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Highlights

Pursuant to a congressional request, GAO evaluated the Air Force's: (1) physical inventory procedures to determine their accuracy and completeness; (2) research into differences between inventory counts and records; and (3) physical security over inventory.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. The Secretary of Defense, in requiring annual statistical samples as the basis for measuring and reporting inventory accuracy in the inventory control effectiveness report, should provide that these samples exclude zero balance items where there is no record of a storage location.
Closed - Implemented
In requiring annual statistical samples as a basis for measuring and reporting inventory accuracy in the DOD Inventory Control Effectiveness Report, samples must exclude zero balance items where there is no record of a storage location.
Department of the Air Force 2. The Secretary of the Air Force should direct the Commander, AFLC, to reevaluate its research and adjustment policies, especially the policy of not adjusting discrepancies under $5,000, which do not involve more than 10 percent of recorded items, to ensure that they do not have adverse effects on inventory management. If the policy is determined to be supportable, ensure that approval to implement it has been obtained from DOD.
Closed - Implemented
DOD has approved the Air Force's testing of its inventory research and adjustment policies.
Department of the Air Force 3. The Secretary of the Air Force should direct the Commander, AFLC, to continue emphasizing the need for effective causative research that determines underlying causes of inventory discrepancies and systemic problems. Variances currently under the monetary criteria for causative research should be sampled as further input to identifying and correcting systemic problems.
Closed - Implemented
AFLC has instituted a program to measure the effectiveness of causative research and has taken extensive management action to identify and correct problem areas. Sampling under monetary criteria is required and a reporting criteria has been established.
Department of the Air Force 4. The Secretary of the Air Force should direct the Commander, AFLC, to strengthen physical security at ALC by providing fencing around warehouses where practical, especially primary storage facilities, and not allowing parking of contractor or privately owned vehicles adjacent to warehouses.
Closed - Implemented
AFLC has cages and fencing around essential areas and over 40 miles of new fencing has been installed around warehouses and primary storage facilities. Policy is in place to limit parking of privately-owned vehicles adjacent to warehouses.
Department of the Air Force 5. The Secretary of the Air Force should reassess inventory accuracy in its next FMFIA statement and continue executing and reporting progress on the milestones for correction of the material weaknesses identified in the fiscal year 1986 FMFIA statement.
Closed - Implemented
The Air Force has reported inventory management as a material weakness in its annual statement and will continue to report it until all major weaknesses are corrected.

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