United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office National Security and International Affairs Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1997-04-10 monographic deposited born digital 48 p. GA 1.13:NSIAD-97-37 https://www.govinfo.gov/app/details/GAOREPORTS-NSIAD-97-37 P0b002ee18039ebc0 f:ns97037 DGPO 2010-08-12 2011-03-24 GAOREPORTS-NSIAD-97-37 machine generated eng fdlp REPORT GAOREPORTS-NSIAD-97-37 NSIAD-97-37 Financial management Contractor payments Overpayments Department of Defense contractors Federal agency accounting systems Accounting errors ADP Defense cost control Data integrity Other Written Product NSIAD

Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) efforts to improve its contract payment practices, focusing on: (1) the factors contributing to payment errors and increased costs; (2) DOD's efforts to improve its payment system; and (3) payment practices of commercial companies that DOD might adopt.<p/>GAO noted that: (1) it is imperative that DOD achieve cost-effective control over its payment process; (2) otherwise, it continues to risk hundreds of millions of dollars in potential overpayments and other financial management and accounting control problems; (3) further, improving the efficiency of the payment process would save additional millions of dollars annually in reduced processing costs; (4) the following factors contribute significantly to problems and increased costs in DOD's payment process: (a) nonintegrated computer systems that require manual entry of data that is erroneous or incomplete; (b) multiple documents that must be matched before contractors are paid; and (c) payments that require allocation among numerous accounting categories; (5) improving DOD's payment system will not be an easy or quick undertaking; (6) it will require continued top management attention and support for many years to come; (7) while DOD is taking some steps to address its payment problems, when and to what degree they will effectively correct its problems remains to be seen; (8) further, DOD's actions do not go far enough in addressing the factors GAO identified as contributing to payment problems; (9) for example, DOD has yet to decide on how to minimize transferring existing erroneous data to the new automated system; (10) moreover, it also plans to continue to match multiple documents and allocate payments across numerous accounting categories; (11) GAO's review indicated that DOD might benefit from further examining best practices of commercial organizations that have reengineered their contract payments process; (12) the organizations GAO visited have focused on a long-term effort of continual improvements with contract payments viewed as an integral part of the acquisition process; and (13) in general, these organizations have combined technological improvements with streamlined processes to improve service and reduce costs. https://www.govinfo.gov/content/pkg/GAOREPORTS-NSIAD-97-37/html/GAOREPORTS-NSIAD-97-37.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-NSIAD-97-37/pdf/GAOREPORTS-NSIAD-97-37.pdf GAO/NSIAD-97-37 https://www.govinfo.gov/app/details/GAOREPORTS-NSIAD-97-37 Other Written Product GAO/NSIAD-97-37; Contract Management: Fixing DOD's Payment Problems Is Imperative; Financial management Contractor payments Overpayments Department of Defense contractors Federal agency accounting systems Accounting errors ADP Defense cost control Data integrity Title 31 Section 1341 Title 31 Section 3332 31 U.S.C. 1341 31 U.S.C. 3332 Public Law 103-335 Public Law 104-134