Air Force Logistics

Improved Backorder Validation Procedures Will Save Millions Gao ID: NSIAD-94-103 April 20, 1994

The Air Force continues to have large quantities of invalid backorders in its wholesale and retail supply systems because they are not detected and canceled when they are no longer needed. GAO and the Air Force have worked together to identify invalid backorders valued at more than $209 million at 17 retail supply activities that the Air Force later canceled. Also, since 1987, the Air Force has suspended a program for automatically canceling backorders when retail supply activities do not respond to quarterly requests to reconcile wholesale and retail backorder records. The suspension has resulted in lost opportunities to cancel millions of dollars worth of invalid backorders each quarter. The failure to identify and cancel invalid backorders was due to (1) a lack of detailed validation guidance, (2) inadequate management oversight and resolution of problems flagged by quarterly backorder reconciliation reports, and (3) the prolonged suspension of the automatic cancellation program.

GAO found that: (1) from a sample it reviewed, the Air Force cancelled $209.3 million in invalid backorders; (2) the Air Force should have detected $138.6 million of the invalid backorders during its quarterly reconciliation checks; (3) the Air Force has not provided retail supply activities with detailed guidance for validating backorders; (4) the Air Force is not providing sufficient management attention to the quarterly reconciliation process to correct differences between records at wholesale-level supply activities and retail-level activities; and (5) the Air Force suspended an automatic backorder cancellation provision that required wholesale activities to cancel unreconciled backorders.

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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