Inventory Management:

Army Needs To Reduce Retail Level Excesses

NSIAD-87-197: Published: Sep 2, 1987. Publicly Released: Sep 2, 1987.

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GAO examined the Army's procedures for controlling excess stocks of secondary items to determine whether retail installations were: (1) reporting excess items to the National Inventory Control Point (NICP) for subsequent redistribution to other facilities; (2) retaining the items; (3) redistributing them to another installation; or (4) disposing of them in some other manner.

GAO found that: (1) installations were not reporting excess stocks to NICP; (2) excess items at six major Army command installations increased from $85.1 million in 1984 to $155.3 million in 1986; (3) unreported excess at two of the 14 installations it examined increased from 43 percent and 29 percent in 1984 to 75 percent and 74 percent, respectively, in 1986; (4) installations failed to report excess items because they had improperly retained them for direct exchange or for management purposes; and (5) NICP managers were often unaware that items which were in excess at one location were in short supply at others.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Army notified its major commands to report all excesses.

    Recommendation: To provide the wholesale inventory managers with complete information on excess secondary items at the retail level and enhance their capabilities to make more informed procurement and redistribution decisions, the Secretary of the Army should direct retail-level item managers to report all excesses, not just those items that the installation-level item manager determines should be reported to the wholesale level. In those cases where an installation needs to retain items over its authorized stock level, the installation's item manager should justify the need and obtain the wholesale-level manager's concurrence.

    Agency Affected: Department of Defense: Department of the Army

  2. Status: Closed - Implemented

    Comments: The Army advised its major commands to eliminate retention levels for items where retention levels are not authorized. The Army also directed that freeze codes to preclude automatic reporting be eliminated.

    Recommendation: To provide the wholesale inventory managers with complete information on excess secondary items at the retail level and enhance their capabilities to make more informed procurement and redistribution decisions, the Secretary of the Army should direct the major commands to eliminate retention levels for those secondary items for which retention levels are not authorized.

    Agency Affected: Department of Defense: Department of the Army

 

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