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B-132900-O.M. 1 (1977-11-01)

handle is hein.gao/gaobadwaz0001 and id is 1 raw text is: UNITED STATES GOVERNMENT GENERAL ACCOUNTING OFFICE Memorandum TO : General Counsel IROM Director, FGMSD Scantle u rn SuijwcT: Request for legal opinion on matters related to appropriation reimbursements in Air Force appropriations (Code 90362) C0~ At the request of the Chairman of the House Appropriations Comm ee, we are reviewing financial management procedures in the Department of the Air Force to determine whether they have experienced problems similar to those recently found in the Army and, if so, whether appropriate correc- tive action has been taken. Based on our preliminary survey work, including review of recent Air Force Audit Agency reports, we have questions about the legality of certain procedures used by the Air Force in accounting for appropriation reimburse- ments resulting from Foreign Military Sales (FMS). Early resolution of these issues would help us in planning the approach to and scope of our review. Details of our questions follow. Recording of appropriation reimbursements FMS sales cases-are established upon the execution of a Letter of Offer and Acceptance (DD Form 1513). The year in which the case is estab- lished is referred to as the case year. Although the DD Form 1513 rep-'- resents authority to obligate funds on certain types of sales cases, for most types of cases assigned to the Air Force Logistics Command (AFLC), there must be a firm, definitized customer order (requisition) against the case before obligational authority is established. These requisitions may be, and often are, received in fiscal years subsequent to the case year. Also, obligations and earnings associated with the customer order may occur in even later years. In i976, the Air Force Audit Agency reported that procedure used to account for AFLC-managed FMS cases were not in accordance with applicable Department of Defense and Air Force directives. Customer orders, repre- senting obligational authority, were being established (applied) in the case year, regardless of when they were received and accepted, or when funds to fill the order were obligated. The related earnings and collec- tions'for these orders were also being recorded in the case year even though obligations were incurred to support the order in subsequent fiscal year qppropriations.

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