Serious Breakdown in the Army's Financial Management Systems

FGMSD-76-74: Published: Nov 5, 1976. Publicly Released: Nov 5, 1976.

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Violations of the Antideficiency Act are cited as examples of the breakdown in the Army's accounting and financial management reporting systems, and its efforts to improve its financial management systems are outlined. In April 1976, $205 million in overobligations for Army procurement appropriations was reported.

A major problem in the Army's administration of its procurement appropriations is that a procurement accounting system that records, accounts for, and reconciles financial and program data has not been fully implemented. Violations of the Antideficiency Act have occurred because the Army: overstated orders from foreign governments for goods and services; transferred fund authority out of procurement appropriations to other appropriations when such funds were not available for transfer; made transfers out of appropriations and failed to make corresponding reductions in fund authority allocations; and failed to take corrective action regarding 1972 Army audit agency findings. Reconciliation procedures involve: (1) determination of amounts that have been overobligated; and (2) correcting the Army's financial records.

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