Defense Business Fund

Gao ID: AFMD-93-52R March 1, 1993

Pursuant to a legislative mandate, GAO reviewed the Department of Defense's (DOD) progress in implementing the Defense Business Operations Fund. GAO found that: (1) DOD has not completed policies to govern the Fund's operations and does not anticipate completion until September 1993; (2) DOD needs to define procedures to implement its policies and make changes in its financial systems; (3) DOD has partially implemented a new department-wide accounting system without fully determining its system requirements, evaluating costs, benefits and technical risks, or establishing performance measures; (4) DOD has not conducted a comprehensive assessment of the adequacy of the skills and resources devoted to the Fund and its related systems; (5) DOD has persistent problems in its financial and accounting systems which hamper implementation of the Fund; (6) Congress and auditors cannot rely on DOD financial reports due to their inaccuracy, incompleteness, inconsistency, and untimeliness; (7) financial report inaccuracy is due to the lack of DOD guidance, the failure of accounting systems to provide all necessary information, and inadequate field staffing; and (8) DOD top management needs to make a substantial commitment to the Fund's implementation by placing a high priority on financial management, enhancing existing financial systems, and making realistic evaluations of management and personnel resources.



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