Financial Management

Defense Accounting Adjustments for Stock Fund Obligations Are Illegal Gao ID: AFMD-87-1 March 11, 1987

GAO reviewed the magnitude of a series of Department of Defense (DOD) obligation adjustments to determine whether: (1) the procedures the Army and Air Force used to calculate and record the adjustments were proper; and (2) the adjustments complied with existing legal requirements.

GAO found that: (1) it was not in the government's interest for DOD to augment current appropriations through retroactive accounting adjustments which it did not fully disclose to Congress for approval; (2) DOD used inadequate methods to inform Congress of the impact of obligational adjustments on budget authority; (3) the use of statistical sampling to estimate and adjust recorded obligations was illegal, since the Air Force and the Army could not identify specific transactions or support calculated totals; (4) the adjustments provided additional obligational resources in excess of the amounts DOD requested from Congress; and (5) an accounting policy change was necessary to bring DOD into compliance with accepted accounting principles and standards.


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