Property Disposal:

Controls Needed to Preclude DOD Release of Unsafe Surplus M151 Jeeps

NSIAD-91-10: Published: Jan 2, 1991. Publicly Released: Feb 5, 1991.

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Pursuant to a congressional request, GAO reviewed the Defense Logistics Agency's (DLA) procedures for safeguarding surplus Army M151 jeeps sent to disposal offices, focusing on whether DLA complied with the Department of Defense's (DOD) policy on the mutilation of M151 jeeps to prevent civilian use.

GAO found that: (1) the DOD in-transit accountability system did not effectively control the transfer of M151 jeeps from military units to disposal offices; (2) disposal offices did not use the voluminous reports the accountability system generated to track jeep transit; (3) military units did not investigate record discrepancies between the number of jeeps sent and received because it was time consuming and little emphasis was placed on reconciling differences; (4) disposal offices did not follow such internal control procedures as inspecting vehicles transporting jeep parts, annotating and controlling weight tickets for jeep parts disposed of as scrap, and annotating and controlling delivery passes for usable jeep parts; (5) DLA mutilated jeep frames to prevent restoration to operable condition, but allowed the sale to the public of the rest of the parts, including the suspension, which was considered the primary cause of jeep accidents; and (6) DLA did not report the lack of an effective accounting system for jeep transit or the disposal shortcomings as internal control weaknesses.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOD is redesigning a DOD-wide in-transit control/visibility system. It plans to implement the system in late 1992. In the meantime, DOD is attempting to ensure that manual procedures currently in place are followed.

    Recommendation: The Secretary of Defense should direct management attention to solving the problems in the accountability system for property in transit from units to disposal offices.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: The Office of the Secretary of Defense stated that it will continue to work with DLA to ensure compliance with current policy and procedures to prevent recurrences.

    Recommendation: The Secretary of Defense should require DLA and its Defense Reutilization and Marketing Service to ensure that internal control procedures established to safeguard disposal items are followed.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: DOD agreed that corrective actions were necessary and stated that actions were being taken. However, DOD did not believe that the magnitude of the problem warranted separate reporting. In addition, DOD stated the Army had reported that issue in its annual report of internal control weaknesses.

    Recommendation: The Secretary of Defense should include in the next annual DOD Financial Integrity Act report to the President and Congress the need for an improved accountability system for property in transit from units to disposal offices as well as the need to follow controls during the disposal process and what corrective actions are being taken.

    Agency Affected: Department of Defense

 

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