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119th Congress

Title 10 — Armed Forces

Part I · Chapter 9A — Audit

§ 240d. Audits: audit of financial statements of Department of Defense components by independent external auditors

Statutory text

(a)

Audits Required.—

For purposes of satisfying the requirement under section 3521(e) of title 31 for audits of financial statements of Department of Defense components identified by the Director of the Office of Management and Budget under section 3515(c) of such title, the Inspector General of the Department of Defense shall obtain each year audits of the financial statements of each such component by an independent external auditor.

(b)

Selection of Auditors.—

The selection of independent external auditors for purposes of subsection (a) shall be based, among other appropriate criteria, on their qualifications, independence, and capacity to conduct audits described in subsection (a) in accordance with applicable generally accepted government auditing standards. The Inspector General shall participate in the selection of the independent external auditors.

(c)

Monitoring Audits.—

The Inspector General shall monitor the conduct of all audits by independent external auditors under subsection (a).

(d)

Reports on Audits.—

(1)

In general.—

The Inspector General shall require the independent external auditors conducting audits under subsection (a) to submit a report on their audits each year to—

(A)

the Under Secretary of Defense (Comptroller) as the Chief Financial Officer of the Department of Defense for the purposes of chapter 9 of title 31;

(B)

the Controller of the Office of Federal Financial Management in the Office of Management and Budget;

(C)

the head of each component audited; and

(D)

the appropriate committees of Congress.

(2)

Appropriate committees of congress defined.—

In this subsection, the term “appropriate committees of Congress” means—

(A)

the Committee on Armed Services, the Committee on Homeland Security and Governmental Affairs, and the Committee on Appropriations of the Senate; and

(B)

the Committee on Armed Services, the Committee on Oversight and Government Reform, and the Committee on Appropriations of the House of Representatives.

(e)

Relationship to Existing Law.—

The requirements of this section—

(1)

shall not be construed to alter the requirement under section 3521(e) of title 31 that the financial statements of the Department of Defense as a whole be audited by the Inspector General or by an independent external auditor, as determined by the Inspector General; and

(2)

shall not be construed to limit or alter the authorities of the Comptroller General of the United States under section 3521(g) of title 31.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

  1. National Defense Authorization Act for Fiscal Year 2018

    Pub. L. 115–91 div. A title X § 1002(e)(1) · 131 Stat. 1283

    Enacted · 10 U.S.C. § 240d

    Added and amended Pub. L. 115–91, div. A, title X, § 1002(e)(1)–(3), Dec. 12, 2017, 131 Stat. 1541, § 254

    Source evidence

    Code source credit
    Added and amended Pub. L. 115–91, div. A, title X, § 1002(e)(1)–(3), Dec. 12, 2017, 131 Stat. 1541, § 254

    Enacted provision · exact public law section
    (1) In general.— Chapter 9A of title 10, United States Code, as added and amended by this section, is further amended by adding after section 253, as added and amended by subsection (d), a new section 254 consisting of— (A) a heading as follows: “§ 254. Audits: audit of financial statements of Department of Defense components by independent external auditors” ; and (B) a text consisting of the text of section 1005 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–92; 129 Stat. 861; 10 U.S.C. 2222 note).

  2. National Defense Authorization Act for Fiscal Year 2018

    Pub. L. 115–91 § 1002(e)(2)(B) · 131 Stat. 1283

    Struck · 10 U.S.C. § 240d(a)

    Pub. L. 115–91, § 1002(e)(2)(B), struck out “, United States Code,” after “title 31”

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 115–91, § 1002(e)(2)(B), struck out “, United States Code,” after “title 31”.

    Enacted provision · exact public law section
    (B) in subsections (a) and (e)(2), by striking “, United States Code,”.

  3. National Defense Authorization Act for Fiscal Year 2018

    Pub. L. 115–91 § 1002(e)(3)(A)(i) · 131 Stat. 1283

    Inserted · 10 U.S.C. § 240d(d)(1)(A)

    Pub. L. 115–91, § 1002(e)(3)(A)(i), inserted “and the Chief Management Officer of the Department of Defense” before semicolon

    Source evidence

    Code amendment note
    Subsec. (d)(1)(A). Pub. L. 115–91, § 1002(e)(3)(A)(i), inserted “and the Chief Management Officer of the Department of Defense” before semicolon.

    Enacted provision · exact public law section
    (i) in subparagraph (A), by inserting “and the Chief Management Officer of the Department of Defense” before the semicolon;

  4. National Defense Authorization Act for Fiscal Year 2018

    Pub. L. 115–91 § 1002(e)(2)(A) · 131 Stat. 1283

    Struck · 10 U.S.C. § 240d(d)(1)(A)

    Pub. L. 115–91, § 1002(e)(2)(A), struck out “, United States Code” after “title 31”

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 115–91, § 1002(e)(2)(A), struck out “, United States Code” after “title 31”.

    Enacted provision · exact public law section
    (A) in subsections (d)(1)(A) and (e)(3), by striking “, United States Code”; and

  5. National Defense Authorization Act for Fiscal Year 2018

    Pub. L. 115–91 § 1002(e)(3)(A)(ii) · 131 Stat. 1283

    1. Added · 10 U.S.C. § 240d(d)(1)(C); 10 U.S.C. § 240d(d)(1)(D)

      Pub. L. 115–91, § 1002(e)(3)(A)(ii)–(iv), added subpar. (C)

    2. Redesignated · 10 U.S.C. § 240d(d)(1)(C); 10 U.S.C. § 240d(d)(1)(D)

      Pub. L. 115–91, § 1002(e)(3)(A)(ii)–(iv), redesignated former subpar. (C) as (D)

    Source evidence

    Code amendment note
    Subsec. (d)(1)(C), (D). Pub. L. 115–91, § 1002(e)(3)(A)(ii)–(iv), added subpar. (C) and redesignated former subpar. (C) as (D).

    Enacted provision · exact public law section
    (ii) in subparagraph (B), by striking “and” at the end;

  6. National Defense Authorization Act for Fiscal Year 2018

    Pub. L. 115–91 § 1002(e)(3)(B) · 131 Stat. 1283

    1. Redesignated · 10 U.S.C. § 240d(e)(1)

      Pub. L. 115–91, § 1002(e)(3)(B), redesignated par. (2) as (1)

    2. Struck · 10 U.S.C. § 240d(e)(1)

      Pub. L. 115–91, § 1002(e)(3)(B), struck out former par. (1) which read as follows: “shall be implemented in a manner that is consistent with the requirements of section 1008 of the National Defense Authorization Act for Fiscal Year 2002 (Public Law 107–107; 10 U.S.C. 113 note);”

    Source evidence

    Code amendment note
    Subsec. (e)(1). Pub. L. 115–91, § 1002(e)(3)(B), redesignated par. (2) as (1) and struck out former par. (1) which read as follows: “shall be implemented in a manner that is consistent with the requirements of section 1008 of the National Defense Authorization Act for Fiscal Year 2002 (Public Law 107–107; 10 U.S.C. 113 note);”.

    Enacted provision · exact public law section
    (B) in subsection (e)— (i) by striking paragraph (1); and (ii) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively.

  7. National Defense Authorization Act for Fiscal Year 2018

    Pub. L. 115–91 § 1002(e)(3)(B)(ii) · 131 Stat. 1283

    Redesignated · 10 U.S.C. § 240d(e)(2)

    Pub. L. 115–91, § 1002(e)(3)(B)(ii), redesignated par. (3) as (2). Former par. (2) redesignated (1)

    Source evidence

    Code amendment note
    Subsec. (e)(2). Pub. L. 115–91, § 1002(e)(3)(B)(ii), redesignated par. (3) as (2). Former par. (2) redesignated (1).

    Enacted provision · exact public law section
    (ii) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively.

  8. National Defense Authorization Act for Fiscal Year 2018

    Pub. L. 115–91 § 1002(e)(2)(B) · 131 Stat. 1283

    Struck · 10 U.S.C. § 240d(e)(2)

    Pub. L. 115–91, § 1002(e)(2)(B), struck out “, United States Code,” after “title 31”

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 115–91, § 1002(e)(2)(B), struck out “, United States Code,” after “title 31”.

    Enacted provision · exact public law section
    (B) in subsections (a) and (e)(2), by striking “, United States Code,”.

  9. National Defense Authorization Act for Fiscal Year 2018

    Pub. L. 115–91 § 1002(e)(3)(B)(ii) · 131 Stat. 1283

    Redesignated · 10 U.S.C. § 240d(e)(3)

    Pub. L. 115–91, § 1002(e)(3)(B)(ii), redesignated par. (3) as (2)

    Source evidence

    Code amendment note
    Subsec. (e)(3). Pub. L. 115–91, § 1002(e)(3)(B)(ii), redesignated par. (3) as (2).

    Enacted provision · exact public law section
    (ii) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively.

  10. National Defense Authorization Act for Fiscal Year 2018

    Pub. L. 115–91 § 1002(e)(2)(A) · 131 Stat. 1283

    Struck · 10 U.S.C. § 240d(e)(3)

    Pub. L. 115–91, § 1002(e)(2)(A), struck out “, United States Code” after “title 31”

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 115–91, § 1002(e)(2)(A), struck out “, United States Code” after “title 31”.

    Enacted provision · exact public law section
    (A) in subsections (d)(1)(A) and (e)(3), by striking “, United States Code”; and

  11. John S. McCain National Defense Authorization Act for Fiscal Year 2019

    Pub. L. 115–232 div. A title X § 1002(a)(1)(A) · 132 Stat. 1636

    Changed · 10 U.S.C. § 240d

    Pub. L. 115–232 renumbered section 254 of this title as this section

    Source evidence

    Code amendment note
    Pub. L. 115–232 renumbered section 254 of this title as this section.

    Enacted provision · exact public law section
    (A) In general.— Chapter 9A of title 10, United States Code, 10 USC 240a–240f. is amended by redesignating sections 251 through 254b as sections 240a through 240f, respectively.

  12. National Defense Authorization Act for Fiscal Year 2024

    Pub. L. 118–31 div. A title IX § 901(d) · 137 Stat. 136

    Struck · 10 U.S.C. § 240d(d)(1)(A)

    Pub. L. 118–31 struck out “and the Chief Management Officer of the Department of Defense” after “chapter 9 of title 31”

    Source evidence

    Code amendment note
    Subsec. (d)(1)(A). Pub. L. 118–31 struck out “and the Chief Management Officer of the Department of Defense” after “chapter 9 of title 31”.

    Enacted provision · exact public law section
    (d) Removal of Chief Management Officer as Recipient of Reports of Audits by External Auditors.— Section 240d(d)(1)(A) of such title is amended by striking “and the Chief Management Officer of the Department of Defense”.

14 of 14 references resolved to an enrolled provision

Editorial Notes

Codification

Text of section, as added by Pub. L. 115–91, is based on text of section 1005 of Pub. L. 114–92, div. A, title X, , 129 Stat. 961, which was formerly set out as a note under section 2222 of this title, prior to repeal by Pub. L. 115–91, div. A, title X, § 1002(e)(4), , 131 Stat. 1541.

Amendments2017–2023 · 3 rounds

2023

Subsec. (d)(1)(A). Pub. L. 118–31 struck out “and the Chief Management Officer of the Department of Defense” after “chapter 9 of title 31”.

2018

Pub. L. 115–232 renumbered section 254 of this title as this section.

2017

Subsec. (a). Pub. L. 115–91, § 1002(e)(2)(B), struck out “, United States Code,” after “title 31”.

Subsec. (d)(1)(A). Pub. L. 115–91, § 1002(e)(3)(A)(i), inserted “and the Chief Management Officer of the Department of Defense” before semicolon.

Pub. L. 115–91, § 1002(e)(2)(A), struck out “, United States Code” after “title 31”.

Subsec. (d)(1)(C), (D). Pub. L. 115–91, § 1002(e)(3)(A)(ii)–(iv), added subpar. (C) and redesignated former subpar. (C) as (D).

Subsec. (e)(1). Pub. L. 115–91, § 1002(e)(3)(B), redesignated par. (2) as (1) and struck out former par. (1) which read as follows: “shall be implemented in a manner that is consistent with the requirements of section 1008 of the National Defense Authorization Act for Fiscal Year 2002 (Public Law 107–107; 10 U.S.C. 113 note);”.

Subsec. (e)(2). Pub. L. 115–91, § 1002(e)(3)(B)(ii), redesignated par. (3) as (2). Former par. (2) redesignated (1).

Pub. L. 115–91, § 1002(e)(2)(B), struck out “, United States Code,” after “title 31”.

Subsec. (e)(3). Pub. L. 115–91, § 1002(e)(3)(B)(ii), redesignated par. (3) as (2).

Pub. L. 115–91, § 1002(e)(2)(A), struck out “, United States Code” after “title 31”.

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, . Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, .

Audit Requirement for Department of Defense Components

Pub. L. 118–31, div. A, title X, § 1004, , 137 Stat. 379, as amended by Pub. L. 118–159, div. A, title X, § 1004, , 138 Stat. 2047; Pub. L. 119–60, div. A, title X, § 1005, , 139 Stat. 1029, provided that:

“(a)

In General.—

During each of fiscal years 2024 through 2035, each component of the Department of Defense shall be subject to an independent audit. Any such component that fails to be subject to such an audit during any fiscal year shall have 1.5 percent of unobligated amounts available for the component be cancelled and returned to the general fund of the Treasury for deficit reduction, except as provided in subsection (b).

“(b)

Exceptions.—

The following accounts are excluded from any reductions:

“(1)

Military personnel, reserve personnel, and National Guard personnel accounts of the Department of Defense.

“(2)

The Defense Health Program account of the Department of Defense.”

Transparency of Accounting Firms Used To Support Department of Defense Audit

Pub. L. 115–232, div. A, title X, § 1006, , 132 Stat. 1947, as amended by Pub. L. 116–92, div. A, title X, § 1011, , 133 Stat. 1577, provided that:

“(a)

In General.—

For all contract actions (including awards, renewals, and amendments) occurring more than 180 days after the date of the enactment of this Act [], the Secretary of Defense shall require any accounting firm providing financial statement auditing or audit remediation services to the Department of Defense in support of the audit required under section 3521 of title 31, United States Code, to provide the Department with a statement setting forth the details of any disciplinary proceedings with respect to the accounting firm or its associated persons before any entity with the authority to enforce compliance with rules or laws applying to audit services offered by accounting firms.

“(b)

Treatment of Statement.—

A statement setting forth the details of a disciplinary proceeding submitted pursuant to subsection (a), and the information contained in such a statement, shall be—

“(1)

treated as confidential to the extent required by the court or agency in which the proceeding has occurred; and

“(2)

treated in a manner consistent with any protections or privileges established by any other provision of Federal law.”

Credits

2017–2023 · 3 acts
  1. 2017Added and amended Pub. L. 115–91, div. A, title X, § 1002(e)(1)–(3), , 131 Stat. 1541, § 254
  2. 2018renumbered § 240d, Pub. L. 115–232, div. A, title X, § 1002(a)(1)(A), , 132 Stat. 1945
  3. 2023Pub. L. 118–31, div. A, title IX, § 901(d), , 137 Stat. 354.
Show as published

(Added and amended Pub. L. 115–91, div. A, title X, § 1002(e)(1)–(3), , 131 Stat. 1541, § 254; renumbered § 240d, Pub. L. 115–232, div. A, title X, § 1002(a)(1)(A), , 132 Stat. 1945; Pub. L. 118–31, div. A, title IX, § 901(d), , 137 Stat. 354.)

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