Evaluation of Agency Comments on Cash and Investment Management of Defense Nonappropriated Funds

The major recommendation contained in the report entitled, "Cash and Investment Management of Department of Defense Nonappropriated Funds Need To Be Improved," was that, unless the Department of Defense (DOD) can show that disadvantages outweigh advantages, Congress should enact legislation: (1) directing that DOD nonappropriated funds (NAFs) be put in the Treasury and invested in Treasury securities; and (2) specifying what the interest policy should be. This recommendation envisioned NAF receipts being deposited to the credit of the Treasury and funds excess to current operating needs being invested in Treasury securities. The recommendation was based primarily on the principle of financial management that all funds, including trust funds, received and disbursed by the government as a result of its operations should be deposited with the Treasury and included in the federal budget.