Defense Inventory:

Property Being Shipped to Disposal Is Not Properly Controlled

NSIAD-99-84: Published: Jul 1, 1999. Publicly Released: Jul 1, 1999.

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Pursuant to a congressional request, GAO provided information on the Department of Defense's (DOD) management procedures for controlling excess weapon system parts, components, equipment, and other inventory items that are being shipped to disposal, focusing on the: (1) types and amounts of excess property that is reported as not received when shipped to disposal; and (2) weaknesses in management controls over excess property that is being shipped to disposal that makes it vulnerable to waste, abuse, or loss.

GAO noted that: (1) DOD has had problems accounting for excess property that is being shipped to disposal and has developed comprehensive procedures to track the property; (2) however, the procedures are not working effectively, leaving property vulnerable to loss or theft; (3) in 1998, the Defense Logistics Support Command reported accountability over property being shipped to disposal as a material weakness because there was little enforcement or use of appropriate control procedures; (4) DOD reports that during fiscal year 1998, property valued at about $2.7 billion was shipped to disposal but was not recorded as received by disposal offices; (5) GAO's analysis of DOD's data for the 12-month period ending March 31, 1998, shows that over one-half of the dollar value of property that was reported as not received involved items that require special handling such as communications equipment, aircraft components, and gun parts; (6) DOD does not consider all property reported as not received as lost or stolen; (7) DOD officials stated that in many instances the property in question is received and disposed of properly but is incorrectly reported as not received because the systems used to track the property are not reliable; (8) however, DOD does not know the status of property being shipped to disposal because of the questionable accuracy of data and lack of adherence to control procedures; (9) the reports used to manage and track this property are not accurate because of computer system programming and data input errors; (10) also, control procedures are not being followed because service and disposal office personnel either are not fully aware of the procedures or do not always understand them; (11) GAO reviewed 191 sample shipments of sensitive military property reported as not received; (12) no investigations have been made for any of these shipments; (13) after further review, GAO was able to satisfactorily determine the status of 114 of these shipments (60 percent); (14) GAO found that disposal offices received the shipments but, due to a backlog of property waiting to be processed, had not recorded the receipts; and (15) however, GAO was unable to trace the actual disposition of the remaining 77 shipments (40 percent).

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The statutorily required plan, "Plan to Ensure Visibility of In-transit End Items and Secondary Items," dated September 7, 1999, and implementation plans from the Army (May 19, 2000) the Navy (April 2000), Marine Corps (May 19, 2000), Air Force (July 19, 2000), and TRANSCOM (April 11, 2000) were issued to address adherence to internal control procedures, personnel training, and data accuracy. Also, in response to GAO's report, DOD made changes to its Intransit Control System and to the Military Standard Requisitioning and Issue Procedures. The changes which include edits and revised matching criteria, will eliminate $2.7 billion in erroneous transactions that were previously passed through the system.

    Recommendation: The Secretary of Defense should include actions in the statutorily-required plan for visibility over shipped inventory that would address the lack of adherence to internal control procedures for safeguarding excess property shipped to disposal to include researching and investigating discrepancies between what was reported as sent to disposal and what was received.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: In response to this recommendation, DOD created a new training web site instruction guide that addresses accountability of excess assets and stresses such concepts as accountability, responsibility, and stewardship. In addition, at its top 10 military service generators of excess property, DOD placed special emphasis for truing on an on-going basis. DOD also conducted additional in-house training for disposal office personnel and requested each military service to evaluate the need for additional training.

    Recommendation: The Secretary of Defense should include actions in the statutorily-required plan for visibility over shipped inventory that would address insufficiently trained personnel.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: GAO reported that the disposition of almost $99 million of transactions were incorrectly recorded and automatically provided to the In-Transit Accountability System, causing the system's reports to be erroneous and diminishing their value as a tool for tracking excess items. In response, DOD established a task force under the Joint Commanders Material Management Group. The group confirmed GAO's findings and created transaction edits to prevent such erroneous transactions from being passed to the IN-Transit Accountability System.

    Recommendation: The Secretary of Defense should include actions in the statutorily-required plan for visibility over shipped inventory that would address data accuracy problems contained in the In-transit Accountability System reports.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: The statutorily required plan, dated September 7, 1999, set forth performance measures, milestones, and timetables that DOD is using to help monitor the progress being to reduce the vulnerability of property being shipped to disposal to undetected loss or misplacement.

    Recommendation: The Secretary of Defense should include actions in the statutorily-required plan for visibility over shipped inventory that would address the need for performance measures, milestones, and timetables to help monitor the progress being made to reduce the vulnerability of property being shipped to disposal to undetected loss or misplacement.

    Agency Affected: Department of Defense

 

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