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Internal Controls: DOD Records Retention Practices Hamper Accountability

AIMD/OSI-00-48R Published: Feb 04, 2000. Publicly Released: Feb 04, 2000.
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Highlights

GAO reviewed the Navy's records retention and financial disbursements, focusing on the Navy's application of a Department of Defense (DOD) Financial Management Regulation (FMR) which calls for copies of disbursing officer records to be destroyed after 1 year.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Under Secretary of Defense (Comptroller) To ensure records retention guidance is consistent with the National Archives and Records Administration's General Records Schedule 6 and GAO's Policy and Procedures Manual for Guidance of Federal Agencies, Title 8, the Under Secretary of Defense (Comptroller) should revise DOD's FMR. Specifically, the records retention guidance provided in DOD's FMR, volume 5, chapters 20 and 21, should be revised to clarify that disbursing officers must maintain original records for the 6-year and 3-month period prescribed in General Records Schedule 6, and that copies of records that may be destroyed after 1 year are limited to duplicate records. Also, chapter 21 should be revised to give specific guidance for the retention of original disbursing office records, including transaction detail for amounts deposited in ATM accounts for service members on ships, and provide guidance to differentiate original records from copies. In addition, the Under Secretary of Defense (Comptroller) should validate that disbursement offices have properly implemented the revised DOD records retention regulations.
Closed – Implemented
In DOD's April 2000 response to the report, DOD stated that it was revising the DOD Financial Management Regulation (FMR) chapters cited in the recommendations and will publish the revised chapters later this year. Following the issuance of the revised DOD Financial Management Regulation chapters, the Office of the Under Secretary of Defense (Comptroller) will issue a memorandum to the Military Departments and the Defense Finance and Accounting Service requesting that their internal review organizations validate proper implementation of the records retention regulations during fiscal year 2001. In May 2000, DOD revised chapter 20 of the FMR consistent with GAO's recommendation. One month later, DOD revised chapter 21 of the FMR.

Full Report

Full Report (6 pages)

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Topics

Government Operations
Accounting proceduresDisbursing officersFederal agency accounting systemsFinancial recordsFinancial statement auditsFunds managementInternal controlsRecords managementReporting requirementsRecords retention