Defense Inventory: Navy's Procedures for Controlling In-Transit Items Are Not Being Followed
NSIAD-99-61
Published: Mar 31, 1999. Publicly Released: Apr 27, 1999.
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Highlights
Pursuant to a congressional request, GAO reviewed selected aspects of the Navy's management procedures for controlling items in transit, focusing on the: (1) reported value and types of inventory in transit within and between storage and repair activities, vendors, and end users that were unaccounted for (or lost); and (2) Navy's adherence to procedures for controlling such in-transit inventory.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | In conjunction with developing a statutorily required, comprehensive plan to address visibility over in-transit inventory, the Secretary of Defense should direct the Secretary of the Navy to comply with existing Department of Defense and Navy procedures regarding material receipt acknowledgement of in-transit shipments and reemphasize follow-up procedures on unconfirmed warehoused and purchased material receipts. |
Closed – Implemented
The Commander, Naval Supply Systems Command (NAVSUP), communicated the importance of the proper and timely posting of receipts, as well as prompt and accurate responses to follow-up requests, to supply activities through the NAVSUP monthly update. Additionally, he chartered an Integrated Process Team to look at the current systems, policies, and processes to investigate material receipt acknowledgement problems and proposed short-term solutions.
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| Department of Defense | In conjunction with developing a statutorily required, comprehensive plan to address visibility over in-transit inventory, the Secretary of Defense should direct the Secretary of the Navy to modify the Navy's integrated accounting and logistics systems so that they routinely update both financial and inventory records when in-transit inventory items are received. Until the systems are operational, NAVICP Philadelphia should establish routine reconciliation procedures for its supply and financial records to ensure oversight and control over in-transit inventory items. |
Closed – Implemented
The Supply System Command's Integrated Process Team designed an initiative known as "Brute Force" to provide temporary improvements in the manual reconciliation process until automated programming changes can be made. Brute Force involves the reallocation and increase in staff to: (1) resolve unconfirmed receipts of warehoused material earlier, thereby avoiding potential write-offs; (2) reconcile in-transit write-offs of classified items with inventory records; and (3) perform causative research and analysis of write-offs of warehoused material.
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| Department of Defense | In conjunction with developing a statutorily required, comprehensive plan to address visibility over in-transit inventory, the Secretary of Defense should direct the Secretary of the Navy to specifically target in-transit inventory problems as an issue for review in Federal Managers' Financial Integrity Act assessments. |
Closed – Implemented
According the Navy's Office of Financial Operations, the Naval Inventory Control Point reviewed selected aspects of shipped inventory during its fiscal year 1999 management control review pursuant to the Federal Managers' Financial Integrity Act of 1982. In a September 1, 1999, letter to the Chief of Naval Operations, the Vice Commander, Naval Supply Systems Command, identified material weaknesses in the Naval Inventory Control Point internal controls over shipped inventory. The Vice Commander's letter also outlined planned corrective actions, including milestones and timetables for completion.
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| Department of Defense | In conjunction with developing a statutorily required, comprehensive plan to address visibility over in-transit inventory, the Secretary of Defense should direct the Secretary of the Navy to establish performance measures, milestones, and timetables to help monitor the progress being made to reduce the vulnerability of in-transit inventory to undetected loss or misplacement. |
Closed – Implemented
The Naval Supply Systems Command established four goals at the Naval Inventory Control Point to reduce fiscal year 2000 write-offs and gain better control of classified, sensitive, and high dollar value warehoused material. The goals are based on the number, value, and types of unconfirmed receipts of warehoused material shipments. Progress toward attaining these goals is assessed monthly by the Commander, Naval Supply Systems Command.
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Topics
Internal controlsInventory control systemsLogisticsMilitary inventoriesMilitary materielPerformance measuresProperty and supply managementProperty lossesU.S. NavyMilitary forces