10 U.S.C. § 240d — Audits: audit of financial statements of

Page 332 TITLE 10—ARMED FORCES § 240c employees in addition to departments, agencies, and components.’’ ANNUAL REPORTS ON FUNDING FOR CORRECTIVE ACTION PLANS Pub. L. 116–92, div. A, title X, § 1009(c), Dec. 20, 2019, 133 Stat. 1576, as amended by Pub. L. 116–283, div. A, title X, § 1081(c)(5), Jan. 1, 2021, 134 Stat. 3873; Pub. L. 118–31, div. A, title X, § 1061(i), Dec. 22, 2023, 137 Stat. 400, provided that: ‘‘Not later than 10 days after the submittal to Congress under section 1105(a) of title 31, United States Code, of the budget of the President for any fiscal year after fiscal year 2020, the Secretary of Defense shall submit to the congressional defense com- mittees [Committees on Armed Services and Appro- priations of the Senate and the House of Representa- tives] a report setting forth a detailed estimate of the funding required for such fiscal year to procure, obtain, or otherwise implement each process, system, and tech- nology identified to address the current corrective ac- tion plans of the departments, agencies, components, and elements of the Department of Defense, and the corrective action plan of the Department as a whole, for purposes of chapter 9A of title 10, United States Code, during such fiscal year.’’ [Pub. L. 116–283, div. A, title X, § 1081(c), Jan. 1, 2021, 134 Stat. 3873, provided that the amendment made by section 1081(c)(5) of Pub. L. 116–283 to section 1009(c) of Pub. L. 116–92, set out above, is effective as of Dec. 20, 2020 (probably should be Dec. 20, 2019) and as if included in Pub. L. 116–92.] § 240c. Audit: consolidated corrective action plan; centralized reporting system The Under Secretary of Defense (Comptroller) shall— (1) on a bimonthly basis, prepare a consoli- dated corrective action plan management summary on the status of key corrective ac- tions plans related to critical capabilities for the armed forces and for the components of the Department of Defense that support the armed forces; and (2) develop and maintain a centralized moni- toring and reporting process that captures and maintains up-to-date information, including the standard data elements recommended in the implementation guide for Office of Man- agement and Budget Circular A–123, for key corrective action plans and findings and rec- ommendations Department-wide that pertain to critical capabilities. (Added Pub. L. 115–91, div. A, title X, § 1002(d), Dec. 12, 2017, 131 Stat. 1540, § 253; renumbered § 240c, Pub. L. 115–232, div. A, title X, § 1002(a)(1)(A), Aug. 13, 2018, 132 Stat. 1945.) Editorial Notes AMENDMENTS 2018—Pub. L. 115–232 renumbered section 253 of this title as this section. § 240d. Audits: audit of financial statements of Department of Defense components by inde- pendent external auditors (a) AUDITS REQUIRED.—For purposes of satis- fying the requirement under section 3521(e) of title 31 for audits of financial statements of De- partment 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 inde- pendent external auditor. (b) SELECTION OF AUDITORS.—The selection of independent external auditors for purposes of subsection (a) shall be based, among other ap- propriate criteria, on their qualifications, inde- pendence, and capacity to conduct audits de- scribed in subsection (a) in accordance with ap- plicable generally accepted government auditing standards. The Inspector General shall partici- pate in the selection of the independent external auditors. (c) MONITORING AUDITS.—The Inspector Gen- eral 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 con- ducting audits under subsection (a) to submit a report on their audits each year to— (A) the Under Secretary of Defense (Comp- troller) 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 Man- agement and Budget; (C) the head of each component audited; and (D) the appropriate committees of Con- gress. (2) APPROPRIATE COMMITTEES OF CONGRESS DEFINED.—In this subsection, the term ‘‘appro- priate committees of Congress’’ means— (A) the Committee on Armed Services, the Committee on Homeland Security and Gov- ernmental 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 Appropria- tions of the House of Representatives. (e) RELATIONSHIP TO EXISTING LAW.—The re- quirements of this section— (1) shall not be construed to alter the re- quirement 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 audi- tor, 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. (Added and amended Pub. L. 115–91, div. A, title X, § 1002(e)(1)–(3), Dec. 12, 2017, 131 Stat. 1541, § 254; renumbered § 240d, Pub. L. 115–232, div. A, title X, § 1002(a)(1)(A), Aug. 13, 2018, 132 Stat. 1945; Pub. L. 118–31, div. A, title IX, § 901(d), Dec. 22, 2023, 137 Stat. 354.) 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, Nov. 25, 2015, 129 Stat. 961, which was formerly set out Page 333 TITLE 10—ARMED FORCES § 240e 1 See References in Text note below. as a note under section 2222 of this title, prior to repeal by Pub. L. 115–91, div. A, title X, § 1002(e)(4), Dec. 12, 2017, 131 Stat. 1541. AMENDMENTS 2023—Subsec. (d)(1)(A). Pub. L. 118–31 struck out ‘‘and the Chief Management Officer of the Department of De- fense’’ 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), in- serted ‘‘and the Chief Management Officer of the De- partment 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 redesig- nated former subpar. (C) as (D). Subsec. (e)(1). Pub. L. 115–91, § 1002(e)(3)(B), redesig- nated 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), redes- ignated 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), redes- ignated 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 Con- gress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representa- tives by House Resolution No. 5, One Hundred Eight- eenth Congress, Jan. 9, 2023. AUDIT REQUIREMENT FOR DEPARTMENT OF DEFENSE COMPONENTS Pub. L. 118–31, div. A, title X, § 1004, Dec. 22, 2023, 137 Stat. 379, as amended by Pub. L. 118–159, div. A, title X, § 1004, Dec. 23, 2024, 138 Stat. 2047, provided that: ‘‘(a) IN GENERAL.—During each of fiscal years 2024 through 2034, each component of the Department of De- fense 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 Treas- ury for deficit reduction, except as provided in sub- section (b). ‘‘(b) EXCEPTIONS.—The following accounts are ex- cluded from any reductions: ‘‘(1) Military personnel, reserve personnel, and Na- tional 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, Aug. 13, 2018, 132 Stat. 1947, as amended by Pub. L. 116–92, div. A, title X, § 1011, Dec. 20, 2019, 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 [Aug. 13, 2018], the Secretary of Defense shall re- quire any accounting firm providing financial state- ment auditing or audit remediation services to the De- partment 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 con- tained 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 pro- tections or privileges established by any other provi- sion of Federal law.’’ § 240e. Audits: use of commercial data integra- tion and analysis products in preparing au- dits (a) DEPLOYMENT OF DATA ANALYTICS CAPABILI- TIES.—The Secretary of Defense shall use com- petitive procedures under chapter 137 1 of this title to procure or develop technologies or serv- ices, including those based on commercially available information technologies and services to improve data collection and analyses to sup- port preparation of auditable financial state- ments for the Department of Defense. (b) USE OF FUNDING AND RESOURCES.—The Sec- retary of Defense may use science and tech- nology funding, prototypes, and test and evalua- tion resources as appropriate in support of de- ployment of technologies and services as de- scribed in subsection (a). (Added and amended Pub. L. 115–91, div. A, title X, § 1002(f)(1), (2), Dec. 12, 2017, 131 Stat. 1541, 1542, § 254a; renumbered § 240e, Pub. L. 115–232, div. A, title X, § 1002(a)(1)(A), Aug. 13, 2018, 132 Stat. 1945.) Editorial Notes CODIFICATION Text of section, as added by Pub. L. 115–91, is based on text of subsecs. (a) and (b) of section 1003 of Pub. L. 114–328, div. A, title X, Dec. 23, 2016, 130 Stat. 2380, which were formerly set out in a note under section 2222 of this title, prior to repeal by Pub. L. 115–91, div. A, title X, § 1002(f)(3), Dec. 12, 2017, 131 Stat. 1542. REFERENCES IN TEXT Chapter 137 of this title, referred to in subsec. (a), was repealed by Pub. L. 116–283, div. A, title XVIII, § 1881(a), Jan. 1, 2021, 134 Stat. 4293, effective Jan. 1, 2022, in con- junction with the transfer and reorganization of acqui- sition provisions in this title by Pub. L. 116–283, div. A, title XVIII, Jan. 1, 2022, 134 Stat. 4149. For definition of ‘‘chapter 137 legacy provisions’’, see section 3016 of this title. AMENDMENTS 2018—Pub. L. 115–232 renumbered section 254a of this title as this section. 2017—Subsec. (a). Pub. L. 115–91, § 1002(f)(2)(A), sub- stituted ‘‘of this title’’ for ‘‘of title 10, United States Code,’’ and struck out ‘‘, as soon as practicable,’’ after ‘‘develop’’. Subsec. (b). Pub. L. 115–91, § 1002(f)(2)(B), substituted ‘‘deployment of technologies and services as described in subsection (a)’’ for ‘‘this deployment’’.