Troop Store creates revenue leakage
(December 16, 2004)
In a letter dated, June 13, 2003, a former Chairman of the House Standing Committee on Commerce requested that OPA conduct an audit or investigation addressing complaints that AAFES members at the U.S. Army Reserve Unit in Saipan (hereinafter "AAFES-Saipan) were abusing their shopping privileges. He requested that OPA: (1) determine if potential abuse was occurring, and (2) quantify the financial impact of any such abuse in terms of taxes foregone and the effect on the overall economy.
In September 2003, OPA began planning an audit of AAFES-Saipan. During our survey work, OPA discovered multi-jurisdictional problems that served to restrict the scope of our audit work. As a result, OPA was unable to complete its audit in accordance with Governmental Auditing Standards.
However, the limited information obtained indicates that AAFES-Saipan members may have abused their buying privileges. Because OPA was unable to quantify the amount, extent of, or reasons for such abuse, OPA is unable to render an opinion concerning AAFES-Saipan activities.
AAFES is a multi-billion dollar enterprise established as a semi-autonomous agency of the Department of Defense. It is charged with generating a profit for use in funding the Morale, Welfare and Recreational Programs of the Army and Air Force. While AAFES receives no direct Federal appropriations, it does receive operating subsidies from the military to help reduce the cost of products sold to its patrons.
