Drain Clogs – 01-12-2012

Defense Working Capital Funds

A curious line I found skimming through the most recent war supplemental:

For an additional amount for ‘Defense Working Capital Funds’, $1,134,887,000, to remain available until expended.

It sounded a little like one of those shady investment wings that large industrial corporations have been using, or in this context, a slush fund.  I looked up some documents and found a few things, starting with this report (pdf) from the DoD comptroller.  The stated purpose:

A. Revolving funds were established to satisfy recurring Department of Defense requirements using a businesslike buyer-and-seller approach.  The generators of requirements justify the need for funds to the Congress, but are not always the organizations that execute the requirement.  In some instances, the ”customers” or “buyers” contract with DoD “provider” or ”seller” organizations that have expertise in the service or product required, and operate under business financial management principles.  Unlike profit-oriented commercial businesses, the revolving funds goal is to break even over the long term. Revolving fund selling prices established in the budget are stabilized or fixed during execution to protect customers from unforeseen fluctuations that would impact on their ability to execute the programs approved by the Congress.

Multiple GAO reports have been saying that this has not been happening.