Financial Management

More Controls Needed Over Army's Obligation of Funds Gao ID: AFMD-87-18 May 14, 1987

GAO assessed the Army's efforts to prevent improper obligations of customers' operation and maintenance (O&M) funds by industrial fund activities.

GAO found that, of the $3.3 million in O&M funds that the Army carried over in fiscal year 1986, it improperly obligated $2.9 million during previous fiscal years, thereby extending the availability of O&M appropriations which would have either expired or been properly obligated for other purposes. GAO noted that the improper obligations precluded the Army from making valid obligations because the O&M appropriations had expired by the time it deobligated the funds. GAO concluded that, although a December 1985 instruction clarified and provided more guidance concerning obligations, the Army needs to take additional steps to reduce the risks associated with the: (1) year-end obligation process not preventing recurring problems of improper obligations; and (2) quarterly deobligation reports not providing enough information to Army Materiel Command (AMC) headquarters officials to effectively monitor implementation at industrial fund activities.

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.

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