Chuck Grassley: “this amendment pertains to Department of Defense (DOD) disbursements. It requires DOD to match certain disbursements…”

“this amendment pertains to Department of Defense (DOD) disbursements. It requires DOD to match certain disbursements with obligations prior to payment. This policy has been incorporated in the last six appropriations acts: Fiscal years 1995, 1996, 1997, 1998, 1999, and 2000. Each year we have ratcheted down the threshold. The threshold is the dollar amount of the disbursement that must be matched with its corresponding obligation. We started at the $5 million level. Under current law, the threshold is now set at 500,000.00 dollars. In 1999, the Senate voted to lower the threshold from $1 million to the current level. Both the DOD Inspector General and the General Accounting Office have repeatedly stated that policy is a good idea. It is helping the department to control the flow of money. First, it is an important internal control procedure. It is a first-line of defense against fraudulent payments. If a corresponding obligation cannot be identified, the payment cannot be made. It is as simple as that. Second, it is helping the department avoid 'problem disbursements' or unmatched disbursements. A few years ago, the department had unmatched disbursements totaling about 50 billion dollars. This situation created gaping holes in DOD's books of account. And these gaping holes in the books of account are one big reason why DOD consistently fails to earn a 'clean' opinion in the annual CFO audits.”