Inventory Management

Despite Defense Department (DOD) actions to correct inventory management weaknesses, discrepancies persist between military records and GAO's physical count of highly sensitive handheld missiles. Moreover, these weapons remain vulnerable to insider theft because DOD does not always open a representative sample of containers during maintenance checks. GAO was able to match its physical count of handheld rockets with military records, but it found oversight weaknesses with these weapons as well. For example, the Marine Corps reported that three rockets were missing from shipments returning from the Persian Gulf War. The Naval Criminal Investigative Service reached no conclusions about whether the rockets were missing, lost, or stolen, and the investigations were closed. Moreover, the armed services have different procedures and requirements for overseeing the rockets. If DOD is to effectively oversee these sensitive weapons, it needs to establish an integrated, general ledger controller system, which links DOD's accounting systems with its logistics and other key management systems. GAO did not find any evidence that terrorists or other extremists had stolen any highly sensitive handheld missiles, rockets, munitions, or explosives from military arsenals. DOD personnel, however, have stolen grenades, C-4 explosives, and TNT.

GAO noted that: (1) DOD has taken actions to improve the oversight of category I handheld missiles; (2) it conducted a worldwide inventory of handheld missiles; established a new baseline inventory count as of December 31, 1994; and implemented procedures to track changes to the baseline; (3) DOD also established procedures to check containers to ensure that each had a missile and verify serial numbers; (4) DOD reemphasized physical security procedures to be followed at its facilities; (5) despite DOD's progress toward better oversight of handheld missiles, some weaknesses remain; (6) adjustments continue to be made to the baseline as additional missiles are located and errors are discovered; (7) discrepancies still exist between records of the number of missiles and GAO's physical count; (8) the missiles may be vulnerable to insider theft because DOD is not always selecting a representative sample of containers to be opened during maintenance checks; (9) some facilities are not fully complying with DOD physical security requirements; (10) although GAO was able to match the physical count of AT4 and light antitank weapon (LAW) rockets at each site visited with the item manager's records, GAO also found oversight weaknesses with the category I rockets; (11) the Marine Corps reported three AT4 rockets missing from shipments returning from the Persian Gulf after Operation Desert Storm; (12) the Naval Criminal Investigative Service reached no conclusions on whether the rockets were missing, lost, or stolen, and the investigations were closed; (13) the services have different procedures and requirements for maintaining oversight of the rockets; (14) DOD's accounting and related systems, including its logistics systems, are not integrated; (15) in accordance with the Chief Financial Officer's (CFO) Act of 1990, each agency is to establish an integrated financial management system; (16) establishing an integrated, general ledger controller system, which ties together DOD's accounting systems with its logistics and other key management systems, is critical if DOD is to effectively ensure oversight and control over its sensitive material; (17) GAO did not find any documentation that terrorists or other extremists had stolen any category I handheld missiles or rockets or category II munitions or explosives from DOD arsenals; (18) some weapons continue to be vulnerable to insider theft as quantities of various category II items have been stolen by uniformed or DOD civilians; and (19) DOD and intelligence sources did not have any indication that the stolen items were intended for terrorists.

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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