Department of Defense Progress in Resolving Contract Audits

Gao ID: AFMD-84-4 October 27, 1983

In response to a congressional request, GAO evaluated the Department of Defense's (DOD) contract audit resolution system to determine whether: (1) procurement officials comply with resolution system requirements; (2) the system meets government standards; and (3) the system needs improving.

Before the 1982 revisions, the contract auditing resolution system did not work as intended because of design weaknesses and procurement officials did not comply with system requirements. Further, DOD experienced mixed results in resolving audits. As of March 31, 1983, there were about 600 contract audits with questioned costs of $1.7 billion which had remained unresolved for more than 6 months. This represented a 55-percent increase over the previous year. While the revisions made in the system corrected many of the weaknesses, the revised system had just become operational and it was too early for GAO to determine the extent of compliance with system requirements. If properly implemented, the system should satisfy almost all government requirements for audit resolution. However, a few changes are still needed to improve effectiveness and ensure the most economical operation.

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.

Director: John J. Adair Team: General Accounting Office: Accounting and Financial Management Division Phone: (202) 275-5200


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