Accounting and Reimbursement for Foreign Military Sales

A review was completed at the Army International Logistics Command of the accounting and reimbursement of administrative expenses, including civilian and military personnel costs, connected with foreign military sales.

An unnecessary loss of revenue to the Government was discovered. The 2-percent administrative surcharge is not being billed to foreign customers on certain cases although applicable authorization provides for the surcharge. These cases are erroneously coded in the computer master program as being exempt from the surcharge. The cause of the incorrect coding was not determined because of a lack of documentation. A total of 66 incorrectly coded cases were identified. However, a recently introduced programming system will assure correct coding in the future.

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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