About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

LOG IN
LOG IN


FPCD-78-15 1 (1978-01-19)

handle is hein.gao/gaobaawoe0001 and id is 1 raw text is: DOCUhENT RESUME 04809 - 80245105] (gesiricted) Cash and Investment 4anagement of Department of Defense Nonappropriated Funds geed To Be Improved. FPCD-78-15; E-148581. January 19, 1978. 19 pp. + 3 appendices (4 pp.). Report to Rep. Jack prooks, Chairman, House Conmittee on Government Operations: Legislation and National Security Subcommittee; by Elmer B. Staats, Comptroller Generale Issue Area: Personnel ainagement and Compensation (300). Contact: Federal Personnel and Cokpensation Div. Budqet Function: Natio'n~al Defense: Defense-reLated Activitie3 (054); General GOv nment: Central Fiscal Operations (803); Interest: Ot1cr Intrest (902). Organization concerned Department of Delense; Department of the Air Force; Department of the Navy; Department cf the Army; Department of the Treasury. Congressional Relevance: House Committee on Government Operations: Legislgtion and National Security Subcommittee. Rep. J-qck Brooks. The Peptrtmeat of Defense (LOD) supplements the cost of morale, weltare, andtirecreation (MWR) programs with nonappropriated funds.-These programs generate approximately $5 biii.ion in receipts gach year uhich are managed by central offices in each military department. As of June 30, 1977, central tunds had inyegtments totaling approximately $813 million. Findinqs/Conclusions: Several options were considered for involving the Trqasury in holding and investing the -ash, the most logical option being to transfer banking functions to the Treasury and limit investments to Treasury obligations. This practic? would be consistent with Federal fiscal and accounting policies and would have the most safeguards, but it would reduce interest income and investment flexibility. Management of NWR activ-.ties did not maximize the effectiveness of cash and investment functions, thus reducing interest earrings. while many central activities used some centralized banking, the Army and iarine corps did, not. In central banking, receipts from many activities are pooled into one or a few banks, enabling central management to inv-st jArger amounts of funds. Deficiencies noted in investment management practices were: dtfe --'-teral requirements were no+tbaing followed in all case ,-, Navy, and Navy Resal,.5ysten Office had large percentages of their central investkts concentrated in single banks or qeoqraphic areas; thgArmy borrowed approximately $14 million to invest at a higher rite of interest than allowed by DOD instructions; the Aray lacked specific investment objectives and policies; aiid the Marine Corps lacked central control over revenues. Recommendations: The Secretary of Defense should: direct the Army to a opt a centralized banking and accounting system to establish formalized objectives, goals, and procedures for cash flow management and to monitor its investment program;