Army Efforts To Restore Integrity to Its Financial Management Systems

FGMSD-78-28: Published: Apr 27, 1978. Publicly Released: Apr 27, 1978.

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In October 1975, the Assistant Secretary of the Army (Financial Management) notified the House Appropriations Committee of a serious breakdown in the financial control over Army procurement appropriations which resulted in violations of the Antideficiency Act totaling more than $225 million. These violations related to the section of the Act that provides that no officer or employee shall make or authorize an expenditure from, or create or authorize an obligation under, any appropriation exceeding the amount therein.

The most serious factors contributing to the Army's overall financial management problems were: failure to design and implement an effective procurement appropriation accounting system; failure to adequately control fund allocations, reprogrammings, and transfers; and failure to accurately account for customer orders. The impact of these problems was compounded by the phenomenal growth of the Army's customer order program over several years. Army efforts to correct the financial management problems have been concentrated in: eliminating erroneous balances in its accounting records, primarily in the procurement appropriation accounts and improving its accounting, reporting, and fund control systems to prevent recurrence of these problems. The Army has recorded over $1.5 billion in adjustments to its accounting records but, because many of the records are missing or in poor condition, it is unlikely that all errors will ever be found or corrected.

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