Internal Controls:

Defense's Use of Emergency and Extraordinary Funds

AFMD-86-44: Published: Jun 4, 1986. Publicly Released: Jul 21, 1986.

Additional Materials:

Contact:

John F. Simonette
(202) 275-9490
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GAO reviewed whether adequate procedures are in place to control the Department of Defense's (DOD) use of funds allocated for emergency and extraordinary (E&E) expenses.

GAO found that: (1) DOD lacks management control of confidential E&E funds because the Office of the Secretary of Defense (OSD) has not issued a regulation governing the use of such funds; (2) although OSD issued a departmentwide regulation governing the use of E&E funds for official representation, DOD did not always follow them; (3) there were instances in which DOD spent E&E funds on entertaining DOD personnel; (4) DOD components repeatedly used E&E funds for expenditures that were not of an emergency or extraordinary nature; (5) the lack of a departmentwide regulation resulted in inconsistencies in DOD component regulations; and (6) two DOD components do not require adequate separation of duties related to checking account responsibilities. GAO also found that: (1) certain fiscal year 1984 and 1985 expenditures for official representation were prohibited by regulations or used for nonemergency situations; and (2) although E&E funds may be spent for any purpose determined to be proper, regulations do not address the use of E&E funds to pay for recurring events or entertaining DOD personnel.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: DOD does not concur with this recommendation. It has chosen not to issue a departmentwide regulation because of the authority extended to the Secretaries of Defense to use E&E funds at their discretion. In addition, DOD contends that, since the GAO report does not indicate any significant misuse of authority regarding the use of funds, no specific direction is required.

    Recommendation: The Secretary of Defense should issue a departmentwide regulation governing all uses of E&E funds, not just those for official representation. At a minimum, this regulation should establish criteria regarding the purposes for which confidential funds can or cannot be used.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: Regulations were revised to ensure proper internal control by separation of duties in controlling checking accounts.

    Recommendation: The Secretary of Defense should direct the Secretary of the Army and the Secretary of the Air Force to require the Army Intelligence and Security Command and the Air Force Office of Special Investigations to revise their regulations to require an adequate separation of duties in controlling checking accounts used for E&E funds.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: DOD reviewed the expenditures GAO questioned, and reimbursement will be considered in cases where it is appropriate. DOD believes, however, that no useful purpose would be served in reviewing all expenditures for the last 2 years. DOD also reviewed existing procedures for approving the expenditure of funds for official representation.

    Recommendation: The Secretary of Defense should direct all DOD components authorized to use E&E funds for official representation to examine their records for at least the past 2 fiscal years and obtain reimbursement for E&E expenditures that were made primarily for the benefit of DOD personnel.

    Agency Affected: Department of Defense

  4. Status: Closed - Not Implemented

    Comments: DOD does not concur with this recommendation. It contends that expenditures for recurring entertainment events are well within the intent of their E&E authority, whether foreseeable or not.

    Recommendation: The Secretary of Defense should require that all regulations governing representation funds prohibit using such funds in the future for recurring events.

    Agency Affected: Department of Defense

 

Explore the full database of GAO's Open Recommendations »

Sep 29, 2016

Sep 28, 2016

Sep 27, 2016

Sep 26, 2016

Sep 23, 2016

Sep 21, 2016

Sep 7, 2016

Aug 30, 2016

Looking for more? Browse all our products here