Joint Logistics Systems Center Reporting of Systems Development Costs.
Abstract
This audit was performed to meet the requirements of Public Law 101-576, the "Chief Financial Officers Act of 1990," as amended by Public Law 103-356, the "Federal Financial Management Act of 1994." The Joint Logistics Systems Center (JLSC) was organized in FY 1992 to accomplish Corporate Information Management goals for the depot maintenance and supply management business areas of the DoD Working Capital Funds. Specifically, the JLSC served as a central agent with the responsibility for managing the design, development, and implementation of DoD-wide automated information systems for depot maintenance and supply management. As of the end of FY 1996, the JLSC reported $1.3 billion in systems development costs on its annual financial statements. To obtain funds to cover JLSC system development costs, the Under Secretary of Defense (Comptroller) required each of the depot maintenance and supply management business areas of the DoD Working Capital Funds to charge additional costs to their customers, primarily Military Department operational units, for goods or services provided. Those surcharges total nearly $2 billion through FY 1998. Audit Objective. The overall audit objective was to determine the reliability of information presented in the property, plant, and equipment accounts of the JLSC financial statements. We also determined whether the costs of the JLSC systems developments were appropriately transferred to the organizations that would operate the systems for capitalization. Additionally, we assessed the Under Secretary of Defense (Comptroller) policy on the recovery of depreciation costs for the JLSC systems developments. Audit Results. The JLSC did not transfer about $1.54 billion of systems development costs, incurred through the end of FY 1996, to the depot maintenance and supply management organizations responsible for capitalizing and reporting these costs on the financial statements.
Document Details
- Document Type
- Technical Report
- Publication Date
- Feb 03, 1998
- Accession Number
- ADA368245
Entities
Organizations
- Office of the Inspector General, U.S. Department of Defense