Summary: GAO evaluated the naval aviation depots' (NADEP) implementation of the Department of Defense's (DOD) Asset Capitalization Program (ACP) to determine: (1) whether NADEP benefited from the program; (2) the adequacy of the internal controls for managing the program; and (3) the status of the ACP budget execution.
GAO found that NADEP: (1) did not effectively implement ACP to achieve its full potential for increasing efficiency and productivity; (2) did not fully justify many ACP projects; (3) lacked adequate guidance and effective procedures to identify and acquire beneficial investment projects; (4) achieved few benefits from 21 of 52 equipment modernization projects installed between 1985 and 1987; and (5) did not develop an effective internal control system to provide reliable feedback to managers, safeguard assets, and provide accurate accounting for revenues and expenditures. GAO also found that NADEP: (1) did not follow proper accounting techniques for depreciation expenses, resulting in inaccurate records; (2) collected program funds from customers long before they needed the funds; and (3) had a program fund which significantly exceeded the level obligated at the end of the budget year.
