Defense Business Operations Fund Inventory Record Accuracy.
Abstract
The inventory of the Defense Business Operations Fund consisted of consumable and repairable materiel used by DoD Components and other Government agencies to sustain operations. In FY 1996, inventory was the most significant asset category in the Defense Business Operations Fund financial statements. At September 30, 1996, Defense Business Operations Fund inventory totaled $57.1 billion, or about 64 percent of the Defense Business Operations Fund assets. The overall objective of the audit was to determine whether inventory amounts on the FY 1996 Defense Business Operations Fund Consolidated Financial Statements were presented fairly in accordance with the other comprehensive basis of accounting described in Office of Management and Budget Bulletin No. 94-01, "Form and Content of Agency Financial Statements," November 16, 1993. We limited the audit to evaluating the accuracy of the perpetual inventory records for on-hand inventory maintained by the DoD inventory control points and retail storage activities. The audit was limited because DoD management had not developed and executed a DBOF-wide sample; we developed a sample to test inventory record accuracy. The time and resources required to develop and execute the sample prohibited us from testing other aspects of inventory needed to fully audit Inventory, Net. The other aspects included consigned and in-use inventory ($4.7 billion); inventory in-transit ($9.6 billion); adjustments, such as inventory revaluation to latest acquisition cost ($21.7 billion); and the allowance for inventory holding gains and losses ($21.1 billion). We also evaluated the adequacy of the DoD and Defense Logistics Agency management control programs as they related to the audit objectives. The inventory records of the Defense Business Operations Fund were not accurate. About one of every six records sampled were in error.
Document Details
- Document Type
- Technical Report
- Publication Date
- Feb 12, 1998
- Accession Number
- ADA368229
Entities
Organizations
- Office of the Inspector General, U.S. Department of Defense