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IMMEDIATE RELEASE

Release No: 086-01
March 01, 2001

PROGRESS MADE IN ACHIEVING "CLEAN" FINANCIAL STATEMENTS

In presenting audited financial statements for fiscal 2000 to the Office of Management and Budget and the Congress today, the Department of Defense announced the Defense Finance and Accounting Service (DFAS) is the first Defense agency to receive an unqualified - "clean" - opinion on its audited financial statements.

An unqualified opinion is the best opinion provided by an auditor. It means the statements are fairly and accurately presented. Deloitte & Touche, an independent certified public accounting firm, issued the unqualified opinion on the DFAS fiscal 2000 financial statements.

"Many thanks are due to countless hard-working DFAS employees, who are just as committed as I am to this important goal," said DFAS Director Thomas R. Bloom. "This is a tremendous achievement - a watershed day for DoD - and it's just the beginning. We have proven it can be done and are committed to the goal of helping to produce the same for all of DoD," Bloom said.

DFAS is the financial management arm of DoD and was created 10 years ago to consolidate and improve the Department's finance and accounting operations.

In addition to the DFAS opinion, the Department's Military Retirement Fund, with assets valued at more than $160 billion, once again received a clean opinion on its audited financial statements - as it has each year since 1994.

Historically, the federal government made little use of commercial-like financial statements, with accounting standards varying from agency to agency. In the Department of Defense, accounting systems were primarily designed to account for how money appropriated by the Congress was spent. Those systems performed this function well, but were not developed to produce commercial-like financial statements.

With the passage of the Government Management Reform Act, however, federal agencies were required to prepare agency-wide audited financial statements, beginning in 1996. The Department of Defense is committed to achieving clean opinions department-wide, and has focused on modernizing its information management systems, a key to unqualified opinions.