GAO's Views on the Military's Financial Management ADP Systems

Accounting problems in the Department of Defense (DOD) that have been reported by GAO include: the use of open allotments for unauthorized purposes; the nonexistence of general ledgers or the nonuse of them as a source for financial reports; the obligation of O and M funds when material is purchased by local stock funds; the accounting for fixed assets; the obligation of not more than 20 percent of appropriations in the last 2 months of each fiscal year; the accounting procedures for noncontractual claims against the Government; and the lack of accrual accounting. Many of the accounting systems' designs in DOD and the military services were not in conformity with their principles and standards. GAO has always advocated standard systems such as the automatic data processing (ADP) system, but this system has had some problems. Hopefully, the Navy's new standard system will overcome past problems with management and design philosophy which led to a proliferation of nonstandard systems. The Navy's consolidation of its civilian pay systems into seven standard systems, and the Army and Air Force's consolidation of theirs into one each was commended. GAO must have adequate documentation of ADP systems in order to approve them. There have been obsolescence problems regarding documentation. Documentation standards need to be followed. At times the ADP design has not been in conformity with the functional requirements and specifications of the system. This was seen as a communication problem to be handled on an individual basis.