Photo By William Farrow | A munition found and removed in 2018 from a Formerly Used Defense Site in Puerto Rico....... read more read more
REDSTONE ARSENAL, Ala. -- The Environmental and Munitions Center of Expertise (EM CX) is supporting Headquarters USACE with a complex environmental and munitions financial audit focused on future cleanup costs to ensure the Army meets its environmental and munitions response obligations.
The Office of the Assistant Secretary of War Comptroller (OUSW(C)) contracted independent public accounting (IPA) firm KPMG to perform a financial audit covering costs associated with the Environmental and Disposal Liability (E&DL) reported by active Army, Army National Guard, Army Base Realignment and Closure (BRAC) and the Formerly Used Defense Sites (FUDS) programs.
The Army goal is to resolve "material weaknesses" identified by auditors by the end of 2026 and achieve a clean audit opinion by 2028. FUDS accounts for nearly 50% of Army’s event-driven environmental liability (EL), so resolving FUDS audit issues is critical to Army’s audit success. Within the FUDS program, a majority of the EL is in the future cleanup costs which are documented in Cost to Complete (CTC) estimates.
The EM CX, as part of the U.S. Army Engineering and Support Center, Huntsville, plays a critical role in CTC estimates by providing training, subject manager expertise (SME), guidance documents, and estimate reviews for all FUDS districts.
The EM CX provides audit support for CTCs, inventory completeness and serves as the backup support for quarterly environmental liabilities reporting. The audit support teams work with Headquarters U.S. Army Corps of Engineers to develop corrective actions and implement remediation of audit findings called Notice of Finding and Recommendation (NFR).
An NFR is a formal issue written by auditors that explains what is wrong, why it matters, and what the Army needs to fix to improve audit results. The EM CX provides critical support during audit testing by pulling the required documentation for samples and coordinating resolution of questions.
In preparation to meet the 2028 audit goal, Donna Sharp, FUDS Liaison from the EM CX, said the EM CX audit teams are working on audit readiness which is the proactive approach to identify and resolve audit issues before they become audit findings.
“We’ve been supporting HQ USACE and the Districts to achieve the goal to downgrade the Army's material weakness for the FUDS portion of the E&DL and have made significant progress in the last two years,” Sharp said. To achieve their goal, USACE Environmental Districts and the EM CX FUDS team worked together to complete eligibility determinations for 584 FUDS properties by the end of Fiscal 2025.
“An early finding in the audit was that there was too much uncertainty in the completeness of the FUDS E&DL population as 584 properties did not have any eligibility determination documentation in our database of record (FUDSMIS),” Sharp said.
“This was a big effort by HQ USACE, EM CX, and the Districts to conduct the eligibility determinations.” In addition to the 584 properties, the FUDS program must pass completeness testing to ensure there is adequate documentation to support the existence and closeout of projects.
The EM CX completeness team had been proactively working on preparing for audit testing in 2025. Sharp said FUDS passed all baseline completeness testing in 2025 which was a significant milestone since this is the first time FUDS was tested.
The completeness testing is labor intensive and the ability of the EM CX to handle all sample requests freed the field up for execution. There will be additional testing in 2026, but the auditors had no findings around the completeness of the inventory in 2025.
“A position paper explaining the outcome of the eligibility determination of the 584 was accepted by KPMG, so the eligible properties needing additional assessment will not be a material weakness,” Sharp said.
The next step, Sharp said, is to ensure FUDS follows the new Go-Forward process which will ensure the completeness of the inventory going forward. The EM CX completeness team will be spearheading that effort by assisting HQ USACE with inventory tracking and completing backcheck checklists.
In 2025, FUDS closed two of the eight Notice of Finding and Determinations (NFRs) issued in 2024 and prevented issuance of an NFR on baseline completeness.
“In 2026, we are well positioned to close three of the six remaining FUDS NFRs reissued at the end of 2025 with a heavy focus on remediation of Cost-To-Complete estimates (1,755 CTCs in 2025),” Sharp said.
The types of support the EM CX provides will work toward clean audit determination.
EM CX typically provides KPMG with audit data packages as requested and answers follow up questions; provides support to USACE District estimators on how to conduct walk throughs with the IPA of their estimates and quality control and supervisory reviews; provide quality assurance reviews annually and perform testing of any new process to ensure it works as intended.
“FUDS has had good processes in place for a long time, now we are focusing on describing our existing processes using financial audit terminology, identifying where we don't have adequate controls in our process, and helping with corrective actions to address the problems,” she said.
“We make adjustments to our guidance documents (FUDS Cost to Complete Handbook) and provide annual training to cost estimators and reviewers.”
Michelle Lordemann, EM CX director, said the FUDS audit is another example of how EM CX supports the needs of the nation.
“FUDS are a priority because they pose long-term risks to human health, safety, and the environment from hazardous materials, munitions, and explosives left behind from past Department of War activities and USACE prioritizes these cleanups based on risk to the public—particularly in areas where people live, work, or attend school”
| Date Taken: | 02.03.2026 |
| Date Posted: | 02.03.2026 12:04 |
| Story ID: | 557354 |
| Location: | REDSTONE ARSENAL, ALABAMA, US |
| Web Views: | 50 |
| Downloads: | 0 |
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