Department of Defense Foreign Currency Fluctuation Fund for Military Construction and Family Housing
ID-82-20: Published: Feb 16, 1982. Publicly Released: Feb 16, 1982.
- Full Report:
GAO was asked to summarize its followup work on the Department of Defense (DOD) response to an earlier report on the Foreign Currency Fluctuation Fund for Military Construction and Family Housing.
GAO continues to disagree with DOD over its administration of the funding for foreign currency fluctuation, construction, and defense. GAO believes that the Fund was intended to cover foreign currency gains as well as losses and that such gains were to be accounted for and held for possible transfer to the Fund. Foreign currency gains should have been achieved in fiscal year 1981 for the unexpended balances of fiscal years 1979 and 1980 projects. These gains should be reported and held for transfer to reduce earlier losses in the Fund. Moreover, the currency gains would have been more had the Army been accounting for fiscal year 1981 projects and holding their gains for transfer to the Fund. Determining the present status of this Fund is complicated by the DOD action of merging foreign fluctuation funds with NATO infrastructure appropriations without maintaining a separate accounting of Fund transactions and balances. At present, the Fund appears to exist merely as a shell since none of the currency gains realized during a previous fiscal year were transferred to the Fund. Also, GAO found that accounts were reporting currency fluctuations only for those specific accounts still containing unexpended balances and were not reporting gains on previous fiscal years. Some DOD records do show part of the original fund still available. GAO believes that the fund should have remained intact since it was not meant to be a one-time, one-way transfer to cover only foreign currency losses.