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Highlights

Pursuant to a congressional request, GAO examined the Department of the Army's inventory operations, focusing on: (1) whether the Army had a program to use long-supply spares and repair parts in depot-level repair programs and, if so, whether the program worked effectively; and (2) the economic advantages of using those assets in repair programs.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Army 1. The Secretary of the Army should direct the Commander, AMC, to determine whether the automated means developed by the Army Missile Command to match long-supply assets to applicable repair programs will produce the desired results. If not, the Secretary should develop an effective automated procedure that will provide Army-wide capability.
Closed - Implemented
An accomplishment report is being prepared on the results of the MICOM test. Preliminary data indicates that the value of requisitions satisfied from using serviceable assets in long supply amounted to about $3.4 million.
Department of the Army 2. The Secretary of the Army should direct the Commander, AMC, to require inventory control points (ICP) and depots to comply with current policies and procedures for maximizing the use of long-supply assets applicable to repairs performed by contractors and by depots.
Closed - Implemented
The Department of the Army issued a memorandum dated December 26, 1989, directing that AMC comply with guidance for maximizing the use of long supply assets.
Department of the Army 3. The Secretary of the Army should direct the Commander, AMC, to strengthen internal control procedures on the use of long-supply inventories in depot-level repair programs by: (1) monitoring the extent to which corrective actions are responsive to audit findings and recommendations; and (2) conducting on-site management reviews to ensure that inventory control points and depots are complying with procedures for maximizing the use of long-supply assets in depot-level repair programs.
Closed - Implemented
This action had been covered by a material weakness statement issued on this subject last year. For this reason, action has been completed, but GAO will monitor compliance as part of future reviews in the inventory management area.
Department of the Army 4. The Secretary of the Army should direct the Commander, AMC, to report the deficiencies in the use of long-supply assets as a material weakness in the Army's system of internal controls.
Closed - Implemented
GAO reviewed the material weakness statement on this issue. It addresses the problems GAO surfaced on ineffective use of long-supply assets. This action is completed on the recommendation.

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