DOD's FMFIA Assertions

In a fiscal year 1992 report, the Pentagon asserted that its internal control and financial systems were helping to realize the objectives of the Federal Managers' Financial Integrity Act. GAO disputes this claim, citing long-standing management, internal control, and accounting weaknesses that undermine the military's ability to effectively safeguard the hundreds of billions of dollars of resources entrusted to it. GAO is concerned that the Defense Department's (DOD) assessment may lead the new administration to become overly optimistic about the state of DOD management, control, and accounting problems. Although DOD recently authorized a review of the Defense Business Operations Fund--a positive first step in GAO's view--the problems cited by GAO extend well beyond the operations of the fund. Appointing strong top leadership in DOD's financial and information management organizations is critical.