Army Inventory

The Army continues to rely on inaccurate data to determine its inventory requirements for spare and repair parts. For 258 items GAO reviewed, the Army overstated the inventory shortfall by nearly $200 million. If accurate information had been used, the shortfall for these items would have totaled $23 million rather than the $211 million reported. Although the Army is aware of many of the processing, policy, data, and system problems, it has not corrected them because the Defense Department (DOD) is developing a system to determine standard requirements for all the services as part of its Corporate Information Management initiative. For that reason, DOD has limited the amount that the services can spend to change their existing systems. Army officials said that the standard system will not be up and running for at least four years. In the interim, the Army's budget requests may not represent its actual funding needs for spare and repair parts. Furthermore, unless the data problems are resolved now, the inaccurate data will be integrated into the new system.

GAO found that: (1) the Army's 1994 budget report contained numerous inventory data inaccuracies which led to erroneous reports of deficit inventory positions for several items; (2) overstated requirements and understated inventory levels were the major cause of most of the false deficit position reports; (3) the actual deficit position value for 94 items was about ten-fold less than what was reported; (4) some items should have been excluded from the budget stratification process; (5) although the Army is aware of many requirements data problems and has identified several change requests to correct these problems, the Army has not been able to correct these problems because the Department of Defense (DOD) is developing a standard requirements determination system for all the services and has limited how much the services can spend to change their existing systems; (6) the new DOD standard system will not be implemented for 4 years and most of its existing data will be integrated into that system; and (7) the Army cannot ensure that its budget requests represent its actual funding needs for spare and repair parts, that the new system will receive accurate data when it is implemented, or that expensive usable items will not be discarded and reprocured.

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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