Book Description

Pursuant to a legislative requirement, GAO reviewed the Department of Defense (DOD) Concessions Committee's operations, focusing on the Committee's: (1) financial operations; (2) oversight and management; and (3) contributions to morale, welfare, and recreation (MWR) funds. GAO noted that: (1) the Concessions Committee's financial statements are audited by an independent public accounting firm, and those financial statements have consistently received unqualified opinions; (2) as a result, GAO did not independently review the Committee's financial operations; (3) GAO reviewed an independent public accounting firm's work for the last 2 fiscal years; (4) GAO's review disclosed no instances where the firm did not comply in all material respects with generally accepted government auditing standards; (5) the Committee is not subject to the reporting and oversight requirements of other nonappropriated fund instrumentalities; (6) although the Committee's operations are reviewed by a senior official in the Office of the Secretary of Defense, the Committee has not been required to submit financial information to Force Management and Policy; (7) therefore, Congress does not receive information on its activities; (8) also, the Committee's governing directive does not specify the procedures by which the Committee is to manage its day-to-day operations or criteria for determining the types of sales activities it may engage in; (9) in the absence of specific operating procedures, the Committee has followed Army regulations for nonappropriated fund instrumentalities; (10) while GAO did not find any instances where the Committee deviated from the Army regulations, the absence of mandatory operating regulations represents a weakness in management controls; (11) although the Committee has chosen to follow these regulations, it is not required to do so and therefore cannot be held accountable for deviations; (12) although the amount available for MWR contributions is directly linked to the Committee's decisions to retain earnings for reserves and equipment, there is no written policy to guide its members in making these decisions, and GAO could find no documentation supporting how the decisions were reached; (13) although the Committee has a capital expenditure budget, it does not have a long-term operating budget for use in making these decisions; (14) at GAO's suggestion, the Committee has indicated it will prepare a 5-year operating budget that will identify the minimum level of cash reserves that are needed to cover current operations; (15) the Committee also plans to review its long-term capital expenditure budget in light of the ongoing Pentagon renovations; and (16) these actions may result in identifying additional resources that could be made available to MWR funds.