Examination of expense and investment policy for centrally managed items in the Air Force and Navy

Abstract

A basic principle of fiscal law is the identification of an object of expenditure as either an investment or expense; the identification then determines the proper appropriation and means through which the item is acquired. Part of the decision logic for an investment/expense determination is whether the items are centrally managed. The policies and practices surrounding central management of items varies across military departments and sometimes varies within a military department. This report documents various processes, as they exist today, and chronicles changes that occurred recently in the U.S. Air Force. Analyzing those processes indicates unclear policy direction, which leads to nonstandard implementation and problems with compliance. The presence of centralized information technology seems to lessen confusion and aid standardization of practices. Recommendations are offered for policy makers who may be considering changing policies.