Financial Management: Improved Management Needed for DOD Disbursement Process Reforms
AIMD-97-45
Published: Mar 31, 1997. Publicly Released: Mar 31, 1997.
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Highlights
GAO reviewed the Defense Finance and Accounting Service's (DFAS) development and implementation of its project to improve disbursement processes and significantly reduce problem disbursements, focusing on 14 action items to improve transactions by others (TBO) disbursement operations in the short term.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Defense Finance and Accounting Service | To ensure the effective management of ongoing and future disbursement reform efforts, the Director, DFAS, should develop more complete analysis to identify underlying causes, define solutions, and measure progress. |
In February 1997, DFAS designated a new program office to focus on eliminating "For-Others" transactions and reducing problem in-transit disbursements. DFAS analyzed the "For-Others" payment process and identified weaknesses in several business processes as the source of many of its disbursement problems. DFAS has implemented several initiatives, such as the Defense Cash Accountability System (DCAS), to change existing business processes, by automating the internal routing processes for moving edited data to the accounting stations and improving payment timeliness and accuracy. GAO's review of DOD documentation showed that the DCAS module that will reengineer the "For-Others" process was fully implemented at all DFAS locations by the end of fiscal year 1999. According to DOD's February 2000 problem disbursement report, the absolute value of problem in-transit disbursements has decreased by 83 percent since June 1997.
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| Defense Finance and Accounting Service | To ensure the effective management of ongoing and future disbursement reform efforts, the Director, DFAS, should provide for consistent project management with clearly defined responsibilities and authority. |
DFAS dedicated a manager with extensive project, accounting and financial management experience to be responsible for reducing in-transits and overseeing a business process reengineering effort to eliminate for-others transactions. DFAS believes the manager's responsibilities and authority have been clearly articulated to her and DFAS says it will identify and assign staff to be dedicated to this reform effort.
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| Defense Finance and Accounting Service | To ensure the effective management of ongoing and future disbursement reform efforts, the Director, DFAS, should prioritize reform efforts to ensure that sufficient resources are allocated to the most severe sources of problems. |
Annually, DFAS establishes a goal and timeframes for reducing problem in-transit disbursements and eliminating "For-Others" transactions to the extent possible. To help them meet their reduction goals, DFAS implemented the first module of the Defense Cash Accountability System (DCAS), automating the "For-Others" process by electronically transmitting collections, disbursements, and reimbursements between DFAS disbursing and accounting stations. This improved the timeliness for recording in-transit disbursements. This DCAS module was fully implemented at all DFAS locations by the end of fiscal year 1999. According to DOD's February 2000 problem in-transit report, the absolute value of problem in-transit disbursements decreased by 83 percent since June 1997.
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Topics
Accounting proceduresBudget outlaysFederal agency accounting systemsFinancial managementStaff utilizationInteragency relationsInternal controlsQuestionable paymentsExpenditure of fundsGovernment reform