Foreign Military Sales: Navy's Accounting for Sales to Foreign Customers Needs Improvement
AIMD-99-213
Published: Aug 24, 1999. Publicly Released: Aug 24, 1999.
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Highlights
Pursuant to a congressional request, GAO reviewed the Department of Defense's accounting for and reporting on the costs of the foreign military sales (FMS) program, focusing on whether the Navy has properly charged its FMS customers for goods and services already provided.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should direct the Secretary of the Navy to: (1) collect from the FMS trust fund accounts the $11.3 million identified in this report that has not been charged to the FMS customer trust fund accounts for goods and services already provided; and (2) place increased management emphasis on monitoring and follow-up efforts to ensure that foreign customer trust fund accounts are promptly charged for all goods and services and errors recorded in the Navy's Management Information System International Logistics (MISIL) are promptly identified and corrected. |
Closed – Implemented
As of January 2000, DOD had charged the FMS customers accounts for the $11.3 million identified in the report that had not been charged to FMS customers for delivered goods and services. In addition, DOD has continued to monitor and followup on outstanding balances and has identified and collected an additional $1,548,268 which had not been charged to FMS customer's accounts. DOD has also increased monitoring and follow-up efforts to ensure that foreign customer trust fund accounts are promptly charged for all goods and services and that errors recorded in the Navy's MISIL are promptly identified and corrected.
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| Department of Defense | The Secretary of Defense should direct the Secretary of the Navy and the Under Secretary of Defense (Comptroller) to develop and implement a plan to review the remaining $507 million of transactions recorded in the Navy's MISIL system to: (1) identify and collect amounts the FMS customers owe for goods and services already provided; (2) correct erroneous transactions in the MISIL; and (3) determine the causes for these types of errors and take action to eliminate similar errors in the future. |
Closed – Implemented
DOD reported that Navy and the Defense Finance and Accounting Service (DFAS) implemented a plan to review the remaining $507 million of balances in order to (1) identify and collect amounts owed by FMS customers, (2) correct erroneous transactions, and (3) determine the causes for these types of errors in order to take action to eliminate them from occurring in the future. As of January 2000, Navy has completed its review of the $507 million and identified and corrected 22,903 erroneous transactions.
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| Department of Defense | With respect to the remaining $507 million of MISIL transactions, the review could initially focus on the reimbursable transactions since GAO found that 100 percent of the reimbursable transactions in GAO's limited sample represented amounts where FMS customer accounts had not been charged for the goods and services already provided. |
Closed – Implemented
DOD reported that the Navy and Defense Finance and Accounting Service (DFAS) have completed their review of the remaining $507 million of MISIL potential shipped not billed transactions. As of January 2000, DOD has corrected 22,903 erroneous transactions.
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Topics
Federal agency accounting systemsForeign governmentsForeign military salesForeign military sales policiesMilitary cost controlReporting requirementsTrust fundsU.S. NavyMilitary forcesAccounts