Financial Management:

Analysis of Operating Cash Balance of the Defense Logistics Agency's Stock Fund

AFMD-90-75: Published: Jul 5, 1990. Publicly Released: Aug 6, 1990.

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Pursuant to a congressional request, GAO provided information on: (1) whether the Defense Stock Fund, managed by the Defense Logistics Agency (DLA), could operate at less than the currently required 11-day operating cash balance; (2) how refunds made to stock fund customers affected the 11-day balance; and (3) how stock fund customers used the refunds.

GAO found that: (1) the Defense Stock Fund has operated with less than an 11-day operating cash balance; (2) during fiscal years (FY) 1988 and 1989, stock fund monthly operating balances ranged from 1.6 to 17 days of cash; (3) the Department of Defense's (DOD) yearend operating cash balances have been less than the 11-day requirement; (4) operating cash balances for FY 1988 and 1989 showed that the average monthly fluctuation was 4.4 days; (5) DLA has made substantial refunds from the stock fund to its customers, about $5.6 billion since 1985; and (6) the largest refunds were given to DOD stock fund customers in FY 1986 and 1987, and the military services were also recipients of refunds during those years.

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