Industrial Funds: DOD Should Improve Its Accounting for Asset Capitalization Program Funds
NSIAD-86-112
Published: May 23, 1986. Publicly Released: May 23, 1986.
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Highlights
GAO reviewed the implementation of the Department of Defense (DOD) Asset Capitalization Program (ACP) to evaluate its progress and problems after 2 years of operation.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should expedite the establishment of formal ACP accounting procedures within the next fiscal year. |
DOD revised chapter 95, "Industrial Fund Statements," of its accounting manual. The revision provides for identifying ACP funds separate from other industrial funds.
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| Department of Defense | To provide Congress with the information necessary to ensure the viability of ACP and compliance with section 305(j) of the 1985 DOD Authorization Act, the Secretary of Defense should consider establishing separate cash accounts and a separate equity section in the industrial fund accounting system, or expanding its annual reporting to Congress to include actual ACP revenues, obligations, and expenditures by fiscal year. |
DOD decided not to establish separate cash accounts or equity sections in its accounting systems. However, DOD agreed to expand its reporting on ACP in its annual industrial fund report to Congress. The report, issued in February 1987, included a summary of capital asset purchases showing the amount of equipment purchased, amount of actual outlays, and the source of funding.
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Topics
Accounting proceduresAppropriated fundsAssetsCost accountingDefense procurementFunds managementIndustrial fundsInternal controlsProgram managementReporting requirements