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![handle is hein.gao/gaobaawwx0001 and id is 1 raw text is:
DOCOBENT RBESUME
05381 - (B082575,5]
Cash Management Policy and Procedures Need Improvement.
FGMSD-78-20; B-159797. march 17, I°P'. 2 pp. + 3 appendices (11
pp.).
Report to Seretary, Department of Defense; by D. L.
Scantlebury, Director, Financial and General management Studies
Div.
Issue Area: Accounting and Financial Reporting: Sound Cash
Management (2805).
Contact: Financial and General Management Studiez Div.
Budget Function: miscellaneous: Financial management and
Information Systems (1002!.
organization concerned: Department of the Army; Department of
the Air Force; Department of the Navy.
congressional Relevance: House Committee on Armed services;
Senate Committee on Armed Services.
Authority: 31 U.S.C. 492.
A recent revieu showed that the Department of Defense's
(DOD's) cash-on-hand balances exceeded requirements by about $50
million. If this money had been returned to the Treasury,
Government interest costs could have been reduced by about $3.2
million annually. Findings/Conclusions: In spite of promised
action by DOD, cash-on-hand balances were still unnecessarily
large in relation to operating nee4s. Excess balances could be
reduced in the military banking facilities, finance and
accounting o.ffices, foreign currency accounts overseas, and
aboard ships. Excess cash has been on deposit with military
banking facilities overseas, and the central finance office in
Europe had forei.gn currency accounts which were not needed with
the military banking facilities. DOD has not developed criteria
for the central finance offices to use in determining cash
levels to be maintained at these facilities. Reviews shoved that
26 military finance and accounting offices were holding about
$15.5 million in excess cash, costing the Government about
$1,075,000 annually in unnecessary interest costs. Excess cash
balances continue because there is no incentive for Defense
organizations to maintain minimum balances. The President has
directed his reorganization staff to study cash management
policies. Recommendations: The Secretary of Defense should:
issue guidelines for determining the level of cash balances that
should be maintained by central finance offices overseas,
clarify DOD criteria for determining how freq'ently cash should
be replenished at finance and accounting offices, and have the
Secretary of the Navy develop detailed guidelines for
determining hat cash needs should be for deployed ships and
ships in port. (Author/HTV)](ViewImageLocal?handle=hein.gao/gaobaawwx0001&div=1&collection=&method=preview&ext=.png&size=3)