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GGD-85-51 1 (1985-07-09)

handle is hein.gao/gaobabnry0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASAINC TON, D.C. 20548 NAUONAIL SECURITY AND INTERNATIONAL AFFAIRS OVISION B-207093 JULY 9, 1985 The Honorable Caspar W. Weinberger I The Secretary of Defense 127345 Dear Mr. Secretary: Subject: Savings Can Be Realized If Nonappropriated Fund Instrumentalities Pay For Their Unemployment Costs (GAO/GGD-85-51) We are currently conducting a review of unemployment benefit payments to former federal employees. Our review is not yet complete, but we have identified an opportunity that we believe could save the Department of Defense (DOD) several million dollars in appropriated funds each year. DOD can realize these savings by requiring its nonappropriated fund instrumentalities (NAFI)--morale, welfare, and recreation activities--to pay their own unemployment costs. About $22 million in unemployment benefits have been paid to former DOD NAFI employees since fiscal year 1982. DOD NAFIs include movie theaters, gasoline stations, clubs, golf courses, exchanges, and other recreational facilities and programs. According to a DOD official, DOD's 22,000 NAFIs employ about 205,000 people and during fiscal year 1983, gen- erated about $7.8 billion from the sale of goods and services to military customers. DOD's overall policy is to reduce the scope and magnitude of appropriated fund support for NAFI activities. Requiring that NAFI-generated funds, rather than appropriated funds, be used to pay unemployment benefit costs for former NAFI employees would be consistent with this overall policy and with DOD's existing requirement that the NAFIs pay all other employee fringe benefit costs. Moreover, other federal agencies that have NAFI activities require the NAFIs to pay for their former employees' unemployment benefits. Such a change could also provide an incentive for NAFI managers to find ways to reduce their unemployment costs. (966197) 0_51Aq9

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