Plant Modernization

DOD's Management of the Asset Capitalization Program Needs Improvement Gao ID: NSIAD-89-147 August 4, 1989

Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) Asset Capitalization Program (ACP), which Congress intended to finance DOD capital investment projects.

GAO found that: (1) DOD has not provided the services with comprehensive guidance on permissible ACP expenditures, resulting in military activities spending ACP funds on such items as furniture and vehicles; (2) ACP lacked a functional program manager at the department level until July 1989; (3) ACP lacked a systematic approach for identifying investment opportunities, including long-range activity modernization plans; (4) military activities did not follow existing justification, review, or approval procedures, and were slow to acquire and install ACP projects; (5) activities were not adhering to established internal controls; (6) service- and command-directed ACP projects have restricted activities' ability to use ACP for needed plant equipment; (7) many activities bought lower-priority items because they believed they would lose unobligated ACP funds; and (8) the DOD annual report to Congress on ACP did not include all project life-cycle costs.

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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