Financial Management

Strong Leadership Needed to Improve Army's Financial Accountability Gao ID: AIMD-94-12 December 22, 1993

The Army's financial accountability for billions of dollars in resources is seriously undercut by weaknesses in its disbursement systems, inadequate controls over computer processing of financial and logistics information, and limited progress in Defense Department (DOD) efforts to beef up financial management. Overall, the lack of sustained DOD leadership has impaired the Army's ability to strengthen financial accountability. The Army's budget execution information could not be relied on to ensure Army compliance with disbursement limits set by law. Adequate controls were not always used to support recorded disbursements for the Army Material Command. General controls over computer processing gave little assurance that financial data were accurately processed or that automated systems and data were secured. DOD's efforts to improve Army financial management information have been weakened by vacancies in the position of the DOD Chief Financial Officer. Also, DOD lacks a comprehensive plan to guide the assessment of financial management personnel qualifications or other Army efforts to improve financial management. In addition, the roles and responsibilities of the various DOD organizations carrying out the Army's financial management operations have not been spelled out clearly.

GAO found that: (1) the lack of sustained DOD leadership has impaired the Army's overall ability to strengthen its financial accountability; (2) the Army's budget execution system has not been reliable; (3) during FY 1992, the Army Materiel Command did not retain adequate records to support disbursements recorded in the Army budget execution system; (4) weak controls over data processing operations could not ensure that the Army's financial data were accurately processed and secured; and (5) DOD financial management initiatives have been impaired due to a lack of key DOD personnel and a comprehensive guidance plan.

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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