UNDER SECRETARY OF DEFENSE (COMPTROLLER)/CHIEF
FINANCIAL OFFICER, DOD
ASSISTANT SECRETARY OF THE NAVY (FINANCIAL
MANAGEMENT AND COMPTROLLER)
DIRECTOR, DEFENSE FINANCE AND ACCOUNTING SERVICE
AUDITOR GENERAL, DEPARTMENT OF NAVY
SUBJECT: Oversight of the Audit of the FY 2024 Department of the Navy Working Capital
Fund Financial Statements (Project No. D2024-D000FS-0059.000)
The purpose of this memorandum is to inform you of our planned oversight that will
begin immediately. The Chief Financial Officers Act of 1990, as amended, requires this audit.
In accordance with the Act, the DoD Office of Inspector General is the principal auditor for the
Department of the Navy (DON) Working Capital Fund Financial Statements. We contracted
with the independent public accounting firm of Ernst & Young, LLP (EY) to audit the DON
Working Capital Fund Financial Statements as of and for the fiscal years ending September 30,
2024, and September 30, 2023. The objective of EY’s audit is to determine whether the FY 2024
DON Working Capital Fund Financial Statements and related notes are presented fairly and in
conformity with accounting principles generally accepted in the United States of America. The
objective of our project is to provide contract oversight of EY’s audit and determine whether EY
complied with the contract and generally accepted government auditing standards. We will
execute the contractor’s audit procedures associated with reviews of transactions and facilities
that are Special Access Programs and TOP SECRET/Sensitive Compartmented Information and
provide an unclassified version of the results of our review to EY to use in developing its overall
audit conclusions.
We will rely on the Government Accountability Office/Council of the Inspectors General
on Integrity and Efficiency, “Financial Audit Manual,” Volume 2, June 2022 (Updated
May 2023), Section 670, “IG Oversight of Audits Performed by Contracted Independent Public
Accounting (IPA) Firms,” to design and perform oversight procedures to review EY’s audit work
and, if applicable, disclose instances in which EY did not comply, in all material respects, with
generally accepted government auditing standards. Our review will not enable us to express an
opinion on the DON Working Capital Fund Financial Statements or draw conclusions about the
effectiveness of internal control, whether the financial management systems substantially
complied with the Federal Financial Management Improvement Act of 1996, or on the DON
Working Capital Fund’s compliance with laws and regulations. We will provide oversight and
review EY’s audit work, but EY will be responsible for expressing the opinion on the financial
statements and related notes.
We request that you designate a staff member to serve as our point of contact for this
oversight project within 5 days of this memorandum. The point of contact should be a
Government employee—a GS-15, pay band equivalent, or military equivalent—and