Controls Over Fuel Payments
Abstract
The Defense Fuel Supply Center (DFSC) purchases about $3.3 billion in bulk petroleum fuel annually. Bulk fuel contracts include an economic price adjustment clause. The contracts provide that the price paid for fuel will be the market price at the time fuel is delivered. The applicable market price is not determined until several months after the delivery date and usually requires that the interim payment to the contractor be adjusted. When fuel prices are rising, underpayments result. When prices are falling, overpayment results. The objective of the audit was to determine if DFSC control procedures ensured prompt identification and collection of overpayments on bulk fuel purchases. We also followed up on the recommendation contained in the General Accounting Office (GAO) Report No. AFMD-87-30, "Internal Controls Defense Fuel Supply Center's Recording and Reporting Accounts Payable," May 1987, that DFSC classify negative accounts payable amounts as accounts receivable and ensure their prompt collection.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jul 16, 1991
- Accession Number
- ADA379474
Entities
Organizations
- Office of the Inspector General, U.S. Department of Defense