Status of DOD Efforts To Improve Accounting for Foreign Military Sales

T-AFMD-88-9: Published: Mar 31, 1988. Publicly Released: Mar 31, 1988.

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GAO discussed Department of Defense (DOD) efforts to improve its foreign military sales (FMS) accounting procedures and to resolve discrepancies in FMS accounting records. GAO found that: (1) major accounting and internal control weaknesses prevented proper management and control of the FMS Trust Fund; (2) DOD delayed implementation of the new central FMS accounting system because of changes in system design caused by unexpected complexities in the multiple support systems; (3) a series of system design and interfacing requirements changes caused further delays; (4) when system testing fell behind schedule, DOD failed to adjust milestones, causing all the test results to be of questionable use; (5) under a proposed new test schedule, the system would be operational in 1989; and (6) as of December 1987, the estimated cost of the system increased by $30.8 million, to $75.3 million. GAO believes that, to successfully implement new FMS accounting procedures, DOD and the services must work together to: (1) reevaluate problems and determine what improvements are possible; (2) ensure system accuracy and timeliness; (3) carefully document and control final resolutions of existing problems; and (4) ensure the continuing effectiveness of any corrective actions.

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