Twenty-Seven Years' Experience with Defense Industrial Funds

Gao ID: FGMSD-76-51 October 5, 1976

An overview of 27 years of Department of Defense use of industrial funds indicates that some hoped-for objectives were achieved, but there are shortcomings. The funds were authorized by Congress to provide working capital for the operation of Defense industrial and commercial activities.

The funds have simplified financing, promoted the use of cost accounting, fostered efficiency, and provided managerial incentives. However, flexibility in manpower is not always available; financing arrangements have not enhanced productivity; and systems for measurement of costs and productivity are inadequate.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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