Defense's Planned Implementation of the $77 Billion Defense Business Operations Fund

GAO discussed the Department of Defense's (DOD) planned implementation of the Defense Business Operations Fund to determine the total cost of support operations. GAO noted that: (1) DOD lacked the policies, procedures, and systems to implement and operate the Fund in a businesslike manner; (2) existing component systems were not capable of providing accurate and reliable cost information and had serious internal control weaknesses; (3) without proper reporting to Congress, the increased flexibility offered by the Fund could lead to abuses; and (4) the Fund's industrial and stock fund accounting systems lacked adequate internal controls and the ability to report accurately on the results of operations. In addition, GAO believed that DOD should not implement the Defense Business Operations Fund until it better established policies and procedures and corrected weaknesses in the component systems.