Department of Defense In-Transit Inventory

Pursuant to a congressional request, GAO provided information on the Department of Defense's (DOD) management of its in-transit secondary inventory.

GAO noted that: (1) DOD reported that as of September 30, 1996, it had $5.2 billion in in-transit inventory; (2) however, the accuracy of that figure is questionable and may be understated because the services use different definitions as a basis for reporting in-transit inventory; (3) for example, the Army and the Air Force do not report items being shipped between bases; (4) in addition, DOD does not have visibility over all in-transit items; (5) DOD plans to have improved visibility over in-transit inventory when the Global Transportation Network is scheduled to be fully operational in 1999; (6) GAO's preliminary data also raises concerns about the vulnerability of in-transit inventory fraud, waste, and abuse; (7) according to records reviewed to date, DOD initiated about 21 million shipments in fiscal year 1997, but only 8.3 million in shipments had a corresponding notification receipt, with an average shipping time of 13 days; (8) the remaining 12.4 million shipments did not have a specific notification of receipt and had been outstanding for an average of 145 days; (9) these outstanding shipments contained a total of approximately 1.4 billion items; (10) the absence of a specific notification of receipt does not mean that a shipment was not received; and (11) additional audit work is needed to complete an analysis of this situation and determine whether problems have occurred.