Financial Management: Air Force Records Contain $512 Million in Negative Unliquidated Obligations
AFMD-89-78
Published: Jun 30, 1989. Publicly Released: Aug 03, 1989.
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Highlights
Pursuant to a congressional request, GAO reviewed negative unliquidated obligations (ULO) relating to the Air Force's purchase of supply and equipment inventories, focusing on the: (1) age and causes of ULO; and (2) procedures that the Air Force's air logistics centers (ALC) used to report them to senior Air Force officials and to Congress.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should direct the Secretary of the Air Force and the Director of the Defense Logistics Agency to jointly resolve negative ULO already recorded in ALC accounting records with the initial objective of promptly identifying and collecting any overpayments made to contractors. |
Closed – Implemented
The House Appropriations Committee used the GAO report as a basis for reducing Defense's fiscal year (FY) 1990 budget. The Department of Defense is taking action to correct the problem.
|
| Department of the Air Force | The Secretary of the Air Force should direct ALC to report, on a quarterly basis to the Air Force Logistics Command, summary-level data on the total amount and age of negative ULO. |
Closed – Implemented
The Air Force has developed a monthly report that ages negative ULO. This report will be produced by the Central Procurement Accounting System.
|
| Department of the Air Force | The Secretary of the Air Force should ensure that ALC follow existing regulations on taking immediate action to correct negative ULO. |
Closed – Implemented
The Air Force has issued guidance to the major commands and bases to ensure that they follow regulations and review ULO. The negative ULO balance has been reduced from about $500 million to about $400 million.
|
| Department of the Air Force | The Secretary of the Air Force should identify negative ULO as a material weakness in the annual Federal Managers' Financial Integrity Act (FMFIA) report to the Secretary of Defense until this weakness is corrected. |
Closed – Implemented
The Air Force identified negative ULO as a material weakness in its fiscal year 1989 FMFIA report.
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Topics
Accounting errorsAir Force procurementAir Force suppliesBudget obligationsContractor paymentsFederal agency accounting systemsInternal controlsOverpaymentsReporting requirementsUnobligated budget balances