Unauthorized and Questionable Use of Appropriated Funds to Pay Transportation Costs of Non-Appropriated-Fund Activities

LCD-76-233: Published: Jun 3, 1977. Publicly Released: Jun 3, 1977.

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Non-appropriated-fund activities provide members of the armed services with goods and services not furnished by the Government. These activities include post exchanges, liquor stores, clubs, and recreational facilities. The activities operate primarily with funds generated from their own operations, but the Department of Defense (DOD) gives them some appropriated-fund support.

In addition to the support authorized by DOD, millions in appropriated funds have been spent for transportation support that should have been funded by the non-appropriated-fund activities. Non-appropriated-fund activities did not always reimburse DOD for using the Defense Transportation System. Unreimbursed costs primarily related to the overseas transportation of foreign-made merchandise and personal property. The Navy financed overseas land transportation costs with appropriated funds, a practice inconsistent with Army and Air Force practices.

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