Centralization of the Billing and Collecting Functions of the Foreign Military Sales Program
FGMSD-77-46: Published: Sep 16, 1977. Publicly Released: Sep 16, 1977.
- Full Report:
Although centralization can improve accounting systems and financial management, there are a number of weaknesses in the Air Force Accounting and Finance Center's billing and collecting system which the Security Assistance Accounting Center used as a model for its centralized system and certain other problems in the Army's and Navy's systems which could adversely affect the centralized system.
An improved system is needed to control the reporting of foreign military sales deliveries. The Air Force billing process did not insure that funds were received from foreign governments before incurring costs on their behalf. The Air Force accounting system also lacked adequate controls to insure that actual costs incurred for foreign military sales were billed to foreign governments.
Recommendation for Executive Action
Comments: Please call 202/512-6100 for additional information.
Recommendation: The Security Assistance Accounting Center should: (1) establish a system to identify deliveries that are not reported or are reported at incorrect prices; (2) change forecast procedures to make sure that forecasts for all costs to be incurred are included in billing statements; (3) establish systems to ensure that all costs are properly billed to foreign governments; and (4) establish controls to ensure that revised Department procedures for collecting overdue and delinquent accounts are implemented and to take appropriate action on accounts now in a delinquent status. To help ensure that the Security Assistance Accounting Center takes necessary action to improve the billing and collecting system and to evaluate the effectiveness of the system's changes made since centralization, the Secretary of Defense should direct the Defense Audit Service to review the Center's billing and collecting system.