Employee Standards of Conduct:

Improvements Needed in the Army and Air Force Exchange Service and the Navy Resale System Office

FPCD-79-15: Published: Apr 24, 1979. Publicly Released: Apr 24, 1979.

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The Army and Air Force Exchange Service (AAFES) and the Naval Resale System Office (NAVRESO) are the largest of the nonappropriated-fund agencies. They were established to provide merchandise and services to military service personnel at the lowest practical price and to contribute to military welfare and recreation programs from operating profits. Certain aspects of the agencies' standards of conduct programs need improvement including the enforcement of post-employment statutes and the financial disclosure systems.

Although three statutes restrict the post-employment activities of Exchange Service and the Resale System Office employees, the Resale System Office has no system to detect and prevent violations. The Exchange Service has a system, but inadequate filing, processing, and review procedures prevent it from being effective. Nineteen cases were found of possible violations of post-employment laws restricting selling activities of retired military officers at the Exchange Service and referred them to the Department of Justice and the military finance centers for further inquiry and disposition. Since the Exchange Service and the Resale System Office operate under Department of Defense (DOD) standards of conduct regulations, the same problems could exist in other Defense agencies.

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