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DOD Inflation: Budgeting and Monitoring Inflation Funding in the Department of Defense

NSIAD-88-79 Published: Apr 26, 1988. Publicly Released: May 26, 1988.
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Highlights

Pursuant to a congressional request, GAO reviewed the Department of Defense (DOD) budgeting procedures to determine the feasibility of: (1) budgeting separately for inflation; (2) restricting the use of inflation funds specifically for inflation costs; (3) requiring that funds appropriated for inflation, but not spent, lapse at the end of the fiscal year; and (4) providing inflation estimates for individual systems in the Selected Acquisition Reports (SAR).

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense The Secretary of Defense should ensure that inflation amounts included in SAR are computed and adjusted consistently by using the GNP deflator.
Closed – Implemented
DOD states that Instruction 7000.3 requires that the GNP deflator be used unless alternate rates are approved by ASD(C), and that DOD will ensure that these policy requirements are followed.

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Topics

Accounting proceduresAppropriated fundsBudget administrationDefense appropriationsDefense budgetsDefense procurementFunds managementFuture budget projectionsInflationMonitoring