Army Commissary Accounting for Gains and Losses Needs Improvement
Gao ID: FGMSD-78-43 July 17, 1978Army commissaries are financed from appropriated funds, a revolving stock fund, and revenues from retail sales. Although by law merchandise must be sold at cost, a surcharge may be added to pay certain operating expenses. Money collected in excess of the amount required to reimburse the stock fund for operating expenses is used for commissary construction and improvements. Except for inventory losses and changes in inventory levels, sales receipts should generally equal the cost of purchases paid from the stock fund.
From July 1974 through September 1976, the Army stock fund absorbed $9.5 million in commissary losses from unidentifiable causes. These losses should be borne by commissary customers. Also, discounts earned by the fund from prompt payment for purchases, which totalled $1.2 million for the first 9 months of 1977, should have been passed on to the commissary patrons but were not.
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