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 2001-07-26 monographic deposited born digital 35 p. GA 1.13:GAO-01-697 https://www.govinfo.gov/app/details/GAOREPORTS-GAO-01-697 P0b002ee18037890d f:d01697 DGPO 2010-08-12 2011-03-24 GAOREPORTS-GAO-01-697 machine generated eng fdlp REPORT GAOREPORTS-GAO-01-697 GAO-01-697 Appropriation accounts Defense appropriations Expired appropriations Accounting procedures Accounting standards Federal agency accounting systems Contract modifications Contract oversight Noncompliance Financial management DOD Contract Reconciliation System Other Written Product A01462

This report reviews the Department of Defense's (DOD) handling of appropriated funds from expired appropriation accounts. In 1990, Congress changed the law governing the use of appropriation accounts because it determined that controls over them were not working. Without adequate control, Congress was concerned that agencies could disburse money in amounts and for purposes that it had not approved. GAO found that DOD improperly charged appropriation accounts after they were closed. GAO also found that DOD did not establish the requisite systems, controls, and managerial attention required to properly account for its disbursements consistent with the 1990 account closing law, and as a result, DOD made at least $615 million of illegal or otherwise improper adjustments during fiscal year 2000 alone. DOD was aware of the limitations the account closing law placed on the availability of canceled appropriations and that the law was enacted because of previous abuses by DOD's use of old appropriations. DOD also knew that a major system used to control its use of appropriations allowed for disbursements to be charged in a way that was inconsistent with the law. However, DOD did nothing to fix the system, although it estimated the cost to do so to be minimal. The $615 million of adjustments GAO identified as illegal or otherwise improper must be immediately reversed. Also, at a minimum, DOD will need to effect changes to its systems, policies, procedures, and the overall weak control environment that fostered these practices and served to perpetuate the problem. GAO summarized this report in testimony before Congress; see: Canceled DOD Appropriations: $615 Million of Illegal or Otherwise Improper Adjustments, by Jeffrey C. Steinhoff, Managing Director for Financial Management and Assurance, before the Subcommittee on Government Efficiency, Financial Management, and Intergovernmental Relations, House Committee on Government Reform. GAO-01-994T, July 26 (eight pages). https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-01-697/html/GAOREPORTS-GAO-01-697.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-01-697/pdf/GAOREPORTS-GAO-01-697.pdf GAO-01-697 https://www.govinfo.gov/app/details/GAOREPORTS-GAO-01-697 Other Written Product GAO-01-697; Canceled DOD Appropriations: $615 Million of Illegal or Otherwise Improper Adjustments; Appropriation accounts Defense appropriations Expired appropriations Accounting procedures Accounting standards Federal agency accounting systems Contract modifications Contract oversight Noncompliance Financial management DOD Contract Reconciliation System Title 31 Section 1351 Title 31 Section 1353 Title 31 Section 1502 Title 31 Section 1552 31 U.S.C. 1351 31 U.S.C. 1353 31 U.S.C. 1502 31 U.S.C. 1552 Public Law 101-510