[DOD's Authority to Net Out Adjustments to M Accounts]
Highlights
Pursuant to a congressional request, GAO reviewed whether the Department of Defense (DOD): (1) practice of netting out adjustments to obligations recorded in its remaining M accounts was proper under new account closing provisions; and (2) complied with the requirement that it arrange for an audit of its accounts to determine invalid and valid balances. GAO noted that: (1) the new account closing provisions do not require a departure from the prior practice of netting out adjustments; (2) on November 30, 1990, DOD reported an M account balance of $18.8 billion, but the DOD Inspector General believed that the balance was materially misstated and included invalid obligations that should have been deobligated; (3) DOD has not satisfied the audit reporting requirements, since it has not clearly set forth the amount of valid M account obligations; and (4) since it has not determined the proper balance of the M accounts, DOD is not complying with provisions for netting out adjustments to M accounts.