Inadequate Methods Still Used To Account for and Recover Personnel Costs of the Foreign Military Sales Program

FGMSD-78-47: Published: Jul 25, 1978. Publicly Released: Aug 4, 1978.

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Reliable estimates of personnel requirements for Foreign Military Sales Program activities are needed by the Congress so it can establish Department of Defense (DOD) personnel ceilings and assess the impact of personnel used in these activities on the overall capabilities of the armed services. DOD management officials also need reliable estimates of the program's personnel requirements for use in developing a budget.

The Security Assistance Manpower Accounting System which DOD began developing late in 1977 will not provide accurate and reliable data on the number of personnel needed to administer the Foreign Military Sales Program. In fact, the Department has developed no method of manpower accounting for the system. Instead, a new standard personnel-reporting format was used, and personnel data have continued to be developed under practices and procedures previously considered to be inadequate. The Security Assistance Manpower Accounting Report will not produce reliable estimates of personnel needs because: implementing instructions contained no provisions for control over the gathering and assembling of personnel data; instructions for preparing the report did not clearly define administrative personnel; and methods used by the military services to develop data for the report and the budget were inconsistent. DOD has no assurance that the 3 percent surcharge on the sales price of military equipment and services sold under the program is sufficient to recover the full cost of administering the program.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: Administrative personnel estimates in the Security Assistance Manpower Accounting Report and the administrative budget should be improved by: requiring all commands and activities providing administrative personnel data to submit their method of compiling the data to the Assistant Secretary and Director, Defense Security Assistance Agency, for approval; developing a consistent definition of administrative personnel for use in reporting personnel statistics and developing budgets; and requiring that pricing guidelines for Foreign Military Sales items be revised to allow full recovery of the cost of retirement benefits in establishing surcharge rates to recover the program's administrative expenses.

    Agency Affected:


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