DOD Bulk Fuel:

Budgeting for Bulk Fuel and Other Operation and Maintenance Activities

T-NSIAD-96-208: Published: Jul 30, 1996. Publicly Released: Jul 30, 1996.

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GAO discussed the military services' budgeting for bulk fuel. GAO noted that: (1) the Defense Fuel Supply Center's (DFSC) planned bulk fuel sales to the services are about $440 million less than the services' estimated requirements for fiscal year (FY) 1996; (2) Department of Defense (DOD) officials believe that their bulk fuel estimates are not overstated, since the estimates reflect the need to respond to changing requirements and actual fuel use was greater than the amount requested in 2 of the past 4 years; (3) the estimates did not include supplemental funds used to finance contingency operations or fuel returned to DFSC for credit; (4) the $183 million difference in the services' and DFSC estimates for FY 1997 is not as significant as in FY 1996 because DOD, the services, and DFSC have worked to align their estimates more closely; (5) other overestimated operation and maintenance (O&M) accounts include the Army's operating tempo account and the Army's and Navy's depot maintenance accounts; (6) the services have a consistent pattern of over- and underestimating requirements for their O&M activities; (7) O&M obligations may not reflect the activities' actual costs because DOD financial systems do not effectively account for and control actual costs incurred; and (8) although variations between requirement estimates and actual obligations always occur, the services need to make their estimates more accurate to enhance and facilitate budget decisionmaking.

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