DOD's FMFIA Assertions

GAO reviewed the Department of Defense's (DOD) fiscal year (FY) 1992 Federal Managers' Financial Integrity Act (FMFIA) report. GAO noted that: (1) the FY 1992 FMFIA report overstates the effectiveness of DOD internal controls and financial systems and is inconsistent with GAO audit reports; (2) the DOD report identifies 116 material internal control weaknesses in major DOD resource areas such as contract administration, system acquisition, and property management; (3) there are extremely serious accounting control weaknesses in the military services' operations and the Defense Business Operations Fund's activities; (4) DOD accounting systems do not comply with accounting principles and standards; (5) FMFIA managerial self-assessments have not identified serious internal control weaknesses; (6) DOD has not addressed the root causes of its internal control problems, such as staff failure to carry out existing control procedures; and (7) in addition to improving its financial management systems, DOD needs to build a strong financial management team to achieve the initiatives and cost savings it has promulgated.