Inventory Management

Pursuant to a congressional request, GAO reviewed the Army's management of small arms parts for all the services, focusing on whether inventory controls, oversight by higher commands, and physical security were adequate to deter or detect thefts at four depots.

GAO found that: (1) an analysis of one depot's inventory records disclosed significant inventory control problems, including large and consistent losses of small arms parts, failure to complete required annual inventories of small arms parts, and inventories based on estimates rather than actual counts; (2) such inventory control problems were primarily due to the low priority management attached to physical inventories, poor resource management, inadequate warehouse maintenance, and strained storage capacity; (3) the three oversight commands lacked adequate information, objectivity, and followup to effectively monitor inventory management at Army depots; (4) the Army's lack of minimum security standards addressing methods for minimizing the risk of employee thefts allowed depot commanders broad discretion over physical security measures; (5) three depots lacked the necessary infrastructure to easily restrict access to the warehouse area; (6) the depots failed to use available resources to improve security; (7) a May 1991 Department of Defense (DOD) physical security regulation provided broad guidance on the minimum standards needed to protect material in its supply system and should provide a framework for ensuring that all the services have reasonable, consistent security standards; and (8) as a result of GAO studies, one depot began making improvements to its inventory controls and physical security.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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