DOD Procurement: Overpayments and Underpayments at Selected Contractors Show Major Problem
NSIAD-94-245
Published: Aug 05, 1994. Publicly Released: Aug 11, 1994.
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Highlights
Pursuant to a congressional request, GAO reviewed whether: (1) Department of Defense (DOD) contractors are retaining contract overpayments; and (2) contract underpayments are being corrected.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should mobilize available DOD contract, financing, and audit resources to identify, verify, and correct payment discrepancies identified in contractors' records. Using contractor records, DOD can research the payment status of contracts and use this information, along with government records, as a basis for further actions to reconcile payment discrepancies. |
DFAS Columbus Center has established a process to record and research returned payments from defense contractors to identify the reasons and to take actions. The Defense Contract Audit Agency has required its auditors to ensure contractors have policies and procedures for identifying overpayments and promptly refunding them to the government. In June 1998, DFAS issued revised contract reconciliation procedures to improve resource efficiency and provide for more timely reconciliation. Nevertheless, the DFAS Columbus Center continues to have a sizable and growing backlog of contracts to be reconciled. Moreover, significant discrepancies continue to exist, as found in GAO's recent review of Army and Air Force disbursing and accounting records (GAO/AIMD-99-205).
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Topics
AccountabilityDefense procurementDepartment of Defense contractorsFederal agency accounting systemsFinancial managementInternal controlsMilitary cost controlOverpaymentsRefunds to governmentUnderpayments