NONSTANDARD CONTRACT ACCOUNTING PROCEDURES USED BY DEFENSE COMPONENTS CAUSE SUBSTANTIAL ERRORS IN REPORTING, RECORDING, AND CONTROLLING CONTRACT FINANCIAL DATA; MILLIONS OF DOLLARS ARE SPENT FOR UNNECESSARY PERSONNEL AND OTHER COSTS DUE TO DUPLICATION OF ACCOUNTING FUNCTIONS. THE MILITARY STANDARD CONTRACT ADMINISTRATION PROCEDURES FOR THE FINANCIAL CONTROL OF CONTRACTS WERE TO BE IMPLEMENTED 9 YEARS AGO, BUT STILL HAVE NOT BEEN MADE FULLY OPERATIONAL. THE GENERAL ACCOUNTING OFFICE RECOMMENDS THAT THE SECRETARY OF DEFENSE REQUIRE THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGIONS TO ENSURE THE ACCURACY OF THE FINANCIAL TRANSACTIONS PROCESSED AND SENT TO THE MILITARY SERVICES. FURTHER, THE IMPLEMENTATION OF THE MILITARY STANDARD CONTRACT ADMINISTRATION PROCEDURES SHOULD BE REQUIRED IN ALL DEFENSE SYSTEMS INVOLVED WITH CONTRACT ACCOUNTING AND MANAGEMENT. THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) SHOULD REQUIRE SPECIFIC TIMETABLES FROM THE MILITARY SERVICES REGARDING IMPLEMENTATION DATES FOR THE STANDARD PROCEDURES. THE COMPTROLLER SHOULD ALSO MONITOR THE IMPLEMENTATION AND REQUIRE CORRECTIVE ACTION WHERE NEEDED. DEFENSE CONCURRED WITH THE RECOMMENDATIONS, WHILE QUESTIONING WHETHER THE FINANCIAL TRANSACTIONS REVIEWED WERE REPRESENTATIVE OF ALL DEFENSE CONTRACTS. THE APPENDIX CONTAINS DEFENSE'S REPLY TO THE REPORT. (AUTHOR ABSTRACT MODIFIED--RCB)