B-114435(2), B-155021, OCT 23, 1973

B-114435(2),B-155021: Oct 23, 1973

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THE DOCUMENTS ARE FORWARDED TO US FOR AUDIT. WE HAVE BEEN STUDYING THE CENTRALIZED AUDIT ACTIVITY OF OUR TRANSPORTATION AND CLAIMS DIVISION WITH THE PRIMARY OBJECTIVE OF INCREASING THE OVERALL EFFICIENCY OF OUR AUDIT. DISCONTINUANCE OF THE DETAILED AUDIT OF CERTAIN CATEGORIES OF TRAFFIC WHICH ARE SUSCEPTIBLE TO DECENTRALIZED AUDIT BECAUSE THEY INVOLVE SPECIAL CIRCUMSTANCES SUCH AS CONTRACT SERVICES OR COMPUTER PROCESSING. MAC OFFICIALS AGREED THAT THERE WAS NO NEED FOR A DETAILED POST AUDIT AFTER THEIR PREPAYMENT VERIFICATION OF THE CHARGES BILLED FOR PLANELOAD CONTRACT COMMERCIAL SERVICE. GBLS AND GTRS ARE USED AND THE CARRIER RECEIVES PAYMENT FROM THE ARMY AT FORT BENJAMIN HARRISON. THE TARIFFS HAVE SINCE BEEN ELIMINATED.

B-114435(2), B-155021, OCT 23, 1973

WE GRANT AUTHORITY TO THE MILITARY AIRLIFT COMMAND TO AUDIT AND RETAIN AT SCOTT AFB, ILLINOIS, ALL PAYMENT VOUCHERS AND RELATED TRANSPORTATION DOCUMENTS COVERING ALL MAC CONTRACT AIRLIFT SERVICES SUBJECT TO SUCH TEST VERIFICATION AND PROCEDURAL REVIEWS AS MAY BE CONDUCTED BY OUR OFFICE.

TO MR. SECRETARY:

ON AUGUST 24, 1965, WE APPROVED A REQUEST BY THE SECRETARY OF THE AIR FORCE TO DISCONTINUE THE USE OF GOVERNMENT BILLS OF LADING (GBLS) AND TRANSPORTATION REQUESTS (GTRS) TO PROCURE PLANELOAD (CATEGORY B) COMMERCIAL AIRLIFT SERVICES AND TO USE A FORM 8 IN LIEU THEREOF. AT THE SAME TIME, WE ALSO AUTHORIZED THE MILITARY AIR TRANSPORT SERVICE, NOW MILITARY AIRLIFT COMMAND (MAC), TO PAY THE CARRIERS' BILLS AT SCOTT AIR FORCE BASE (AFB), ILLINOIS. AFTER PAYMENT BY MAC, THE DOCUMENTS ARE FORWARDED TO US FOR AUDIT.

WE HAVE BEEN STUDYING THE CENTRALIZED AUDIT ACTIVITY OF OUR TRANSPORTATION AND CLAIMS DIVISION WITH THE PRIMARY OBJECTIVE OF INCREASING THE OVERALL EFFICIENCY OF OUR AUDIT. THIS WOULD BE ACHIEVED THROUGH IMPROVED RATE AUDIT PROCEDURES UTILIZING STREAMLINING, RATE SIMPLIFICATION AND COMPUTERIZATION TECHNIQUES; AND DISCONTINUANCE OF THE DETAILED AUDIT OF CERTAIN CATEGORIES OF TRAFFIC WHICH ARE SUSCEPTIBLE TO DECENTRALIZED AUDIT BECAUSE THEY INVOLVE SPECIAL CIRCUMSTANCES SUCH AS CONTRACT SERVICES OR COMPUTER PROCESSING. WE BELIEVE THAT THE MAC CONTRACT COMMERCIAL SERVICES MEET THIS CRITERIA, AND MAC'S EFFICIENCY IN ITS PREAUDIT SHOULD ENABLE THIS OFFICE TO DISCONTINUE THE DETAILED AUDIT OF PAYMENTS FOR THIS TRAFFIC.

REPRESENTATIVES OF OUR TRANSPORTATION AND CLAIMS DIVISION RECENTLY VISITED MAC HEADQUARTERS TO REVIEW THE AUDIT OPERATIONS AND DISCUSS OUR PROPOSAL THAT MAC ASSUME RESPONSIBILITY FOR THE AUDIT OF THOSE ACCOUNTS. MAC OFFICIALS AGREED THAT THERE WAS NO NEED FOR A DETAILED POST AUDIT AFTER THEIR PREPAYMENT VERIFICATION OF THE CHARGES BILLED FOR PLANELOAD CONTRACT COMMERCIAL SERVICE.

WE ALSO DISCUSSED PROCEDURES IN EFFECT FOR LESS-THAN-PLANELOAD (CATEGORY A) FREIGHT AND PASSENGER TRAFFIC. ON THAT TRAFFIC, GBLS AND GTRS ARE USED AND THE CARRIER RECEIVES PAYMENT FROM THE ARMY AT FORT BENJAMIN HARRISON, INDIANA. ON MARCH 15, 1967, WE CONSIDERED A PROPOSAL TO ELIMINATE GBLS AND GTRS FOR CATEGORY A TRAFFIC AND TO AUTHORIZE PAYMENT AT SCOTT AFB. DID NOT APPROVE THE PROPOSAL BECAUSE THE TARIFFS CONFLICTED WITH THE MAC CONTRACTS, A SITUATION THAT CAUSED SERIOUS PROBLEMS FOR THIS OFFICE IN DISCHARGING ITS AUDIT RESPONSIBILITY. THE TARIFFS HAVE SINCE BEEN ELIMINATED, HOWEVER, AND THE CATEGORY A TRAFFIC IS NOW CONTROLLED BY THE CONTRACTS.

SINCE OUR VISIT, MAC HAS REQUESTED OUR APPROVAL OF THE USE OF MAC FORM 9 FOR CATEGORY A PASSENGER AND CARGO SERVICE. MAC CONSIDERS THE FORM 9 TO BE A SUITABLE SUBSTITUTE DOCUMENT FOR THE GTRS AND GBLS BEING USED AND STATES THAT ITS USE WILL REDUCE CONSIDERABLY THE ADMINISTRATIVE WORKLOAD. IN THE 1967 STUDY, MAC ESTIMATED THAT OVER $192,000 A YEAR COULD BE SAVED BY ELIMINATING GBLS AND GTRS AND THAT MAC COULD ASSUME PAYMENT RESPONSIBILITY AT NO INCREASE IN COST. ACCORDINGLY, THE USE OF MAC FORM 9 FOR CATEGORY A TRAFFIC IS APPROVED PROVIDED ARRANGEMENTS FOR ITS USE ARE MADE WITH THE CARRIERS INVOLVED.

ON THE BASIS OF OUR REVIEW OF MAC'S AUDIT OPERATIONS AND ACCEPTANCE OF OUR PROPOSAL, WE ALSO GRANT AUTHORITY TO THE MILITARY AIRLIFT COMMAND TO AUDIT AND RETAIN AT SCOTT AFB, ILLINOIS, ALL PAYMENT VOUCHERS AND RELATED TRANSPORTATION DOCUMENTS COVERING ALL MAC CONTRACT AIRLIFT SERVICES, SUBJECT TO SUCH TEST VERIFICATION AND PROCEDURAL REVIEWS AS MAY BE CONDUCTED BY OUR OFFICE. WE WILL APPRECIATE ADVICE OF THE DATE CHANGES HEREIN CONSIDERED WILL BE MADE EFFECTIVE SO THAT OUR INTERNAL ARRANGEMENTS MAY BE SCHEDULED ACCORDINGLY.

WE WILL LEND SUCH ASSISTANCE AS MAC MAY REQUIRE IN SETTING UP THE OPERATION. ARRANGEMENTS MAY BE MADE BY CONTACTING MR. T. E. SULLIVAN, DIRECTOR, TRANSPORTATION AND CLAIMS DIVISION.