Financial Management

Operating Cash Requirement for Air Force Stock Fund Can Be Reduced Gao ID: AFMD-89-60 April 7, 1989

Pursuant to a congressional request, GAO reviewed Air Force stock fund pricing and refund practices to determine: (1) whether the stock fund could operate at less than the currently required 11-day operating cash balance; (2) how refunds made to stock fund customers affected the 11-day cash balance; and (3) how customers used the refunds.

GAO found that: (1) the Air Force stock fund accounting system was incomplete and inaccurate, since it did not distinguish between appropriated and operating stock fund cash balances; (2) the Air Force did not report its accounting system deficiencies in its 1988 Federal Managers' Financial Integrity Act (FMFIA) report to the Secretary of Defense; (3) since 1986, the stock fund fiscal year-end operating balances have been equivalent to less than a 3-day supply of cash; (4) a 3-day cash target could reduce the stock fund customers' budget authority by over $215 million; (5) refunds to customers totalling over $1 billion since fiscal year 1984 have been the major factor in reducing the operating cash balance; and (6) it could not determine the disposition of the refunds because the Air Force merged them with other accounts.

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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