Army Inventory Management: Inventory and Physical Security Problems Continue
NSIAD-88-11
Published: Oct 09, 1987. Publicly Released: Oct 22, 1987.
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Highlights
In response to a congressional request, GAO reviewed the Army's inventory management to determine its effectiveness and the adequacy of inventories' physical security.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Army | The Secretary of the Army should direct the inventory managers to perform a physical inventory of all variances disclosed by comparing accountable and custodial records, and use the results of the inventory as the basis for making inventory adjustments. |
Closed – Not Implemented
The Army does not believe it to be cost-effective to implement this recommendation. Therefore, it does not plan any action in this regard. In view of the action planned, or ongoing for the other recommendations, GAO cannot object to the Army's lack of action on this recommendation.
|
| Department of the Army | The Secretary of the Army should direct the inventory managers to report all variances between physical inventories and accountable records and use the reported variances in measuring inventory management effectiveness. |
Closed – Implemented
The Department of Defense (DOD) is developing policy implementation provisions to improve the collection and utilization of data related to inventory accuracy measurement. This requirement has been published in DOD Instruction 4130.35.
|
| Department of the Army | The Secretary of the Army should direct the inventory managers to develop an inventory methodology, such as statistical sampling, which will allow managers to obtain a representative and realistic view of its inventory management effectiveness based on indicators such as dollar and unit variance, as well as initial record accuracy. |
Closed – Implemented
Requirements and procedures for developing a statistical sampling approach have been developed and the instructions have been issued.
|
| Department of the Army | The Secretary of the Army should direct the inventory managers to reemphasize the need for effective causative research that identifies the causes for the inventory variances and tracks the causes over a period of time to identify systemic problem areas. An alternative to the current procedures would be to statistically sample the variances and do the necessary in-depth research to identify the causes of the variances. |
Closed – Implemented
DOD initiated a study of the causative research process in order to recommend policy and procedural changes to improve its effectiveness and efficiency. Causative research is constantly implemented and is being conducted for all variances disclosed in the statistical inventory sample.
|
| Department of the Army | The Secretary of the Army should, as an alternative to the current process for allocating resources, establish a separate budget line for physical security of its inventories so that it can have better visibility of the progress toward making needed upgrades of facilities, equipment, and personnel rather than leaving it up to the major commands and installation commanders to decide how the resources should be allocated. |
Closed – Not Implemented
DOD does not support the need for a separate budget line. It believes that it has sufficient visability of Army funding levels to monitor security upgrades. Therefore, it chose not to take action.
|
| Department of the Army | The Secretary of the Army should reexamine the previously planned corrective actions and determine why these actions have either not been taken, or why they have not resulted in improved inventory management. |
Closed – Implemented
The open recommendations from the 1983 report, as well as the recommendations from this report, will be included in the Army Supply Master Plan for continued follow-up.
|
| Department of the Army | The Secretary of the Army should report the internal control weaknesses discussed, along with a corrective action plan, in the Army's next annual Financial Integrity Act (FMFIA) statement. |
Closed – Implemented
The Army and DOD included an assessment of physical inventory control in its FMFIA statements.
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Topics
Accounting errorsAccounting proceduresArmy facilitiesArmy suppliesFacility securityInternal controlsInventory control systemsMilitary inventoriesPhysical securityInventory