The GAO released a report on the Department of Defense’s bulk fuel operations.

The Department of Defense (DOD), as the largest purchaser and consumer of bulk fuel in the U.S. government, spent $10.3 billion in fiscal year 2022. Managing DOD’s fuel process is a complex task involving multiple stakeholders, locations, systems, and transactions. It is crucial for management to maintain accurate end-to-end documentation of the business process and internal controls.

However, the GAO discovered that the military services and selected DOD components have not fully documented their end-to-end business process for purchasing, selling, and recording fuel transactions in their financial accounting systems. Although some aspects of the process are documented in various procedure documents, the existing documentation is outdated and incomplete. This lack of accurate documentation increases the risk of inadequate design and implementation of control activities for purchasing bulk fuel, which can undermine DOD’s ability to ensure accountability and control costs. Consequently, policymakers may lack reliable information on how DOD utilizes its provided resources.

Moreover, the complexities of the DOD bulk fuel process extend to the absence of memorandums of agreement (MOAs) between the military services and the Defense Logistics Agency (DLA) for the use of military installations as storage and management sites for DLA-owned bulk fuel. A 2019 policy mandated the establishment of MOAs between military installations and DOD components, but as of October 2022, only 10 out of approximately 500 required MOAs were in place. The lack of a plan for establishing the remaining MOAs hampers efforts to clarify the rights and responsibilities of the parties involved at each installation.

The GAO conducted this study to address concerns raised during the audit of the U.S. government’s consolidated financial statements. The report examines the consistency of DOD policies with relevant guidance in recording and reporting bulk fuel purchase data, as well as the alignment of selected components’ procedures with DOD policies. The review encompassed the Departments of the Air Force, Army, and Navy, as well as the U.S. Transportation Command, which collectively accounted for approximately 89 percent of DOD’s fuel purchases in fiscal year 2021.


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