Commercial Sales Financed under the Foreign Military Sales Financing Program
Abstract
The overall objective of the audit was to determine whether adequate contract administration controls existed over direct commercial purchases funded under the FMS Financing Program. To meet the objective, we reviewed procedures and internal controls at the DSAA, the Military Departments, and the Defense Logistics Agency as they related to contract administration and support for direct commercial sales contracts. We reviewed DSAA approvals for funding such contracts, contract pricing, collection of nonrecurring costs and asset use charges, controls of contract deliveries, approvals of progress payments to contractors; procurement quality assurance, and compliance with the Buy American Act. To review internal controls at each U.S. Government activity we visited, we obtained the most recent Annual Statement of Assurance required by DoD Directive 5010.38, "Internal Management Control Program," April 14, 1987. We tested DSAA's procedures for oversight of contract administration by taking a statistical sample of direct commercial sales contracts. To accomplish this, we identified a universe of 354 non-Israeli contract actions valued at over $1 billion, covering all of FY 1988 and the first 10 months of FY 1989. From this universe, we randomly selected a sample of 20 contract actions valued at $132.9 million. These actions had a dollar range from $85,000 to $95 million, represented 530 contract line items, and were applicable to 4 countries. We made statistical projections where applicable and feasible.
Document Details
- Document Type
- Technical Report
- Publication Date
- May 21, 1991
- Accession Number
- ADA380087
Entities
Organizations
- Office of the Inspector General, U.S. Department of Defense