Navy Maintenance: Naval Aviation Depots' Asset Capitalization Program Needs Improvement
NSIAD-88-134
Published: Apr 28, 1988. Publicly Released: Apr 28, 1988.
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Highlights
GAO evaluated the naval aviation depots' (NADEP) implementation of the Department of Defense's (DOD) Asset Capitalization Program (ACP) to determine: (1) whether NADEP benefited from the program; (2) the adequacy of the internal controls for managing the program; and (3) the status of the ACP budget execution.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Navy | The Secretary of the Navy should direct the Commander, Naval Air Systems Command, to place additional management emphasis on the NADEP ACP. Specifically, the Commander should: (1) issue ACP guidance that includes well-defined procedures for justifying, ranking, reviewing, and approving projects to ensure that only valid beneficial projects are approved; (2) develop a systematic approach for identifying investment opportunities, including planning that emphasizes work process improvements; (3) ensure prompt implementation of approved projects so that anticipated benefits can be obtained as quickly as possible; and (4) initiate post-investment analyses or other measures to determine if anticipated benefits are being realized and if changes in program management are needed. |
On December 22, 1988, the Navy issued a comprehensive instruction (NAVAIRINST 11010.5) on management of the naval aviation ACP program. This instruction covers the matters included in this recommendation.
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| Department of the Navy | The Secretary of the Navy should direct the Commander, Naval Air Systems Command, to improve internal controls for the NADEP ACP program by ensuring accurate ACP depreciation accounting within NADEP and emphasizing adherence to existing controls for safeguarding assets. |
Depreciation accounting is included in NAVAIRINST 11010.5. In addition, depreciation accounting and safeguarding assets is being pursued at all depots and is receiving extraordinary attention during Inspector General audits.
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| Department of the Navy | The Secretary of the Navy should: (1) report actual ACP obligations to the Secretary of Defense and Congress; and (2) limit future funding for the NADEP ACP to that which can be successfully obligated each year, considering actual requirements and resources assigned to execute the program. |
The amended budget for fiscal years (FY) 1988 through 1989 and the biannual budget for FY 1990 through 1991 were based on actual obligations rather than commitments. In addition, the Navy reduced the FY 1988 and 1989 equipment obligation authority for the ACP program by $197.3 million.
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Topics
Budget administrationFunds managementIndustrial fundsInternal controlsNaval procurementProgram managementReporting requirementsUnexpended budget balancesMilitary forcesAsset capitalization