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Pursuant to a congressional request, GAO examined the Department of Defense's (DOD) use of expired appropriations, focusing on the: (1) growth and size of the M accounts and the merged surplus authority through September 30, 1990; (2) use of such accounts by the Army, Navy, and Air Force to fund upward adjustments of contract costs; and (3) extent to which that use satisfies all legal requirements.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. The Secretary of Defense should direct the service secretaries to revise their procedures for the use of expired budget authority to require, in addition to the information already provided in the request and approval process, a comprehensive statement concerning the reason for the upward adjustment. This information should explain the circumstances, contingencies, or management practices that caused the need for the upward adjustment.
Closed - Implemented
DOD issued guidance, dated June 13, 1991, that fully implemented the recommendation.

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