Internal Controls
Federal Supply Service Depot Transportation Costs Can Be Reduced Gao ID: GGD-87-63 May 8, 1987GAO reviewed management controls over Federal Supply Service (FSS) supply distribution operations to assess how well FSS management control systems ensure that motor freight transportation costs are held to a minimum.
GAO found that FSS: (1) spends about $37 million to transport depot-stocked merchandise by motor freight carrier to federal agencies; (2) spends an additional $7 million annually to transport goods to federal agencies by other means; and (3) could save an estimated $3.8 million of the $37 million annually by consolidating shipments. GAO also found that FSS does not always consolidate shipments because: (1) it does not monitor depot performance in consolidating shipments, but monitors and holds depots accountable for meeting timeliness goals for processing and shipping agency orders; (2) its policy prohibits consolidating priority shipments with nonpriority shipments; and (3) its automated system requires depots to manually consolidate shipments, since the system processes orders separately according to the storage location of the merchandise within the depot. GAO noted that FSS is currently studying the feasibility of automating its depot operations, which would address the problems associated with producing shipping documents concurrently with order filling documents, but would not address the problems relating to different depot storage locations or the prohibition against merging priority and nonpriority orders.
RecommendationsOur 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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