Auditing and Financial Management:
Navy Negative Undelivered Orders
AIMD-96-37R, Feb 12, 1996
GAO examined the Navy's appropriation balances for undelivered orders and related balances for accounts payable as of September 30, 1994. GAO noted that: (1) Defense and Finance Accounting Service (DFAS)-Cleveland reduced two appropriation balances for undelivered orders by $72 million; (2) negative balances for undelivered orders could indicate that orders were not properly recorded, disbursements were charged to the wrong appropriation, overpayments or duplicates occurred, or the Navy exceeded its budget; (3) the reductions by DFAS-Cleveland staff caused several financial reports to be inaccurate; (4) DFAS-Cleveland followed erroneous branch office guidance which led to inconsistent reporting practices; and (5) as of September 1995, DFAS-Cleveland staff discontinued the practice of arbitrarily eliminating negative undelivered orders balances.