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Highlights

GAO reviewed the Defense Logistics Agency's (DLA) continuing efforts to implement and comply with the Federal Managers' Financial Integrity Act of 1982 (FMFIA).

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Defense Logistics Agency 1. The Director, DLA, should discontinue reporting that its systems of internal accounting and administrative control, taken as a whole, meet the requirements of FMFIA until the program provides an adequate basis for determining the overall status of internal controls.
Closed - Implemented
DLA will continue to use its complete network of management controls as a basis for determining compliance with FMFIA. The DLA 1986 Annual FMFIA Statement once again cited this as a basis to conclude that it had overall reasonable assurance.
Defense Logistics Agency 2. The DLA accounting systems should not be reported as being in conformance with the Comptroller General's requirements until the systems are reviewed and tested in operation and the major deficiencies are corrected.
Closed - Implemented
DLA does not agree that a panel is required. It took a decentralized approach, assigning responsibility to each staff element and field activity. The systems automation center will coordinate and identify systematic problems.
Defense Logistics Agency 3. The Director, DLA, should establish a centrally controlled, coordinated approach for evaluating internal controls with ADP systems and use the Department of Defense ADP Internal Control Guidelines as a guide.
Closed - Implemented
DLA established the Financial Systems Evaluation Office, which will evaluate and test systems in operation.

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