Financial Management

The reliability of weapon system cost information in the Army's reports to Congress and the Pentagon and in Army reports used to support critical cost decisions is highly questionable. This information, which came from at least 18 disparate financial and logistics systems, (1) was incomplete and inconsistent among systems, (2) did not include all costs required by Army guidelines, (3) reflected unsupported adjustments, and (4) could not be independently verified. GAO's audit of the Army's financial statements for fiscal year 1992 noted continuing problems with the accuracy of weapon system cost information in the Army's logistics systems. As a result, Congress and other users of the reports cannot be fully confident that reported weapon systems costs are reliable.

GAO found that: (1) the cost reports that the Army submitted to Congress did not clearly present all the relevant costs authorized by Congress; (2) current cost reports must be further analyzed, since support costs are recorded by type of cost rather than by weapon system; (3) the Army cannot adequately ensure that its weapon system cost reports are complete, accurate, and supportable; (4) the Army is creating conflicting cost values by not using historical cost data or current cost data in its weapon system cost reports; and (5) the Army's reported weapon system costs are not conducive to independent verification, since external and internal reports on weapon system costs are inconsistent and include significant unsubstantiated adjustments.

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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