Financial Management:

Fiscal Year 1992 Audit of the Defense Cooperation Account

NSIAD-93-185: Published: Aug 13, 1993. Publicly Released: Aug 13, 1993.

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Pursuant to a legislative requirement, GAO reviewed contributions of money, real or personal property, services, and supplies given to the Department of Defense (DOD) by any person, foreign government, or international organization.

GAO found that: (1) during fiscal year (FY) 1992, deposits to the Defense Cooperation Account totalled $5.3 billion; (2) DOD transferred $10.8 billion to DOD accounts and other agencies to fund incremental costs of Operations Desert Shield and Desert Storm; (3) DOD implemented adequate accounting procedures and internal controls to administer the account; (4) as of September 30, 1992, foreign governments had contributed goods and services valued at $5.7 billion; (5) DOD drafted regulations governing the Defense Cooperation Account and the deposit of proceeds from the sale of donated goods; and (6) FY 1992 contributions to DOD and related Defense Cooperation Account transactions were considerably less than in FY 1991.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Implementing the GAO recommendation, Congress passed P.L. 103-160 requiring GAO to make "periodic audits" rather than annual audits of contributions to DOD.

    Matter: Congress should amend 10 U.S.C. 2608(i) and 2350g(d), which currently require that GAO conduct an annual audit of the Defense Cooperation Account and related activities. Specifically, the law should provide GAO with audit authority without specifying the frequency of the audits.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: On February 8, 1995, the Under Secretary of Defense (Comptroller) issued a memorandum to the heads of DOD components that promulgates guidance on contributions for defense programs, projects, and activities. This guidance has been incorporated in chapter 3 of volume 12 of the DOD Financial Management Regulations, which are scheduled to be printed in September 1996.

    Recommendation: The Secretary of Defense should issue financial management regulations on the Defense Cooperation Account and related contributions of money and goods.

    Agency Affected: Department of Defense


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