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Financial Management: More Controls Needed Over Army's Obligation of Funds

AFMD-87-18 Published: May 14, 1987. Publicly Released: May 14, 1987.
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Highlights

GAO assessed the Army's efforts to prevent improper obligations of customers' operation and maintenance (O&M) funds by industrial fund activities.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Army The Secretary of the Army should direct AMC to improve management controls over its obligation process by revising the December 1985 Letter of Instruction on O&M obligation/deobligation procedures to require an independent observer of the year-end obligation process to help ensure that all regulatory requirements are met.
Closed – Implemented
On June 26, 1987, AMC issued a revised Letter of Instruction directing that an independent observer review procedures for year-end obligations and observe the year-end obligation process.
Department of the Army The Secretary of the Army should direct AMC to improve management controls over its obligation process by rejecting any deobligation reports submitted by activities that do not adequately explain why deobligations were made.
Closed – Implemented
On June 26, 1987, AMC issued a revised Letter of Instruction which warned that inadequately supported deobligation analyses would be rejected and returned to their originators.
Department of the Army The Secretary of the Army should direct AMC to improve management controls over its obligation process by reviewing information currently required for deobligation reports to determine what additional information, such as the date of the initial obligation, is needed to better monitor the deobligation process.
Closed – Implemented
On June 26, 1987, AMC issued a revised Letter of Instruction requiring eight additional elements of information in deobligation analysis reports, including the date of the initial obligation.

Full Report

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Topics

Appropriated fundsBudget obligationsDefense appropriationsDeobligationsFunds managementIndustrial fundsInternal controlsMonitoringRevolving fundsMilitary forces