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Department of the Army: Unauthorized Activity Codes Used to Requisition New DOD Property

GAO-01-85R Published: Dec 06, 2000. Publicly Released: Jan 04, 2001.
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Highlights

This report focuses on the military's inventory management activities. Army activities and contractors are assigned activity codes to requisition property in the military supply system. Some of these codes are identified as "unauthorized" to requisition and are primarily used as a ship-to address. GAO found that 15 percent of Army activity codes identified as unauthorized to requisition were inappropriately used to requisition more than $2.6 billion in new government property during the past five years. These problems exist because activity coordinators are poorly trained or inexperienced. The Army also lacks internal controls to prevent such unauthorized requisitions.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To correct these problems, the Secretary of Defense should direct the Secretary of the Army to verify whether the requisitioning authority for all Army activity codes is categorized accurately.
Closed – Implemented
The Department of the Army reconciled the Requisitioned Authenticity Code assigned to each Activity Address Code to verify that the codes were categorized accurately. In addition, the Army's activity address coordinators will verify an incoming requisition's authenticity code assigned to each activity address code under their purview, and will be held accountable for the need for all activity address codes within their span of control.
Department of Defense To correct these problems, the Secretary of Defense should direct the Secretary of the Army to review procedures, including personnel training requirements, for assigning activity codes to ensure that assignments are appropriate, made in accordance with regulation, and routinely inspected to ensure compliance.
Closed – Implemented
The Logistics Support Activity has completed a 100 percent reconciliation of the Army's 51,297 activity address codes and made minor changes and deletions as necessary. The Army's policy has been changed to require an annual reconciliation between the Major Army Command American National Standard and the Logistics Support Activity database.
Department of Defense To correct these problems, the Secretary of Defense should direct the Secretary of the Army to incorporate safeguards in appropriate databases to ensure that activity codes established as unauthorized to requisition are not used to requisition government property.
Closed – Implemented
DOD has reported that, for the appropriate databases, safeguards have been put in place to ensure that activity codes established as unauthorized will not be allowed to requisition material.

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Topics

Government Operations
Defense procurementFederal agency accounting systemsInternal controlsInventory control systemsLogisticsMilitary forcesInternational relationsFraud, Waste and AbuseEmployee trainingLogistics support