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GAO assessed the Army's efforts to prevent improper obligations of customers' operation and maintenance (O&M) funds by industrial fund activities.
GAO found that, of the $3.3 million in O&M funds that the Army carried over in fiscal year 1986, it improperly obligated $2.9 million during previous fiscal years, thereby extending the availability of O&M appropriations which would have either expired or been properly obligated for other purposes. GAO noted that the improper obligations precluded the Army from making valid obligations because the O&M appropriations had expired by the time it deobligated the funds. GAO concluded that, although a December 1985 instruction clarified and provided more guidance concerning obligations, the Army needs to take additional steps to reduce the risks associated with the: (1) year-end obligation process not preventing recurring problems of improper obligations; and (2) quarterly deobligation reports not providing enough information to Army Materiel Command (AMC) headquarters officials to effectively monitor implementation at industrial fund activities.
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