Navy's Progress in Improving Physical Inventory Controls and the Magnitude, Causes, and Impact of Inventory Record Inaccuracies in the Army, Air Force, and Defense Logistics Agency

Gao ID: NSIAD-84-9 November 4, 1983

Pursuant to a congressional request, GAO reviewed the: (1) Navy's progress in improving physical inventory controls; (2) magnitude, causes, and impact of physical inventory adjustments in the Army, Air Force, and Defense Logistics Agency (DLA); and (3) adequacy of Department of Defense (DOD) policies, procedures, and efforts to improve physical inventory controls and inventory record accuracy.

GAO found that the Navy is making good progress in executing a plan to improve physical inventory controls and security over supply system inventories, and it has completed an immediate action designed to establish accurate inventory record baseline data. GAO also found that the magnitude and impact of the inventory accuracy problem in the Army, Air Force, and DLA are much greater than previously recognized by DOD and its components. These inaccuracies frequently have an adverse impact on supply economies and degrade the readiness of military forces. DOD is in the process of implementing a DOD-wide physical inventory improvement plan that calls for a series of actions to be taken through fiscal year 1985 to identify needed improvements in policies, procedures, and standards for upgrading inventory record accuracy. GAO concluded that, although the plan is a positive step, more steps need to be taken to enhance the accuracy of inventory records.


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