Defense Inventory

Poor management practices have allowed items in the Air Force's "suspended inventory," which cannot be issued because of questionable condition, to go unreviewed for years. As a result, the Air Force is vulnerable to incurring unnecessary repair and storage costs as well as readiness problems. Within the military, the Air Force has the largest amount of suspended inventory--more than 70 percent of the $3.3 billion of all Defense Department (DOD) suspended inventory. The Warner Robins Air Logistics Center has the highest reported value of suspended inventory, accounting for about $1.3 billion (53 percent) of the Air Force's suspended inventory. The vast majority of items that GAO reviewed at Warner Robins are not being reviewed in a timely manner. About 64 percent of the inventory that GAO reviewed had been in a suspended category for more than one year, and some had been suspended for more than six years.

GAO noted that: (1) significant management weaknesses exist in the Air Force's management of inventory that it categorizes as suspended; (2) as a result, the Air Force is vulnerable to incurring unnecessary repair and storage costs and avoidable unit readiness problems; (3) this situation exists largely because management controls are not being implemented effectively or are nonexistent; (4) among DOD components, the Air Force reported the largest amount of suspended inventory--more than 70 percent of the $3.3 billion of all DOD suspended inventory; (5) in April 1997, the Air Force had 403,505 secondary items, valued at $2.4 billion, in a suspended status; (6) the Warner Robins Air Logistics Center (ALC) had the highest reported value of suspended inventory, accounting for about $1.3 billion (53 percent) of the Air Force's suspended inventory; (7) the vast majority of the suspended items reviewed are not being reviewed in a timely manner; (8) of the 1,820 suspended items reviewed with established standards, 97 percent failed to meet these standards; (9) about 64 percent of the inventory reviewed had been in a suspended category for over 1 year, and some had been suspended for over 6 years; (10) delays in determining the usability of suspended inventory can result in increased logistics support costs and readiness problems; (11) Warner Robins had over 2,000 unfilled customer demands (valued at about $53 million) while similar items were in suspension; (12) over 500 of these unfilled demands (valued at about $7 million) could have potentially been filled with these items; (13) two B-52H aircraft had not been fully operational for 175 days and 24 days because two $16,000 data entry keyboards were not available for issue in the Air Force supply system, yet two such keyboards had been maintained in a suspended status for two years; (14) management controls at Warner Robins over items categorized as suspended inventory have broken down and contributed to inventory being in a suspended status beyond established timeframes; (15) Air Force Materiel Command guidance does not comply with DOD policy and safeguard against lengthy suspensions, and Materiel Command and Warner Robins oversight of inventory management has generally been nonexistent; (16) Warner Robins lacks clearly defined suspended inventory management procedures for, and sufficient emphasis on, controlling suspended inventory; and (17) further, management of suspended inventory has not been identified in Air Force assessments of internal controls as a significant weakness, as provided in the Federal Managers' Financial Integrity Act of 1982.

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.

Director: Team: Phone: