United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2001-05-30 monographic deposited born digital 35 p. GA 1.13:GAO-01-559 https://www.govinfo.gov/app/details/GAOREPORTS-GAO-01-559 P0b002ee180386655 f:d01559 DGPO 2010-08-12 2011-03-24 GAOREPORTS-GAO-01-559 machine generated eng fdlp REPORT GAOREPORTS-GAO-01-559 GAO-01-559 Defense budgets Financial management Reporting requirements Industrial funds DOD Defense Working Capital Fund Other Written Product A01066 This report examines the working capital fund activities for the Department of Defense (DOD) to (1) identify any potential changes in current management processes or policies that, if made, would result in a more efficient operation and (2) evaluate various aspects of the DOD policy that allow Defense Working Capital Fund activities to carry over a 3-month level of work from one fiscal year to the next. GAO found that DOD does not have a sound analytical basis for its current 3-month carryover standard. DOD established a 3-month carryover standard for most working capital fund activity groups, although it has not performed the analysis necessary to support the 3-month standard. Without a validation process, neither DOD nor congressional decisionmakers can be assured that the 3-month standard is achieving its intended goal of providing activity groups with reasonable amounts of carryover to ensure a smooth transition from one fiscal year to the next or whether the carryover is excessive. In addition, carryover information currently reported under the 3-month standard is not comparable between services and is misleading to DOD and congressional decisionmakers. Specifically, because the military services use different methods to calculate the number of months of carryover, their results can differ markedly. Further complicating the congressional budget review of carryovers is that some activity groups have underestimated their budgeted carryover year after year, thereby providing decisionmakers with misleading year-end carryover information and resulting in more funding being provided than was intended. GAO also reviewed the potential financial impact of reducing the amount of fiscal year-end carryover permitted by DOD policy. GAO's analysis showed that if a 30-day, 60-day or 75-day carryover policy had been in effect during the fiscal year 2001 budget review process, the amount of budgeted customer orders could have been reduced by about $2.9 billion, $1.6 billion, or $1.0 billion, respectively. https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-01-559/html/GAOREPORTS-GAO-01-559.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-01-559/pdf/GAOREPORTS-GAO-01-559.pdf GAO-01-559 https://www.govinfo.gov/app/details/GAOREPORTS-GAO-01-559 Other Written Product GAO-01-559; Defense Working Capital Fund: Improvements Needed for Managing the Backlog of Funded Work; Defense budgets Financial management Reporting requirements Industrial funds DOD Defense Working Capital Fund Public Law 106-398