Army Transportation:

Alleged Overcharges on Rail Shipments to and From Ft. Irwin, California

NSIAD-88-174: Published: May 13, 1988. Publicly Released: Jun 8, 1988.

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Pursuant to a congressional request, GAO reviewed: (1) a former U.S. Army National Training Center (NTC) employee's allegations that rail carriers frequently overcharged NTC for equipment transportation; (2) a related U.S. Army Forces Command audit; and (3) related General Services Administration (GSA) transportation audits.

GAO found that: (1) rail carriers overcharged NTC by over $3 million; (2) rail carriers' improper application of the negotiated rates in their transportation bills accounted for $1.7 million of the overcharges; and (3) military transportation offices' improper preparation of government bills of lading (GBL) accounted for about $1.3 million of the overcharges. GAO also found that: (1) the Army's actions to correct overcharge problems included auditing carriers' bills before paying them, issuing detailed written instructions on GBL preparation, and adopting new internal control procedures; (2) GSA does not have ready access to all the information it needs to conduct effective preaudits; and (3) the Army has not issued a written standard operating procedure for its new internal controls.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: GSA delegated authority for preaudit of all Defense transportation bills to the Secretary of Defense.

    Recommendation: To ensure that all GBL relating to rotational moves are audited prior to payment and to enable the auditors to better evaluate the correctness of GBL preparation, the Administrator of General Services should delegate authority for the preaudit function to the Secretary of the Army, in accordance with administrative regulations.

    Agency Affected: General Services Administration

  2. Status: Closed - Implemented

    Comments: Internal control procedures have been formalized.

    Recommendation: The Secretary of the Army should direct that the internal control procedures adopted by the NTC transportation office for determining outbound substituted cars be placed in writing as standard operating procedures for NTC. In addition to covering the procedures currently followed, the written procedures should require the transportation office to obtain information supporting the reasons for any significant change in the number of cars used on the inbound and outbound shipments.

    Agency Affected: Department of Defense: Department of the Army

 

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