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GAO discussed the Department of Defense's (DOD) progress in implementing and operating the Defense Business Operations Fund. GAO noted that: (1) DOD initiated a number of comprehensive, long-term projects in July 1989 to streamline its administrative operations; (2) the fund could provide more relevant budgeting and oversight information, identify activities that increase the level of cost, reduce the amount of cash needed to support Fund operations, provide better DOD-wide management information, and correct financial and information management problems if it is properly implemented; (3) DOD has not corrected long-standing problems in the fund because of vacant management positions, underestimates of the magnitude and complexity of implementing the fund, and severe systems and financial control problems within DOD that have not been addressed; (4) the fund represents a comprehensive management tool for the services to plan and control their operations; and (5) DOD needs to minimize risks that might cause the fund to fall short of its objectives.

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