Millions lost through Army’s sloppy record keeping

Due to sloppy record-keeping, the Army cannot confirm that $68
million worth of shipped parts and tools ever made it into the hands of
repair contractors, congressional auditors say.

The Government
Accountability Office, the auditing arm of Congress, released a report
Wednesday showing that the Army in 2004 failed to consistently record
shipment receipts to such contractors. That is one of many issues, the
GAO says, that leads to weak inventory oversight.

The report
noted that Defense Department policy requires each service to confirm
the receipt of all assets shipped to contractors. But, the report said,
“the Army is not consistently recording shipment receipts in its
inventory management systems.”

The Army is the third military
branch to be admonished for faulty oversight. In earlier audits, the
GAO found a similar oversight problems with the Navy’s and Air Force’s
parts and tool shipments.

Each year, the Army ships thousands of
items, from small tools to turbine engines, to private contractors for
repair, alterations or modifications.

Looking at data from two
inventory control points, GAO investigators estimated that 15 percent _
or $68 million _ of the unclassified shipments they analyzed “could not
be confirmed as being received.”

Additionally, the GAO said
receipt records for $481.7 million in unclassified items shipped for
repair _ about 42 percent _ could not be reconciled with shipping
records. Discrepancies also were found in records for 37 percent, or
about $8.1 million shipments, of classified parts and tools.

data show that the Army, on the basis of records receipts maintained in
its inventory management systems, cannot confirm that a substantial
portion of its inventory items shipped to repair contracts were in fact
received,” the audit said.

The GAO said the head of the Army’s
Materiel Command should look at providing contractors advance notice of
shipments, require quarterly status reports and better document
contractors’ receipt of shipments.

Jack Bell, the deputy under
secretary of defense for logistics and materiel readiness, said in a
Nov. 29 letter in response to a draft of the report that he would agree
to put in place the GAO’s recommendations.

Michelle McCaskill, a
spokeswoman for the Army Materiel Command, said Wednesday the command
“will ensure there are consistent, systematic procedures in place to
obtain and document contractors’ receipt of repair items and follow up
promptly on unconfirmed receipts.”


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