Report | May 6, 2014

Improvement Needed for Management of Commemorative Program Funds

DODIG-2014-067

Objective

We determined whether accounting of funds used for the Korean War 60th Commemoration (KWC60) program was accurate and complete.

Findings

The Army’s accounting of funds used for the KWC60 program was incomplete and inaccurate. Specifically, the Army Deputy Chief of Staff (DCS), G-2 did not accurately record or report all of KWC60 program funding and costs, or maintain source documents to support transactions recorded in the accounting system. As a result, funding and cost data of the KWC60 program are not reliable, and a potential for improper payments exists. Additionally, the Army spent at least $2.5 million more than the $5 million spending limit set by Public Law 111-383. As a result, the Army did not comply with the Public Law 111-383 spending limit and may have violated the Antideficiency Act. These conditions occurred because the Army did not effectively perform the Executive Agent responsibilities, such as monitoring resources or preserving records, in accordance with DoD Directive 5101.1.

An Army contracting officer obligated $125,100 of donations on behalf of the Army DCS, G-2 after the funds were no longer available to use for the KWC60 program. In addition, the Army DCS, G-2 transferred less money to the DoD Vietnam War Commemorative Fund than required. These conditions occurred because the Army DCS, G-2 indicated on a purchase order that the funds had no expiration date instead of citing the reference to Public Law 111-383, which limited the period the funds were available for obligation to September 30, 2013. As a result, the Army DCS, G-2 initiated actions that violated Public Law 111-383 and may have violated the Antideficiency Act.

Recommendations

The Secretary of the Army should issue implementing guidance for effectively performing Executive Agent responsibilities in accordance with DoD Directive 5101.1, which includes developing standard operating procedures that identify key processes, roles, and responsibilities for resource management.

The Assistant Secretary of the Army (Financial Management and Comptroller) should:

  • obtain and review supporting documentation for $517,510 in disbursements and initiate corrective actions if improper payments are found;
  • initiate a preliminary review in accordance with DoD Regulation 7000.14-R, volume 14, chapter 3 to determine whether the Army violated the Antideficiency Act, and, if it did, recommend corrective actions, including actions for responsible officials; and
  • initiate corrective action to identify and transfer all unobligated amounts that remained in the DoD Korean War Commemoration Fund as of September 30, 2013.

Management Comments and Our Response

Comments from the Secretary of the Army and the Assistant Secretary of the Army (Financial Management and Comptroller) were responsive. No further comments are required.

This report is a result of Project No. D2013-D000FE-0150.000.