Financial Management: Better Controls Essential to Improve the Reliability of DOD's Depot Inventory Records.
Abstract
Adequate accountability and visibility over available supplies and equipment are significant components of mission readiness and are important to ensuring that funds are effectively spent. Department of Defense (DOD) reports, including financial statement reports, must provide decisionmakers with accurate information on the amount and composition of fts inventory. For example, the Congressional Committees use DO D's reported inventory amounts as an important measure to verify inventory reductions and to determine budget requirements. At the end of fiscal year 1998, the Air Force, Army, Navy, and the Defense Logistics Agency (DLA) combined reported over $57 billion of inventory-an amount that is material to both DOD's departmentwide financial statements and to the consolidated financial statements for the U.S. government. Over the years, auditors have repeatedly found problems with the accuracy of DOD's perpetual inventory records. DLA distribution depots' inventory records, which account for approximately 75 percent of DOD's reported inventory, supply much of the information in DOD's financial and supply reports. As part of our audit of the fiscal year 1998 governmentwide financial statements, we evaluated DOD procedures for verifying the accuracy of its perpetual inventory records. We assessed the internal controls over DLA's physical inventory process to determine whether they provide a reliable accuracy measure of the perpetual inventory records.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 1999
- Accession Number
- ADA365536
Entities
Organizations
- United States Government Accountability Office