Management Review:

Follow-Up on the Management Review of the Defense Logistics Agency

NSIAD-88-107: Published: Mar 28, 1988. Publicly Released: Mar 28, 1988.

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GAO assessed the Defense Logistics Agency's (DLA) actions in response to 16 GAO recommendations for improving management controls and effectiveness.

GAO found that DLA: (1) completed actions in response to seven recommendations and has actions underway in response to nine; and (2) could further improve the steps it has already taken to improve strategic and mobilization planning and management controls. GAO also found that: (1) DLA did not identify the resources necessary for strategic, mid-, and short-range planning; (2) the services disagreed over the types of items to include in mobilization requirements, which delayed plan revisions; (3) field activity reports of potential contractor overpayments included incomplete data; (4) program offices did not provide managers with the data needed to assess their effectiveness in reducing the growth of nonstandard parts in its inventory; (5) DLA lacked actual cost data for its existing automatic data processing (ADP) operations to make the appropriate cost-benefit and other financial decisions related to its modernization program; (6) DLA did not centralize management control over its information resources activities; and (7) DLA continues to work on improving its weapon system support and its productivity program.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: A revised DOD Instruction 4120.19 was issued on July 6, 1989. The new instruction appears to correct the problems addressed by the recommendation.

    Recommendation: The Secretary of Defense should revise the existing Department of Defense (DOD) instruction to require that program offices provide information on the disposition of all DLA recommendations for the use of standard military parts that are not accepted and establish management controls that ensure complete reporting.

    Agency Affected: Department of Defense

  2. Status: Closed - Not Implemented

    Comments: The actions taken did not correct the problem. However, subsequent GAO and DOD-IG audits have recommended other corrective actions which are now being addressed by DLA.

    Recommendation: The Secretary of Defense should ensure that DLA regional offices make accurate and complete reports about possible overpayments to contractors.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: Defense and DLA agree that mobilization planning needs improvement. DLA believes that it has exhausted all reasonable approaches to statistically determining mobilization requirements without success. It concluded that requirements can only be determined through an item-by-item evaluation. The services have indicated that they do not have the resources to make such an evaluation.

    Recommendation: The Secretary of Defense should issue guidance that defines which items should be included in mobilization requirements data the services submit to DLA.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: A new DLA planning, programming, and budgeting system was implemented as of January 1988. An accomplishment report has been prepared.

    Recommendation: The Secretary of Defense should require the Director, DLA, to identify resources associated with accomplishing mid- and short-range objectives as part of the planning, programming, and budgeting process.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: The existing accounting system has been expanded to accommodate the cost tracking requirements of the Logistics System Modernization Program. Job accounting techniques were interfaced with existing accounting systems in early fiscal year 1990. DLA can now identify costs of each of its ADP systems.

    Recommendation: The Secretary of Defense should develop a system that will allow DLA to identify the costs of its ADP operations on a system-by-system basis.

    Agency Affected: Department of Defense

 

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