Information on Duplicate Payments to Contractors by DLA's DCASR in Cleveland, OH

GAO examined the issue of duplicate payments by the government to contractors, surveying procedures at selected federal payment centers, including the Defense Logistics Agency's (DLA) Defense Contract Administration Services Region (DCASR) in Cleveland, Ohio.

A review of the DCASR records containing government checks and contractor refunds and an analysis of payment transactions showed that: (1) private businesses had returned 26 payments of $1,000 or more during fiscal year 1984, totalling $8.5 million; (2) contractors or the military identified 10 of the 26 duplicate payments and DCASR identified 4; and (3) manual processing, used when the automated system rejected payment, was a significant contributor to duplicate payment errors. All nine DCASR centers used the same automated payment system, however only about half of the payments were processed without some need for manual review, additional data input, or other actions. The automated payment system had controls for preventing duplicate payments which were only effective if the proper procedures were followed. GAO also found that DCASR did not have a routine procedure to detect potential duplicate payments without relying heavily on others. GAO provided the results of its review and a listing of 744 potential duplicate payments to DCASR. DLA has initiated plans to redesign its accounting system; however, GAO feels that some consideration should be given to expanding the present system's capability to identify duplicate payments. GAO requested that the results of any further testing for duplicate payments performed be forwarded to it.