DEPARTMENT OF 

JUSTICE

Working Capital Fund 

Adheres to Some Key 

Operating Principles 

but Could Better 

Measure Performance 

and Communicate 

with Customers

Report to the Subcommittee on 

Commerce, Justice, Science, and 

Related Agencies, Committee on 

Appropriations, House of 

Representatives

January 2012

GAO-12-289

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-289, a report to the 

Subcommittee on Commerce, Justice, 

Science, and Related Agencies, Committee on 

Appropriations, House of Representatives 

January 2012

DEPARTMENT OF JUSTICE 

Working Capital Fund Adheres to Some Key 

Operating Principles but Could Better Measure 

Performance and Communicate with Customers

Why GAO Did This Study

The Department of Justice’s (Justice) 

working capital fund is intended to 

provide increased efficiencies in how 

the department funds and offers 

shared services—such as payroll, 

telecommunications, financial services, 

mail, and publications—valued at over 

$1 billion annually. Ensuring that the 

working capital fund is managed as 

efficiently as possible could allow 

Justice to use saved resources for 

other departmental priorities. GAO was 

asked to determine how Justice 

(1) manages its working capital fund to 

promote compliance with applicable 

fiscal laws and key operating 

principles, (2) communicates shared 

services rates with customers, 

(3) measures performance to evaluate 

whether fund activities are contributing 

to agency goals, and (4) ensures that 

its excess unobligated balances are 

used in accordance with legal 

authorities and managed so that 

Justice can make well-informed 

funding decisions. GAO reviewed 

statutory authorities, analyzed Justice 

policies, interviewed budget and 

finance officials, and conducted focus 

groups with some shared services 

customers.

What GAO Recommends

GAO is making three 

recommendations to improve the 

management of the working capital 

fund, including providing opportunities 

for two-way substantive 

communications with customers and 

developing performance measures for 

the fund. Justice generally agreed with 

our findings and recommendations and 

noted that it will continue to explore 

ways to address the issues we 

identified.

What GAO Found

The Justice Management Division (JMD), the component responsible for 

managing the working capital fund, effectively tracks fund functions to ensure 

adherence to applicable fiscal laws and sound management practices. For 

example, JMD has well-established policies and procedures for tracking and 

monitoring the four working capital fund functions so that the fund adheres to 

authorized purposes. Further, JMD structures its reimbursable agreements with 

customers to facilitate adherence to the Economy Act—the statutory authority 

underlying most of JMD’s customer orders. JMD also clearly delineates roles and 

responsibilities, which allows customers to know who to contact with questions

and clearly assigns responsibility for obligating and expending funds. Justice also 

ensures the fund’s self-sufficiency by recovering total costs for the provided 

services. These actions are consistent with two of the four key operating 

principles for working capital funds. 

Customers noted positive benefits from Justice’s shared services but seek more 

information on rate structures and want assurances that fund costs are equitably 

distributed. For example, customers said they valued the breadth of services 

offered as well as the experience of fund staff but wanted to better understand 

the basis for shared services rates and more opportunities to discuss billing 

concerns and service changes with JMD. Officials expressed surprise at these 

concerns. They noted that informal information sharing on rates and rate 

structures happens regularly, but explained that each staff director has his/her 

own way of communicating with customers and acknowledged that some may be 

better at providing customer support than others. 

JMD does not systematically measure important aspects of shared service 

provision and working capital fund management. For example, JMD tracks 

workload measures such as the number of transactions processed, but does not

assess customer satisfaction with shared services. It also does not have 

measures to assess how effectively it manages the fund, such as whether 

managers are responsive to concerns about shared service rates or billing

issues—areas with which customers have expressed concern. Absent a formal 

mechanism for customers to provide timely and regular feedback, JMD cannot 

sufficiently assess whether customer needs are met or have changed. JMD also 

has not assessed its shared services rates to know whether they provide a good 

value to customers. If available, specific working capital fund-level performance 

information would allow JMD to regularly compare actual performance with 

planned or expected performance. Further, a corresponding management review 

process could help JMD achieve the efficiencies that working capital funds were 

designed to produce, potentially freeing up resources that could be realigned for 

other departmental initiatives. Lastly, performance measures aligned with 

strategic goals can be used to evaluate whether and how working capital fund 

activities contribute to departmentwide goals and crosscutting initiatives. 

Justice has processes to ensure that excess unobligated balances are used in 

accordance with legal authorities. It also has an established process to make 

well-informed decisions on how to spend available funds. However, JMD budget 

officials told us that these balances were unavailable for departmentwide 

priorities in recent years because they have been used to meet rescissions.

View GAO-12-289. For more information, 

contact Denise M. Fantone at (202) 512-6806 

or fantoned@gao.gov. 
Page i GAO-12-289 Working Capital Fund

Letter 1 

Background 4

JMD Effectively Tracks Working Capital Fund Moneys in 

Accordance with Fiscal Law and Aspects of Key Operating 

Principles 12

Customers Noted Positive Benefits of Shared Services but Need 

More Information on Rates, Costs, and Billing Information, and 

More Opportunities for Substantive, Two-way Communication 16

JMD Does Not Measure Customer Satisfaction with or the Costeffectiveness of Its Shared Services 21

Justice’s Excess Unobligated Balances Have Been Unavailable for 

Departmental Priorities in Recent Years 24

Conclusions 27

Recommendations for Executive Action 29

Agency Comments and Our Evaluation 30

Appendix I Other Working Capital Fund Services and Customers 31

Appendix II Key Operating Principles for Managing Working Capital Funds 33

Appendix III Comments from the Department of Justice 35

Appendix IV GAO Contact and Staff Acknowledgments 37

Tables

Table 1: Justice’s Working Capital Fund Functions 5

Table 2: Working Capital Fund Unobligated Balance Transfers and 

Rescissions 26

Table 3: Super Surplus Balances and AFF Rescissions 27

Table 4: Working Capital Fund Services and Support – “Other 

Services” 31

Table 5: Working Capital Fund Customers – “All Other Customers” 31

Contents
Page ii GAO-12-289 Working Capital Fund

Figures

Figure 1: Working Capital Fund Services and Customers for Fiscal 

Year 2010 7

Figure 2: Working Capital Fund Key Operating Principles 11

Abbreviations

AAG/A Assistant Attorney General for Administration

AFF Assets Forfeiture Fund

CAB Customer Advisory Board

DHS Department of Homeland Security

FMIS Financial Management Information System

FTE full-time equivalent

JMD Justice Management Division

OBD Offices, Boards, and Divisions

OMB Office of Management and Budget

UBT Unobligated Balance Transfers

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Page 1 GAO-12-289 Working Capital Fund

United States Government Accountability Office 

Washington, DC 20548

January 20, 2012

The Honorable Frank R. Wolf

Chairman

The Honorable Chaka Fattah

Ranking Member

Subcommittee on Commerce, Justice, Science, and Related Agencies

Committee on Appropriations

House of Representatives

One way federal agencies can increase their efficiency and reduce costs 

is to share services. The Department of Justice’s (Justice) working capital 

fund is intended, in part, to provide increased efficiencies and flexibilities 

in the funding and provision of centralized, administrative shared 

services.1

Intragovernmental revolving funds include working capital, franchise, and 

other similar types of funds. They are self-supporting and used to conduct 

businesslike activities within and between federal agencies. In general,

intragovernmental revolving funds allow agencies to benefit from 

economies of scale or take advantage of specialized expertise that the 

agency may not have. A market-like atmosphere is intended to create 

incentives for customers and fund managers to exercise cost control and 

economic restraint.

These services include, among other things, 

telecommunications, financial services, mail, publications, and payroll 

valued at over $1 billion annually. Working capital funds and other types 

of intragovernmental revolving funds enable agencies to operate more 

efficiently by consolidating and providing services used by multiple 

organizations within an agency. Ensuring that the working capital fund is 

managed as efficiently as possible could allow Justice to use saved 

resources for other departmental priorities.

This report is the third in a series in response to the subcommittee’s 

request to review the management of intragovernmental revolving funds, 

the shared services they support, and unobligated carryover balances in 

those funds. It builds on our work at the National Institute of Standards 

 

1

 Justice refers to its subagencies, such as the Federal Bureau of Investigation and the 

Drug Enforcement Administration, as components. 

 
 

Page 2 GAO-12-289 Working Capital Fund

and Technology,2 the Department of Commerce, and the U.S. Census 

Bureau.3 For this report, we were asked to determine (1) how Justice 

manages its working capital fund to promote compliance with applicable 

fiscal laws and key operating principles, (2) the effectiveness of Justice’s 

communications with working capital fund customers and its efforts to 

ensure that its shared services rates are equitably distributed, (3) the 

effectiveness of Justice’s performance measures in evaluating whether 

working capital fund activities are contributing to the achievement of 

agency goals, and (4) how Justice ensures that its excess unobligated 

balances in the working capital fund and the Assets Forfeiture Fund (AFF) 

are used in accordance with legal authorities and managed in a way that 

allow Justice to make well-informed agencywide funding decisions.4

For the first objective, we reviewed relevant legislation and statutory 

authorities that govern Justice’s working capital fund, as well as Justice’s 

documented policies and procedures for managing, tracking, and 

monitoring funds deposited into the fund. To determine to what extent 

Justice adhered to sound management principles, we referred to 

guidance on internal controls and cost accounting as well as relevant 

Justice Inspector General reports.5

 

2 GAO, Intragovernmental Revolving Funds: NIST’s Interagency Agreements and 

Workload Require Management Attention, 

Additionally, we used recently 

developed and compiled criteria on key operating principles for working 

capital funds. To identify these principles, we reviewed governmentwide 

guidance on business operating principles, internal controls, managerial 

GAO-11-41 (Washington, D.C.: Oct. 20, 2010). 

3 GAO, Intragovernmental Revolving Funds: Commerce Departmental and Census 

Working Capital Funds Should Better Reflect Key Operating Principles, GAO-12-56

(Washington, D.C.: Nov. 18, 2011).

4 Justice’s AFF is a nationwide law enforcement program. The principal mission of AFF is 

to disrupt and dismantle criminal organizations by depriving them of the use of the 

economic proceeds of their crimes and of assets used to facilitate their crimes. Federal 

employees, contract personnel, and foreign, state, and local law enforcement officials 

work cooperatively in investigating and prosecuting cases involving asset seizure and 

forfeiture to support the program’s mission.

5 GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999); Federal Accounting Standards Advisory Board, 

Statement of Federal Financial Accounting Standards No. 4: Managerial Cost Accounting 

Standards and Concepts and Standards for the Federal Government (Washington, D.C.: 

July 31, 1995); and Department of Justice Inspector General, Top Management and 

Performance Challenges in the Department of Justice – 2010 (Washington, D.C.: Nov. 9, 

2010).
 

Page 3 GAO-12-289 Working Capital Fund

cost accounting, and performance management. Our prior work on user 

fees, franchise funds, performance management, and customer service 

also informed the development of these principles. We also met with staff 

from the Office of Management and Budget (OMB) to obtain their views, 

and they found the principles to be reasonable.6

For the second objective, we reviewed Justice’s policies and procedures 

for setting and reviewing rates and collecting charges and its process for 

communicating with its customers. Additionally, we referred to our prior 

work on federal user fees, as appropriate.7

For the third objective, we reviewed the working capital fund’s customer 

feedback mechanisms as well as performance and workload evaluation 

tools. Additionally, we reviewed the fund’s performance measures and the 

data it collects to assess its performance.

We examined the rate-setting 

process for services provided through the working capital fund; however, 

we did not independently verify whether the process resulted in equitable 

distribution of costs among customers or in the recovery of total costs.

For the fourth objective, we reviewed Justice’s legal authorities as well as 

the policies and procedures governing the use of excess unobligated 

balances within its working capital fund and AFF. We also reviewed 

congressional notifications and budget documents to understand how 

these balances have been used.

For all objectives, we interviewed senior management, budget, and 

finance staff from the Justice Management Division (JMD), the Justice 

component that manages the working capital fund. Additionally, we met 

with representatives of the working capital fund’s Customer Advisory 

Board (CAB) as well as staff from the finance divisions of selected 

working capital fund customers. Specifically, Justice provided access to 

six of the eight Justice components represented on the CAB. We 

conducted focus groups with five of these board members and met 

separately with a sixth member who was unable to attend the focus 

group. Additionally, we conducted separate focus groups with 

representatives from 13 customer components—about half of all 

 

6 GAO-12-56.

7 GAO, Federal User Fees: A Design Guide, GAO-08-386SP (Washington, D.C.: May 29, 

2008).
 

Page 4 GAO-12-289 Working Capital Fund

customers not on the advisory board. To develop and analyze themes 

emerging from our focus groups and interviews, we conducted a content 

analysis of participants’ discussions and responses to our questions.

We conducted this performance audit from January 2011 to January 2012 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

JMD has overall responsibility for managing the working capital fund and 

AFF. Justice’s working capital fund was created by Congress on 

January 2, 1975. The fund is authorized to maintain moneys from four 

distinct sources, or functions (see table 1). The first and primary function 

of the fund is to finance, on a reimbursable basis, administrative shared 

services provided by JMD to other components of the department and 

other federal agencies. The second function of the working capital fund is 

to collect up to 3 percent of funds collected pursuant to civil debt 

collection litigation activities into the fund. A third function of the working 

capital fund is to collect up to 4 percent of earnings from its shared 

services provision. Finally, the working capital fund’s fourth function is to 

capture expired departmental unobligated balances into the working 

capital fund’s Unobligated Balance Transfers (UBT) account. Because the 

working capital fund is a no-year account, all amounts earned or collected 

by the fund are available without fiscal year limitation to be used for 

specific authorized purposes. For example, amounts from three of the 

four working capital fund functions may be used for capital equipment 

investments and financial system improvements.

Background

Justice’s Working Capital 

Fund Serves Four 

Functions
 

Page 5 GAO-12-289 Working Capital Fund

Table 1: Justice’s Working Capital Fund Functions

Authorized 

functions Source of funds How these funds can be spent 

Provision of shared 

services

FY 2010 revenue:

$1.2 billion

Costs for goods and 

services are collected 

from customers. Justice 

charges rates that cover 

the total expenses, 

including accrued 

annual leave and 

overhead costs.

• Continue working capital fund 

operations

• Future capital and equipment 

investments

Debt collection 

improvement

FY 2010 revenue:

$102 million

Justice is authorized to 

credit up to 3 percent of 

amounts pursuant to 

civil debt collection 

litigation activities.

Funds must be used in the following 

order:

• Paying the costs of processing and 

tracking civil and criminal debt 

collection litigation

• Paying financial systems and debt 

collection-related personnel, 

administrative, and litigation 

expenses

Four percent 

retention

FY 2010 surplus: 

$38 million 

Justice is authorized to 

retain up to 4 percent of 

the total shared services 

earnings each fiscal 

year.

Upon notification to the Senate and 

House Committees on Appropriations, 

these funds can be used for the 

following:

• Acquiring capital equipment

• Improving and implementing 

Justice’s financial management 

and personnel systems

Unobligated 

Balance Transfers

FY 2010 deposits: 

$75 million

Justice is authorized to 

transfer expired 

unobligated balances 

into the working capital 

fund from other Justice 

accounts. 

Upon notification to the Senate and 

House Committees on Appropriations, 

these funds can be used for the 

following:

• Financing Justice-wide capital 

equipment acquisition

• Developing and implementing law 

enforcement or litigation-related 

automated data processing 

systems 

• Improving and implementing the 

department’s financial 

management and 

payroll/personnel systems

Source: GAO analysis based on Justice documents.

The largest portion of the working capital fund comes from charges for 

centralized administrative and infrastructure support services and 

functions collected on a reimbursable basis from Justice components. 

The shared services provided by the working capital fund are generally 
 

Page 6 GAO-12-289 Working Capital Fund

commercial functions, such as data processing, publications, building 

services, financial operations, employee data, telecommunications, 

property management, and space management (see working capital fund 

services and support in fig. 1).

While most Justice components use the working capital fund to obtain 

administrative shared services, there is no statutory requirement that they 

do so. For fiscal year 2010, Justice’s largest customers were the U.S. 

Attorney’s Office, JMD, the Bureau of Prisons, the Federal Bureau of 

Investigation, and the Drug Enforcement Administration (see customers in 

fig. 1). Some services are also available to other federal agencies. For 

example, the Department of Homeland Security (DHS) was the largest 

non-Justice customer of the working capital fund. The working capital 

fund received $38 million from DHS in fiscal year 2010 for information 

technology services. However, JMD officials told us that DHS is exiting 

the working capital fund and its remaining agreements with the fund are 

expected to be completed by fiscal year 2013.
Federal

Bureau of

Investigation

($71 million)

Bureau of

Prisons

($81 million)

Justice

Management

Division

($110 million)

U.S. Attorneys

($332 million)

All other

customers

($517 million)

4.7%

Drug

Enforcement

Administration

($57 million)

4.1%

Civil Division

($50 million)

6.7%

9.1%

27.3%

5.9%

3.1%

Information

technology

security staff

($38 million)

Other services

($107 million)

Contract

management

staff

($188 million)

2.9%

Justice building

services

($35 million)

2.9%

Security services

($35 million)

2.6%

Financial management

information system

($32 million)

2.4%

Mail, multimedia,

and publication

services

($29 million)

15.4%

19.0%

43.0%

Operation

services staff

($230 million)

Space management

($526 million)

Working

capital fund 

services and 

support

Working

capital fund 

customers

Interactive graphic Figure 1: Working Capital Fund Services and Customers for Fiscal Year 2010

Page 7 GAO-12-289 Working Capital Fund

Directions:

Mouseover the highlighted “Other services” and “All other customers” wedges of the two pie charts below for 

expanded program listings. 

Print instructions For a printable text version of this graphic, go to appendix I.

Source: GAO analysis of Department of Justice information.
 

Page 8 GAO-12-289 Working Capital Fund

To set and review rates for working capital fund services, JMD develops, 

in the context of Justice’s budget formulation process, an annual 2-year 

operating plan. As a part of developing the operating plans, JMD sets the 

rates for its services using one of three strategies.

• The “dollar-per-widget” strategy aligns rates with the cost of the 

service provided. JMD creates an internal cost schedule of these 

services that lists, for example, how much a photocopy or scan job 

costs. This strategy is designed to bill customers for the amount of 

service actually used.

• The pass-through charge strategy is used to set rates for services that 

the working capital fund acquires from another provider. Customer 

rates are based on costs as determined by the non-Justice service 

providers, such as the flexible spending account services provided by 

the Office of Personnel Management and rent charges from the 

General Services Administration.

• The allocation strategy is applied when actual usage is more difficult 

to predict, such as for information technology security, e-government 

services, and acquisition support. Allocations are determined in 

various ways, such as a percentage of full-time equivalents (FTE), a 

percentage of budget authority, or a weighted average of both. 

Additionally, JMD staff factor in data such as recent cost information 

and expected use of a service for the coming year. To calculate the 

estimated cost for a specific customer, JMD reviews the customer’s 

actual use in prior years and expected use for the upcoming fiscal 

year. From that, JMD calculates a percentage to charge customers 

that will cover the cost of providing that level of service. All customers 

using a service are charged a percentage of total estimated costs 

throughout the year.

JMD officials told us that they generally apply the dollar-per-widget and 

pass-through charge strategies in setting shared services rates and that 

they only use the allocation strategy when the other strategies would not 

work well.

Justice established its eight-member Customer Advisory Board (CAB) in 

1994 to improve customer satisfaction with the working capital fund. The 

CAB also advises JMD on fund management issues. The eight 

components represented on the CAB are the Bureau of Alcohol, Tobacco, 

Firearms and Explosives; Bureau of Prisons; Drug Enforcement 

Administration; Federal Bureau of Investigation; General Legal Activities; 

U.S. Attorneys; U.S. Marshals Service; and Office of Inspector General. 

Working Capital Fund 

Customer Advisory Board
 

Page 9 GAO-12-289 Working Capital Fund

JMD elected these eight components to be members of the CAB because 

they were the working capital fund’s largest customers. JMD convenes an 

annual meeting with CAB members at the beginning of each fiscal year to 

present the updated operating plan and selected purchases for the year.

We have previously identified the following four key operating principles 

to guide the management of working capital funds.8

• Clearly delineate roles and responsibilities: Appropriate 

delineation of roles and responsibilities promotes a clear 

understanding of who will be held accountable for specific tasks or 

duties, such as authorizing and reviewing transactions, implementing 

controls over working capital fund management, and helping ensure 

that related responsibilities are coordinated. In addition, this reduces 

the risk of mismanaged funds and tasks or functions “falling through 

the cracks.” Moreover, it helps customers know who to contact if they 

have questions.

For further 

information about the four key principles and their underlying 

components, see figure 2.

• Ensure self-sufficiency by recovering the agency’s actual costs: 

Transparent and equitable pricing methodologies allow agencies to 

ensure that rates charged recover the agencies’ actual costs and 

reflect customers’ service usage. If customers understand how rates 

are determined or changed—including the assumptions used—

customers can better anticipate potential changes to those 

assumptions, identify their effect on costs, and incorporate that 

information into budget plans. A management review process can 

help to ensure that the methodology is applied consistently over time 

and provides a forum to inform customers of decisions and discuss as 

needed.

• Measure performance: Performance goals and measures are 

important management tools applicable to all operations of an agency, 

including the program, project, or activity levels. Performance 

measures and goals could include targets that assess fund managers’ 

responsiveness to customer inquiries, the consistency in the 

application of the funds’ rate-setting methodology, and the billing error 

rates. Performance measures that are aligned with strategic goals can 

be used to evaluate whether and, if so, how working capital fund 

 

8 GAO-12-56.

Working Capital Fund Key 

Operating Principles
 

Page 10 GAO-12-289 Working Capital Fund

activities are contributing to the achievement of agency goals. A 

management review process comparing expected to actual 

performance allows agencies to review progress toward goals and 

potentially identify ways to improve performance.

• Build in flexibility to obtain customer input and meet customer 

needs: Opportunities for customers to provide input about working 

capital fund services or voice concerns about needs in a timely 

manner enable agencies to regularly assess whether customer needs 

are being met or have changed. This also enables agencies to 

prioritize customer demands and use resources most effectively, 

enabling them to adjust working capital fund capacity up or down as 

business rises or falls.

By incorporating these principles in written guidance, agencies promote 

consistent application of management processes and provide a baseline 

for agency officials to assess and improve management processes. 

Moreover, agencies can use guidance as a training tool for new staff and 

as an information tool for customers, program managers, stakeholders, 

and reviewers.
Interactive graphic Figure 2: Working Capital Fund Key Operating Principles

Page 11 GAO-12-289 Working Capital Fund

Source: GAO analysis.

Print instructions To print text version of this graphic, go to appendix II.

Clearly delineate roles and 

responsibilities

Ensure self-sufficiency by recovering the 

agency’s actual costs

Measure performance

Build in flexibility to obtain customer 

input and meet customer needs

Establish management review and approval process at the functional

or activity level that ensures appropriate tracking and use of funds

Define key areas of authority and responsibility

Segregate duties to reduce error or fraud

Establish transparent and equitable pricing methodology

Set rates to cover agency’s actual costs of providing service

Establish management review process for rate setting

Establish performance measures and goals

Align performance measures with strategic goals

Establish management review of working capital fund performance

Communicate with customers regularly and in a timely manner

Develop process to assess resources needed to meet changes in 

customer demand

Establish process to prioritize requests for services

Key principle Components of principle

Directions:

Mouseover buttons for definitions of key principles and buttons to see examples 

of evidence that support key principles.

Description Example
 

Page 12 GAO-12-289 Working Capital Fund

JMD has well-established policies and procedures for tracking and 

monitoring each of the four working capital fund functions to adhere to 

authorized purposes. JMD uses its financial management system, the 

Financial Management Information System (FMIS), to track moneys by 

project codes to distinguish among the different working capital fund 

functions. Additionally, Justice’s written policies direct the head of each 

component to maintain a financial accounting system with internal 

controls in place to ensure effective management and disbursement of 

federal funds. FMIS also supports the departmentwide fund control 

system; it is designed to restrict both obligations and expenditures from 

each appropriation or fund account to the amount available for obligation 

or expenditure.

Since 1984, all working capital fund moneys are identified and tracked 

using reimbursement code numbers so that JMD can identify the source 

of all funds and monitor obligations established against the working 

capital fund’s partitioned subaccounts related to each of the fund’s four 

functions. Balances associated with each function are tracked in separate 

partitions in the working capital fund and remain available until expended. 

This ensures that the funds associated with the four working capital fund 

functions are tracked and managed to ensure that they are used in 

accordance with its authorities.9

 

9 According to JMD officials, retained earnings have been primarily used for the 

consolidated financial management and travel systems. Civil debt funds have been used 

in the order authorized and primarily for processing and tracking civil and criminal debtcollection litigation. JMD adheres to notification requirements for the 4 percent retention 

and the unobligated balance transfer functions.

JMD Effectively 

Tracks Working 

Capital Fund Moneys 

in Accordance with 

Fiscal Law and 

Aspects of Key 

Operating Principles

JMD Effectively Tracks 

Working Capital Fund 

Functions to Ensure 

Adherence to Authorized 

Purposes and Applicable 

Fiscal Laws
 

Page 13 GAO-12-289 Working Capital Fund

JMD structures its reimbursable agreements with customers in a way that 

facilitates adherence to the Economy Act—the statutory authority 

underlying most of the shared services orders received from customers.10

Justice’s policies also require that JMD establish an accurate and reliable 

tracking system to monitor, on an ongoing and consistent basis, 

obligations established against reimbursable agreements for billing 

purposes. Justice has issued guidance on how JMD should manage 

payments to the working capital fund so that those amounts are 

accurately recorded and controlled, and ensure that anticipated and 

actual reimbursements for goods or services provided are properly 

recorded. Further, Justice’s policies govern how JMD controls and 

monitors shared services funds and describe the responsibilities of both 

the provider and customer. For example, these policies task JMD, in the 

role of the service provider, with the responsibility of monitoring 

reimbursements anticipated, earned, billed, unbilled, and collected, in 

relation to the agreed-upon agreement amount. Customers are 

responsible for monitoring the status of reimbursable services performed 

but not yet billed to ensure that obligations recorded are sufficient to pay 

for the shared services they receive. In responding to a draft of this 

report, Justice officials also noted that the service providers convey the 

status of the reimbursable agreements to the customers quarterly.

For example, Justice aligns its agreements to coincide with a single fiscal 

year and has policies against accepting advanced funds from federal 

customers (instead, Justice generally receives reimbursements after 

providing shared services). This helps Justice and its customers comply 

with the Economy Act’s deobligation requirements and mitigates the risk 

of using appropriated funds when they are not legally available.

To clearly delineate roles and responsibilities, JMD clearly defines key 

areas of authority, responsibilities, and roles within the working capital 

fund. This allows customers to know who to contact if they have 

questions. Justice describes this information in a departmentwide funds 

control order. These delineated roles and responsibilities are posted on 

the working capital fund web page and are available to both internal and 

external customers as well as the general public. Key working capital fund 

 

10 31 U.S.C. § 1535.

JMD Adheres to Aspects of 

Two Key Operating 

Principles to Manage the 

Working Capital Fund
 

Page 14 GAO-12-289 Working Capital Fund

duties and responsibilities are spread among multiple individuals and 

offices. For example:

• The Assistant Attorney General for Administration (AAG/A) is the 

fund’s general manager and approves all final decisions and major 

initiatives affecting customers.

• The Deputy Assistant Attorney General, Controller (DAAG-Controller), 

is the financial manager of the working capital fund and is responsible 

for overseeing budgets.

• Staff directors ensure service delivery to customers, develop 

operating plans and rate structure, produce customer billings, and are 

responsible for day-to-day fund management.

• Budget staff review and monitor all working capital fund budgets and 

make recommendations about the funding initiatives and rate changes 

requested by staff directors.

JMD has also clearly defined the responsibilities for the administrative 

control of working capital funds. JMD has established policies and 

guidance regarding roles and responsibilities for obligating and expending 

funds. Specifically, financial management policies state that the AAG/A is 

the department’s Chief Financial Officer with responsibilities that include 

direction and oversight of JMD’s financial procedures, practices, 

operations, systems, and internal controls. In addition, the component 

heads are responsible for accurate, timely, and complete financial data. 

These written roles and responsibilities specify how key duties are spread 

among multiple individuals and can help customers understand who does 

what. The information is also sufficiently detailed to be useful for internal 

JMD purposes, such as training and succession planning.

To ensure self-sufficiency by recovering the agency’s actual costs, 

another key working capital fund operating principle, JMD generally 

charges rates that cover the total cost of providing shared services.11

 

11 JMD officials said that cross subsidization of accounts allows the working capital fund to 

recover the total costs of providing shared services at the fund level.

It 

bases customer charges on both estimated direct and indirect costs. JMD 

estimates direct costs based on historical data trends and the actual costs 

of providing that service. JMD uses an overhead allocation methodology 

to determine the administrative costs of providing shared services, which 
 

Page 15 GAO-12-289 Working Capital Fund

are then spread to each shared services account and collected from 

customers as part of the overall rate structure.

As part of its annual 2-year operating plan process, JMD ensures that 

rates remain aligned with total costs of operations. JMD staff review the 

rates by conducting a line-by-line review of each shared services account 

to determine how costs will change for the coming year. JMD factors 

forecasted revenue and rate changes based on historical and market data 

into its shared services rates.

JMD’s strategy is to recover total cost at the fund level. Although JMD’s 

goal is for each shared services account to break even, JMD officials said 

that some lines of business generate income while others operate at a 

loss. For example, officials told us that certain services, such as data 

center services, have recovered more than their actual costs while others, 

such as the audiovisual and photography services, do not always fully 

recover costs. Recovering costs at the fund level results in some amount 

of cross subsidization between various services, which can help ensure 

that the fund remains solvent.
 

Page 16 GAO-12-289 Working Capital Fund

During our focus groups and interviews, customers said that they find the 

working capital fund’s shared services to be valuable.12 For example, 

customers cited the breadth of services offered as well as the experience 

and knowledge of shared services staff as key strengths of the fund. 

Further, two customers said that they appreciated the convenience and 

ease of having these services provided in-house. However, as we will 

discuss below, CAB members we spoke with were concerned about their 

limited advisory role, and customers in our focus groups were concerned 

about how JMD communicates with customers about working capital fund 

rates and billing information. These customers wanted more opportunities 

for substantive, two-way communication with the working capital fund 

staff directors. JMD officials explained that each working capital fund staff 

director has his or her own way of communicating and interacting with 

customers and acknowledged that some may be better at providing 

customer support than others.

 

12 We conducted three focus groups with working capital fund customers. Specifically, we 

met with six of the eight CAB members and 13 other working capital fund customers from 

Justice. In total, we met with 19 customers who represented 15 Justice components.

Customers Noted 

Positive Benefits of 

Shared Services but 

Need More 

Information on Rates, 

Costs, and Billing, and 

More Opportunities 

for Substantive, Twoway Communication

Customers Noted Some

Positive Benefits of the 

Working Capital Fund’s 

Shared Services Provision
 

Page 17 GAO-12-289 Working Capital Fund

Customers had different perspectives on whether shared services rates 

were fair. Two customers told us that they believe the working capital 

fund negotiates the best rates on their behalf, but one of these customers 

pointed out that his component lacked information that would ensure the 

staff of this. Other customers said that without information proving 

otherwise, they assume that they pay more than what it costs for JMD to 

provide the service. Customers also noted that they would like more 

transparency related to the earnings that JMD generates from rates set 

using the allocation strategy and how it affects actual shared services 

charges. For example, one customer noted that when determining the 

rates for e-mail services—whose rates are determined using the 

allocation strategy—basing rates on total FTE counts is less accurate 

than basing the rate on the actual number of staff using the service. 

Generally, customers indicated that they would have a greater sense of 

comfort with shared services rates if they better understood what they 

were based on.

JMD officials expressed surprise at these concerns. They said that 

information sharing on rates and rate structures happens regularly on an 

informal basis and in forums, such as monthly budget officer meetings, 

and that information about the shared services rates is available in 

various places depending on the service. For example, they said that 

some shared services rate information is available on Justice’s intranet 

pages and that the cover memos accompanying the reimbursable 

agreements for certain services contain substantial amounts of 

information about how the rates are set each year. Further, with respect 

to e-mail rates, they said that they base the charges on the number of 

active e-mail accounts at the end of the prior fiscal year and that they 

adopted this allocation strategy in response to customer feedback. 

Specifically, officials said that in the past, JMD billed e-mail charges 

based on monthly counts of active e-mail accounts but that CAB 

members found the variability in billings too difficult to plan for and instead 

preferred paying a set monthly charge. JMD officials told us that as a 

result, the working capital fund now charge for e-mail services based on 

the active number of e-mail accounts at the end of the prior fiscal year, 

and that they adjust their counts annually.

Currently, JMD officials directly communicate the basis for shared 

services rates only with CAB members at the annual meeting and do not 

have a formalized mechanism to do so with customers not on the board. 

In response to a question about how non-CAB customers would receive 

rate information, JMD officials explained that this information is included 

in the operating plan. Further, they said that there is a board member 

Customers Would Like 

More Information on Rate 

Structures and Assurance 

That Rates Are Equitably 

Distributed
 

Page 18 GAO-12-289 Working Capital Fund

responsible for sharing relevant portions of the operating plan with all of 

the department’s direct reports and other customers. However, JMD 

officials did not know whether this process is working as intended. It is 

also unclear whether the CAB member with the responsibility for sharing 

information with non-CAB members has the necessary knowledge of rate 

structures and changes as they apply to other components. Transparent 

and equitable pricing methodologies allow agencies to ensure that rates 

charged recover agencies’ actual costs and reflect customers’ service 

usage. If customers understand how rates are determined, they can 

better anticipate changes to assumptions, identify their effect on costs, 

and incorporate this information into their budget planning.

Absent regular opportunities for a substantive two-way exchange of 

information, miscommunications such as those described above are 

unlikely to be resolved. Most customers we spoke with—both CAB 

members and nonmembers—said that they want more opportunities for a 

substantive exchange of information with JMD. For example, the majority 

of CAB members we met with said that because they historically have not 

received information about changes to shared services rates prior to the 

annual meeting and feel unprepared to have a substantive discussion 

about the operating plan and provide input on other management issues. 

JMD officials responded to this by saying that the annual meeting is not 

intended to be the only or primary vehicle for engaging their customers. 

Rather, they view the CAB meeting as the first step in the 

communications process and see the annual board meeting as an 

executive-level overview of fund issues for the coming year. They also 

said that they have always provided opportunities for and encouraged 

feedback and questions about the materials after the meeting, and that 

CAB members sometimes provide written and oral responses. 

JMD officials said that although staff directors occasionally provide some 

component-specific rate information upon request prior to the annual 

meeting, they have historically not provided advance copies of the 

operating plan, proposed rates, or both for three reasons. First, JMD 

officials explained that it is difficult to provide that information early 

because of the timing of when the plan is finalized and when the CAB 

meetings must occur. JMD officials said that they begin the operating plan 

process late in the fiscal year to ensure that updated data are available to 

adjust rates for the coming year. At the same time, the meeting needs to 

occur early in the fiscal year so that CAB members can approve the 

operating plan, which includes updated shared services rates that will be 

used to renew reimbursable agreements with customers. Second, officials 

Most Customers Want 

More Opportunities for 

Substantive, Two-way 

Communication with JMD
 

Page 19 GAO-12-289 Working Capital Fund

were concerned about sharing a draft plan that had not been finalized. 

Lastly, JMD officials were concerned that if they provided the information 

in advance, CAB members would focus too exclusively on componentspecific details and limit the group’s ability to engage in a high-level 

discussion about the fund. This year, in response to discussions about 

preliminary observations from focus groups conducted as part of our 

review, JMD provided CAB members with the operating plan about a 

week before the annual meeting. A JMD official said that one member 

acknowledged the usefulness of receiving materials in advance. Further, 

the JMD official noted that there were fewer questions about the 

operating plan than in past years, but could not directly attribute this to 

having sent the operating plan out ahead of time.

CAB members also want more substantive two-way communications 

during the board meetings. Board members told us that the structure of 

the annual CAB meeting does not allow for this type of exchange. They 

said that because most of the meeting consists of briefings by JMD, there 

is limited opportunity for members to ask questions or provide input on 

fund operations. JMD officials told us that one way they solicit the 

opinions of CAB members is by asking them to vote on whether certain 

large investments should be made in the coming year, though they also 

acknowledged that CAB members have not voted on many issues in 

recent years. CAB members, however, do not view voting as a means for 

substantive input since the votes are on very specific issues that do not 

relate to how the working capital fund is managed.

JMD has no formal venue to communicate with non-CAB customers; 

however, JMD officials told us that customers have a variety of avenues 

to learn more about the shared services they purchase. For example, 

JMD staff said that they meet monthly with the executive officers and 

budget officers, that they attach cover memos to the reimbursable 

agreements that contain information about the rates and services, and 

that general information about the shared services and working capital 

fund is available on Justice’s intranet site. Nevertheless, customers want 

more opportunities to learn about upcoming service enhancements or 

changes. JMD officials told us that they have taken steps, such as those 

mentioned above, to improve communications with customers and that 

they remain committed to doing so. Although communication is clearly a 

shared responsibility between the customer and the shared services 

provider, effectively communicating with customers involves sharing 

relevant analysis and information as well as providing opportunities for 

customer input. Agencies that do not communicate effectively with 
 

Page 20 GAO-12-289 Working Capital Fund

stakeholders miss opportunities for meaningful feedback that could affect 

the outcome of changes in both rates and program implementation.

Customer experiences with getting clear, timely, well-explained bills for 

working capital fund services are mixed. On the one hand, a customer 

noted that the library service provides clear, detailed, and complete billing 

information that is easily accessible online. The customer explained that 

such information helped components fulfill their bill-paying and audit 

responsibilities. On the other hand, based on our review of customer bills 

for other shared services and information gathered during our focus 

groups, we found that other shared service accounts do not always 

provide enough information for customers to understand the basis for 

actual charges or fulfill bill-paying and audit responsibilities.

Our review of billing statements from various shared service accounts 

revealed various levels of detail on billing statements. Some bills had 

detailed information specifying the basis of every charge; however, one 

bill included an account service fee of over $20,000 without any 

explanation. Similarly, during our focus groups, finance staff responsible 

for paying for the shared services provided noted that billing adjustments 

sometimes appear without any explanation. Further, they said that JMD 

does not always provide complete billing information in a timely manner, 

especially in cases where customers are billed for a different amount than 

they had expected to pay at the beginning of the year. This inhibits 

customers’ ability to anticipate their actual charges at the end of the year 

and undermines their ability to properly account for these costs. 

Customers also said that the follow-up necessary to obtain more 

information on these charges is time consuming and resource intensive.

Some customers do not receive complete, timely billing information 

because customers do not always provide JMD with contact information 

for individuals with responsibility for paying bills. Working capital fund 

account managers told us that they primarily communicate information 

such as rates, projected charges, and periodic reports to the points of 

contact listed in the interagency agreements. Customers can identify up 

to two customer points of contact in these agreements. However, JMD 

officials noted that while customers sometimes include program staff as 

the points of contact, finance staff contacts are not always identified.

JMD officials said that they expect the designated points of contact to 

pass information along to the right people within the components, as 

appropriate. JMD budget officials acknowledged that communication 

JMD Does Not Always 

Provide Customers with 

Timely, Clear Billing 

Information
 

Page 21 GAO-12-289 Working Capital Fund

challenges exist within the components and that the information may not 

be getting to the appropriate staff. However, they also noted that it is the 

customer’s responsibility to communicate billing information internally with 

its finance staff. While this is not an unreasonable expectation, we believe 

that helping to ensure that the right information gets to the right people at 

the right time is part of providing good customer service.

JMD does not systematically assess customer satisfaction with its 

services. A JMD official explained that this is the case because officials 

rely on JMD staff directors to gather customer feedback at a frequency 

appropriate for their specific services. A working capital fund staff director 

we spoke with said that JMD solicited customer input on an informal basis 

and had conducted surveys at the customers’ request. The surveys we 

reviewed requested customer feedback on measures such as satisfaction 

and timeliness of services provided as well as whether improvements are 

needed. Absent a formal mechanism for customers to provide regular, 

timely feedback about working capital fund services, JMD cannot 

sufficiently assess whether customer needs are being met or have 

changed. As we have previously reported, establishing performance 

measures and goals for shared services is a critical management tool that 

can help an agency understand whether each of the working capital fund 

services it provides meet customer needs.13

JMD has not assessed its shared services to know whether they provide 

a good value to customers, and therefore has not shared information 

about the cost-effectiveness of its services with customers. In our focus 

groups, customers said that although they expect the shared services to 

 

13 GAO-12-56. 

JMD Does Not 

Measure Customer 

Satisfaction with or 

the Cost-effectiveness 

of Its Shared Services

JMD Does Not 

Systematically Assess 

Customer Satisfaction with 

Its Shared Services

JMD Does Not Measure 

the Cost-effectiveness of 

Its Shared Services
 

Page 22 GAO-12-289 Working Capital Fund

offer them economies of scale—and customers assume that they are in 

fact getting a good value—JMD has not provided data that demonstrate 

this. Customers explained that having this information is especially 

important in light of the tight fiscal conditions they expect to face in the 

foreseeable future. In fact, one customer noted that his staff will be 

evaluating whether shared services purchased by his component are cost 

effective.

Providing information about the cost-effectiveness of shared services 

would also help JMD provide better customer service, in keeping with the 

President’s efforts to streamline and improve service delivery.14 Further, 

without conducting analysis to ensure that working capital fund services 

are a good value, JMD cannot use performance information to improve its 

own operations.15 Lastly, data on the cost-effectiveness of shared 

services can help JMD customers meet the determination requirement of 

the Economy Act. When ordering services under the Economy Act, 

customers—as ordering agencies—must determine that the order is in 

the best interest of the government and cannot be procured as 

conveniently or inexpensively by contracting directly with the private 

sector.16 Although JMD, as the performing agency, is not required to 

provide information to customers to help them make this determination, it 

has a business interest in helping other Justice components, which are 

the bulk of the working capital fund’s customers, comply with these 

requirements.

Performance measures that are aligned with strategic, departmentwide 

goals can facilitate assessments on whether working capital fund 

activities are contributing to agency goals. JMD tracks and monitors the 

performance of its shared services provision on a limited, ad hoc basis. 

For example, JMD tracks workload measures, such as the number of 

 

14 Exec. Order No. 13,571, Streamlining Service Delivery and Improving Customer 

Service, 76 Fed. Reg. 24,339 (May 2, 2011).

15 GAO-12-56. 

16 31 U.S.C. § 1535. In addition, the Federal Acquisition Regulation requires that each 

Economy Act order be supported by a determination and finding stating that the 

interagency acquisition is in the best interest of the government and that the supplies or 

services cannot be as conveniently or economically procured by contracting directly with a 

private source. 48 C.F.R. 17.503(a).

JMD Does Not Assess 

Whether the Working 

Capital Fund Is Effectively 

Managed
 

Page 23 GAO-12-289 Working Capital Fund

personnel actions completed, number of transactions processed, and 

computer processing unit hours available. However, JMD does not have 

measures to assess how effectively it manages the fund, such as whether 

managers are responsive to customer issues on rates or billing—two 

areas with which customers have expressed concern.

A fiscal year 1997 financial audit of the fund tasked account managers 

with outlining major objectives and developing performance measures for 

the working capital fund. However, JMD officials told us that this had not 

been accomplished for all the department’s shared services accounts 

before fiscal year 2007, when Justice rolled the financial, performance, 

and accountability audits of the working capital fund into Justice’s audit of 

the Offices, Boards, and Divisions (OBD).17

Since the fund’s creation in 1975, changes in the work environment, 

technologies, budget conditions, agency needs, and long-term 

efficiencies have had an impact on how JMD provides shared services to 

its customers. Therefore, opportunities exist for JMD to evaluate whether 

the working capital fund provides shared services efficiently or the 

services are aligned with current departmental needs. For example, 

customers told us that while they need most services provided by the 

working capital fund, JMD has required them to use some services 

despite customers’ ability to provide these services themselves. 

Specifically, one customer said that although her component had 

Accordingly, JMD officials told 

us that the working capital fund no longer receives its own audited 

financial statements; instead Justice develops performance measures for 

the OBD, under which the working capital fund audits were consolidated. 

This audit approach does not provide JMD with an opportunity to 

specifically measure working capital fund-level performance. In its agency 

comments, Justice clarified that while the working capital fund is part of a 

broader audited financial statement, performance measures are 

continually tracked and maintained through the department’s Quarterly 

Status Report process during budget execution activities. Nevertheless, 

as we noted earlier, the workload measures that are tracked do not 

assess whether the fund is effectively managed, which is a key operating 

principle for working capital funds.

 

17 Justice’s OBD comprises legal, executive, and management organizations. The working 

capital fund’s financial statements are prepared as part of OBD’s consolidated statement. 

Although financial audits occur at the OBD level, management and oversight of the fund 

remains a responsibility of JMD.
 

Page 24 GAO-12-289 Working Capital Fund

received appropriations to develop security training, it was required to 

purchase the same training from the working capital fund a few years 

later. She questioned whether components could have provided this 

training more cheaply and effectively than JMD. Another customer said 

that although his component owned and preferred its own audio 

equipment, it was required to use speakers and microphones provided by 

the working capital fund whenever events were held in the main Justice 

building. Both customers stated that JMD should assess whether the 

working capital fund should continue to provide those services for all 

components.

If available, specific working capital fund-level performance information 

would allow JMD to regularly compare actual performance with planned 

or expected performance. Making adjustments to the fund management 

and services, as appropriate, in a corresponding management review 

process could help JMD achieve the efficiencies that working capital 

funds were designed to produce, potentially freeing up resources that 

could be realigned for other departmental initiatives. Further, such a 

review could also allow JMD to better reassess functions to ensure that 

the working capital fund continues to provide the critical underlying 

infrastructure and support that allow other Justice components to perform 

their primary functions. Performance measures that are aligned with 

strategic goals can be used to evaluate whether and, if so, how working 

capital fund activities are contributing to the achievement of agency goals 

and departmentwide crosscutting initiatives. 

Justice has the authority to capture excess unobligated balances into the 

working capital fund and AFF to fund various departmental priorities. 

These balances are available until expended. Specifically, the AFF 

balance—known as the Super Surplus—may be used for any authorized 

law enforcement purpose, while the working capital fund’s Unobligated 

Balance Transfers account—known as UBT—may be used for capital 

investments or administrative purposes. 

According to the AAG/A, who has responsibility for managing these 

authorities as Justice’s Chief Financial Officer, the working capital fund 

and AFF’s authority to retain and use transferred excess unobligated 

balances is a tremendous benefit for the department. He considers these 

authorities to be part of a suite of financial tools available to manage 

projects to meet Justice priorities.

Justice’s Excess 

Unobligated Balances 

Have Been 

Unavailable for 

Departmental 

Priorities in Recent 

Years
 

Page 25 GAO-12-289 Working Capital Fund

Excess unobligated balances from accounts across the department can 

be transferred into the working capital fund’s UBT. This account consists 

of moneys from expired Justice appropriation balances that are not 

needed to cover obligations or other adjustments and are about to be 

canceled.18 Excess unobligated balances in AFF can be transferred into 

the Super Surplus account.19

Justice leadership uses a four-step process to make final decisions on 

how to use the working capital fund’s UBT and AFF’s Super Surplus.

The Super Surplus amounts include prioryear declared excess unobligated balances. The Assets Forfeiture 

Management Staff, in conjunction with JMD budget staff, determine the 

amounts needed to (1) maintain AFF solvency by covering anticipated 

forfeiture-related expenses, (2) ensure a reserve for pending equitable 

forfeited assets and third-party payments with partners and victims 

(referred to as major sharing reserves), and (3) retain funding to cover 

rescissions. Any remaining funds can be declared as excess unobligated 

balances and used to increase the Super Surplus balance.

1. When excess unobligated balances are available, Justice components 

submit requests for funds to JMD. These requests must provide 

sufficient justification to allow senior Justice officials to make informed 

decisions about the use of these funds.

2. JMD budget staff consider each funding request in light of the priority 

resource needs of the department and the authorized purposes for 

which UBT and Super Surplus balances are available. JMD budget 

staff present their recommendations to the AAG/A for review and 

approval.

 

18 Appropriations available for a definite period are canceled 5 fiscal years after the period 

of availability for obligations ends. Once balances are canceled, the amounts are 

unavailable for any purpose.

19 The Comprehensive Crime Control Act of 1984 established AFF. AFF receives 

proceeds of forfeitures and pays for the costs associated with such forfeitures, including 

the costs of managing and disposing property; satisfying valid liens, mortgages, and other 

innocent owner claims; and other costs associated with accomplishing the legal forfeiture 

of property. The Attorney General is authorized to use AFF to pay any necessary 

expenses associated with forfeiture operations, such as property seizures, detention, 

management, forfeiture, and disposal. In responding to agency comments, Justice officials 

said that the AFF also has limited authority to finance certain general investigative 

expenses.
 

Page 26 GAO-12-289 Working Capital Fund

3. The AAG/A, with input from the Attorney General and other 

departmental leaders, makes the final decision on how to allocate 

these balances.

4. Before using the excess unobligated balances, JMD notifies OMB and 

the House and Senate Appropriations Committees’ Commerce, 

Justice, and Science Subcommittees on how much they will use from 

the UBT and Super Surplus and for what purpose. While Justice is 

only required to notify Congress and OMB of its uses, it generally 

waits for approval before using the funds.

In the past, Justice has used the working capital fund UBT to fund general 

administrative acquisitions, such as improving Justice’s financial 

management system. However, JMD budget officials told us that the UBT 

has not been available for departmental priorities in recent years. Since 

fiscal year 1995, Justice has used the UBT for rescissions enacted in law 

and drawn from the working capital fund. When rescinded amounts were 

equal to or greater than the existing UBT balance, those funds were 

unavailable for departmental priorities (see table 2).

Table 2: Working Capital Fund Unobligated Balance Transfers and Rescissions 

Dollars in millions

FY 2008 FY 2009 FY 2010 FY 2011

UBT deposits $181 $90 $75 $114

Working capital fund rescission 41 100 0 26

UBT available for agency priorities 140 0 75 88

Sources: Justice documents, GAO analysis of the President’s Budget Appendixes for the working capital fund as well as fiscal year 

2011 appropriations acts, and JMD officials. 

When AFF Super Surplus balances were available, Justice allocated 

funding for various law enforcement purposes as determined by the 

Attorney General’s statutory discretion, such as programs targeting 

crimes against children. Because rescissions from AFF have been 

greater than the existing Super Surplus balance since fiscal year 2008, 

the Super Surplus has been unavailable for departmental priorities in 

recent years. Further, an amount equal to the prior fiscal year’s rescission 
 

Page 27 GAO-12-289 Working Capital Fund

has been designated for return to the AFF Super Surplus the following 

fiscal year (see table 3).20

Table 3: Super Surplus Balances and AFF Rescissions 

Dollars in millions

FY 2008 FY 2009 FY 2010 FY 2011

Super Surplus balance $55 $45 $207 $79

AFF rescission 240 285 387 495

Source: GAO analysis of Assets Forfeiture Management Staff documents and the President’s Budget Appendixes for the Assets 

Forfeiture Fund.

Working capital funds provide agencies with an opportunity to operate 

more efficiently by consolidating and providing services. They also create 

incentives for customers and managers to exercise cost control and 

economic restraint. Given the fiscal pressures facing the federal 

government, consolidating operations could potentially achieve cost 

savings and help agencies provide more efficient and effective services. 

Agencies can maximize the potential of these opportunities by following 

four key working capital fund operating principles. Specifically, these 

principles are to clearly delineate roles and responsibilities, ensure selfsufficiency by recovering the agency’s actual costs, measure 

performance, and build in flexibility to obtain customer input and meet 

customer needs. JMD effectively tracks working capital fund moneys in 

accordance with fiscal law, clearly delineates roles and responsibilities 

within the fund, and ensures self-sufficiency by recovering total shared 

services costs. Further, customers noted positive benefits from shared 

services, including the breadth of services offered, the experience and 

knowledge of shared services staff, and the convenience and ease of 

having these services provided in-house.

 

20 The President’s Budget designates a return of Super Surplus each fiscal year in an 

amount equal to the prior fiscal year’s rescission. However, AFF’s appropriation for that 

fiscal year does not specifically provide for such a return of the Super Surplus. In 

responding to a draft of this report, Assets Forfeiture Management Staff told us that AFF 

rescissions to date are temporary in that the rescinded amounts are not transferred out of 

the AFF at any time, but are unavailable for obligation during the fiscal year of the 

rescission. When the fiscal year in which the rescission occurred expires, the AFF moneys 

are then available for use in the following fiscal years unless and until another rescission 

is enacted. 

Conclusions
 

Page 28 GAO-12-289 Working Capital Fund

Customers do not always understand the basis for the rates they pay and 

lack assurances that fund costs are equitably distributed among 

customers. Although JMD established the CAB to improve customer 

satisfaction with the working capital fund, board members do not find the 

annual meeting—JMD’s primary vehicle for engaging board members 

about shared services and their accompanying rates—a useful forum in 

which to understand and provide advice on fund management and 

operations. Further, JMD does not have a systematic way to 

communicate with non-CAB customers, which results in uneven flow and 

availability of information among working capital fund customers, 

especially regarding the structures of some shared services rates. JMD 

officials described various ways that they push information on rates and 

services out to their customers but ultimately agreed that some customers 

may have better access to this information than others, and said that they 

remained committed to continuing to improve communication with 

customers. Providing ample opportunity for customers to provide input on 

services and voice their concerns about the fund is a key principle for 

managing working capital funds. Further, transparent and equitable 

pricing methodologies allow agencies to ensure that shared services 

rates charged recover agencies’ actual costs and reflect customers’ 

service usage. If customers understand how rates are determined, they 

can better anticipate changes to assumptions, identify their effect on 

costs, and incorporate this information into their budget planning.

Customer experiences with getting clear, timely, well-explained bills for 

working capital fund services are mixed, and our review of customer bills 

for shared services found that some services do not always provide 

enough information for the customers to understand the basis for the 

charges contained in the bills. As a result, customers’ ability to anticipate 

their actual charges at the end of the year and to properly account for 

these costs was inhibited. Although customers do not always provide 

JMD with points of contact for billing information, we believe that helping 

to ensure that the right information gets to the right people at the right 

time is part of providing good customer service.

Although JMD tracks and monitors limited performance information for 

some shared services, it does not have measures to assess how 

effectively it manages the fund, such as whether managers are 

responsive to customer inquiries or billing error rates—two areas with 

which customers have expressed concern. By establishing performance 

measures and goals for working capital fund operations that align with 

Justice’s strategic goals, and putting a management review process in 

place to track fund performance, JMD would have the necessary tools to 
 

Page 29 GAO-12-289 Working Capital Fund

know whether the fund is achieving the efficiencies that intragovernmental 

revolving funds were designed to produce. Absent a systematic way to 

measure customer satisfaction with shared services as well as fund-level 

performance, JMD is missing an opportunity to identify potential 

improvements and efficiencies to the services it provides. Further, by 

better understanding the fund’s effectiveness, JMD could potentially free 

up resources that could be realigned for other departmental priorities.

To improve the management of the Justice working capital fund, we 

recommend that the Attorney General direct the AAG/A to take the 

following three actions:

1. Improve opportunities for two-way substantive communication with 

shared services customers. This could include developing a means to 

discuss customer concerns about working capital fund rates and services; 

organizing breakout sessions on specific lines of business, to be attended 

by appropriate customer program and finance staff; restructuring the 

annual CAB meetings to allow further opportunities for two-way 

communication; conducting a periodic survey or listening session with 

customers on such topics as their level of satisfaction or potential 

changes to service needs; or a combination of these.

2. Help ensure that information on the basis of rates for each shared 

services and sufficiently detailed billing information reaches the 

appropriate customer staff, especially those in the finance and program 

offices. This could include posting relevant portions of the operating plan 

with information on the basis of rate structures on Justice’s intranet, 

requiring both a program office and finance point of contact to be 

provided in each reimbursable agreement, or organizing periodic 

dedicated sessions for both program staff and finance customer staff to 

discuss issues relevant to them.

3. Develop performance measures to monitor whether all shared services 

are provided in an efficient and effective manner. These measures should 

support goals that align with Justice priorities and, as the departmental 

needs change over time, provide JMD additional assurance that the level 

and types of working capital fund services provided support current 

departmental goals. 

Recommendations for 

Executive Action
 

Page 30 GAO-12-289 Working Capital Fund

We provided a draft of this report to the Attorney General for official 

review and comment. In his letter, which is reprinted in appendix III, the 

Assistant Attorney General for Administration generally agreed with our 

findings and recommendations. Specifically, he noted that JMD will 

continue to explore ways to address the issues we identified. For the third 

recommendation, he noted that while it is possible to enhance oversight 

of the working capital fund by formulating and tracking additional 

performance measures, such measures would not be necessary to 

assure Justice that fund services support the department’s needs. While 

we agree that fund services provide critical support to Justice’s mission, 

we continue to believe that as the departmental needs change over time, 

JMD could provide additional assurance that the level and types of 

working capital fund services provided support current agency goals. 

Further, we have revised the third recommendation to reflect this. Justice 

provided technical comments, which we incorporated as appropriate.

We are sending copies of this report to the Attorney General and other 

interested parties. In addition, the report is available at no charge on the 

GAO website at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

me at (202) 512-6806 or fantoned@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. Major contributors to this report are listed in 

appendix IV.

Denise M. Fantone

Director, Strategic Issues

Agency Comments 

and Our Evaluation
Appendix I: Other Working Capital Fund 

Services and Customers 

Page 31 GAO-12-289 Working Capital Fund

The following tables show the interactive data from figure 1. Table 4 

shows working capital fund amounts for services and support for “other 

services.” Table 5 shows working capital fund amounts for customers 

under “all other customers.” 

Table 4: Working Capital Fund Services and Support – “Other Services” 

Services and support Dollar amount

Financial management services $29 million

Human resource systems $28 million

Enterprise solutions staff $13 million

Library acquisitions service $12 million

Human resources $11 million

E-government services staff $8 million

Assets forfeiture management staff $3 million

Program review services $3 million

Source: Justice documents.

Table 5: Working Capital Fund Customers – “All Other Customers” 

All other customers Dollar amount

U.S. Trustee Program $44 million

General Administration $43 million

Justice Information Sharing Technology $41 million

Criminal Division $41 million

Executive Office for Immigration Review $40 million

Department of Homeland Security $38 million

Antitrust Division $31 million

U.S. Marshals Service $28 million

Bureau of Alcohol, Tobacco, Firearms and Explosives $26 million

Civil Rights Division $22 million

Office of Justice Programs $21 million

Environment and Natural Resources Division $20 million

National Security Division $17 million

Tax Division $17 million

Other users $14 million

Community Oriented Policing Services $13 million

Office of the Inspector General $12 million

Appendix I: Other Working Capital Fund 

Services and Customers
Appendix I: Other Working Capital Fund 

Services and Customers 

Page 32 GAO-12-289 Working Capital Fund

All other customers Dollar amount

Assets Forfeiture $9 million

Narrowband Communications $8 million

Federal Prison Industries $6 million

National Drug Intelligence Center $5 million

Interpol $4 million

Office on Violence Against Women $4 million

Fees and Expenses of Witnesses $3 million

Community Relations Service $2 million

Office of Legal Counsel $2 million

Solicitor General $2 million

United States Parole Commission $1 million

International Criminal Investigative Training Assistance Program $1 million

Court Services and Offender Supervision Agency $1 million

Office of the Federal Detention Trustee $1 million

Source: Justice documents.
Appendix II: Key Operating Principles for 

Managing Working Capital Funds

Page 33 GAO-12-289 Working Capital Fund

Principle Components of principle

Examples of evidence supporting 

principle

Clearly delineate roles and responsibilities

Appropriate delineation of roles and responsibilities 

promotes a clear understanding of who will be held 

accountable for specific tasks or duties, such as 

authorizing and reviewing transactions, 

implementing controls over working capital fund 

management, and helping to ensure that related 

responsibilities are coordinated. In addition, this 

reduces the risk of mismanaged funds and tasks or 

functions “falling through the cracks.” Moreover, it 

helps customers know who to contact if they have 

questions.

Segregate duties to reduce error or 

fraud

Written roles and responsibilities specify 

how key duties and responsibilities are 

divided across multiple individuals/offices 

and are subject to a process of checks 

and balances. This should include 

separating responsibilities for authorizing 

transactions, processing and recording 

them, and reviewing the transactions.

Define key areas of authority and 

responsibility

Written description of all working capital 

fund roles and responsibilities is 

available in an accessible format, such 

as a fund manual. Discussions with 

providers and clients confirm a clear 

understanding.

Establish management review and 

approval process at the functional or 

activity level that ensures 

appropriate tracking and use of

funds

A routine review process exists to ensure 

proper execution of transactions and 

events.

Ensure self-sufficiency by recovering the 

agency’s actual costs

Transparent and equitable pricing methodologies 

allow agencies to ensure that rates charged recover 

agencies’ actual costs and reflect customers’ service 

usage. If customers understand how rates are 

determined or changed, including the assumptions 

used, customers can better anticipate potential 

changes to those assumptions, identify their effect 

on costs, and incorporate that information into 

budget plans. A management review process can 

help to ensure that the methodology is applied 

consistently over time and provides a forum to 

inform customers of decisions and discuss as 

needed.

Establish transparent and equitable 

pricing methodology

Published price sheets for services are 

readily available. Documentation of 

pricing formulas supports equitable 

distribution of costs.

Set rates to cover agency’s total 

costs of providing service

Pricing methodology and accompanying 

process ensure that in aggregate, 

charges recover the actual costs of 

operations.

Establish management review for 

rate setting

Management review process allows fund 

managers to receive and incorporate 

feedback from customers. Discussions 

with customers confirm an understanding 

of the charges and that they are viewed 

as transparent and equitable.

Measure performance

Performance goals and measures are important 

management tools applicable to all operations of an 

agency, including the program, project, or activity 

levels. Performance measures and goals could 

include targets that assess fund managers’ 

responsiveness to customer inquiries, the 

consistency in the application of the funds’ ratesetting methodology, and the billing error rates. 

Performance measures that are aligned with 

strategic goals can be used to evaluate whether 

and, if so, how working capital fund activities are 

contributing to the achievement of agency goals. A 

Establish performance measures 

and goals

Performance indicators and metrics for 

working capital fund management (not 

just for the services provided) are

documented.

Align performance measures with 

strategic goals

Indicators or metrics to measure outputs 

and outcomes are aligned with strategic 

goals and working capital fund priorities.

Appendix II: Key Operating Principles for 

Managing Working Capital Funds
Appendix II: Key Operating Principles for 

Managing Working Capital Funds

Page 34 GAO-12-289 Working Capital Fund

Principle Components of principle

Examples of evidence supporting 

principle

management review process comparing expected to 

actual performance allows agencies to review 

progress toward goals and potentially identify ways 

to improve performance.

Establish management review of 

working capital fund performance

Working capital fund managers regularly 

compare actual performance with 

planned or expected results and make 

improvements as appropriate. In 

addition, performance results are 

periodically benchmarked against 

standards or “best in class” in a specific 

activity. 

Build in flexibility to obtain customer input and 

meet customer needs

Opportunities for customers to provide input about 

working capital fund services, or voice concerns 

about needs, in a timely manner enable agencies to 

regularly assess whether customer needs are being 

met or have changed. This also enables agencies to 

prioritize customer demands and use resources 

most effectively, enabling them to adjust working 

capital fund capacity up or down as business rises 

or falls.

Communicate with customers 

regularly and in a timely manner

An established forum, routine meetings, 

surveys, or a combination of these solicit 

information on customer needs and 

satisfaction with working capital fund 

performance.

Develop process to assess 

resources needed to meet changes 

in customer demand

Established communication channels 

regularly and actively seek information 

on changes in customer demand and 

assess the resources needed to 

accommodate those changes.

Establish process to prioritize 

requests for services

Established management review process 

allows for trade-off decisions to prioritize 

and shift limited resources needed to 

accommodate changes in demand 

across the organization.

Source: GAO analysis. 
Appendix III: Comments from the Department 

of Justice 

Page 35 GAO-12-289 Working Capital Fund

Appendix III: Comments from the 

Department of Justice
Appendix III: Comments from the Department 

of Justice 

Page 36 GAO-12-289 Working Capital Fund
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 37 GAO-12-289 Working Capital Fund

Denise M. Fantone, (202) 512-6806 or fantoned@gao.gov

In addition to the contact named above, Jacqueline M. Nowicki, Assistant 

Director, and Shirley Hwang, Analyst-in-Charge, managed this 

assignment. Melissa L. King, Catherine H. Myrick, and Keith C. O’Brien 

made major contributions to this report. Cynthia Saunders provided 

methodological assistance, Felicia Lopez provided legal assistance, and 

Donna Miller developed the report’s graphics. Other individuals providing 

key advice included Sandra Burrell, Samantha Carter, and Jack Warner.

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments

(450881)
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