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Financial Management: Navy Needs to Improve Its Accounting for Ship Fuel Purchases

AFMD-91-54 Published: Jul 23, 1991. Publicly Released: Jul 23, 1991.
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Highlights

Pursuant to a congressional request, GAO reviewed the Navy's practices for acquiring ship fuel, focusing on whether the Navy had adequate controls to ensure that its financial management systems accurately accounted for ship fuel purchases.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Navy To improve the Pacific Fleet's accounting controls over Navy ship fuel purchases, the Secretary of the Navy should direct the Commander in Chief, Pacific Fleet, to require its ships to provide the requisition number and quantity for each fuel purchase in the Navy Energy Usage Reporting System reports.
Closed – Implemented
In September 1991, Pacific Fleet ships began including the requisition number and quantity for each fuel purchase in their reports.
Department of the Navy To improve the Pacific Fleet's accounting controls over Navy ship fuel purchases, the Secretary of the Navy should direct the Commander in Chief, Pacific Fleet, to produce monthly reports for Fleet accounting managers to use in reviewing fuel purchase transactions and resolving accounting errors.
Closed – Implemented
In late 1991, the Pacific Fleet implemented new procedures that require more detailed reporting of ship fuel purchases. With these new procedures, the Fleet is producing monthly reconciliation reports on unmatched expenditures and the aging of unpaid fuel purchases.
Department of the Navy To ensure that timely and reliable data on ship fuel purchases are recorded in the Fleets' accounting records, the Secretary of the Navy should direct the Commanders in Chief, Atlantic and Pacific Fleets, to record obligation data on ship fuel purchases promptly and accurately in the accounting system.
Closed – Implemented
The Chief of Naval Operations reemphasized to the fleets the need to record transactions promptly and correctly in accordance with DOD and Navy Comptroller instructions.
Department of the Navy To ensure that timely and reliable data on ship fuel purchases are recorded in the Fleets' accounting records, the Secretary of the Navy should direct the Commanders in Chief, Atlantic and Pacific Fleets, to conduct prompt reviews of the unpaid account balances in accordance with the Defense regulation.
Closed – Implemented
The Atlantic Fleet began conducting more extensive reviews in October 1990. The Pacific Fleet, in late 1991, implemented procedures to identify and monitor unpaid account balances in accordance with Defense regulations.

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Topics

Accounting errorsAccounting proceduresCost accounting standards complianceFederal agency accounting systemsFinancial management systemsFuel suppliesInternal controlsNaval procurementReporting requirementsMilitary forces