Improvements Still Needed in Recouping Administrative Costs of Foreign Military Sales
AFMD-82-10
Published: Feb 02, 1982. Publicly Released: Feb 10, 1982.
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Highlights
Although Congress has made it clear that the foreign military sales program is not to be subsidized, the Department of Defense (DOD) has no assurance that surcharges on sales to foreign customers are sufficient to recover the full costs of administering the program. GAO was asked to review DOD actions on previous GAO recommendations for improving the accounting and financial management of the program.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense, to improve the financial management of the administrative surcharge fund, should direct the Air Force to reverse the improper transfers made to the administrative surcharge account. |
Closed – Not Implemented
The Air Force was unable to document the basis for the improper entries. Also, the transaction money would be too old to be transferred to the Air Force and would go to the "M" account. Therefore, the recommendation is no longer valid.
|
| Department of Defense | The Secretary of Defense, to improve the financial management of the administrative surcharge fund, should require the Defense Security Assistance Agency to monitor the adequacy of the administrative surcharge rate and make periodic adjustments when warranted to ensure full recovery of costs. |
Closed – Implemented
Although Defense did not agree with the report's findings, it did concur with this recommendation. Congress reduced the Defense budget by $85 million in 1983 (see accomplishment report A-AFMD-83-15). No further work is planned.
|
| Department of Defense | The Secretary of Defense, to improve the financial management of the administrative surcharge fund, should direct each military service to periodically adjust its budget estimates to reflect actual costs incurred and report these adjustments to the Defense Security Assistance Agency. |
Closed – Not Implemented
Defense did not concur with this recommendation. Although GAO believes the recommednation to be valid, there is no further action necessary as Congress reduced Defense's 1983 budget. Also, the report is now over 2 years old and the division has no further audit plans.
|
| Department of Defense | The Secretary of Defense, to improve the financial management of the administrative surcharge fund, should direct the Defense Security Assistance Agency to revise its existing budget guidance to Department of Defense activities to clearly identify the costs to be included in the budget submissions and to require recovery of the full administrative costs of foreign military sales. |
Closed – Not Implemented
Defense did not concur with this recommendation. Although GAO believes the recommendation to be valid, no further action is necessary as Congress reduced Defense's 1983 budget. Also, the report is now over 2 years old, and the division has no further audit plans.
|
| Department of Defense | The Secretary of Defense, to improve the financial management of the administrative surcharge fund, should require all commands and activities to develop accurate and timely personnel and other cost data for use in preparing budget submissions and obtaining reimbursement for expenses incurred. |
Closed – Implemented
Although Defense did not agree with the report's findings, it did concur with this recommendation. Congress reduced the Defense budget by $85 million in 1983 (see accomplishment report A-AFMD-83-18). The division does not plan any further work.
|
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Topics
Accounting systemsAdministrative costsBudget administrationCollection proceduresCost analysisForeign military salesMonitoringProgram managementReimbursements to governmentSubsidies