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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