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FGMSD-78-28 1 (1978-04-27)

handle is hein.gao/gaobaaxby0001 and id is 1 raw text is: DOCUHMT RESUMlE 05682 - [B1226171 d i Army Efforts To Restore Integrity to Its Financial Management Systems. FGMSD-78-28; B-132900. April 27, 1978. 25 pp. * 5 appendices (10 pp.) Report to Rep. George fi. Mahon, Chairsaa, House Committee on AFpropriations; by Elmer B. Staats, Comptroller General. Issue Area: Accounting and Financial feporting: Overcbligations and Overexpenditures (2804); Federal Procurexent of Goods and Services (1900). Contact: Financial and General Management Studies Div. Budqet Function: miscellaneous: Financial aanagement 'nd Intormation Systems (1002). Orqanization Concerned: Department of the army. Conqressional Relevance: House Committee on AF4roFriationg. Rep. George H. Mahon. Authority: Anti-Deficiency Act (31 U.S.C. 665). Budget and Accountinq Procedures Act of 1950 (31 U.S.C 66). 2 GAO 27.2. In October 1975, the Assistant Secretary cf the Army (Financial Management) Dotified the house Apprcpriations Committee of a serious breakdown in the financial control over Army procurement appropriations which risulted in viclaticns of the Anti-Deficiency Act totaling more than $225 million. 1hese violations related to the section of the act that prcvides that no officer or employee shall mak-. or authorize an expenditure from, or create or authorize an obligation under, any arpropriation exceeding the -mount therein. Findinqs/Conclusions: The most serious factcrs contributing to the Army's overall financial management prcblems were: failure to aesign and implezent an effective procurement approprlation accounting system; failure to adequately ccntrcl fund allocations, reprogramings, and transfers; and failure to accurately account for customer orders. 2he imFact of theso problems was compounded by the phenomenal growth of the Army's customer order program over several years. Army efforts to ccrrect the financial management problems have been concentrated in: eliminating erroneous balances in itF accountiog reccrds, primarily in the procurement arpropriaticn acccunts; and improvinq its accounting, reporting, and ±und control systems to prevent recurrence of these problems. Ihe Army has recorded over $1.5 billion in adjustments to its accounting records, but Decause many of the records are missing or in ;oor condition, it is unlikely that all erxors will ever be fcund or corrected. Recommendations: The Secretary ot Defense should have the Secretary of the Army: make sure the design and inpletentation of the remaining phase of the Army's rew riocuremc,. appropriation program and fund control system are accomplished as quickly as possible, develop a plan to iiplement a standardized procurement appropriation accounting sy3tem at the installation level with a single data source, notify him and the

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