Savings Can Be Realized if Nonappropriated Fund Instrumentalities Pay for Their Unemployment Costs

Gao ID: GGD-85-51 July 9, 1985

During a review of unemployment benefit payments to former federal employees, GAO identified an opportunity for the Department of Defense (DOD) to save several million dollars in appropriated funds annually.

GAO found that DOD does not require nonappropriated fund instrumentalities (NAFI) to pay for unemployment benefits received by former NAFI employees. Since fiscal year 1982, about $22 million in DOD appropriated funds have been paid to the Department of Labor to cover NAFI unemployment costs. GAO believes a requirement that NAFI-generated funds be used to cover these costs would: (1) be consistent with a DOD policy to reduce the scope and magnitude of appropriated fund support for NAFI activities; and (2) provide an incentive for NAFI managers to reduce unemployment costs. GAO noted that: (1) no other federal agency uses appropriated funds to pay NAFI unemployment costs; (2) congressional subcommittees have directed DOD to use NAFI-generated funds to cover NAFI unemployment costs; and (3) DOD could use current accounting procedures to allocate unemployment costs to each individual NAFI.

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: Rosslyn S. Kleeman Team: General Accounting Office: General Government Division Phone: (202) 512-9204


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