Defense Inventory

The Defense Department (DOD) has had problems accounting for excess property being shipped to disposal and has developed comprehensive procedures to track the property. However, the procedures are not working well and property remains vulnerable to loss and theft. DOD reports that property valued at $2.7 billion was shipped to disposal during 1998 but was not recorded as received by disposal offices. A GAO analysis found that more than one-half of the dollar value of property that was reported as not received involved items that require special handling, such as communications equipment, aircraft components, and gun parts. DOD does not consider all property reported as not received as lost or stolen. DOD officials said that, in many cases, the property in question is received and disposed of properly but is incorrectly reported as not received because the systems used to track the property are unreliable. DOD, however, does not know the status of property being shipped to disposal. The reports used to manage and track property are inaccurate because of computer system programming and data input errors. Also, control procedures are not being followed because personnel either are not fully aware of the procedures or do not always understand them. GAO recommends that the military take steps to correct information system errors and train staff on control procedures.

GAO noted that: (1) DOD has had problems accounting for excess property that is being shipped to disposal and has developed comprehensive procedures to track the property; (2) however, the procedures are not working effectively, leaving property vulnerable to loss or theft; (3) in 1998, the Defense Logistics Support Command reported accountability over property being shipped to disposal as a material weakness because there was little enforcement or use of appropriate control procedures; (4) DOD reports that during fiscal year 1998, property valued at about $2.7 billion was shipped to disposal but was not recorded as received by disposal offices; (5) GAO's analysis of DOD's data for the 12-month period ending March 31, 1998, shows that over one-half of the dollar value of property that was reported as not received involved items that require special handling such as communications equipment, aircraft components, and gun parts; (6) DOD does not consider all property reported as not received as lost or stolen; (7) DOD officials stated that in many instances the property in question is received and disposed of properly but is incorrectly reported as not received because the systems used to track the property are not reliable; (8) however, DOD does not know the status of property being shipped to disposal because of the questionable accuracy of data and lack of adherence to control procedures; (9) the reports used to manage and track this property are not accurate because of computer system programming and data input errors; (10) also, control procedures are not being followed because service and disposal office personnel either are not fully aware of the procedures or do not always understand them; (11) GAO reviewed 191 sample shipments of sensitive military property reported as not received; (12) no investigations have been made for any of these shipments; (13) after further review, GAO was able to satisfactorily determine the status of 114 of these shipments (60 percent); (14) GAO found that disposal offices received the shipments but, due to a backlog of property waiting to be processed, had not recorded the receipts; and (15) however, GAO was unable to trace the actual disposition of the remaining 77 shipments (40 percent).

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: