Plant Modernization: DOD's Management of the Asset Capitalization Program Needs Improvement
Abstract
Between fiscal years 1983 and 1989, about $5 billion was approved for plant modernization under the Asset Capitalization Program for the Department of Defense (DOD). The Chairman, Subcommittee on Readiness, Sustainability and Support, Senate Committee on Armed Services, asked GAO to evaluate the adequacy of existing guidance; the implementation of the program, including the success achieved and the problems encountered; and the adequacy of internal controls. The Subcommittee also asked GAO to identify any major factors affecting program execution. Industrial fund activities, such as aircraft maintenance depots, shipyards, and public works centers, perform functions of an industrial or commercial nature. In 1983, DOD established the program to modernize plant and industrial equipment at the activities. Under the program, the activities purchase equipment with industrial funds rather than direct appropriations. The activity initially finances the cost of the equipment and then charges its customers, such as fleet commanders, for work performed. It recovers the cost of equipment by including depreciation expense in the charge to its customers.
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 01, 1989
- Accession Number
- AD1170184
Entities
People
- Andrew G. Marek
- Floyd Adkins
- Frank C. Conahan
- George A. Jahnigen
- Ilene H. Fliegel
- Kevin Kumanga
- Louis J. Rodrigues
- Pete Westbrook
- Roy K. Judy
- Thomas Perry
- Virginia M. Saavedra
Organizations
- United States Government Accountability Office