Financial Audit:

Air Force's Base-Level Financial Systems Do Not Provide Reliable Information

AFMD-91-26: Published: Jan 31, 1991. Publicly Released: Jan 31, 1991.

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GAO reviewed the Air Force's base-level financial management operations for fiscal years (FY) 1988 and 1989, focusing on weaknesses in internal controls and financial reporting within the bases and related commands.

GAO found that the: (1) Air Force's base-level General Accounting and Finance System routinely generated inaccurate financial information that totalled over $2.7 billion in FY 1988 and 1989; (2) base and command personnel failed to perform analytical reviews of account balances, resulting in widespread instances of inaccurate and incomplete financial data; (3) European base staff attributed significant undetected or uncorrected accounting errors in account balances to poorly trained personnel and careless accounting practices; (4) the new Combat Ammunition System failed to report inventory balances in the base-level general ledger system, causing a $115.7-million understatement of ammunition inventories; (5) bases failed to report accurate real property account balances because they incorrectly recorded construction in progress and did not timely process real property transactions; (6) base-level personnel did not always properly receive, issue, and account for equipment and inventory items; and (7) bases failed to compare master payroll files with master personnel records to ensure that payments were appropriate and accurate.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: On May 7, 1991, Headquarters, U.S. Air Force, reemphasized to all major commands existing requirements that in-use equipment be properly identified. The Air Force Audit Agency will conduct a financial audit of the Air Force in FY 1992.

    Recommendation: The Assistant Secretary of the Air Force, Financial Management, and Comptroller should ensure that equipment is tagged and identified for inventory accountability.

    Agency Affected: Department of Defense: Department of the Air Force: Office of the Assistant Secretary (Financial Management)

  2. Status: Closed - Implemented

    Comments: On May 7, 1991, Headquarters, U.S. Air Force, reemphasized to all major commands the need to reinforce existing requirements that equipment be issued only to authorized users in authorized quantities. The Air Force Audit Agency will conduct a financial audit of the Air Force in FY 1992.

    Recommendation: The Assistant Secretary of the Air Force, Financial Management, and Comptroller should ensure that equipment is issued only to authorized personnel and only in authorized quantities.

    Agency Affected: Department of Defense: Department of the Air Force: Office of the Assistant Secretary (Financial Management)

  3. Status: Closed - Implemented

    Comments: DOD stated that on September 20, 1990, Headquarters, Air Force Logistics Command, issued a message to bases directing them to ensure full compliance with existing requirements for preparing and resolving reports of discrepancy. Also, on May 6, 1991, Headquarters, U.S. Air Force, directed all major commands to comply with pertinent regulations regarding these reports.

    Recommendation: The Assistant Secretary of the Air Force, Financial Management, and Comptroller should ensure that reports of discrepancy are produced and followed up on in a timely manner.

    Agency Affected: Department of Defense: Department of the Air Force: Office of the Assistant Secretary (Financial Management)

  4. Status: Closed - Implemented

    Comments: The Department of Defense (DOD) stated that, where necessary, actions were implemented to review and clarify existing requirements for accurate accounting of construction in progress. Also, increased emphasis was placed on training accounting personnel regarding this matter.

    Recommendation: The Assistant Secretary of the Air Force, Financial Management, and Comptroller should ensure that construction in progress is recorded consistently and accurately.

    Agency Affected: Department of Defense: Department of the Air Force: Office of the Assistant Secretary (Financial Management)

  5. Status: Closed - Implemented

    Comments: DOD stated that procedures were implemented in September 1990 to obtain munitions inventory values from the Combat Ammunition System-B.

    Recommendation: The Assistant Secretary of the Air Force, Financial Management, and Comptroller should ensure that inventory in the Combat Ammunition System is reported in the general ledger.

    Agency Affected: Department of Defense: Department of the Air Force: Office of the Assistant Secretary (Financial Management)

  6. Status: Closed - Implemented

    Comments: DOD stated that actions had been taken to review and clarify existing requirements for analyzing accounts, making necessary corrections, and documenting any changes/adjustments. DOD also stated that increased emphasis had been placed on training accounting personnel.

    Recommendation: The Assistant Secretary of the Air Force, Financial Management, and Comptroller should ensure that account analysis is performed routinely, accounts are corrected accordingly, and documentation is maintained for accounting purposes.

    Agency Affected: Department of Defense: Department of the Air Force: Office of the Assistant Secretary (Financial Management)

  7. Status: Closed - Implemented

    Comments: The Department of Defense (DOD) stated in its written response that training packages were prepared and distributed to base and major command accounting and finance activities, along with placing more emphasis on accounting and properly maintaining financial accounts in formal training programs.

    Recommendation: The Assistant Secretary of the Air Force, Financial Management, and Comptroller should ensure that accounting and finance personnel at bases and major commands are properly trained to detect, analyze, and correct erroneous account balances.

    Agency Affected: Department of Defense: Department of the Air Force: Office of the Assistant Secretary (Financial Management)

  8. Status: Closed - Implemented

    Comments: DOD stated that the Air Force implemented the Standard Civilian Automated Pay System at all bases in December 1990 which incorporates automated procedures for matching payroll and personnel records on a periodic basis.

    Recommendation: The Assistant Secretary of the Air Force, Financial Management, and Comptroller should ensure that personnel files are matched and reconciled with employee payroll files at least monthly.

    Agency Affected: Department of Defense: Department of the Air Force: Office of the Assistant Secretary (Financial Management)

 

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