DOD Infrastructure:

DOD Is Opening Unneeded Finance and Accounting Offices

NSIAD-96-113: Published: Apr 24, 1996. Publicly Released: Apr 24, 1996.

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David R. Warren
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GAO reviewed the Department of Defense's (DOD) plan to open new finance and accounting offices.

GAO found that: (1) the Defense Finance and Accounting Service (DFAS) estimated that it needed 16 rather than 21 finance and accounting offices to support DOD finance and accounting operations; (2) by limiting the number of offices to 16, DOD could maintain its projected annual operating savings of $120 million and avoid spending $51 million in military construction costs; and (3) despite this analysis, DOD has continued with its plan to open 21 offices because it believes the Fiscal Year 1996 DOD Authorization Bill requires it to do so.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: DOD did not agree with the recommendation. DOD concluded that the National Defense Authorization Act for Fiscal Year 1996 directed it to open two of the facilities that its study had concluded were not needed. However, there was still time to address the need for the remaining three facilities that were not needed. DOD delayed its decision to open three of the five unneeded operating locations and indicated it would provide Congress with the required information if it decided to open them. DOD later decided to open one additional location without conducting the required study. DOD's position for not studying the need for this facility was that the requirement only applied to sites opened during FY1996. Nevertheless, by not opening the remaining 2 sites, DOD avoided spending about $22 million in military construction funds.

    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller) to terminate plans to open the five facilities that DFAS determined are no longer needed to effectively carry out DOD finance and accounting operations.

    Agency Affected: Department of Defense


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