Financial Management:

Status of the Defense Business Operations Fund

AFMD-92-79: Published: Jun 15, 1992. Publicly Released: Jun 15, 1992.

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Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) progress in implementing the Defense Business Operations Fund, provided information on key tasks, and proposed deadlines for DOD to consider in implementing the Fund.

GAO found that DOD: (1) has not finalized the Fund's key policies involving cash management, intrafund transactions, and capital asset accounting; (2) has made little progress in improving the existing cost accounting systems used by the stock and industrial funds and has not finalized the requirements for the cost accounting system it plans to develop; (3) must ensure that management expertise and staffing levels are sufficient and prioritize financial management; (4) must enhance existing financial systems, implement new systems more effectively, and consider cost implications in its decisionmaking; and (5) plans to meet the deadlines GAO proposed for periodic progress in implementation of the Fund.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The House and Senate Armed Services Committees' reports for FY 1993 extended the sunset provision until April 15, 1994. The Senate Armed Services Committee report provided that no new activities be added to the Fund. The House Armed Services Committee report also established key milestones for evaluating the implementation of the Fund.

    Matter: As DOD has made only limited progress in developing and implementing key policies and systems, Congress may wish to extend the sunset provision and related restrictions on Fund operations called for in the National Defense Authorization Act of Fiscal Years 1992 and 1993 through the end of fiscal year (FY) 1994. If the extension is authorized, DOD should not be permitted to add any new activities to the Fund in FY 1994. Congress may also wish to make achievement of the key milestone dates mentioned above criteria for the evaluation of the Fund.


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