Defense Business Operations Fund: Improved Pricing Practices and
Financial Reports Are Needed to Set Accurate Prices (Letter Report,
06/22/94, GAO/AIMD-94-132).

The primary goal of the Defense Business Operations Fund is to focus
management attention on the total cost of carrying out critical Defense
Department (DOD) business operations and the management of those costs.
A basic principle of the Fund is to set prices that recover the total
costs of providing goods and services to its customers. This report (1)
describes the process used to develop the Fund's fiscal year 1995
prices, (2) identifies major reasons Fund prices have increased, (3)
identifies major reasons the Fund has continued to incur operating
losses, and (4) provides information on the adequacy of the Fund's
budget and financial reports. GAO limited its review to depot
maintenance and supply operations, the Fund's largest business areas,
which will account for $51 billion, or 66 percent, of the Fund's
estimated revenues in fiscal year 1995.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-94-132
     TITLE:  Defense Business Operations Fund: Improved Pricing 
             Practices and Financial Reports Are Needed to Set Accurate
             Prices
      DATE:  06/22/94
   SUBJECT:  Cost accounting
             Financial records
             Revolving funds
             Funds management
             Industrial funds
             Overhead costs
             Fees
             Federal agency accounting systems
             Accountability
             Internal controls
IDENTIFIER:  Defense Business Operations Fund
             
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