Problems in Accountability and Security of DOD Supply Inventories

GAO discussed its review of the Department of Defense's (DOD) inventory management practices and found significant problems within all DOD supply systems. GAO found that, within the Army supply system, the major problems included: (1) loss and lack of accountability of large quantities of ammunition and explosives; (2) shipment of excessive amounts of repair parts to Europe; (3) inaccurate inventory records; (4) inadequate research of the reasons for discrepancies between records and inventory counts; and (5) inadequate physical security. GAO identified the Air Force's major inventory management problems as: (1) inaccurate materiel shipment and receipt records; (2) contractor access to the supply system; (3) inaccurate inventory records; and (4) inadequate physical security. GAO reviewed the Navy's shore-based supply systems and found that: (1) the Navy had no procedure to ensure receipt of materiel; (2) the Navy did not always perform required annual physical inventories; and (3) the Navy discarded usable materiel at both the wholesale and retail level. The Marine Corps' major inventory management problems included the lack of proper identification, segregation, and safeguarding of controlled items. At the Defense Logistics Agency, GAO found many longstanding problems, including: (1) high inventory adjustment rates; (2) lack of materiel-receipt confirmation, and (3) a potential problem with control over requisitioning.