Financial Statement Presentation of DoD Progress Payments.
Abstract
Progress payments are a means of providing contract financing for work- in-process expenditures on fixed-price Government contracts with long lead times. Progress payments are designed to alleviate undue strain on a contractor's cash flow and provide interim financing as progress occurs. This is the second in a series of reports resulting from our DoD-wide audit on the financial reporting of DoD progress payments. This report discusses the disclosure of the progress payments DoD organizations made to contractors in FY 1996. The previous report addressed disclosure of the portions of progress payments that were due, but were withheld from contractors pending completion of the contract (contract holdbacks). This audit was performed in conjunction with the Military Department audit agencies. The Defense Contract Management Command is primarily responsible for administering and approving progress payments on DoD contracts, and the Defense Finance and Accounting Service is responsible for payment. During FY 1996, the Military Departments and the Defense Logistics Agency reported $29.6 billion of progress payments that the Defense Finance and Accounting Service paid to DoD contractors. During FY 1997, the Defense Business Operations Fund was realigned into several Working Capital Funds. This realignment does not affect the matters discussed in this report. Our audit objective was to determine whether progress payments were accurately shown on the financial statements of the DoD General Fund and the Defense Business Operations Fund for FY 1996.
Document Details
- Document Type
- Technical Report
- Publication Date
- May 27, 1998
- Accession Number
- ADA367896
Entities
Organizations
- Office of the Inspector General, U.S. Department of Defense