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GAO: DoD Should Update Financial Mgmt Guidance to Meet Cash Balance Requirements

The Government Accountability Office has urged the Defense Department to update its Financial Management Regulation to help maintain cash balances within upper and lower cash requirements.

GAO said Friday DoD’s Defense-wide Working Capital Fund reported that monthly cash balances were outside limits set by FMR for 87 of 120 months from fiscal years 2007 through 2016.

The Defense Finance and Accounting Service, Defense Information Systems Agency and Defense Logistics Agency use the DWWCF to charge for goods and services delivered to the U.S. military and other customers.

GAO noted the cash reserves were outside requirements primarily due to changes in fuel costs.

DoD’s FMR includes guidance on tools managers can use to help keep monthly cash balances within limits but the regulation does not contain instructions on when to use such tools.

The DWWCF might not be able to pay bills on time or hold funds that could be used for other priorities when monthly cash balances do not meet requirements for a long time, the report stated.

GAO recommended DoD to update the FMR to add guidance on when DoD managers should use available tools to maintain monthly cash balances within required levels.

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