Army Inventory

Unfilled War Reserve Requirements Could Be Met With Items From Other Inventory Gao ID: NSIAD-94-207 August 25, 1994

After the Defense Department (DOD) Comptroller told the Army that it could use inventory not needed for peacetime missions to satisfy unfilled war reserve requirements, the Army estimated that it could reduce its unfilled war reserve requirements by nearly $187 million at its five inventory control points. GAO found that this estimate was understated and that the Army could actually meet $497 million of its unfilled war reserve requirements by using such inventory. Although GAO tried to reconcile the difference between the Army's and GAO's estimates, computer programming errors prevented Army officials from reconstructing the methodology used to arrive at their estimate. Army officials agreed that GAO's approach was correct. DOD officials said that before the Army could transfer this inventory to the war reserve category, DOD would have to change its policy to allow the Army to exceed the $2.9 billion ceiling on protected war reserve inventory.

GAO found that: (1) after the Department of Defense (DOD) Comptroller lifted the restriction on the use of inventory items not purchased with war reserve appropriations, the Army estimated that it could reduce its unmet war requirements by $186.6 million; (2) the Army could meet $497 million in unfilled war reserve requirements by using items not needed for operating purposes; (3) the Army could meet additional requirements if it establishes a repair program for inventory items in unserviceable condition, but in the face of defense downsizing, this may not be a prudent use of resources; (4) although the Army's $186.6-million estimate was understated, the Army could not reconstruct its methodology for its estimate because of computer programming errors; and (5) the Army believes that DOD has to change its $2.9-billion ceiling on protected war reserve inventory before it can transfer the additional inventory to the war reserve.

Recommendations

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