Army Inventory:

Budget Requests for Spare and Repair Parts Are Not Reliable

NSIAD-96-3: Published: Jan 29, 1996. Publicly Released: Jan 29, 1996.

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GAO reviewed the: (1) accuracy of the databases used to determine Army spare and repair parts requirements and inventory levels for Defense Business Operations Fund budget requests; and (2) actions taken to correct data problems that could affect the reliability of these budget estimates.

GAO found that: (1) the Army's 1994 budget report contained numerous inventory data inaccuracies which led to erroneous reports of deficit inventory positions for several items; (2) overstated requirements and understated inventory levels were the major cause of most of the false deficit position reports; (3) the actual deficit position value for 94 items was about ten-fold less than what was reported; (4) some items should have been excluded from the budget stratification process; (5) although the Army is aware of many requirements data problems and has identified several change requests to correct these problems, the Army has not been able to correct these problems because the Department of Defense (DOD) is developing a standard requirements determination system for all the services and has limited how much the services can spend to change their existing systems; (6) the new DOD standard system will not be implemented for 4 years and most of its existing data will be integrated into that system; and (7) the Army cannot ensure that its budget requests represent its actual funding needs for spare and repair parts, that the new system will receive accurate data when it is implemented, or that expensive usable items will not be discarded and reprocured.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The Army was to provide a request for funding for the system change requests to the Joint Logistics Systems Center by March 1996. As of May 1997, the request had not been submitted. The Army plans no further action on this recommendation.

    Recommendation: The Secretary of Defense should direct the Secretary of the Army to proceed with the pending system change requests to correct the data problems. Doing so could correct many of the identified problems. Furthermore, the corrective actions would improve the overall reliability and usability of the information for determining spare and repair parts requirements.

    Agency Affected: Department of Defense

 

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