Financial Management:

DOD's Use of Expired and Lapsed Appropriations

T-NSIAD-90-65: Published: Sep 20, 1990. Publicly Released: Sep 20, 1990.

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GAO discussed: (1) the use of expired and lapsed budget authority by the Department of Defense (DOD); and (2) legislation to strengthen control and oversight of DOD budget authorities. GAO noted that: (1) as of September 30, 1989, the amount in the DOD M account was about $18.7 billion, and the DOD merged surplus accounts included an additional $25 billion; (2) the M accounts for all other executive branch agencies totalled $9.5 billion; (3) the number and dollar value of DOD M account transactions over $100,000 for the military services increased significantly for fiscal years (FY) 1985 through 1989; (4) in an M account transaction review of the military services, in 7 cases the transactions seemed appropriate, 3 cases involved improper use of M accounts, and the other 8 cases involved expired budget authority; and (5) the questionable circumstances of the individual cases relate more to financial and contact management deficiencies within DOD, than to the use of expired and lapsed accounts. GAO believes that: (1) additional legislation would limit the amount of surplus budget authority available, and improve accountability; (2) financial leadership, such as the establishment of a chief financial officer, and improved reporting and auditing of transactions using lapsed authority, are necessary to resolve the problems; and (3) DOD should correct certain financial and contract management practices which allow the unnecessary use of M account authorities.

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