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B-159896 1 (1974-03-21)

handle is hein.gao/gaobaafsq0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE 0 WASHINGTON, D.C. 20548 DIVISION OF FINANCIAL AND oqsqyo GENERAL MANAGEMENT STUDIES MAR 2 1 1974 B-159896 ~III~ ll lll~lIll 111II111111 11111lIliiilU LM095950 The Honorable The Secretary of Defense C Dear Mr. Secretary: DOD policy, contained in DOD Directive 7410.4, requires that signif- icant costs of maintaingrs uilized and underutilized mobilization- essential,,pna equiment at industrial fund activities be- iftified and separately funded. DOD reported to the Congress in fiscal year 1972 that industrial fund activities were separately funded for about $10.6 million for various functions in support of reserve industrial capacity. Only $2°7 million of these funds were provided to maintain unuth and underutilized plant and equipment. Since the peak of the Vietnam hostilities, many industrial fund activ- ities have had decreased workloads resulting in increased amounts of unutilized and underutilized plant and equipment. However, industrial fund managers are still responsible for such plant and equipment to the extent it is needed for mobilization preparedness. In view of the reduced mission workload, continuing mobilization re- quirements, and small amount of costs reported for maintaining unutilized and underutilized plant and equipment, we reviewed the manner in which these costs were being computed, reported, budgeted for, and funded by 45 major Army and Navy industrial fund activities. SCOPE OF REVIEW We made our review at selected Army and Navy commands, including the Army Materiel Command, Chief of Naval Material, Naval Ordnance Systems Command, Naval Ship Systems Command, and Naval Air Systems Command. At these commands we reviewed pertinent financial data relating to 45 indus- trial fund activities. The acquisition value of plant and equipment at the 45 activities was about $3.7 billion of a total of $7°5 billion at Army and Navy industrial fund activities in fiscal year 1972. A/I767)

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