Recommendation: The Secretary of Defense should ensure that written ACSA guidance includes recordkeeping procedures related to ACSA congressional notifications and signature dates to help enable the provision of complete information for Congress. (Recommendation 1)

Agency: Department of Defense: Office of the Secretary of Defense
Status: Open

Comments: DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. At that time, DOD provided a copy of a February 2020 memorandum issued in response to our draft recommendation that outlined procedures to capture and preserve information about ACSA establishment, including the dates of DOD's congressional notifications of intent to designate countries for ACSAs and agreement signature dates. In April 2020, DOD provided evidence confirming appropriate distribution of the memorandum. As of May 2020, we continue to work with DOD officials to secure evidence confirming its implementation.

Recommendation: The Secretary of Defense should take steps to verify the accuracy of ACSA order statuses recorded in DOD's system of record, and make corrections as appropriate. (Recommendation 3)

Agency: Department of Defense: Office of the Secretary of Defense
Status: Open

Comments: DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. As we confirm DOD efforts in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of Defense should implement a process to reconcile data in financial systems with the data and associated documents collected and stored in DOD's ACSA system of record on a periodic basis. (Recommendation 4)

Agency: Department of Defense: Office of the Secretary of Defense
Status: Open

Comments: DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. As we confirm DOD efforts in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of Defense should develop and implement a mechanism to record and track the extent to which it is meeting required time frames to receive reimbursement for ACSA orders. (Recommendation 5).

Agency: Department of Defense: Office of the Secretary of Defense
Status: Open

Comments: DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. As we confirm DOD efforts in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of Defense should take steps to improve invoicing of ACSA orders, such as identifying ACSA orders recorded in DOD's system of record that have not been invoiced and sending invoices to partner countries. (Recommendation 6)

Agency: Department of Defense: Office of the Secretary of Defense
Status: Open

Comments: DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. As we confirm DOD efforts in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of Defense should implement a process to monitor ACSA orders recorded as overdue in DOD's system of record, and take steps to resolve outstanding reimbursements, as appropriate. (Recommendation 7)

Agency: Department of Defense: Office of the Secretary of Defense
Status: Open

Comments: DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. As we confirm DOD efforts in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of the Army should direct the Army's Provost Marshal General to take actions to help ensure that physical security inspections at locations with Arms, Ammunition, and Explosives (AA&E) are conducted on time, as required by Army guidance. (Recommendation 1)

Agency: Department of Defense: Department of the Army
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of the Navy should direct the Chief of Naval Operations' Supply, Ordnance, and Logistics Operations Division to take actions to help ensure that physical security inspections at locations with AA&E are conducted on time, as required by Navy guidance. (Recommendation 2)

Agency: Department of Defense: Department of the Navy
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of the Navy should direct the Marine Corps Deputy Commandant for Plans, Policies, and Operations to take actions to help ensure that physical security inspections at locations with AA&E are conducted on time, as required by Marine Corps guidance. (Recommendation 3)

Agency: Department of Defense: Department of the Navy
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of the Air Force should direct the Air Force's Office of the Deputy Chief of Staff for Logistics, Engineering and Force Protection, Directorate of Security Forces, to take actions to help ensure that inspectors at locations with AA&E are consistently documenting in inspection reports that all minimum requirements for physical security were checked. (Recommendation 4)

Agency: Department of Defense: Department of the Air Force
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of Defense should direct the Under Secretary of Defense for Intelligence to revise DOD guidance to require that the military services establish a process to consistently document the resolution of all identified physical security deficiencies. (Recommendation 5)

Agency: Department of Defense
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: To ensure the Army retains accountability of SRC I ammunition in an in-transit status, consistent with DOD policy, the Secretary of Defense should direct the Secretary of the Army to evaluate and identify actions to enable the Army to retain accountability for in-transit items until acknowledgment of receipt.

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation. As of January 2020, the Army is undergoing a financial audit of all munitions processes that affect the financial voucher, including the Material-In-Transit between locations, both wholesale and retail. The Army gained a consensus that until a unified record for both wholesale and retail is adopted, the shipping and receipt process will remain the same as that currently in use. An effort is underway to determine the best Army Enterprise Ammunition Supply Chain via an Other Transaction Agreement solution intended to provide a seamless supply chain from wholesale to the end user. The estimated completion date is September 2023.

Recommendation: The Senior Civilian Official for the Office of the Assistant Secretary of the Navy should develop a review process so that data call information on sponsor owned material is correctly reported.

Agency: Department of Defense: Department of the Navy: Office of the Assistant Secretary of the Navy (Financial Management): Senior Civilian Official
Status: Open

Comments: According to Navy officials, sponsor owned material is a subset of Operating Materials and Supplies (OM&S) contained within the OM&S-Remainder (OM&S-R) account. The Navy's auditors have reported a material weakness related to the OM&S-R account since fiscal year 2005. Recently, the auditors reported that the Navy did not have adequate policies, procedures, internal controls, and supporting documentation to support the balance and reporting of the OM&S-R account. The Navy currently has efforts underway to address this material weakness with a target completion date of early fiscal year 2021.

Recommendation: The Senior Civilian Official for the Office of the Assistant Secretary of the Navy should revise the Navy's policies for compiling its financial statements so that they are in accordance with federal accounting standards and the DOD Financial Management Regulation. Specifically: (1) ammunition items needing repair and those categorized as excess, obsolete, and unserviceable should be revalued appropriately to comply with SFFAS No. 3 and the DOD Financial Management Regulation; and (2) shipboard inventories aboard smaller combatant ships should be reported as operating materials and supplies in accordance with federal accounting standards.

Agency: Department of Defense: Department of the Navy: Office of the Assistant Secretary of the Navy (Financial Management): Senior Civilian Official
Status: Open

Comments: Regarding the first part of this recommendation, the Navy reports its ordnance within the Operating Materials and Supplies-Ordinance (OM&S-O) account and acknowledged in its most recent agency financial report (AFR) that valuation adjustments pertaining to repair cost are not currently calculated for ordnance. Also, the Navy's auditors have reported a material weakness related to the OM&S-O account since fiscal year 2005. Recently, the auditors reported that the Navy did not have adequate policies, procedures, and internal controls to effectively implement accounting standards related to its OM&S-O account. The Navy currently has efforts underway intended to address this material weakness with a target correction date of late fiscal year 2021. Regarding the second part of this recommendation, SFFAS 3 states that OM&S should be accounted for using the consumption method; in that materials are to be reported as an asset until they are issued to an end user for consumption in normal operations, at which point they would be expensed. Navy acknowledges, in its fiscal year 2019 AFR, that due to system limitations operating expenses are not always recognized when the items are consumed. The Navy also stated that efforts are underway to transition to the consumption method to properly recognize expenses; however, no target completion date was provided.