Initiatives to Improve Free Asset Management

LCD-77-416: Published: Feb 28, 1977. Publicly Released: Feb 28, 1977.

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The Department of Defense (DOD) generates funds by selling equipment which is not required to be replaced in DOD inventory. Receipts from these sales are called free assets. DOD has taken corrective actions to improve its management of free assets.

A past GAO report identified weaknesses in reporting and managing free assets. Since that time, DOD established a definition of free assets to be used by all the services; notified service branches of the new definition and required conformance with it; and established the Security Assistance Accounting Center to promote efficient financial management of the Foreign Military Sales Program. The objective of standardizing procedures could be better achieved if DOD and the service headquarters closely coordinated their work. The Army is doing a great deal to correct free asset management deficiencies noted in the last GAO report.

Recommendation for Executive Action

  1. Status: Closed

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

    Recommendation: In order to promote the uniform, DOD-wide application of free asset criteria and to improve the accuracy of future free asset estimates, the Secretary of Defense should initiate closer coordination with the services to resolve problems in applying free asset criteria to complex aspects of equipment sales and develop more effective techniques for forecasting free asset funds that will accrue from future foreign military sales.

    Agency Affected:


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