Financial Management:

Problems in Accounting for DOD Disbursements

AFMD-91-9: Published: Nov 9, 1990. Publicly Released: Nov 9, 1990.

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David O. Nellemann
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GAO reviewed the military services' accounting problems with cross-disbursements, focusing on cross-disbursements that the Department of State made on behalf of the services.

GAO found that: (1) the services' failure to use uniform financial information caused serious problems in accounting for disbursements; (2) the use of nonstandard data made the processing of cross-disbursement transactions extremely complex and resulted in clerical processing errors; (3) incomplete or erroneous cross-disbursement information resulted in millions of dollars of disbursements remaining unmatched with obligations; (4) as of September 30, 1989, the services could not match $54 million in cross-disbursements from State with obligations; (5) Army and Air Force data on total cross-disbursements as of December 1989 and February 1990, respectively, showed an aggregate of almost $6 billion in disbursements unmatched with obligations, and $440 million of that amount was over 180 days old; (6) the Department of Defense (DOD) implemented a departmentwide management improvement project, the Corporate Information Management (CIM) initiative, to develop standard, uniform information requirements and data formats; and (7) DOD planned to develop a single, uniform numbering or coding structure, the Single Numbering project, to link planning, programming, and budgeting phases with budget execution and accounting.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The single numbering concept has been incorporated in the CIM initiative for use in conjunction with other functional requirements in accomplishing CIM objectives.

    Recommendation: The Secretary of Defense should require that a single numbering structure be made an integral part of the DOD CIM program.

    Agency Affected: Department of Defense

  2. Status: Closed - Not Implemented

    Comments: GAO has conducted a follow-up review on DOD's (all military services) problems in accounting for disbursements pursuant to a request received from Chairman John Glenn, Senate Committee on Governmental Affairs. AIMD-IRM/NSIAD is currently processing an interim report to Chairman Glenn entitled, "Financial Management: DOD Cannot Accurately Account for Disbursements." Pursuant to the Chairman's request, AIMD/IRM-NSIAD is continuing to review DOD's problems with accounting for disbursements. This work will follow up on the recommendations made in this report and will develop more timely recommendations for corrective action based on the current status of DOD's accounting systems for disbursements. The recommendations stemming from this work will supersede the recommendations in this report.

    Recommendation: The Secretary of Defense should incorporate the single numbering coding structure in all service feeder systems that will support and provide information to the DOD-wide standard accounting and finance systems to be developed as a result of the CIM program.

    Agency Affected: Department of Defense


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