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GAO Cites Army's Sloppy Record Keeping
Yahoo News/AP
By ELISABETH GOODRIDGE, Associated Press Writer
December 29, 2005

WASHINGTON - 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.

"These 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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