Food Inventories:

Inventory Management of Federally Owned and Donated Surplus Foods

RCED-86-11: Published: Dec 5, 1985. Publicly Released: Dec 10, 1985.

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In response to several congressional requests, GAO reviewed the Department of Agriculture (USDA), California, Pennsylvania, Michigan, and New York inventory management systems to determine whether: (1) the systems ensured that USDA-owned products and special distribution program products provided to the states were properly controlled; and (2) USDA minimized transportation and storage costs.

GAO found that USDA: (1) maintains a computerized perpetual inventory record of dairy products stored in each warehouse; (2) periodically reconciles its book inventory with physical inventories; (3) has procedures to account for the products shipped into and out of the warehouses; and (4) inspects the warehouses and products periodically to ensure that the products are properly cared for. GAO determined that: (1) USDA perpetual inventory records agreed with those maintained by all 88 warehouses it sampled; (2) examinations made by USDA personnel at 6 warehouses it visited conformed to USDA procedures; and (3) nearly all of the 470 warehouses USDA used in 1984 were examined by USDA personnel twice a year, as required. GAO found that USDA generally shipped products to and from the closest locations and used warehouses charging lower storage rates. GAO also found that the inventory management systems the four states used did not always ensure that products donated for the emergency food assistance program were properly accounted for and managed. For other USDA food assistance programs, such as the School Lunch Program, the Food and Nutrition Service (FNS) requires on-site periodic evaluations of the states' inventory control practices. For the Temporary Emergency Food Assistance Program (TEFAP), however, FNS does not require its regional offices to periodically evaluate the state programs. GAO found that the resulting reports did not present enough information for management to judge whether the states' systems were adequate.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: USDA issued regulations requiring a comprehensive monitoring program and advised its regional offices to periodically evaluate and report on state TEFAP.

    Recommendation: The Secretary of Agriculture should direct the Administrator, FNS, to require FNS regional offices to periodically evaluate and report on the states' inventory management systems to provide management with the information needed to determine whether the systems provide control over the receipt, disposal, and inventory of products at both the state and local levels.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: USDA issued regulations requiring the states to provide FNS with a monthly report specifying TEFAP product inventory levels and the amounts of products received and distributed.

    Recommendation: The Secretary of Agriculture should direct the Administrator, FNS, to require FNS regional offices to review the monthly inventory reports submitted to them by the states to ensure that data on TEFAP are reported and that inventory levels are related to normal usage.

    Agency Affected: Department of Agriculture

 

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