Defense Business Operations Fund

Gao ID: AIMD-94-7R October 12, 1993

GAO provided information on the Department of Defense's (DOD) departmentwide review of the implementation and operation of the Defense Business Operations Fund. GAO found that: (1) in 1993, DOD established a review team to review the Fund's organization, education and training, budget, accounting policy, centralized system development, financial management systems, cash management, and financial reporting; (2) the DOD decision to exclude certain activities from the Fund is compromising the Fund's underlying funding principles and may decrease DOD incentives to reduce costs; (3) DOD needs to reinforce the Fund's original concept of identifying total operational and overhead costs so that it can take appropriate cost reduction actions, adopt a sound cash management policy, and ensure that it has accurate cash forecasts and financial reports and the full support of DOD; (4) DOD may not be able to meet task completion dates for the Fund's Improvement Plan because of a lack of leadership and inaccurate information; and (5) DOD needs to appoint a high-level director to oversee the management of the Fund and ensure that the Fund is effectively and efficiently implemented.



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