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FGMSD-79-2 1 (1978-11-15)

handle is hein.gao/gaobaayfz0001 and id is 1 raw text is: DOCUMENT RESUME 07684 - CC3240 03LVC Correct Balance of Havy's Foreign Military Sales Trust Fund Unknown. FGNSD-79-2; B-132900. Noveuker 15, 1978. Released November 15, 1978. 8 pp. Report to Rep. George H. Mahon, Chairman, House Committee on Appropriations; by Elmer B. SAaats, Comptroller General. Issue Area; Accounting and Financial Reporting: Overobligations and Overexpenditures (2804). Contact: Financial and General Managenent Studies Div. Budget Function: Miscellaneous: Financial Managerent and Information Systems (1002). Organization Concerned: Department of Defense; Department of the Navy; Department of the Treasury. Congressional Relevance: House Committee on Appropriations. Rep. George H. Mahon. Authority: 31 U.S.C. 200. The Navy's foreign military sales (PBS) trust fund account is used to hold and account for cash ccllected frr foreign cov, tries until it is disbursed. The Department ci the Treasury maintains trust fund reco:ds, 'it balances on those records result from data reported to it by the services. Cash collections and disbursements are accounted for in detailed sales case accounting records which are maintained by the Defense Department's Security Assistance Accounting Center. The Center is also responsible for managing the trust fund. Findings/Conclusions: Probleas in the Navy's accounting and reporting of FKS disbursements and ccllections were disclosed when the sales case accounting records were transferred to the Center. The Navy was directed to reconcile the cash talance on the trust fund records with the cash balance shown on official detailed sales case accounting records. Cespite sore than a year's effort involving thousands of staffdays, the Navy has not been able to reconcile these balances. As a result, the correct amount of cash being held for foreign countries is act known. some of the adjustments made by the Navy iere in error or were not adequately supported. Differences between the Treasur trust fund and sales case accounting records have continued to increase, and, at June 1, 1978, totaled $554 million. Under the Navy's current system, there will continue to be a significant amount of transactions in-float at any tine# and, therefore, there will continue to be differences in the balances. Recommendations: The Secretary of Defense should have the Secretary of th3 Navy: direct that prompt action be taken to determine the trust fund cash balance that can be documented for each foreign country and require that Treasury records and sales case accounting records be adjusted accordingly; and insure that procedures are implemented to identify transactions in-float so that in the future the Treasury trust fund balance can be regularly reconciled to sales case accounting records. The

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