Review of Use of Appropriated Funds for Defense Commissary Operations

AFMD-82-45: Published: Aug 11, 1982. Publicly Released: Aug 11, 1982.

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GAO reviewed whether the Department of Defense (DOD) took appropriate action to comply with the intent of Congress regarding the proper funding of certain operating expenses. The review was designed to provide Congress with information to use in considering future DOD appropriation requests.

GAO found that, during fiscal year (FY) 1980, the Army, the Air Force, and the Marine Corps used $3.8 million in appropriated funds for intrabase transportation, purchase and maintenance of equipment, supplies, and utilities. GAO believes that the Armed Services should use commissary revenues to reimburse appropriated funds for all such expenses incurred since the beginning of FY 1976. The Armed Services have provided equipment without charge for use in support of commissary operations and because the commissaries may not have a permanent need for some of this equipment. GAO believes that appropriated funds should be reimbursed in an amount equal to either the cost of the equipment or an appropriate rental charge. In FY 1977, the Air Force used $3.6 million in appropriated funds for the purchase and maintenance of data processing equipment to be used exclusively in its commissary system. This use of funds was prohibited by law. Congressional prohibition against the use of appropriated funds to subsidize certain commissary operating expenses is longstanding. Despite this, such use continues because the military services have adopted widely divergent funding practices that conflict with the intent of Congress and Defense Directives.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: Although there are still areas of disagreement between DOD and GAO regarding what specific costs are properly payable or reimbursable from commissary revenues, Congress supported the GAO interpretation with a $25 million reduction in DOD appropriations. No further work is envisioned at this time.

    Recommendation: The Secretary of Defense should direct the military services to use existing commissary revenues to reimburse appropriated funds for the following: (1) expenses incurred for the cost of intrabase transportation, purchase and maintenance of operating equipment, supplies, and utilities for commissaries, beginning with FY 1976; (2) the cost of, or a reasonable rental charge for, equipment used primarily to support commissary operations; and (3) the cost of purchasing and maintaining the data processing equipment purchased by the Air Force in FY 1977 for the commissary system.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should emphasize to the military services the need to comply with existing Defense Directives in funding commissary operations in future years.

    Agency Affected: Department of Defense

 

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