Financial Management
DOD Needs to Clarify Its General Gift Fund Policies to Provide for Effective Oversight Gao ID: GAO-09-486R May 27, 2009From fiscal year 2005 through fiscal year 2008, the military services received about $295 million in monetary and nonmonetary gifts from individuals and organizations wishing to donate gifts to the Department of Defense (DOD). Section 2601(a) of Title 10, U.S. Code is a long-standing authority under which the secretaries overseeing DOD, the military services, and the Coast Guard may accept a gift on the condition that the gift be used for the benefit of or in connection with the establishment, operation, or maintenance of schools, hospitals, libraries, museums, cemeteries, or other institutions or organizations under the jurisdiction of the secretary concerned. In 2008, gifts to benefit such institutions or organizations included a monetary gift to construct an education center and nonmonetary gifts of a bronze statue and granite benches. In 2006, Congress enacted additional authority, under 10 U.S.C. 2601(b) to allow the acceptance of gifts and services to benefit certain members of the armed forces and civilian employees of DOD who incurred a wound, injury, or illness in the line of duty and to benefit the dependents and survivors of those who are killed or wounded. For example, an Army official stated that the Army had recently accepted Internet services for wounded servicemembers who are recovering in a military hospital. Under 10 U.S.C. 2601, DOD and the military services are bound by certain limitations on both the acceptance and appropriate use of gifts accepted into the general gift funds--individual accounts established within the Department of the Treasury into which proceeds from monetary and nonmonetary gifts are deposited. In addition, DOD and the military services have established rules that are intended, among other things, to ensure that monetary and nonmonetary gifts that are accepted into these funds do not reflect unfavorably on the ability of the department to carry out its responsibilities in a fair and objective manner. DOD's policy establishes requirements for accepting, reporting, and monitoring gifts so that the department has the information necessary to conduct effective oversight of the general gift funds. Oversight of the general gift funds is essential to ensure that proceeds from monetary gifts and the disposal of nonmonetary gifts are properly accounted for and used in accordance with DOD and military service policies. In May 2004, we reported instances in which the military services did not have effective oversight of nonmonetary gifts accepted under the general gift fund authority for the renovations of general officer quarters, and we concluded that the military services had no assurance that the nonmonetary gifts were still in their possession. Under 10 U.S.C. 2601(h), the Comptroller General is required to make periodic audits of gifts, devises, and bequests accepted under section 2601(a) or (b) and to submit a report of the results of such audits to Congress. As agreed with Congressional offices, we addressed this requirement by focusing our review on evaluating the extent to which the military services have implemented DOD's policy for (1) accepting, (2) reporting, and (3) monitoring gifts accepted under the general gift fund authority.
The military services are implementing DOD's policy for accepting gifts under 10 U.S.C. 2601(a) and are in the process of updating their policies to reflect the additional acceptance authority of section 2601(b), which became permanent in 2008. Military service policies for accepting gifts implement DOD's policy by specifying (1) who has the authority to accept gifts, (2) what dollar threshold each acceptance authority official is authorized to accept gifts, and (3) under which conditions these officials should accept or decline gifts. Who can accept gifts and at what dollar threshold vary by service. According to the military services' policies, each acceptance authority must consider the nature of a gift and its conditions, if any, when determining whether to accept or decline gifts, consulting legal counsel when appropriate. While the military services are implementing DOD's policy for accepting gifts, they have not implemented the reporting requirements outlined in DOD's policy under the general gift authority. DOD's policy identifies specific information that the military services are to report and directs that they submit their reports to the DFAS Trust Fund Accounting Division, which in turn is to submit a quarterly report to the Under Secretary of Defense (Comptroller). Since October 2007, when DOD's reporting requirement was first established, the Under Secretary of Defense (Comptroller) has not received the DFAS report on military services' monetary and nonmonetary gifts. Our discussions with DOD officials and review of individual military service policies revealed the following reasons for this absence of reporting: (1) the military services' policies do not consistently reflect the reporting requirements outlined in DOD's policy, (2) DOD's policy did not identify the appropriate DFAS organizations for the military services to send their monetary and nonmonetary gift fund records to, and (3) military service officials have indicated that the lack of a standardized format hampers their ability to consolidate the gift fund information to report to DFAS. Lastly, the military services' policies for monitoring nonmonetary gifts are insufficient to implement DOD's policy for monitoring gifts that fall under the general gift fund authority. According to DOD's policy, acceptance authorities shall keep auditable records of all monetary and nonmonetary gifts and provide this information for periodic audits. Our discussions with military service officials revealed that the military services maintain auditable records for money, but not for nonmonetary gifts. According to military service officials, the military services do not maintain a comprehensive listing of nonmonetary gifts and their current physical location. Service officials explained that once a nonmonetary gift is accepted, it loses its designation as a gift and is entered onto the applicable service's installation property records. Service officials told us that nonmonetary gifts are monitored during the military services' routine inventories of property. However, we believe that this property inventory is not sufficient to implement DOD's procedures for monitoring nonmonetary gifts because the military services do not track gifts to verify that once accepted they are added to the property records. Consequently, the routine inventory of property would not provide evidence of effective oversight of nonmonetary gifts as it is not clear whether the property records include these gifts.
RecommendationsOur 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.
Director: Team: Phone:GAO-09-486R, Financial Management: DOD Needs to Clarify Its General Gift Fund Policies to Provide for Effective Oversight
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GAO-09-486R:
United States Government Accountability Office:
Washington, DC 20548:
May 27, 2009:
The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable Ike Skelton:
Chairman:
The Honorable John M. McHugh:
Ranking Member:
Committee on Armed Services:
House of Representatives:
Subject: Financial Management: DOD Needs to Clarify Its General Gift
Fund Policies to Provide for Effective Oversight:
From fiscal year 2005 through fiscal year 2008, the military services
received about $295 million in monetary and nonmonetary gifts from
individuals and organizations wishing to donate gifts to the Department
of Defense (DOD).[Footnote 1] Section 2601(a) of Title 10, U.S. Code is
a long-standing authority under which the secretaries overseeing DOD,
the military services, and the Coast Guard may accept a gift on the
condition that the gift be used for the benefit of or in connection
with the establishment, operation, or maintenance of schools,
hospitals, libraries, museums, cemeteries, or other institutions or
organizations under the jurisdiction of the secretary concerned. In
2008, gifts to benefit such institutions or organizations included a
monetary gift to construct an education center and nonmonetary gifts of
a bronze statue and granite benches. In 2006, Congress enacted
additional authority, under 10 U.S.C. § 2601(b) to allow the acceptance
of gifts and services[Footnote 2] to benefit certain members of the
armed forces and civilian employees of DOD who incurred a wound,
injury, or illness in the line of duty and to benefit the dependents
and survivors of those who are killed or wounded.[Footnote 3] For
example, an Army official stated that the Army had recently accepted
Internet services for wounded servicemembers who are recovering in a
military hospital.
Under 10 U.S.C. § 2601, DOD and the military services are bound by
certain limitations on both the acceptance and appropriate use of gifts
accepted into the general gift funds--individual accounts established
within the Department of the Treasury into which proceeds from monetary
and nonmonetary gifts are deposited. In addition, DOD and the military
services have established rules that are intended, among other things,
to ensure that monetary and nonmonetary gifts that are accepted into
these funds do not reflect unfavorably on the ability of the department
to carry out its responsibilities in a fair and objective manner. DOD's
policy establishes requirements for accepting, reporting, and
monitoring gifts so that the department has the information necessary
to conduct effective oversight of the general gift funds.[Footnote 4]
Oversight of the general gift funds is essential to ensure that
proceeds from monetary gifts and the disposal of nonmonetary gifts are
properly accounted for and used in accordance with DOD and military
service policies. In May 2004, we reported instances in which the
military services did not have effective oversight of nonmonetary gifts
accepted under the general gift fund authority for the renovations of
general officer quarters, and we concluded that the military services
had no assurance that the nonmonetary gifts were still in their
possession.[Footnote 5]
Under 10 U.S.C. § 2601(h), the Comptroller General is required to make
periodic audits of gifts, devises, and bequests accepted under section
2601(a) or (b) and to submit a report of the results of such audits to
Congress. As agreed with your offices, we addressed this requirement by
focusing our review on evaluating the extent to which the military
services have implemented DOD's policy for (1) accepting, (2)
reporting, and (3) monitoring gifts accepted under the general gift
fund authority.
To evaluate the extent to which the military services have implemented
DOD's policy for accepting, reporting, and monitoring gifts accepted
under the general gift fund authority, we reviewed and analyzed
relevant documents such as statutes and DOD and service policies and
guidance and military services gift fund records for fiscal years 2005
through 2008. While DOD's policy requires the military services to
maintain gift fund records of all monetary and nonmonetary gifts
accepted, military service officials acknowledged that they could not
readily tell us the total magnitude of gifts that had been accepted
below the secretary level because the records are not centrally managed
or tracked. Thus, we obtained gift fund records for all monetary and
nonmonetary gifts accepted at the secretary level--which generally are
gifts with higher values or gifts of real property--from fiscal year
2005 through fiscal year 2008. To augment our review of these
documents, we interviewed officials from the Office of the Under
Secretary of Defense (Comptroller), which is the office that provides
oversight for the operation of the general gift funds to discuss the
policies and internal controls that office has in place to oversee the
management of the general gift funds. We also interviewed officials
from the military services and the Defense Finance and Accounting
Service (DFAS) Trust Fund Accounting Division, which is responsible for
managing the general gift fund accounts, to discuss DOD's policy and
any implementation challenges. Lastly, we interviewed selected donors
who made significant donations to the military services during the
period covered by our review to obtain their perspectives on the
military services' gift acceptance process and to discuss any donation-
related challenges they may have experienced.
While DOD's gift fund policy covers gifts accepted by DOD, the military
services, and the Coast Guard, we did not include the Coast Guard in
our review because, according to DOD's policy, gifts to the Coast Guard
would fall under DOD oversight only when the Coast Guard was operating
under the authority of the Secretary of the Navy at the direction of
the President or as directed by Congress in a declaration of war.
According to Coast Guard officials, at this time the Coast Guard has
not accepted any gifts that would fall under DOD's oversight. In
addition, we did not review gifts received under other authorities,
such as 10 U.S.C. § 2608, which permits the Secretary of Defense to
accept certain contributions from any person, foreign government, or
international organization. We did not review gifts accepted under this
authority because it fell outside the scope of the mandate.
On the basis of our discussions with agency officials and our review of
relevant documentation, we determined that for the purposes of our
report the data were sufficiently reliable for evaluating the military
services' policies and procedures for implementing DOD's general gift
fund policy and identifying broad implementation challenges. We
conducted our performance audit from September 2008 through May 2009 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Summary:
The military services are implementing DOD's policy for accepting gifts
under 10 U.S.C. § 2601(a) and are in the process of updating their
policies to reflect the additional acceptance authority of section
2601(b), which became permanent in 2008. Military service policies for
accepting gifts implement DOD's policy by specifying (1) who has the
authority to accept gifts, (2) what dollar threshold each acceptance
authority official is authorized to accept gifts, and (3) under which
conditions these officials should accept or decline gifts. Who can
accept gifts and at what dollar threshold vary by service. For example,
within the Navy and the Marine Corps, only the Secretary and Under
Secretary of the Navy have the authority to accept gifts of "real
property."[Footnote 6] In the Army and the Air Force, however, several
officials have been delegated the authority to accept gifts of real
property as long as the value of the gift is within their dollar
threshold for acceptance. In addition, each service policy delegates
gift acceptance authority for certain gifts to the heads of the service
academies, which are major recipients of donations. According to the
military services' policies, each acceptance authority must consider
the nature of a gift and its conditions, if any, when determining
whether to accept or decline gifts, consulting legal counsel when
appropriate. For example, under DOD's policy, after reviewing a gift
offer, acceptance authorities shall decline a gift if it is determined
that the gift would be inconsistent with the general gift fund
authority or with DOD's related policy or would compromise the
integrity or appearance of integrity of any DOD officials or programs.
The military services are in the process of updating their policies to
reflect the additional acceptance authority of section 2601(b) that
would benefit servicemembers and civilians wounded in the line of duty
and dependents or survivors of those wounded or killed in the line of
duty, therefore, we are not making recommendations regarding this
additional acceptance authority at this time.
While the military services are implementing DOD's policy for accepting
gifts, they have not implemented the reporting requirements outlined in
DOD's policy under the general gift authority. DOD's policy identifies
specific information that the military services are to report and
directs that they submit their reports to the DFAS Trust Fund
Accounting Division, which in turn is to submit a quarterly report to
the Under Secretary of Defense (Comptroller). Since October 2007, when
DOD's reporting requirement was first established, the Under Secretary
of Defense (Comptroller) has not received the DFAS report on military
services' monetary and nonmonetary gifts. Our discussions with DOD
officials and review of individual military service policies revealed
the following reasons for this absence of reporting: (1) the military
services' policies do not consistently reflect the reporting
requirements outlined in DOD's policy, (2) DOD's policy did not
identify the appropriate DFAS organizations for the military services
to send their monetary and nonmonetary gift fund records to, and (3)
military service officials have indicated that the lack of a
standardized format hampers their ability to consolidate the gift fund
information to report to DFAS. Even though the Army's policy did not
contain DOD's reporting requirements, Army officials described an
instance in which the Army contacted the DFAS Trust Fund Accounting
Division and was told by this division that it was not the appropriate
entity to receive the military services' reports. On February 27, 2009,
after we had relayed our concerns about these issues to DOD, the Under
Secretary of Defense (Comptroller) issued a memorandum directing the
military services to implement DOD's reporting requirements and submit
their reports to the appropriate DFAS office. This recently issued
memorandum begins to address the discrepancy in the reporting
requirements and the confusion as to where the military services should
report information, so we are not making recommendations on these
specific issues at this time. While we are encouraged by these actions,
we note that DOD's policy does not assign responsibility to a single
DFAS entity for consolidating service report submissions into the
quarterly report sent to the Under Secretary of Defense (Comptroller).
Also, still not addressed are the service officials' concerns about the
lack of a standardized reporting format. Without a single DFAS entity
to serve as the final reporting collection point and without a
standardized reporting format to facilitate service efforts to assemble
and document information, DOD may continue to experience difficulties
obtaining and synthesizing the specific information needed for the
effective oversight of the general gift funds. As a result, we are
recommending that the Secretary of Defense direct the Under Secretary
of Defense (Comptroller) to clarify its gift fund policy so that it
assigns responsibility to a single DFAS entity to consolidate the
service DFAS submissions into one quarterly report to the Under
Secretary of Defense (Comptroller), and also so that the policy assigns
responsibility for developing a standardized reporting format and
requires the use of that format.
Lastly, the military services' policies for monitoring nonmonetary
gifts are insufficient to implement DOD's policy for monitoring gifts
that fall under the general gift fund authority. According to DOD's
policy, acceptance authorities shall keep auditable records of all
monetary and nonmonetary gifts and provide this information for
periodic audits. Our discussions with military service officials
revealed that the military services maintain auditable records for
money, but not for nonmonetary gifts. According to military service
officials, the military services do not maintain a comprehensive
listing of nonmonetary gifts and their current physical location.
Service officials explained that once a nonmonetary gift is accepted,
it loses its designation as a gift and is entered onto the applicable
service's installation property records. Service officials told us that
nonmonetary gifts are monitored during the military services' routine
inventories of property. However, we believe that this property
inventory is not sufficient to implement DOD's procedures for
monitoring nonmonetary gifts because the military services do not track
gifts to verify that once accepted they are added to the property
records. Consequently, the routine inventory of property would not
provide evidence of effective oversight of nonmonetary gifts as it is
not clear whether the property records include these gifts. As a
result, we are recommending that the Secretary of Defense direct the
secretaries of the military services to document, in their gift fund
records, the transfer of nonmonetary gifts to the property records in
order to provide evidence that nonmonetary gifts are on the property
records, which according to military service officials are routinely
audited.
In written comments on a draft of this report, DOD concurred with all
three of our recommendations and stated that it had already revised its
gift fund policy to address the three recommendations. DOD also
provided technical comments which we have incorporated where
appropriate. DOD's comments are reprinted in enclosure II.
Background:
Section 2601 of Title 10, U.S. Code, grants the secretaries overseeing
DOD, the military services, and the Coast Guard the authority to accept
certain gifts. Specifically, 10 U.S.C. § 2601(a) authorizes the
secretary concerned to accept "any gift, devise, or bequest of real
property, personal property,[Footnote 7] or money on the condition that
the gift, devise, or bequest be used for the benefit, or in connection
with the establishment, operation, or maintenance of a school,
hospital, library, museum, cemetery, or other institution or
organization under the jurisdiction of the Secretary." Section 2601(b)
of Title 10, U.S. Code, authorizes the secretary concerned to accept
gifts of real or personal property, money, or services used to benefit
certain members of the armed forces and civilian employees of DOD who
incur a wound, injury, or illness in the line of duty and to benefit
the dependents and survivors of those who are killed or injured.
Section 2601(d) of Title 10, U.S. Code prohibits the acceptance of
property, money, or services when:
* its use would result in the violation of any prohibition or
limitation otherwise applicable to any program, project, or activity;
* conditions attached to the property, money, or services are
inconsistent with applicable law or regulation;
* the secretary concerned determines that the use of the property or
money or the performance of the services would reflect unfavorably on
the ability of DOD, the Coast Guard, any employee of DOD, or any member
of the military services to carry out any responsibility or duty in a
fair and objective manner; or:
* the secretary concerned determines that the use of the property or
money or performance of the services would compromise the integrity of
any program of DOD or the Coast Guard or any individual involved in
such a program.
In October 2007, DOD updated its policy by revising the DOD Financial
Management Regulation to establish DOD's policy to provide implementing
guidance and procedures to meet the requirements of 10 U.S.C. § 2601.
DOD's policy specifically identifies certain circumstances under which
DOD should not accept a gift, including but not limited to instances
where a gift creates or requires:
* the appearance or expectation of favorable consideration as a result
of the gift;
* the appearance of an improper endorsement of the donor or its events,
products, services, or enterprises;
* a serious question of impropriety in light of the donor's present or
prospective business relationships with DOD;
* the expenditure or use of funds in excess of amounts appropriated by
Congress; or:
* substantial expenditures or administrative efforts and maintenance
that are disproportionate to any benefit.
DOD's policy includes internal controls for accepting, reporting, and
monitoring gifts as recommended by the federal standards.[Footnote 8]
Federal internal control standards require agencies to establish
clearly defined areas of authority and responsibility for operations
and include needed information in policies for reporting and
monitoring. For example, DOD's policy assigned authority and delegated
responsibility at various levels for accepting gifts. The policy also
identified the type of information that should be reported for managing
the gift funds. Furthermore, it also provided guidance on information
that should be available to allow for effective monitoring of gifts.
Since military service officials stated that monetary and nonmonetary
gifts accepted are not centrally managed, a comprehensive listing of
gifts accepted by the military services was not available. However, to
get an idea of the type and dollar value of gifts accepted, we obtained
gift records for gifts accepted at the secretary level, which are
generally gifts of higher values and real property for fiscal years
2005 to 2008. These records showed that the Army accepted gifts
totaling approximately $81 million; the Air Force, $107 million; and
the Navy and Marine Corps, $107 million. The types of nonmonetary gifts
received varied widely. Examples of the types of gifts received include
the following: land, improvements to real property, tools, books, golf
carts, a bus, monuments, surgical equipment, and tickets to various
events. A listing of gifts accepted at the secretary level from fiscal
year 2005 through fiscal year 2008 and their total dollar value appears
in enclosure I.
Military Services Are Implementing DOD's Policy for Accepting Gifts and
Are Updating Their Policies to Reflect a Recent Addition to the Law:
Acceptance Authorities and Dollar Thresholds for Gifts Accepted into
the General Gift Funds Vary by Military Service:
Section 2601(a) of Title 10, U.S. Code provides the authority to accept
gifts to "the Secretary concerned."[Footnote 9] Each military service
has policies in place under which its secretary delegates this
authority, in whole or in part, to other acceptance authorities within
the respective service. Who can accept certain gifts varies by service.
For example, within the Navy and the Marine Corps, only the Secretary
and Under Secretary of the Navy have the authority to accept gifts of
real property, whereas in the Army and Air Force, several officials
have been delegated the authority to accept gifts of real property as
long as the value of the gift is within their dollar threshold for
acceptance. For personal property, all the service secretaries delegate
authority, in whole or in part, for these types of gifts to other
acceptance authorities below the secretary level.
Each military service policy also authorizes the superintendents of the
service academies, which are major recipients of donations, the
authority to accept certain gifts.[Footnote 10] In addition to the
service policies for accepting gifts, the academies may have their own
policies in place to operate and manage gifts accepted. For example,
according to Army and Air Force officials, the U.S. Military Academy
and the U.S. Air Force Academy have established supplemental policies
that outline the procedures for accepting gifts.[Footnote 11]
The dollar thresholds at which designated acceptance authorities are
authorized to accept gifts vary by service. For example, excluding the
service academies, the Secretary of the Air Force has delegated gift
acceptance authority to a number of subordinates for gifts of personal
property up to $50,000, while the Secretary of the Navy has delegated
authority to accept gifts up to $60,000. Table 1 shows the dollar
threshold at which the acceptance authorities of each military service
can accept gifts.
Table 1: Gift Acceptance Dollar Thresholds for the Military Services
(by Type of Gift):
Type of gift: Personal property: Army[A];
Any value:
* Secretary of the Army;
Up to $500,000:
* Superintendent, U.S. Military Service Academy;
Up to $250,000:
* Surgeon General;
* Commanding General, Installation Management Command, for
nonappropriated activities only, delegated as follows:
- Commanding General, Family and Morale, Welfare and Recreation
Command;
- Installation Management Command region directors;
- Up to $100,000 - garrison commanders;
- Up to $50,000 (when delegated by garrison commanders) - Family and
Morale, Welfare, and Recreation directors.
Type of gift: Personal property: Air Force[B];
Over $50,000:
* Secretary of the Air Force;
* Air Force General Counsel;
* Air Force Deputy General Counsel;
Up to $100,000:
* Superintendent, Air Force Academy;
$5,000 to $50,000:
* Chief of Staff;
* Commanders of major commands;
*Other specified in AFI 51-601;
$5,000 or less:
* Installation commanders.
Type of gift: Personal property: Navy and Marine Corps[C]:
Over $60,000:
* Secretary of the Navy;
* Under Secretary of the Navy;
Up to $60,000:
* Chief and Vice Chief of Naval Operations;
* Commandant of the Marine Corps;
* Assistant for Administration, Under Secretary of the Navy;
* Commanding flag officers;
* Superintendent Naval Academy;
* Others specified in SECNAVINST 4001.2H;
$3,000 to $12,000:
* Flag officers in commands who report to the Chief of Naval
Operations;
* Others specified in OPNAVIST 4001.1E;
$3,000 or less:
* Commanding officers for certain systems commands;
* Other specified in OPNAVINST 4001.1E.
Type of gift: Real property: Army[A];
Any value:
* Secretary of the Army;
Up to $500,000:
* Superintendent, U.S. Military Service Academy;
Up to $250,000:
* Surgeon General;
* Commanding General, Installation Management Command, for
nonappropriated activities only, delegated as follows:
- Commanding General, Family and Morale, Welfare and Recreation
Command;
- Installation Management Command region directors;
- Up to $100,000 - garrison commanders;
- Up to $50,000 (when delegated by garrison commanders) - Family and
Morale, Welfare, and Recreation directors.
Type of gift: Real property: Air Force[B];
Over $10,000 or requiring expenditures for acceptance or upkeep over
$1,000:
* Secretary of the Air Force;
* Assistant Secretary of the Air Force (Manpower, Reserve Affairs,
Installations and Environment);
* Principal Deputy Assistant Secretary (Manpower, Reserve Affairs,
Installations and Environment);
* Deputy Assistant Secretary (Installations);
* Deputy for Installations Management;
$25,000 or less:
* Director, Air Force Museum;
$10,000 or less not requiring annual upkeep over $1,000:
* Commanders, major commands;
* Others specified in AFI 51-601;
$10,000 or less:
* Superintendent, Air Force Academy.
Type of gift: Real property: Navy and Marine Corps[C]:
All gifts:
* Secretary of the Navy;
* Under Secretary of the Navy.
Source: GAO analysis of DOD data.
[A] The Army thresholds are the result of specific delegations by the
Secretary of the Army, and have not been incorporated in the Army gift
regulation. Army Regulation 1-100, Gifts and Donations (Nov. 15, 1983).
[B] Air Force thresholds are based on Air Force Instruction 51-
601,Gifts to the Department of the Air Force (Nov. 26, 2003).
[C] Navy thresholds are based on Secretary of the Navy Instruction
4001.2H, Acceptance of Gifts (Mar. 14, 2006), and Chief of Naval
Operations Instruction 4001.1E, Acceptance of Gifts (Dec. 1, 2006).
[End of table]
Policies for Accepting or Declining Gifts:
For each military service, after receiving a gift offer, acceptance
officials must consider the nature of the gift and its conditions, if
any, before accepting or rejecting the gift, consulting legal counsel
as appropriate. Legal counsel may review each offer for ethical
considerations and compliance with regulations and provides a
recommendation on whether to accept the gift. After reviewing a gift
offer, acceptance authorities shall decline a gift if it is determined
that accepting the gift would be inconsistent with the general gift
fund authority or with DOD or military service policies. For example,
DOD, Air Force and Navy guidance states that a gift will be declined if
acceptance of the gift would (1) not be in the best interests of DOD or
the military service, (2) create a serious question of impropriety in
light of the donor's present or prospective business relationships with
DOD or the military service, or (3) create substantial expenditures
that would make accepting the gift not cost-effective.
Examples of gifts that were declined include the following:
* Military officials accepted and shipped a large quantity of playing
cards to deployed service personnel, but later declined to accept a
second larger quantity of playing cards because the shipping costs were
not cost-effective.
* An energy exploration company offered a playground and video
technology computer equipment, but this donation was declined because
the company was seeking additional mineral leases on the installation-
-a possible conflict of interest.
* An artist wanted to work with a military service to establish a
corporation that would use her angel statue as a new American icon
(replacing the Statue of Liberty). The donor wanted the military's
assistance with establishing the corporation and subsidizing the
efforts to sculpt the statue. This donation was declined because,
according to the service's general counsel, the military is legally
prohibited from assisting in the establishment and operation of a
corporation.
The Length of Time It Takes the Military Services to Accept Gifts
Varies:
According to military service officials, the length of time it takes to
accept or decline gifts can greatly vary, depending on the type of gift
and whether a specific stipulation has been made on the use of the
gift. Military service officials stated that it takes about 2 weeks to
accept a monetary gift once a formal offer has been received. However,
the service officials said that it could take several months to more
than a year to accept a nonmonetary gift once a formal offer has been
made.
Example of gifts acceptance and time frames include the following:
* A military spouse sent a check for $100 to the Honor Guard as an
honorarium for performing a service at Arlington National Cemetery.
This gift was accepted within 5 days and deposited into the Treasury's
Miscellaneous Receipts account.
* Air Force officials stated that it took 5 months to accept a donation
of pavers used to repair a memorial.
* Navy officials received a formal offer for a memorial on June 22,
2006, valued at $157,500. The offer was accepted by the Secretary of
the Navy on March 23, 2007, about 9 months later.
Some gifts have specific stipulations that must be met, which may
affect how long it takes to accept them. For example, Army officials
received a formal offer of $419,400 for the Family and Morale, Welfare,
and Recreation program at Fort Bragg, North Carolina, on October 28,
2008. The offer was sent to the Office of the General Counsel and
accepted by the Secretary of the Army on October 31, 2008. A condition
of this gift was that it had to be accepted by November 1, 2008. In
another example, multiple copies of a children's book were donated to
the Arlington National Cemetery on November 13, 2008, with the
stipulation that the books be provided to children of family members
killed in the line of duty and buried at Arlington National Cemetery.
Because child psychologists were involved in creating the book, the
Army took approximately 3 weeks to review the manuscript because of the
potential psychological implication to children. This donation was
approved on December 17, 2008, about 5 weeks later.
We interviewed two donor organizations that made significant donations
to the military services to obtain their perspectives on the military
services' gift acceptance process and to discuss any donation-related
challenges they may have experienced. Anecdotal reports from these
organizations varied with respect to their satisfaction with the
military services' respective processes for accepting gifts. The first
organization, a service-specific donor for the Navy, stated that it did
not have any issues with the Navy's acceptance process or the time it
took for the Navy to accept its gifts. On the other hand, the second
donor organization that routinely donates to all the military services
expressed concerns about the time it took for each of the military
services to accept nonmonetary gifts. The donor said that it took the
military services too long, often a year or longer, to accept its
gifts--for example, buildings donated to house family members visiting
hospitalized servicemembers. The donor reported that it was taking the
military services increasingly longer to accept gifts. The donor
believed that considering the long-standing relationship it had with
the military services, the time it took them to accept the gifts should
decrease rather than increase over time. The donor told us that because
the specifications for the donated buildings are very standard and have
not changed over time, the acceptance process should be very quick and
simple.
Military Services Are Updating Policies to Reflect Additional
Acceptance Authority:
According to military service officials, they are in the process of
updating their policies to reflect the additional acceptance authority
that became permanent in the 2008 National Defense Authorization Act
allowing gifts to be accepted that benefit certain servicemembers and
civilian employees of DOD who are wounded in the line of duty or
dependents and survivors of those killed or wounded. Originally, this
additional acceptance authority, which was included in DOD's October
2007 update of the DOD Financial Management Regulation, was due to
expire on December 31, 2007. Because the new authority was due to
expire soon, the military services decided not to update their
policies. However, this authority was made permanent in January 2008.
Thus, we were told by military service officials that they are now in
the process of updating their policies to include this additional
authority. They stated that there will be separate acceptance policies
for 10 U.S.C. § 2601(a) and (b) as outlined in DOD's policy.
The Military Services Have Not Implemented the Reporting Requirements
Outlined in DOD's Policy:
While the military services are implementing DOD's policy for accepting
gifts, they have not implemented the reporting requirements outlined in
DOD's policy under the general gift authority. Since DOD's policy was
updated in October 2007, the military services stated that they have
not submitted any required reports to DFAS, which in turn has not
submitted any reports to the Under Secretary of Defense (Comptroller).
Our discussions with DOD officials and review of individual service
policies revealed the following reasons for this absence of reporting:
(1) the military services policies do not consistently reflect the
reporting requirements outlined in DOD's October 2007 policy, (2) DOD's
policy did not identify the appropriate DFAS organizations for the
military services to send their monetary and nonmonetary gift fund
records to, and (3) service officials have indicated that the lack of a
standardized format hampers the military services' ability to
consolidate the gift fund information to report to DFAS.
Implemented in October 2007, DOD's policy for reporting gifts accepted
under the general gift fund authority requires that the military
services maintain specific documentation and information for all
monetary and nonmonetary gifts received under 10 U.S.C. § 2601(a) and
(b). For example, acceptance authorities are required to report:
* a description of the gift;
* the value of the gift (estimated value if nonmonetary) including the
validation method used;
* the name and address of the donor;
* the date the gift was received;
* the expected useful life of the donation;
* details of any conditions, restrictions, or other relevant specific
information regarding the gift;
* a unique identifier or data element used to track the same or similar
nonmonetary items received or shipped from different sources; and:
* a statement explaining the benefits of accepting the gift.
According to DOD's policy, the military services are to provide this
information to the DFAS Trust Fund Accounting Division no later than 10
days after the end of each quarter. Subsequently, the DFAS Trust Fund
Accounting Division is to prepare and submit a quarterly report to the
Under Secretary of Defense (Comptroller). DOD's policy also requires
that in the reports to the DFAS Trust Fund Accounting Division, the
military services report monetary and nonmonetary gifts separately and
gifts accepted under 10 U.S.C. § 2601(a) and (b) separately.
Military Services' Policies Do Not Reflect the Reporting Requirements
Outlined in DOD's Policy:
Our review of the military services' policies and our discussions with
service officials identified that the military services' policies do
not contain DOD's policy requirement that the military services report
monetary and nonmonetary gifts to DFAS and do not specify the
documentation and information requirements that are contained in DOD's
policy. Service officials offered different reasons for why they were
not submitting gift fund reports to DFAS. Navy and Marine Corps
officials initially explained that their respective military services
did not incorporate DOD's reporting requirements into service-level
policy because 10 U.S.C. § 2601 provided the military services with the
direct authority to accept gifts and, by extension, the authority to
develop their own related policies. Air Force officials told us that
they were not aware of DOD's October 2007 policy and, specifically, of
its reporting requirements. According to Army officials we interviewed,
even though the Army's current policy did not include DOD's reporting
requirements, they thought that DOD's policy did apply to them.
However, these officials described one instance in which the Army
contacted the DFAS Trust Fund Accounting Division to determine if it
was supposed to submit its reports to the division and was told that
the division would not accept the data. The Trust Fund Accounting
Division would not accept the data because it said that the division
was the wrong entity to receive the military services' records, even
though at that time the DFAS Trust Fund Accounting Division was the
responsible organization for collecting the gift fund records according
to DOD's policy.
DOD's Policy Does Not Identify the Appropriate DFAS Organizations for
Reporting Monetary and Nonmonetary Gifts:
DFAS Trust Fund Accounting Division officials we interviewed offered a
second reason why the Trust Fund Accounting Division and the military
services had not followed the reporting requirements included in DOD's
policy in effect at the time. While DOD's policy identified the DFAS
Trust Fund Accounting Division as the responsible organization for
collecting service gift fund records, DFAS officials stated that they
believed DOD's policy did not identify the correct DFAS organization
for collecting this information and, as such, it had not accepted any
service gift fund records. According to DFAS Trust Fund Accounting
Division officials, this division is usually responsible for managing
only DOD departmental or other defense agency accounts and not military
service accounts. Furthermore, because each military service has a DFAS
office that is currently managing the military service's accounts, the
DFAS Trust Fund Accounting Division officials believe that those
military service offices should have been responsible for managing the
military services' respective general gift fund accounts. DFAS Trust
Fund Accounting Division officials stated that the division was given a
draft of DOD's policy and provided comments, but the original draft
policy did not include the requirement for the Trust Fund Accounting
Division to be the responsible organization for collecting military
service gift fund records, although the final policy did include the
requirement.
DOD Takes Action to Correct Some Reporting Deficiencies:
On February 27, 2009, after we discussed our initial findings on the
lack of gift fund reporting and the military service and DFAS responses
with DOD officials, the Under Secretary of Defense (Comptroller) issued
a memorandum directing the services to:
(1) implement DOD's reporting requirements;
(2) report to the appropriate DFAS office; and:
(3) establish and update procedures for receiving, accounting for, and
disposing of real and personal property gifts to be consistent with the
DOD Financial Management Regulation and DOD property accountability
policy.
According to service officials, the military services are in the
process of updating their respective policies to reflect the reporting
requirements outlined in DOD's policy. The memorandum requires the
military services to provide their updated policies to the Under
Secretary of Defense (Comptroller) by March 31, 2009, and begin
reporting the required gift fund records to the appropriate DFAS office
by April 10, 2009. According to the Under Secretary of Defense
(Comptroller) official responsible for the new guidance, the military
services were subsequently provided with the service-specific DFAS
points of contact to which they are to send their gift fund records.
Furthermore, officials in the Office of the Under Secretary of Defense
(Comptroller) stated that they plan to elevate the requirement laid out
in the memorandum within the military services' chain of command if the
military services' policies are not updated or gift fund records are
not sent to DFAS within the set time frames. According to an Under
Secretary of Defense (Comptroller) official, as of April 8, 2009, all
military services had complied with the requirement to update their
policies.
However, while we are encouraged by the initial steps DOD has taken to
implement gift fund reporting, DOD's policy is still not clear on what
DFAS entity will be responsible for consolidating the service DFAS
submissions into the quarterly report sent to the Under Secretary of
Defense (Comptroller). Without a single entity to compile all DFAS
submissions into one report, DOD will not have the information
necessary for conducting effective oversight of the general gift funds.
Lack of a Standardized Reporting Format May Hamper the Military
Services' Ability to Consolidate Gift Fund Information:
Military service officials are concerned that a lack of a standardized
format within the military services to be used for assembling and
reporting the monetary and nonmonetary gift fund records within the
military services will hamper their ability to consolidate the gift
fund information to provide to DFAS. DOD's policy identifies the
information that is to be reported to DFAS, but does not indicate what
standardized format should be used or who is responsible for developing
such a format. For example, officials from the Air Force and Navy
explained that the required gift fund information would have to be
obtained from several locations within each service. Without a
consistent format, acceptance authorities responsible for assembling
the required information would do so inconsistently, thereby
complicating the information to be sent to DFAS. These service
officials would like to obtain guidance on who is responsible for
developing a standardized format. We agree with the service officials
that without a standardized format for the military services to use,
information may not be easily compiled, and DOD may not have the
information necessary for effective oversight of the general gift
funds.
The Military Services' Procedures for Monitoring Nonmonetary Gifts Are
Insufficient to Implement DOD's Policy:
The military services' policies for monitoring nonmonetary gifts are
insufficient to implement DOD's policy for nonmonetary gifts under the
general gift fund authority. DOD's policy for monitoring gifts accepted
under the general gift fund authority requires that the acceptance
authorities keep accurate, auditable, and timely records of all gifts
and provide this information for periodic audits. Additionally, DOD's
policy requires the receiving organization to obtain and retain the
required documentation and information for all gifts received. For
audit purposes, the supporting documentation for monetary and
nonmonetary gifts must be retained for 6 years and 3 months beyond the
life of the asset.
Contrary to DOD's policy, the military services are not keeping
auditable records of nonmonetary gifts accepted under general gift
authority. According to service officials, the military services do not
maintain comprehensive documentation of nonmonetary gifts accepted and
their current physical locations. The service officials explained that
the reason they do not maintain a listing of nonmonetary gifts and
their physical locations is because once a nonmonetary[Footnote 12]
gift is accepted it loses its designation as a gift and is entered onto
the applicable service's installation property records.[Footnote 13]
The current service gift fund policies generally require officials to
follow the procedures prescribed by the applicable service-specific
policies for property accountability. Service officials maintained that
nonmonetary gifts are being monitored during the military services'
routine inventories of property. However, our review revealed that the
military services' routine property inventories do not constitute an
audit of nonmonetary gifts as directed by DOD's policy, because the
military services were unable to provide any documentation to verify
that nonmonetary gifts had been added to the property records.
Consequently, the routine inventory of property as currently conducted
is insufficient for monitoring nonmonetary gifts and does not provide
DOD with the level of assurance needed for effective oversight.
While our review of the military service gift funds' documentation did
not provide assurance that the military services' procedures for
monitoring nonmonetary gifts were sufficient to implement DOD's policy,
the military services' procedures for monitoring monetary gifts appear
to be reasonable. Through our review of the military services' policies
and discussions with service officials, we found that the military
services have procedures in place so that all gifts of money that are
accepted are deposited into the appropriate account. Additionally,
acceptance authorities maintain gift fund documentation that shows the
receipt of the money and instructions on where the money is to be
deposited. Furthermore, based on our conversations with DFAS officials,
there are procedures in place to ensure that the military services'
gift fund accounts are monitored and records are verified. For example,
DFAS officials said that all the military services' gift fund
transactions are reconciled on a regular basis to ensure that the gift
fund account information is accurate. Examples of monitoring performed
include monthly reconciliations between DFAS's records and the Treasury
account records and an annual reporting of investment transactions to
the Treasury.
Conclusions:
DOD's and the military services' policies for accepting gifts are
necessary to ensure that gifts are not accepted that would reflect
unfavorably on the ability of the department to carry out its
responsibilities in a fair and objective manner. Also important are the
department's policies for reporting and monitoring gifts, which allow
for effective oversight. Oversight of the general gift funds is
essential to ensure that proper accountability over donated property is
established and maintained. Without military service implementation of
DOD's policy for reporting and monitoring gifts, DOD will not have the
information it needs for the effective oversight of general gift funds.
Recommendations for Executive Action:
To assist DOD in overseeing the reporting of the general gift funds, we
are recommending that the Secretary of Defense direct the:
(1) Under Secretary of Defense (Comptroller) to revise its general gift
fund policy to assign responsibility to a single DFAS entity to
consolidate the service DFAS submissions into one quarterly report to
the Under Secretary of Defense (Comptroller);
(2) Under Secretary of Defense (Comptroller) to revise its general gift
fund policy to assign responsibility to the appropriate organization
for developing a standardized reporting format for the military
services to use when assembling the reporting requirements outlined in
DOD's policy and then develop and require use of the standardized
format; and:
(3) secretaries of the military services to maintain documentation in
their gift fund records that nonmonetary gifts have been transferred to
the property records in order to provide evidence that nonmonetary
gifts are on the property records, which in turn are routinely audited.
Agency Comments and Our Evaluation:
In written comments on a draft of this report (reprinted in enclosure
II), DOD concurred with all three of our recommendations. Based on
discussions throughout our review, the Office of the Under Secretary of
Defense (Comptroller) revised its gift fund policy on February 27, 2009
to address our recommended actions. Specifically, the revised policy
(1) assigns responsibility to DFAS (Standards and Compliance) to
consolidate the services DFAS gift fund submissions into one quarterly
report to the Under Secretary of Defense (Comptroller) and to develop a
standardized reporting format for the military services to start using
when assembling the reporting requirements and (2) directs the military
services to maintain documentation in gift fund records that
nonmonetary gifts have been transferred to the property records. DOD's
comments indicate that as a result of the revised policy, actions have
been completed for two of the three recommendations and that the third
recommendation will be complete when the services begin using the new
standardized format in July 2009. We believe that DOD's revised policy
addresses our recommendations and when fully implemented should provide
the department with the information it needs to allow for effective
oversight and to ensure that proper accountability of donated property
is maintained.
DOD also provided technical comments which we have incorporated where
appropriate.
We are sending copies of this report to the Director of the Office of
Management and Budget; the Secretary of Defense; and the Secretaries of
the Army, the Navy, and the Air Force. The report also is available at
no charge on the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-4523 or leporeb@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made major contributions to
this report are listed in enclosure III.
Signed by:
Brian J. Lepore, Director:
Defense Capabilities and Management:
Enclosures - 3:
[End of section]
Gifts Accepted by the Military Services under the General Gift Fund
(Fiscal Year 2005 through Fiscal Year 2008):
In tables 2 through 4, we identify gifts received under the general
gift fund from fiscal year 2005 through fiscal year 2008 that were
valued at $250,000 or greater for the Army, Air Force and Navy,
respectively. We identify the service recipient of each of these gifts
when known or when the gift was designated for a specific service
recipient. As the last entry in each table, we list in aggregate gifts
received that were valued at under $250,000 per gift.
Table 2: Dollar Value of Gifts Received by the Army from Fiscal Year
2005 through Fiscal Year 2008 (Dollars in thousands):
Gift received: Airborne and Special Operations Museum, Fort Bragg;
Dollar value of gift received: $22,500.
Gift received: Foley Athletic Center, U.S. Military Academy;
Dollar value of gift received: $10,250.
Gift received: Sybase Software, U.S. Military Academy;
Dollar value of gift received: $10,000.
Gift received: Anderson Rugby Complex, U.S. Military Academy;
Dollar value of gift received: $7,100.
Gift received: Warrior and Family Support Center, Fort Sam Houston;
Dollar value of gift received: $3,589.
Gift received: General officers quarters, Huntsville, Ala.;
Dollar value of gift received: $2,700.
Gift received: Monetary donation, U.S. Military Academy;
Dollar value of gift received: $2,678.
Gift received: Fisher House, Womack Army Medical Center;
Dollar value of gift received: $2,500.
Gift received: Lucas Military Heritage Center, U.S. Military Academy;
Dollar value of gift received: $2,000.
Gift received: Scoreboard, U.S. Military Academy;
Dollar value of gift received: $1,700.
Gift received: Fisher House, Fort Sam Houston;
Dollar value of gift received: $1,600.
Gift received: Fisher House, Fort Campbell;
Dollar value of gift received: $1,500.
Gift received: Rugby complex, U.S. Military Academy;
Dollar value of gift received: $1,000.
Gift received: Class of 1956 Cold War Memorial, U.S. Military Academy;
Dollar value of gift received: $1,000.
Gift received: Home construction, U.S. Military Academy;
Dollar value of gift received: $750.
Gift received: Addition to museum, Fort Sam Houston;
Dollar value of gift received: $700.
Gift received: Monument for Old Guard Committee, Fort Myer;
Dollar value of gift received: $700.
Gift received: Warrior Center, Landstuhl Regional Medical Center;
Dollar value of gift received: $651.
Gift received: Groves Golf Center, U.S. Military Academy;
Dollar value of gift received: $650.
Gift received: Monetary donation;
Dollar value of gift received: $409.
Gift received: Monetary donation;
Dollar value of gift received: $405.
Gift received: Building renovation, Letterkenny Army Depot;
Dollar value of gift received: $400.
Gift received: Monetary donation, U.S. Army War College;
Dollar value of gift received: $371.
Gift received: The Liberty Limited Excursion;
Dollar value of gift received: $362.
Gift received: Software licenses;
Dollar value of gift received: $359.
Gift received: Construction and materials, Fort Benning;
Dollar value of gift received: $350.
Gift received: Monetary donation to the Army War College;
Dollar value of gift received: $330.
Gift received: Fisher House Pavilion, Fort Sam Houston;
Dollar value of gift received: $285.
Gift received: Heavy rail dock, Letterkenny Army Depot;
Dollar value of gift received: $285.
Gift received: Monuments, Fort Drum;
Dollar value of gift received: $280.
Gift received: Painting services;
Dollar value of gift received: $277.
Gift received: Total value of other gifts donated for which the value
of each gift was $250,000 or less;
Dollar value of gift received: $3,531.
Gift received: Total;
Dollar value of gift received: $81,212.
Source: GAO analysis of DOD data.
[End of table]
Table 3: Dollar Value of Gifts Received by the Air Force from Fiscal
Year 2005 through Fiscal Year 2008 (Dollars in thousands):
Gift received: Bird of Prey and X-36 Air Vehicles;
Dollar value of gift received: $84,000.
Gift received: Secondary power system equipment, landing gear bushing
cells, and software test stations;
Dollar value of gift received: $5,015.
Gift received: Construction of Joint Use Education Center;
Dollar value of gift received: $5,000.
Gift received: 12 houses for extended-stay care for military service
personnel (and their families) receiving inpatient treatment at the
base hospital;
Dollar value of gift received: $2,750.
Gift received: 12 houses for extended-stay care to military service
personnel (and their families) receiving inpatient treatment at the
base hospital;
Dollar value of gift received: $2,000.
Gift received: Media promotion supporting air show and meals and
beverages to Air Force personnel;
Dollar value of gift received: $1,016.
Gift received: Addition to an existing Air Force museum gallery;
Dollar value of gift received: $915.
Gift received: 2.64 acres of land;
Dollar value of gift received: $600.
Gift received: 101.79 acres of land to support housing privatization;
Dollar value of gift received: $590.
Gift received: Interest distributed in 2007;
Dollar value of gift received: $532.
Gift received: 121.45 acres of land;
Dollar value of gift received: $480.
Gift received: Air park with five displays of historical aircraft;
Dollar value of gift received: $300.
Gift received: Bronze statue of General Harmon and granite benches;
Dollar value of gift received: $300.
Gift received: Display of the Air Force 60th anniversary's
commemoration logo on a race car during the American Heroes program at
the Lowes Motor Speedway;
Dollar value of gift received: $300.
Gift received: A memorial wall to honor special operations personnel
who lost their lives in war;
Dollar value of gift received: $280.
Gift received: Public bus transportation and food and beverages for the
Air Force staff;
Dollar value of gift received: $255.
Gift received: Honor Guard statue;
Dollar value of gift received: $255.
Gift received: Total value of other gifts donated for which the value
of each gift was $250,000 or less;
Dollar value of gift received: $2,613.
Gift received: Total;
Dollar value of gift received: $107,201.
Source: GAO analysis of DOD data.
[End of table]
Table 4: Dollar Value of Gifts Received by the Navy from Fiscal Year
2005 through Fiscal Year 2008 (Dollars in thousands):
Gift received: U.S. Naval Academy Museum exhibits;
Dollar value of gift received: $34,100.
Gift received: Brigade sports complex, U.S. Naval Academy;
Dollar value of gift received: $18,500.
Gift received: Construction of new museum;
Dollar value of gift received: $10,000.
Gift received: New hockey and tennis facility;
Dollar value of gift received: $6,000.
Gift received: Training center and job placement program;
Dollar value of gift received: $5,562.
Gift received: Fisher House, San Diego, Calif.;
Dollar value of gift received: $3,600.
Gift received: "EZ Scores" calling cards;
Dollar value of gift received: $3,125.
Gift received: Software;
Dollar value of gift received: $3,072.
Gift received: Final phase of construction of the U.S. Naval Academy
Museum;
Dollar value of gift received: $2,230.
Gift received: 391,250 packs of the Military Assistance Communication
Kit for deployed personnel;
Dollar value of gift received: $1,950.
Gift received: Precision Approach Radar System;
Dollar value of gift received: $1,750.
Gift received: Software;
Dollar value of gift received: $1,405.
Gift received: Media support materials during 2000-2006;
Dollar value of gift received: $1,200.
Gift received: Upgrades to the construction of the Commodore Uriah P.
Levy Center and the Jewish Chapel, U.S. Naval Academy;
Dollar value of gift received: $1,100.
Gift received: 2 new squash courts;
Dollar value of gift received: $1,000.
Gift received: Girl Scout cookies;
Dollar value of gift received: $776.
Gift received: Planning and design of the U.S. Naval Academy Museum
exhibits;
Dollar value of gift received: $710.
Gift received: George H. W. Bush tribute room;
Dollar value of gift received: $675.
Gift received: Project support for 2008;
Dollar value of gift received: $631.
Gift received: Snow removal equipment to the Naval Air Station Joint
Reserve Base, Willow Grove;
Dollar value of gift received: $528.
Gift received: Statues, U.S. Naval Academy;
Dollar value of gift received: $500.
Gift received: Family, Morale, Welfare, and Recreation programs;
Dollar value of gift received: $493.
Gift received: Project support for 2007;
Dollar value of gift received: $473.
Gift received: Project support for 2005;
Dollar value of gift received: $445.
Gift received: Morale, Welfare, and Recreation programs;
Dollar value of gift received: $403.
Gift received: 10,000 magazine subscriptions for personnel in Iraq and
Afghanistan;
Dollar value of gift received: $400.
Gift received: Columbarium;
Dollar value of gift received: $341.
Gift received: Virtual Technology Development and Operations Center,
Naval Air Warfare Center Training Systems Division, Orlando, Fla.;
Dollar value of gift received: $300.
Gift received: Fisher Houses, Bethesda, Md.;
Dollar value of gift received: $300.
Gift received: Floating dock at Naval Submarine Base, New London,
Conn.;
Dollar value of gift received: $300.
Gift received: New organ for the chapel, U.S. Naval Academy;
Dollar value of gift received: $290.
Gift received: Research support;
Dollar value of gift received: $280.
Gift received: Media support materials for 2007;
Dollar value of gift received: $260.
Gift received: Media support materials for 2008;
Dollar value of gift received: $260.
Gift received: Total value of other gifts donated for which the value
of each gift was $250,000 or less;
Dollar value of gift received: $4,023.
Gift received: Total;
Dollar value of gift received: $106,982.
Source: GAO analysis of DOD data.
[End of table]
[End of section]
Enclosure II: Comments from the Department of Defense:
Under Secretary Of Defense:
Comptroller:
1100 Defense Pentagon:
Washington, DC 20301-1100:
May 12, 2009:
Mr. Brian Lepore:
Director, Defense Capabilities and Management:
Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Lepore:
This is the Department of Defense (DoD) response to the Government
Accountability Office (GAO) draft report, Financial Management: DoD
Needs to Clarify Its General Gift Fund Policies to Provide for
Effective Oversight, dated April 9, 2009 (GAO Code 351265/GAO-09-486R).
The Department concurs with the findings and recommendations in the
report. Corrective actions have been taken on two of the three
recommendations. Corrective actions for the remaining recommendation
will he completed by July 2009.
My point of contact on this matter is Ms. Jodie Fisher. She may be
reached by email at jodie.fisher@osd.mil or telephone at (703) 602-
0371.
Signed by:
Robert F. Hale:
Attachment: As stated:
[End of letter]
GAO Draft Report - Dated April 9, 2009:
GAO Code 351265/GAO-09-486R:
"Financial Management: DoD Needs to Clarify Its General Gift Fund
Policies to Provide for Effective Oversight"
Department Of Defense Comments To The Recommendations:
Recommendation 1: The GAO recommends that the Secretary of Defense
direct the Under Secretary of Defense (Comptroller) to revise its
general gift fund policy to assign responsibility to a single Defense
Finance and Accounting Service (DFAS) entity to consolidate the Service
DFAS submissions into one quarterly report to the Under Secretary of
Defense (Comptroller).
DOD Response: Concur. The Office of the Under Secretary of Defense
(Comptroller) revised its general gift fund policy and assigned
responsibility to DFAS (Standards and Compliance) to consolidate the
Service DFAS submissions into one quarterly report to the Under
Secretary of Defense (Comptroller). Action is complete.
Recommendation 2: The GAO recommends that the Secretary of Defense
direct the Under Secretary of Defense (Comptroller) to revise its
general gift fund policy to assign responsibility to the appropriate
organization for developing a standardized reporting format for the
Services to use when assembling the reporting requirements outlined in
DoD's policy and then develop and require use of the standardized
format.
DOD Response: Concur. The Office of the Under Secretary of Defense
(Comptroller) revised its general gift fund policy and assigned
responsibility to DFAS (Standards and Compliance) to develop a
standardized reporting format for the Services to use when assembling
the reporting requirements. DFAS (Standards and Compliance) will
develop and require use of the standardized format for the July 2009
reporting period.
Recommendation 3: The GAO recommends that the Secretary of Defense
direct the Secretaries of the Military Services to maintain
documentation in their gift fund records that non-monetary gifts have
been transferred to the property records in order to provide evidence
that non-monetary gifts are on the property records, which in turn arc
routinely audited.
DOD Response: Concur. The Office of the Under Secretary of Defense
(Comptroller) directed the Services, in its revised general gift fund
policy, to maintain documentation in gift fund records that non-
monetary gifts have been transferred to property records. Action is
complete.
[End of section]
GAO Contact and Staff Acknowledgments:
GAO Contact:
Brain J. Lepore, (202) 512-4523 or leporeb@gao.gov:
Acknowledgments:
In addition to the contact named above, Laura Durland, Assistant
Director; Bonita Anderson; Mae Jones; Gregory Marchand; Stephanie
Moriarty; and Terry Richardson made significant contributions to the
report.
[End of section]
Footnotes:
[1] In this report, unless otherwise specified, we use "gift" to refer
to any gift, devise or bequest of real property, personal property, or
money under the authority of 10 U.S.C. § 2601(a) or (b).
[2] Acceptance of services is permitted only under section 2601(b).
[3] Section 2601(b) of Title 10, U.S. Code was included in section 374
of the National Defense Authorization Act for Fiscal Year 2006, Pub. L.
No. 109-163 (2006). The authority expired on December 31, 2007, but was
reinstituted and made permanent by section 593 of the National Defense
Authorization Act for Fiscal Year 2008, Pub. L. No.110-181 (2008).
[4] DOD's policy for accepting, reporting, and monitoring gifts under
the gift fund authority is DOD Financial Management Regulation
7000.14R, Operation and Use of General Gift Funds of the Department of
Defense and Coast Guard, vol. 12, ch. 30 (September 2008).
[5] GAO, Defense Infrastructure: Issues Related to the Renovation of
General and Flag Officer Quarters, [hyperlink,
http://www.gao.gov/products/GAO-04-555] (Washington, D.C.: May 17,
2004).
[6] Real property includes land and any buildings, improvements, or
fixtures on that land.
[7] Personal property, as defined in Navy policy, is clothing, jewelry,
household furnishings, money, vehicles, stocks, bonds, intangibles, and
all property not defined as real property.
[8] GAO, Internal Control: Standards for Internal Control in the
Federal Government, [hyperlink,
http://www.gao.gov/products/GAO/AMID-00-21.3.1] (Washington, D.C.:
November 1999).
[9] This means the Secretary of Defense for gifts to DOD; the
Secretaries of the Army, Navy, and Air Force for gifts to the military
services; and the Secretary of Homeland Security for gifts to the Coast
Guard.
[10] In the case of the U.S. Military Academy and the U.S. Naval
Academy, this supplements additional specific gift acceptance
authorities. See 10 U.S.C. § 4356 and 10 U.S.C. § 6973, respectively.
[11] See, for example, Army Regulation 210-3, Nonstandard Activities of
the United States Military Academy and West Point Military Reservation,
ch. 11 (June 7, 1990).
[12] Tracking of records would exclude consumable items such as tickets
and food.
[13] Tracking of records would exclude consumable items such as tickets
and food.
[End of section]
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