Federal Manager's Daily Report

DoD Still Not Fully Accounting for Its Property in Contractors’ Hands, GAO Says

The DoD still is not fully accounting for its property in the hands of contractors, more than two decades since the issue was first identified as a “material weakness” in its financial statements, the GAO has said.

Lack of accounting and reporting on that so-called “government furnished property,” or GFP, is one reason that DoD continues to be the only major federal agency that has been unable to receive an audit opinion on its department-wide financial statements, it said.

The GAO said that since 2001, the DoD has issued eight separate target dates for better accounting, with the latest deadline being 2026. For example, it said that 2019 guidance seeking for example establish a baseline of such assets, has suffered from problems including “inefficient and incomplete” distribution of the guidance, confusing terminology, and lack of management review of compliance, it said.

The report said that DoD’s most recent estimate of the value of such property, in 2014, was $220 billion, but said “that amount is likely significantly understated. That was based a later GAO finding that the number of such assets owned just by the Army is unknown and that the “actual quantities may be greatly different than the Army’s documented property records reflect.”

It said DoD fully or partly concurred with recommendations to develop a comprehensive strategy to clearly articulate detailed DoD-wide efforts and oversee components’ compliance.

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