Published: 1995
Total Pages: 57
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The Chief Financial Officers Act of 1990 requires DoD to prepare financial statements for revolving funds. The Supply Management Business Area of the Defense Logistics Agency (DLA) Defense Business Operations Fund (DLA Supply Management) is a revolving fund established for procuring, storing and selling consumable supply items to DoD Components and other Government agencies. DLA Supply Management reported assets of $ 12 billion and liabilities of $ 1.2 billion as of September 30, 1994. The principal asset and liability accounts include accounts receivable ($871 million), accounts payable ($914 million), and inventory ($10 billion). This audit is one of a series of audits being conducted by the Inspector General, DoD, in response to the Chief Financial Officers Act. The audit was conducted in conjunction with audits of the DLA Distribution Depots Business Area (Project No. 4LD-2007) and the Reutilization and Marketing Business Area (Project No. 4LE-2008). The results of each audit will be provided in separate audit reports. We issued a draft report on March 27, 1995; however, management was not required to provide comments because this report contains no recommendations. No comments were received from management. The objectives of the audit were to determine whether the DLA Supply Management Statement of Financial Position as of September 30, 1994 was presented fairly in accordance with Office of Management and Budget Bulletin No. 94-01, F Form and Content of Agency Financial Statements," November 16, 1993. We evaluated the internal control structure established for DLA Supply Management and assessed compliance with applicable laws and regulations that could have a material effect on the financial statement.