Summary: The Department of Defense (DOD) believes the military club system and related alcohol package store operations are vitally important to the morale of servicemen. However, the system is having considerable financial difficulties. GAO studied the operation and management of military service clubs and related alcoholic beverge store operations.
Military clubs generally consist of separate physical facilities for officers, noncommissioned officers, and enlisted personnel with a consolidated alcohol beverage package store to serve all personnel. These entities constitute a major business enterprise with gross sales revenues in the millions. Package store operations are profitable. However, reliance on package store profits not only serves as a disincentive to effective and efficient management but is also inconsistent with congressional intent that these profits benefit all personnel. Clubs are also dependent on appropriated fund support. Military personnel costs constitute a major portion of appropriated fund support which is inconsistent with the DOD policy that civilians be employed in morale, welfare, and recreational activites to the extent practicable. Some of the problems within the club system can be corrected through effective and innovative management. The current decentralized management approach provides installation commanders with almost ultimate unlimited flexibility in club operations and their actions are not always in the best interest of the clubs.
