Navy Accounting Systems

GAO has been cooperating with members of the Navy's accounting staff as they have worked to submit two accounting system designs for GAO approval. Approval of these designs is anticipated during fiscal year 1980. Revised capitalization criteria for Government-owned property was issued by GAO. The revised criteria increased the dollar minimum for the capitalization of all fixed assets except furniture, fixtures, and office equipment, from $300 to $1000. The dollar minimum for furniture, fixtures, and office equipment remains at $300. Navy instructions requiring fixed asset accounting at all industrial fund activities does not include the specific dollar capitalization criteria for furniture, fixtures, and office equipment. GAO cannot approve any accounting system design that does not conform to its established limits for capitalization of property. A receiving report is needed for the design documentation at the Military Sealift Command in order to comply with GAO requirements for documentary evidence to support disbursements to contractors. The present procedure used by the Military Sealift Command involves comparing details between documents prepared from the same source. No receiving report is used to support the disbursement. GAO needs help and assurance that the necessary action will be taken to ensure that adequate documentation for these Navy accounting systems will be submitted in a timely manner, so that the systems can qualify for approval early in fiscal year 1981.