Significant Audit Findings in the Department of Defense
Abstract
The Navy uses tankers to transport fuel for itself and for the other military services. Part of the tanker fleet consists of 14 Government--owned T-2 tankers built during the 1940s. Navy studies concluded that transportation costs would be reduced by replacing the 14 old tankers with 9 new ones. The Navy entered into a long-term (20-year) leasing arrangement on June 20, 1972, by having private interests obtain the funds to finance the construction of the tankers with Navy's guarantee that it would lease them. GAO made a review to determine (1) whether the Navys action was the more economical method to meet its needs, (2) whether or not the Congress had an opportunity to consider the wisdom of the transaction before the formal commitment to spend future funds, and (3) whether review and approval by the Congress should be required for future transactions of this type. A March 23, 1972, decision of the Comptroller General on the legality of this leasing arrangement stated that GAO could not say the transaction resulted in purchase of an asset, for which funds are required to be authorized and appropriated by the Congress, because the Navy never obtains actual title to the tankers, GAO said it had no legal objection to the transaction but that, in view of the program's magnitude it would seem appropriate to inform the House and Senate Committees on Armed Services and Appropriations of Navy plans before going forward. Navy officials advised GAO that they gave informal rather than formal notification to selected committee staff members.
Document Details
- Document Type
- Technical Report
- Publication Date
- Feb 21, 1974
- Accession Number
- AD1170737
Entities
People
- Elmer B. Staats
Organizations
- United States Government Accountability Office