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United States General Accounting Office:
GAO:
Report to Congressional Requesters:
January 2002:
Defense Inventory:
Control Weaknesses Leave Restricted and Hazardous Excess Property
Vulnerable to Improper Use, Loss, and Theft:
GAO-02-75:
Contents:
Letter:
Results in Brief:
Background:
Special Programs Obtained Property They Should Not Have Received:
Property Accountability Is Inadequate:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Descriptions of the Three Special Programs:
Appendix III: Location of Defense Reutilization and Marketing Offices:
Appendix IV: Processes Used by the Department of Defense and Two
Special Programs to Track Excess Property:
Appendix V: Comments From the Department of Defense:
Appendix VI: Comments From the 12th Congressional Region Equipment
Center:
Appendix VII: GAO Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Some Special Programs Obtained Ineligible Hazardous Property:
Table 2: All Three Special Programs Obtained Ineligible Restricted
Property:
Table 3: Number of Ineligible Restricted and Hazardous Supplies Issued
to Special Programs (1995-2000):
Table 4: Ineligible Property Obtained by the Three Special Programs
That Did Not Appear to Be Mission Related:
Table 5: Accountability of Excess Property Issued to Special Programs
(1995-2000):
Table 6: Accountability of Restricted Supplies Issued to Special
Programs (1995-2000):
Table 7: Accountability of Hazardous Supplies Issued to Special
Programs (1995-2000):
Table 8: Military Affiliate Radio System Locations and Membership:
Figures:
Figure 1: Department of Defense Disposal Process:
Figure 2: Number (Percentage) of Eligible and Ineligible Excess
Property Orders Received by Special Programs (1995-2000):
Figure 3: Value (Percentage) of Eligible and Ineligible Excess
Property Acquired by Special Programs (1995-2000):
Figure 4: Number (Percentage) of Eligible and Ineligible Excess
Property Supplies Acquired by Special Programs (1995-2000):
Figure 5: Examples of Restricted Items Not in the Special Programs'
Property Databases:
Figure 6: Defense Reutilization and Marketing Offices in the Western
Hemisphere and the Pacific Zone:
Figure 7: Defense Reutilization and Marketing Offices in the Southeast
and Asia Zones and the Pacific Zone:
Figure 8: Defense Reutilization and Marketing Offices in the Atlantic,
Central European, and Mediterranean Zones:
[End of section]
United States General Accounting Office:
Washington, DC 20548:
January 25, 2002:
The Honorable Tom Harkin:
United States Senate:
The Honorable Nick Lampson:
House of Representatives:
Each year over the past 5 years, the Department of Defense has
accumulated billions of dollars in excess property.[Footnote 1] This
property covers the entire range of materials, equipment, and articles
the Department uses, including vehicles, weapons, hand tools, lumber,
medical equipment, and furniture. The Department is authorized to
dispose of excess property and encourages the reuse of excess property
to the maximum extent possible. Defense components, civilian federal
agencies, and 12 programs have equal priority and first rights to
excess property. The 12 programs are referred to by the Department and
in this report as "special programs." Property not reused by the
federal agencies or the special programs is made available to state
and local governments, nonprofit organizations, and the public.
We have previously reported on the potential for fraud, waste, abuse,
and mismanagement of Defense inventory and have identified the
Department's inventory management as a high-risk area.[Footnote 2]
Because of continuing concerns about the Department's management of
its excess inventory in general, you asked us to further investigate
this area. As agreed with your offices, this report addresses issues
involving the special programs. Specifically, it focuses on excess
property issued to 3 of the 12 special programs-—the Military
Affiliate Radio System,[Footnote 3] the Civil Air Patrol, and the 12th
Congressional Regional Equipment Center.[Footnote 4] We judgmentally
selected these three programs because they (1) were found by our
Office of Special Investigations to have obtained and used some excess
property that was not consistent with their mission, (2) had readily
available information about the excess property they received, (3)
store their data in relatively few locations, and (4) are subject
exclusively to Department of Defense oversight.
Our objectives were to determine whether these three programs (1)
were acquiring property that they were not eligible to receive and, if
so, how much, and (2) could account for the property they received, as
required by the Department's or their own policies and procedures. Our
program selection process, scope, and methodology are described in
greater detail in appendix I. The three programs are described in
appendix II.
Results in Brief:
Between 1995 and 2000, the three special programs obtained items that
they were not eligible to receive with a total reported value of $34
million. Many of these included items whose use, storage, and disposal
were restricted because of military technology/applications or items
hazardous to public health and safety. Further, special program
officials were sometimes unaware of the items' nature. Additionally,
the Department of Defense may have incurred unnecessary costs to ship
ineligible property to one special program. The three special programs
were able to obtain the items because the Defense facilities that
store the property are not required to verify which items the programs
are eligible to receive, and because program officials do not
consistently follow applicable guidelines. We also noted that the
programs' lists of property they are allowed to obtain are not
comprehensive because the lists exclude mission-related items similar
to those already permitted. The problems we identified were not
limited to the three special programs. We found similar problems
associated with the other programs.
The Army component of the Military Affiliate Radio System could
account for all of the property it obtained. Conversely, the Civil Air
Patrol and the Air Force component of the Military Affiliate Radio
System could not properly account for most of the excess property they
obtained, including about 17,000 supplies with military applications
or trade restrictions and about 17,000 hazardous supplies. (The 12th
Congressional Regional Equipment Center is not required to track items
because it is given title to the property.) Indeed, these three
programs did not have reliable records for over three-quarters of
their excess property. The Navy Military Affiliate Radio System could
account for most of its items, although it did not have records for
more than 500 supplies with military applications or trade
restrictions. Together, the three special programs obtained over
80,000 hazardous supplies. In many cases, program officials were
unaware that their programs had received such items. We also found
similar problems in other special programs. This lack of
accountability increases the risk of mishandling excess property and
the potential for waste, fraud, and abuse.
We are making programwide as well as program-specific recommendations
aimed at enhancing internal controls over the Department's disposal of
its excess property and the subsequent accountability for the
property. In commenting on a draft of this report, the Department of
Defense generally concurred with our recommendations.
Background:
Responsibility for disposal of excess Department of Defense property
has been delegated to the Defense Reutilization and Marketing Service,
which is part of the Defense Logistics Agency. When a military service
or Defense agency organization has property it no longer needs, it
turns the property over to a Defense Reutilization and Marketing
Service field office—or reutilization facility. At the time we
concluded our review, there were 97 reutilization facilities, located
in 41 states and territories and 13 countries. Appendix III shows the
locations of the 97 Defense reutilization facilities.
The property in these reutilization facilities changes daily and
includes a myriad of items, ranging from air conditioners to
automobiles, tents to typewriters, and computers to couches. Items
[Footnote 5] are made available for reuse according to established
priorities. First priority is given to federal agencies—including
other Defense activities—-and 12 special programs that have equal
status with Department activities. The 12 special programs are:
* Department of Defense Humanitarian Assistance Program;
* Law enforcement agencies;
* 12th Congressional Regional Equipment Center;
* Department of Defense or service museums;
* Academic institutions and nonprofit educational organizations;
* National Guard units;
* Senior Reserve Officer Training Corps units;
* Morale, welfare, and recreation activities and services;
* Military Affiliate Radio System;
* Civil Air Patrol;
* Department of Defense contractors; and;
* Foreign governments and international organizations.
The Military Affiliate Radio System is run by licensed amateur radio
operators whose primary mission is to augment existing communications
during disasters and handle personal communications for the Armed
Forces and the U.S. government civilian personnel stationed throughout
the world. It is composed of separate Army, Navy (including the Marine
Corps and the Coast Guard), and Air Force components, all managed and
funded separately, and the Joint Staff Directorate for Command,
Control, Communications, and Computer Systems provides Department
oversight. The Civil Air Patrol is the civilian auxiliary of the Air
Force and is overseen by the Civil Air Patrol-Air Force, a unit of the
Air Education and Training Command. Its mission includes emergency
services such as search and rescue, disaster relief, and counterdrug
operations and the promotion of aerospace education in schools. The
12th Congressional Regional Equipment Center was established in 1992
as a demonstration project to help municipalities and nonprofit
organizations in western Pennsylvania complete infrastructure projects
that would otherwise be too costly to undertake. The Center acquires
excess heavy equipment, and according to Center officials, rents it at
below-market rates.
Excess property items are dispensed on a first-come, first-served
basis to those activities with the same reuse priority. In fiscal year
2000, the Department of Defense reused excess property valued at $1.9
billion, and other federal agencies reused excess property valued at
$2.5 billion. Property that is not reused within the federal
government is declared surplus and is made available first to state
and local governments and nonprofit organizations. In fiscal year
2000, property valued at $334 million was donated to state and local
governments and others. Surplus material that remains after the
donation cycle is sold to the public, and residual property is sent to
a landfill or another appropriate site for final disposal. The
disposal process is depicted in figure 1.
Figure 1: Department of Defense Disposal Process:
[Refer to PDF for image: illustration]
Excess Property:
Military service or Defense agency unit:
* Defense Reutilization and Marketing Office;
* Reutilization by other Defense organizations;
* Transfer to other federal agencies;
* Transfer to 12 special programs.
Surplus Property:
* Donation to non-federal organizations;
* State and local governments;
* Nonprofit organizations.
Public sales:
Disposal facilities:
Source: Our analysis of Defense Reutilization and Marketing Service
data.
[End of figure]
Defense reutilization facilities accept most items, including those
that pose health and environmental risks and those built for military
purposes.[Footnote 6] Hazardous property[Footnote 7] may be reused,
but its transportation, storage, use, and disposal are subject to
federal and state laws and regulations. Examples of hazardous property
include motor oil, paint, and freon from air conditioners. Department
of Defense policy also calls for identifying and demilitarizing' or
imposing trade limits on items that have a significant military
technology/application before they are released from the Department's
control. Trade security controls are designed to preclude the transfer
of items with a significant military technology/application to any
entity whose interests are counter to those of the United States.
Examples of items with a demilitarization requirement include tanks,
some electronics equipment, military aircraft, night-vision devices,
radio sets, and optical sights. Examples of items with a trade
security requirement include binoculars, electronic digital counters,
power supply units, computer equipment, and test equipment such as
oscilloscopes and multimeters. Department officials estimate that of
the 14 million active and inactive items in the Department's supply
system, about 140,000 (1 percent) have hazardous characteristics and
3.6 million (26 percent) have demilitarization and/or trade security
control requirements.
In this report, items referred to as "eligible" and "ineligible" are
items that the special programs are allowed and not allowed to have,
respectively. "Restricted" items are those with a demilitarization
requirement and/or trade security control.
Special Programs Obtained Property They Should Not Have Received:
Between 1995 and 2000, the three special programs obtained items
valued at millions of dollars that they were not eligible to receive.
Consequently, this property was unavailable for reuse by federal
agencies or other special programs. Moreover, a significant portion of
the ineligible supplies were restricted or hazardous items and the
special program officials did not always know the restriction or
hazardous nature of these items. As our other investigations have
shown, these problems are not limited to the three special programs.
These problems are caused both by the Department that does not require
its reutilization facility staff to verify a requester's eligibility
to receive an item and by the special program officials who do not
always follow applicable guidelines concerning the types of items they
can have. We also found that the programs' lists of eligible property
were not comprehensive and did not include other mission-related items
that were similar to items already permitted.
Three Special Programs Received $34 Million of Ineligible Material—-
Some Restricted or Hazardous:
During the study period, the Military Affiliate Radio System, the
Civil Air Patrol, and the 12th Congressional Regional Equipment Center
staff submitted more than 32,000 orders (see figure 2) valued at $171
million (see figure 3). Of these, more than 4,300 (13 percent) were
for ineligible property valued at about $34 million (20 percent). All
of the orders represented 2.2 million supplies, of which a half-
million (24 percent) were ineligible (see figure 4).
Figure 2: Number (Percentage) of Eligible and Ineligible Excess
Property Orders Received by Special Programs (1995-2000):
[Refer to PDF for image: vertical bar graph]
Number (percent) of orders:
Military Affiliate Radio System: Army:
Eligible: 278 (93%);
Ineligible: 21 (7%).
Military Affiliate Radio System: Navy:
Eligible: 889 (59%);
Ineligible: 614 (41%).
Military Affiliate Radio System: Air Force:
Eligible: 3,819 (83%);
Ineligible: 797 (17%).
Military Affiliate Radio System: Civil Air Patrol:
Eligible: 19,401 (92%);
Ineligible: 1,720 (8%).
12th Congressional Regional Equipment Center:
Eligible: 4,042 (77%);
Ineligible: 1,174 (23%).
Total:
Eligible: 28,426 (87%);
Ineligible: 4,339 (13%).
Source: Our analysis of Defense Reutilization and Marketing Service
data.
[End of figure]
Figure 3: Value (Percentage) of Eligible and Ineligible Excess
Property Acquired by Special Programs (1995-2000):
[Refer to PDF for image: vertical bar graph]
Acquisition value (percent of total):
Military Affiliate Radio System: Army:
Eligible: $2.5 million (95%);
Ineligible: $0.1 million (5%).
Military Affiliate Radio System: Navy:
Eligible: $8.9 million (46%);
Ineligible: $10.5 million (54%).
Military Affiliate Radio System: Air Force:
Eligible: $29.2 million (75%);
Ineligible: $9.8 million (25%).
Military Affiliate Radio System: Civil Air Patrol:
Eligible: $47.6 million (85%);
Ineligible: $8.1 million (15%).
12th Congressional Regional Equipment Center:
Eligible: $49.6 million (91%);
Ineligible: $5.1 million (9%).
Total:
Eligible: $137.8 million (80%);
Ineligible: $33.7 million (20%).
Source: Our analysis of Defense Reutilization and Marketing Service
data.
Note: Totals may not add due to rounding.
[End of figure]
Figure 4: Number (Percentage) of Eligible and Ineligible Excess
Property Supplies Acquired by Special Programs (1995-2000):
[Refer to PDF for image: vertical bar graph]
Number of items (percent of total):
Military Affiliate Radio System: Army:
Eligible: 5,948 (99%);
Ineligible: 48 (1%).
Military Affiliate Radio System: Navy:
Eligible: 55,367 (60%);
Ineligible: 36,472 (40%).
Military Affiliate Radio System: Air Force:
Eligible: 272,419 (94%);
Ineligible: 15,910 (6%).
Military Affiliate Radio System: Civil Air Patrol:
Eligible: 1,065,524 (92%);
Ineligible: 93,951 (8%).
12th Congressional Regional Equipment Center:
Eligible: 307,713 (45%);
Ineligible: 382,255 (55%).
Total:
Eligible: 1,706,966 (76%);
Ineligible: 528,641 (24%).
Source: Our analysis of Defense Reutilization and Marketing Service
data.
[End of figure]
Some Program Officials Were Unaware of Receiving Ineligible Hazardous
and Restricted Property:
All of the special programs received restricted and/or hazardous
excess property, although not all of the program officials were aware
that their programs had obtained the items. Program officials at the
three Military Affiliate Radio System programs and at the 12th
Congressional Regional Equipment Center were unaware that they had
received restricted items, and Air Force and Navy Affiliate Radio
System officials were unaware that they had received hazardous items
(see tables 1 and 2).
Table 1: Some Special Programs Obtained Ineligible Hazardous Property:
Special program: Military Affiliate Radio System: Army;
Did programs/members obtain hazardous items they were not eligible to
have? No;
Were program officials aware members had these items? N/A.
Special program: Military Affiliate Radio System: Navy;
Did programs/members obtain hazardous items they were not eligible to
have? Yes;
Were program officials aware members had these items? No.
Special program: Military Affiliate Radio System: Air Force;
Did programs/members obtain hazardous items they were not eligible to
have? Yes;
Were program officials aware members had these items? No.
Special program: Civil Air Patrol;
Did programs/members obtain hazardous items they were not eligible to
have? Yes;
Were program officials aware members had these items? Yes.
Special program: 12th Congressional Regional Equipment Center[A];
Did programs/members obtain hazardous items they were not eligible to
have? Yes;
Were program officials aware members had these items? Yes.
[A] Ineligible hazardous property was determined in consultation with
the Defense Logistics Agency.
Source: Our analysis of Defense Reutilization and Marketing Service
data.
[End of table]
Table 2: All Three Special Programs Obtained Ineligible Restricted
Property:
Special program: Military Affiliate Radio System: Army;
Did programs/members obtain restricted items they were not eligible to
have? Yes;
Were program officials aware members had these items? No.
Special program: Military Affiliate Radio System: Navy;
Did programs/members obtain restricted items they were not eligible to
have? Yes;
Were program officials aware members had these items? No.
Special program: Military Affiliate Radio System: Air Force;
Did programs/members obtain restricted items they were not eligible to
have? Yes;
Were program officials aware members had these items? No.
Special program: Civil Air Patrol;
Did programs/members obtain restricted items they were not eligible to
have? Yes;
Were program officials aware members had these items? Yes;
Special program: 12th Congressional Regional Equipment Center[A];
Did programs/members obtain restricted items they were not eligible to
have? Yes;
Were program officials aware members had these items? No.
[A] Ineligible restricted property was determined in consultation with
the Defense Logistics Agency.
Source: Our analysis of Defense Reutilization and Marketing Service
data.
The three programs obtained almost 25,000 ineligible hazardous
supplies such as batteries, chemicals, computer equipment, and oils.
In addition, about 3,800 of the ineligible supplies were restricted.
[Footnote 9] The 12th Congressional Regional Equipment Center is the
only program that the Department does not permit to have restricted
items because its mission does not require them. Center officials said
that they knew of this exclusion but were unaware that they had
received more than 500 such supplies during the study period. The
number of ineligible, restricted, and hazardous supplies obtained by
each program are shown in table 3.
Table 3: Number of Ineligible Restricted and Hazardous Supplies
Issued to Special Programs (1995-2000):
Special program: Military Affiliate Radio System: Army;
Ineligible supplies[A]: Restricted: 7;
Ineligible supplies[A]: Hazardous: 0.
Special program: Military Affiliate Radio System: Navy;
Ineligible supplies[A]: Restricted: 268;
Ineligible supplies[A]: Hazardous: 34.
Special program: Military Affiliate Radio System: Air Force;
Ineligible supplies[A]: Restricted: 262;
Ineligible supplies[A]: Hazardous: 8,800.
Special program: Civil Air Patrol;
Ineligible supplies[A]: Restricted: 2,793;
Ineligible supplies[A]: Hazardous: 4,394.
Special program: 12th Congressional Regional Equipment Center[B];
Ineligible supplies[A]: Restricted: 513;
Ineligible supplies[A]: Hazardous: 11,661.
Special program: Total;
Ineligible supplies[A]: Restricted: 3,843;
Ineligible supplies[A]: Hazardous: 24,889.
[A] Four ineligible supplies, which were obtained by the Navy Military
Affiliate Radio System, were both restricted and hazardous. These
supplies are reported in this table as both.
[B] The number of ineligible restricted and hazardous supplies was
determined in consultation with the Defense Logistics Agency.
Source: Our analysis of Defense Reutilization and Marketing Service
data.
[End of table]
The Department May Have Incurred Unnecessary Cost to Ship Excess
Property:
During 1995-2000, the Department may have incurred unnecessary cost to
ship 915 orders of excess property to the 12th Congressional Regional
Equipment Center. According to both Department of Defense policy and
the 1993 agreement between the Department and the Center, the Center
is responsible for all shipment costs.[Footnote 10] However, in 1995
the Department began an experimental project at several installations
to keep excess property in place to minimize transportation and
handling costs (as opposed to sending the property first to a
reutilization facility, which is normally the procedure). No
limitation was placed on the Center's participation in the program.
Property that was subsequently reused was shipped to all recipients,
including the Center, at the Department's expense. It is not clear
whether the agreement should have precluded the Center from
participating in this project. Defense officials estimate that the
Department spent $46,000 to ship items from reutilization facilities
as far away as California, Washington, and Texas to the Center's
headquarters in Blairsville, Pennsylvania. Almost one-third of these
orders-—valued at $521,000-—were for ineligible items and estimated
shipping costs exceeded $15,000.
Problems Had Been Previously Identified in Other Special Programs:
Other special programs are also obtaining excess property that they
are not allowed to receive. According to several recent investigations
conducted by our Office of Special Investigations:
During 1998 and 1999, a National Guard unit in Florida obtained
thousands of dollars of excess property without prior approval from
the appropriate office as required.[Footnote 11] Furthermore, the unit
used an invalid activity address code[Footnote 12] to acquire the
property.
The president of a construction company obtained excess property under
false pretense by purporting to be the curator of a military museum.
Some of the property was used on company projects. In November 1999,
36 military vehicles (including tanks and armored personnel carriers)
and weapons (including howitzers and a rocket launcher) were removed
from the individual's custody. In November 1999, his company was fined
$10,000, and in February 2000, he was sentenced to probation and
community service.
Defense contractors used invalid activity codes and expired contracts
to obtain property valued at over $6 million of property without
proper authorization.[Footnote 13] One contractor obtained 256,648
supplies from reutilization facilities, but could account for only
54,561 of them. The 202,087 (79 percent of the total) missing supplies
included raw materials, equipment, and clothing. Some of the property
had been reported stolen.
An activity code assigned to the Department of Defense Humanitarian
Assistance Program was used to order about $12 million of excess
property after the code was invalidated.[Footnote 14] This matter is
currently under investigation, and we plan to report on this in the
future.
A number of law enforcement agency program participants are currently
under investigation for their alleged role in the improper acquisition
of excess property according to Defense investigative agencies. In
addition, we recently determined that a number of activity codes
remained active after they should have been deleted and that law
enforcement agencies obtained more excess property than authorized. We
are also investigating inconsistencies in the type of excess property
authorized for issuance to law enforcement agencies and plan to report
on this in the future.
In May and June of 2000, a number of law enforcement agency program
participants received excess property that was not authorized on 16
different occasions. The approving program official was not aware that
additional property had been issued until we requested a transaction
history comparing the quantity of property approved to the property
acquired.
As was the case with the three special programs, these other programs
were able to obtain ineligible property because the Department did not
exercise adequate oversight To eliminate weaknesses cited in our
recent reports,[Footnote 15] the Deputy Under Secretary of Defense for
Logistics and Materiel Readiness directed the Defense Logistics Agency
to review how it establishes and controls activity codes. The Agency
plans to redesign its activity code database to take advantage of
modern electronic commerce methods. This review began in February
2001, and it is expected to be completed in the summer or fall of 2002.
As part of its redesign effort, the Agency is considering establishing
purpose codes to identify property an organization is eligible to
obtain. Officials involved in this effort believe that the accountable
program officers for the 12 special programs could use these specific
codes to verify their eligibility to obtain excess property.
Control Weaknesses Allowed Special Programs to Obtain Ineligible Items:
The three special programs obtained ineligible excess property partly
because of internal control weaknesses at the Defense reutilization
facilities, which are not required to determine whether a program is
allowed to have a requested item, and partly because program officials
do not consistently follow guidelines when approving requests for
property.
Reutilization Facility Staff Is Not Required to Review Property
Requests for Eligibility of Items:
Current Department policy[Footnote 16] does not require reutilization
facility staff to scrutinize property requests to determine whether a
requester is eligible to receive a particular type of property.
Defense reutilization facility staff is required to verify only that
(1) individuals requesting and picking up property are authorized
representatives of a valid receiving organization and (2) the property
request form is signed by an accountable program officer. Before
releasing the property, reutilization facility staff also verifies
that the item on the request form matches the item that is being
picked up.
Special Program Officials Did Not Follow Guidelines:
Special program officials did not follow applicable guidelines for
obtaining excess property. Policies and procedures established for the
programs were supposed to prevent ineligible requests from reaching
the reutilization facilities. However, requests for ineligible
property were numerous and widespread.
Military Affiliate Radio System. Although each of the three Military
Affiliate Radio Systems obtained items it was not allowed to have,
officials responsible for approving property requests said they were
unaware that their members had received any unauthorized items.
However, almost one out of five requests approved by the three systems
was for property not in the 18 authorized federal supply classes
[Footnote 17] (see figure 4). The three systems also obtained over
9,000 unauthorized restricted or hazardous supplies, even though all
three have a two-tiered review and approval process for property
requests to verify, among other things, that the requested item is
within the authorized federal supply classes. The Air Force and Navy
Systems have issued guidance allowing their members to obtain property
outside the authorized federal supply classes on a case-by-case basis
and when properly justified. The Air Force requires this justification
in writing. The Army System is stricter and does not allow its members
to have items outside of the authorized federal supply classes.
In their response to a draft of this report, Army System officials
provided another list of authorized federal supply classes that they
said was used to approve excess property requests. This list was in
effect from October 22, 1996, to June 30, 1997. This 8-month time
period is also covered by guidance issued by the Department that
contains a different, more restrictive set of authorized federal
supply classes. Using the Army System's list, 11 orders (not 21) with
ineligible federal supply classes were approved. These were valued at
$14,000 (down from $128,000) and represented 30 supplies (down from
48). According to a Department official, when Department and program
guidance conflict, Department guidance is followed.
Civil Air Patrol. According to Air Force and Patrol officials, very few
written requests for items outside of the 97 allowed federal supply
classes were submitted and approved by the Air Force during the 5-year
study period. Our analysis of Department records showed that during
this period, the Patrol received 1,720 orders for 94,000 supplies
(valued at $8.1 million) that were not in the eligible federal supply
classes. Civil Air Patrol and Air Force policies[Footnote 18] differ
on what must be done to obtain an item not in the eligible federal
supply classes. A Civil Air Patrol regulation states that a request
for an item not in the eligible federal supply classes may be approved
by the Air Force regional director for logistics if a valid need for
that item exists. Patrol officials stated that the list of eligible
federal supply classes is intended to be a guide, not a definitive
list. However, the Air Force instruction states that requests for
items outside of the allowed federal supply classes are approved on a
case-by-case basis and require written justification, which should be
kept for 1 year. We asked for copies of justification letters that had
been submitted for ineligible items; however, Civil Air Patrol and Air
Force officials could not locate any and could only recall receiving a
few justification letters. According to an Air Force official who
oversees Patrol operations, in cases where a Patrol regulation differs
from an Air Force regulation, the Air Force regulation is followed.
12th Congressional Regional Equipment Center. During the study period,
the Center staff submitted to Defense reutilization facilities almost
1,200 orders (for 382,000 supplies) valued at $5.1 million that were
not included in its agreement with the Defense Logistics Agency.
Center officials stated that they were aware the orders were for
ineligible items but approved the requests on the assumption that the
reutilization facilities would reject any that were deemed
inappropriate. According to Center officials, fewer than five property
requests from 1995 to 2000 were rejected by the reutilization
facilities because of the type of property involved. In one instance,
the only one that officials could recall, the ineligible property
included office supplies, parachute cords, and computer equipment.
The 12th Congressional Regional Equipment Center does not have to
obtain Department approval before submitting a property request to the
reutilization facilities, unless the item is not covered by its
agreement with the Defense Logistics Agency. In that event, according
to the Defense Logistics Agency, the Center is required to submit a
written request to the Agency, but has rarely done so. (In contrast,
the Civil Air Patrol and the Military Affiliate Radio System must have
all their requests cleared by a Department of Defense official.) As a
result, the Defense reutilization facilities provide the only
consistent external oversight of the Center's property requests.
According to Defense Logistics Agency officials, it is not the role of
the reutilization facility staff to determine whether a property
request is appropriate, although a couple of times a year the Agency
is contacted by a reutilization facility clerk questioning the
appropriateness of a particular property request submitted by the
Center. However, the Agency maintains that this responsibility resides
with the accountable program officer, who, in the case of the Center,
is a Center employee.
Lists of Eligible Items Do Not Accurately Reflect the Special
Programs' Needs:
Department and program guidance allows the Military Affiliate Radio
System, the Civil Air Patrol, and the 12th Congressional Regional
Equipment Center only to obtain excess property that supports their
respective missions. Program officials, in collaboration with the
Department of Defense, have compiled a list of federal supply classes
for each program that contains items that members may obtain. However,
with the assistance of Department officials, we reviewed these lists
and determined that they are not comprehensive and therefore do not
accurately reflect the programs' missions. Some ineligible property
seems to be mission-related in that it is similar to property the
programs are eligible to receive. For example, 71 percent ($14.6
million) of the $20.5 million in ineligible property that the three
Military Affiliate Radio Systems obtained consisted of communication
items and electrical or electronic components. Similarly, the Civil
Air Patrol obtained more than $800,000 in communication items, and the
12th Congressional Regional Equipment Center obtained about $675,000
in metal that was made into various shapes, including sheets, I-beams,
and rods.
There were also instances where the ineligible property did not appear
to be mission related (see table 4).
Table 4: Ineligible Property Obtained by the Three Special Programs
That Did Not Appear to Be Mission Related:
Military Affiliate Radio System[A]:
Trucks;
Pumps and compressors;
Air conditioning and air circulating equipment;
Special purpose clothing;
Maintenance and repair shop equipment;
Photographic supplies;
Furniture;
Hand tools.
Civil Air Patrol:
Combat headsets;
Sewage treatment equipment;
Computer hardware, including monitors, printers, and central
processing units;
Laundry equipment;
Diesel engines and power transmission equipment;
Television sets;
Optical sighting equipment;
Camouflage netting;
Demolition material.
12th Congressional Regional Equipment Center:
Passenger vehicles;
Food preparation and serving equipment;
Computer hardware, including monitors and central processing units;
Special purpose clothing;
Office supplies;
Photographic supplies;
Furniture;
Radios;
Medical and dental instruments.
[A] The Army Affiliate Radio System did not obtain any of the items
listed in this column.
Source: Department and GAO review of approved federal supply classes.
[End of table]
The 1993 agreement between the 12th Congressional Regional Equipment
Center and the Defense Logistics Agency has been amended several times
to increase the quantities of heavy equipment the Center may acquire,
but the types of eligible items have only changed once since 1993. In
November 1996, eight new federal supply classes were added and two
classes were eliminated from the original list of eligible items.
Besides heavy equipment, the Center is allowed to obtain ancillary
equipment and supplies (e.g., oil, antifreeze, and repair parts). In
addition, the Center is to only request property that is necessary for
its operation. No guidance has been issued to identify all the items
covered by the agreement. Similarly, the agreement does not address
limits on the number of ancillary items the Center can have. As a
result, the Center was able to acquire a large number of eligible
supplies, including more than 20,000 hand tools and almost 900 pieces
of firefighting equipment. Defense Logistics Agency officials agreed
that these quantities probably exceeded what the Center is required to
sustain its operations.
Property Accountability Is Inadequate:
Two of the three Military Affiliate Radio System programs and the
Civil Air Patrol maintain poor accountability over the excess property
they have acquired, including restricted and hazardous items. (The
Department does not require the 12th Congressional Regional Equipment
Center to track received excess property because it is given title to
the property.)[Footnote 19] This lack of accountability increases the
property's vulnerability to misuse, loss, and theft. We compared the
property the Department recorded issuing to the special programs with
the property recorded in the programs' databases and found that the
databases had a significant number of missing records (see table 5).
The Civil Air Patrol, for example, could not account for 98 percent of
the excess property supplies (77 percent based on value) it had
obtained from the Defense reutilization facilities.
Table 5: Accountability of Excess Property Issued to Special Programs
(1995-2000):
Special program: Military Affiliate Radio System: Army;
In database: Supplies (percent): 127 (100%)
In database: Value (percent): $0.5 million (92%)
Not in database: Supplies (percent): 0 (0%)
Not in database: Value (percent): $0 (0%)
Special program: Military Affiliate Radio System: Navy (sample);
In database: Supplies (percent): 5,547 (88%)
In database: Value (percent): $9 million (67%)
Not in database: Supplies (percent): 724 (12%)
Not in database: Value (percent): $4.5 million (33%)
Special program: Military Affiliate Radio System: Air Force;
In database: Supplies (percent): 38,703 (13%)
In database: Value (percent): $27 million (69%)
Not in database: Supplies (percent): 249,615 (87%)
Not in database: Value (percent): $12 million (31%)
Special program: Civil Air Patrol;
In database: Supplies (percent): 476 (2%)
In database: Value (percent): $2.7 million (23%)
Not in database: Supplies (percent): 28,172 (98%)
Not in database: Value (percent): $9.4 million (77%)
Special program: 12th Congressional Regional Equipment Center;
Not required to track.
Source: Our analysis of Defense Reutilization and Marketing Service
and program data.
[End of table]
Military Affiliate Radio System:
On the basis of annual inventories, officials at the Army and Air Force
Affiliate Radio System programs believed that most of their excess
property could be accounted for.[Footnote 20] We found that the Army
Affiliate Radio System could account for all of the excess supplies
the Defense reutilization facilities reported releasing to its
members. Conversely, the Air Force Affiliate Radio System could not
account for 87 percent of its excess supplies (31 percent based on
value). We also judgmentally sampled items obtained by the Navy
Affiliate Radio System and asked that the program's regional officials
search their local databases for records of the items. The officials
could not account for 12 percent of the supplies (33 percent based on
value) in our sample; however, more than three-quarters of the
restricted supplies the program had obtained were unaccounted for (see
table 6). These included radio and television equipment, batteries,
measuring and test instruments, and computer equipment.
Civil Air Patrol:
In accordance with Air Force supply policy, the Civil Air Patrol is
required to track nonexpendable property, that is, items that can be
reused. However, we could not account for most of the more than 28,000
nonexpendable supplies the Patrol acquired from the Defense
reutilization facilities. Items we could not locate in the property
database included radio and television equipment, office furniture,
and special purpose clothing. More than half of the supplies were
special purpose clothing items such as cold weather clothing and
flyers' helmets, jackets, and coveralls. Patrol officials explained
that a majority of the clothing was in poor condition, was not
reusable, and therefore did not require tracking. However, we found no
evidence to suggest that Patrol officials considered an item's
condition when deciding if it should be tracked.[Footnote 21] Air
Force supply policies do allow senior officials some discretion on
what property to track, and we believe linking this decision to an
item's condition is reasonable, when accompanied by a record of the
decision.
Based on a recommendation by the Department of Defense Inspector
General's Office, beginning on January 1, 2002, the Patrol will track
only those items, excess or otherwise, valued at $2,500 or more.
[Footnote 22] While we agree a dollar threshold is an important factor
to consider in determining which items should be tracked, other
factors should not be ignored. For example, Air Force policy requires
pilferable items to be tracked, regardless of their value, because of
their demand in the civilian economy. The Patrol obtained 5,500
expendable, pilferable supplies during the study period, such as hand
tools, communications and electronic equipment, and vehicle equipment
and parts. Tracking nonexpendable and expendable restricted and
hazardous items, regardless of their value, also is prudent.
The Civil Air Patrol's ability to manage its property, including that
obtained from reutilization facilities, has been impaired by its
information systems. The Patrol does not include national stock
numbers[Footnote 23] or indicate whether an item is restricted or
hazardous in its property database. As a result, the Patrol cannot
readily determine the status of this property, nor can it ensure its
proper handling. The Air Force has directed the Patrol to improve how
it accounts for excess property, and the Patrol is reviewing different
approaches.
12th Congressional Regional Equipment Center:
Although the Center is not required to track excess property, we found
that it had disposed of some property in a manner that was
inconsistent with the terms of its agreement with the Defense
Logistics Agency. The Center is only supposed to obtain property that
it needs for its operations and should not sell property without the
permission and knowledge of the Defense Logistics Agency. However, the
Center was selling excess property to its members without permission
or notification. Items for sale included office equipment and
supplies, paper products, hand tools, and furniture. Sales revenue
from 1995 to 2000 was reported at $636,000.[Footnote 24] According to
Center officials, sales proceeds were used to fund the Center's
operations.
Restricted or Hazardous Items Are Not Adequately Tracked:
The Civil Air Patrol and the Air Force Military Affiliate Radio System
could not properly account for restricted or hazardous excess property
they had obtained. The Army Affiliate Radio System could account for
all of its restricted property and did not receive any hazardous
property. Department policy requires non-Department of Defense
organizations to sign an agreement acknowledging the receipt of
restricted items and accepting responsibility for their care. However,
because Defense policy treats the 12 special programs like Defense
organizations, a recipient is not required to sign this agreement.
Consequently, program officials are often unaware that the property
they have is restricted. Department policy also requires Defense
reutilization facilities to store hazardous property separately and
under increased security control. Additionally, recipients of
hazardous property are provided information on how to use it safely
and the consequences of misuse. While we did not attempt to confirm
whether reutilization facility officials complied with this
requirement, officials from the Navy and Air Force Military Affiliate
Radio Systems and the Civil Air Patrol—-programs that had obtained
hazardous items—-did not recall receiving this information.[Footnote
25]
Program officials who are unaware that they have restricted or
hazardous property cannot track its whereabouts and cannot take
necessary precautions to safeguard its distribution or use and store
and transport it safely. Currently, only the Civil Air Patrol has
procedures for dealing with restricted property. Of the three programs
that received hazardous property, only the 12th Congressional Regional
Equipment Center has necessary procedures. None of the special
programs indicate whether an item is restricted or hazardous in their
property databases. As tables 6 and 7 show, many of these supplies
were not recorded. Officials from all three special programs agreed
that it would be beneficial to track the status of restricted and
hazardous items in their property databases.
Table 6: Accountability of Restricted Supplies Issued to Special
Programs (1995-2000):
Special program: Military Affiliate Radio System: Army;
Restricted supplies: 25;
In database (percent): 25 (100%);
Not in database (percent): 0 (0%).
Special program: Military Affiliate Radio System: Navy (sample);
Restricted supplies: 727;
In database (percent): 158 (22%);
Not in database (percent): 569 (78%).
Special program: Military Affiliate Radio System: Air Force;
Restricted supplies: 1,264;
In database (percent): 863 (68%);
Not in database (percent): 401 (32%).
Special program: Civil Air Patrol[A];
Restricted supplies: 16,984;
In database (percent): 205 (1%);
Not in database (percent): 16,779 (99%).
Special program: 12th Congressional Regional Equipment Center;
Restricted supplies: 819;
In database (percent): Not required to track;
Not in database (percent): Not required to track.
[A] The Civil Air Patrol also received 15,549 expendable restricted
supplies. The Patrol is tracking 1 percent of these expendable
supplies.
Source: Our analysis of Defense Reutilization and Marketing Service
and program data.
[End of table]
Table 7: Accountability of Hazardous Supplies Issued to Special
Programs (1995-2000):
Special program: Military Affiliate Radio System: Army;
Hazardous supplies: 0;
In database (percent): 0%;
Not in database (percent): 0%.
Special program: Military Affiliate Radio System: Navy (sample)[A];
Hazardous supplies: 0;
In database (percent): 0%;
Not in database (percent): 0%.
Special program: Military Affiliate Radio System: Air Force;
Hazardous supplies: 18,773;
In database (percent): 1,635 (9%);
Not in database (percent): 17,138 (91%).
Special program: Civil Air Patrol[B];
Hazardous supplies: 72;
In database (percent): 0%;
Not in database (percent): 72 (100%).
Special program: 12th Congressional Regional Equipment Center;
Hazardous supplies: 65,052;
In database (percent): Not required to track;
Not in database (percent): Not required to track.
[A] None of the 34 hazardous supplies obtained by the Navy Radio
Affiliate System were included in the sample.
[B] The Civil Air Patrol also received 7,419 expendable hazardous
supplies. The Patrol is tracking less than 1 percent of these
expendable supplies.
Source: Our analysis of Defense Reutilization and Marketing Service
and program data.
[End of table]
Examples of restricted items not in the databases included 14 pieces
of night vision equipment, over 2,700 radio equipment supplies (which
according to Department officials, could be used to disrupt military
communications, send and receive secure transmissions, or transmit on
military frequencies), and over 100 pieces of camouflage equipment.
These items are shown in figure 5.
Figure 5: Examples of Restricted Items Not in the Special Programs'
Property Databases:
[Refer to PDF for image: 3 photographs]
Camouflage screening system.
Night vision image intensifier;
Camouflage screening system;
Radio receiver-transmitter.
Source: Department of Defense and Radian Incorporated.
[End of figure]
(See appendix IV for an explanation of how Defense reutilization
facilities, the Military Affiliate Radio System programs, and the
Civil Air Patrol track excess property.)
Problems Also Identified With Other Special Programs:
Our Office of Special Investigations has found similar problems with
property accountability in the other special programs. For example, a
Florida National Guard unit did not follow procedures to account for
excess property it had obtained, and Defense contractors did not
inventory or track excess property. According to the Defense
Reutilization and Marketing Service's Office of Command Security, a
lack of inventory records creates conditions conducive to crime
because property could be stolen or diverted.
Conclusions:
Internal control weaknesses, both at Defense reutilization facilities
and at special programs, leave excess property vulnerable to misuse,
loss, and theft. As a result, there is the risk that unauthorized
individuals or organizations may be able to obtain property with
military applications or technology. Special programs have been able
to obtain ineligible excess property with military
technology/applications and hazardous items—in some cases without
realizing it. In addition, program officials did not know the
whereabouts of much of their excess property. Further, because these
programs have obtained property that they are not eligible to have,
the property is unavailable for reuse by federal agencies or other
special programs. These problems also exist in other special programs.
Recommendations for Executive Action:
Given the unique policies and regulations associated with each of the
special programs, addressing the control weaknesses we identified
requires actions that apply to all programs as well as actions
tailored to each individual program.
For all programs, we recommend that the Secretary of Defense direct
the Director of the Defense Logistics Agency to take the following
actions:
(1) As part of the Department's redesign of its activity code
database, establish codes that identify the type of excess property—by
federal supply class—and the quantity that each special program is
eligible to obtain and provide accountable program officers access to
appropriate information to identify any inconsistencies between what
was approved and what was received.
(2) Reiterate policy stressing that Defense reutilization facility
staff must notify special program officials of the specific tracking
and handling requirements of hazardous items and items with military
technology/applications.
We also recommend that the Secretary of Defense ensure that
accountable program officers within the Department verify, prior to
approving the issuance of excess property, the eligibility of special
programs to obtain specific types and amounts of property, including
items that are hazardous or have military technology/applications.
This could be accomplished, in part, through the Department's ongoing
redesign of its activity code database.
For each individual program, we further recommend the following.
(1) With regard to the 12th Congressional Regional Equipment Center, we
recommend that the Secretary of Defense direct the Director of the
Defense Logistics Agency to review and amend, as necessary, its
agreement with the Center in the following areas:
* the Center's financial responsibility for the cost of shipping
excess property obtained under the experimental project,
* the ancillary items the Center is eligible to receive,
* the rules concerning the sale of property and procedures for the
Center to notify the Agency of all proposed sales of excess property,
* the Center's responsibility for tracking items having military
technology/application and hazardous items, and,
* the need for Agency approval of the Center's orders for excess
property.
(2) With regard to the Army, the Navy, and the Air Force Military
Affiliate Radio Systems, we recommend that the Secretary of Defense
direct the Chairman of the Joint Chiefs of Staff to have the Joint
Staff Directorate for Command, Control, Communications, and Computer
Systems review which items these systems are eligible to receive, on
the basis of their mission and needs, and direct each of the Military
Affiliate Radio Systems to accurately track excess property, including
pilferable items, items with military technology/applications, and
hazardous items.
(3) With regard to the Civil Air Patrol, we recommend that the
Secretary of Defense direct the Secretary of the Air Force to have
the Civil Air Patrol-Air Force review which items the Patrol is
eligible to receive, on the basis of its mission and needs, and direct
the Patrol to accurately track its excess property, including
pilferable items, items with military technology/applications, and
hazardous items.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, the Department of
Defense generally concurred with our recommendations. It fully
concurred with four of our recommendations and partially concurred
with two—those calling for the establishment of an automated process
to reject requests for excess property that each special program is
not eligible to obtain and to provide accountable program officials
access to information about their property requests.
The Department agreed with our assessment that modifying the current
approval process to ensure that only valid requests for excess
property are filled would enhance program oversight The Department
further stated if it is not economically feasible to modify the
exiting database, it would consider alternative approaches to
achieving the intent of our recommendation. The Department also
indicated that the Defense Reutilization and Marketing Service has
placed an inventory query on its website to assist program officials
in monitoring their reutilization transactions. We are encouraged by
the Department's commitment to correct the current approval process.
The Department's comments are reprinted in their entirety in appendix
V.
In separate written comments, 12th Congressional Regional Equipment
Center officials generally agreed with the accuracy of the report's
contents as it relates to the Center. The Center also noted that the
success of the Center could be improved with a revised contract with
the Defense Logistics Agency, which the Department indicated it is
doing now. The Center's comments are reprinted in their entirety in
appendix VI.
The Defense Logistics Agency, the Air Force, the Joint Staff, and the
12th Congressional Regional Equipment Center provided technical
comments, which were incorporated in the report as appropriate.
As arranged with your offices, unless you publicly announce its
contents earlier, we plan no further distribution of this report until
30 days from its issue date. At that time, we will send copies of this
report to interested congressional committees; the Secretaries of
Defense, of the Army, of the Navy, and of the Air Force; and the
Director of the Defense Logistics Agency.
If you or your staff have any questions about this report, please
contact me at (202) 512-8412 or Robert H. Hast at (202) 512-7455. Key
contributors to this report are listed in appendix VII.
Signed by:
David R. Warren, Director:
Defense Capabilities and Management:
Signed by:
Robert H. Hast, Managing Director:
Office of Special Investigations:
[End of section]
Appendix I: Scope and Methodology:
We selected the Military Affiliate Radio System, the Civil Air Patrol,
and the 12th Congressional Regional Equipment Center for review
because they (1) were found by our Office of Special Investigations to
have obtained and used some excess property that was not consistent
with their mission, (2) store their data in relatively few locations,
(3) are subject exclusively to Department of Defense oversight, and
(4) have information about their excess property that is readily
available from the Defense Reutilization and Marketing Service.
We collected and analyzed data on excess Department of Defense
property obtained by the three special programs from January 1, 1995-
June 30, 2000, with the exception of the 12th Congressional Regional
Equipment Center, where we used data from October 1, 1995-December 31,
2000. The reason for this time shift is because the Center did not
begin acquiring excess defense property until October 1995. During our
review, we did not assess the effectiveness of the 12th Congressional
Regional Equipment Center.
To answer the two questions addressed in this report, we spoke with
officials from:
* Headquarters, Defense Logistics Agency, Fort Belvoir, Virginia.
* Headquarters, Defense Reutilization and Marketing Service, Battle
Creek, Michigan.
* Defense Reutilization and Marketing Office, Fort Meade, Maryland.
* Army Logistics Management College, Fort Lee, Virginia.
* Headquarters, Army Military Affiliate Radio System, Fort Huachuca,
Arizona.
* Headquarters, Navy Military Affiliate Radio System, Washington, D.C.
* Headquarters, Air Force Military Affiliate Radio System, Scott Air
Force Base, Illinois.
* Headquarters, Navy Military Affiliate Radio System, Region 2,
Charleston, South Carolina.
* Headquarters, Civil Air Patrol, Maxwell Air Force Base, Alabama.
* Headquarters, Civil Air Patrol-U.S. Air Force, Maxwell Air Force
Base, Alabama.
* 12th Congressional Regional Equipment Center, Blairsville,
Pennsylvania.
* Headquarters, Air Force Equipment Policy Team, Directorate of
Supply, Washington, D.C.
* Joint Staff, Communications and Computer Networks Division,
Directorate for Command, Control, Communications, and Computers,
Washington, D.C.
To determine whether the three special programs had received
ineligible excess property—and if so, how much—we compared the federal
supply classes of the acquired property to each program's list of
approved federal supply classes. The Defense Reutilization and
Marketing Service provided a record of the excess property issued to
each program over the 5-1/2 years in electronic spreadsheet files.
According to Defense Reutilization and Marketing Service officials,
the data they provided us was the most accurate information available
on the disposition of excess property. We did not independently verify
the data we received on excess property at these special programs.
Records contained descriptive and identifying information about each
order, including date of the transaction, price data, national stock
number, demilitarization and environmental codes, and quantity issued.
For the Military Affiliate Radio System and the Civil Air Patrol
programs, items with federal supply classes not on the approved lists
were treated as ineligible. For the 12th Congressional Regional
Equipment Center, a list of eligible heavy equipment was included as
an attachment to its agreement with the Defense Logistics Agency. The
eligibility of various ancillary items was determined by unanimous
agreement between our staff and Defense Logistics Agency officials who
oversee the Center's operations on behalf of the Department. Where the
eligibility of a certain item was ambiguous, we considered it to be
eligible. For example, the Military Affiliate Radio Systems limit some
items to their state and regional directors; however, we did not take
this distinction into account in our analysis. In those cases where an
apparent typographical error resulted in a mismatch between a Defense
Reutilization and Marketing Service record and a property database
record, we treated the two as a match.
To determine whether the special programs could account for the
property they had received, we met with officials from the Army, Navy,
and Air Force Military Affiliate Radio Systems and the Civil Air
Patrol to discuss their policies, procedures, and practices for
tracking the excess property and obtained electronic or paper copies
of the programs' property databases. We matched the Defense
Reutilization and Marketing Service records of property issued to
these programs with entries in the programs' databases. Although we
did not evaluate how well the 12th Congressional Regional Equipment
Center had tracked the excess property it was issued, we spoke with
Center officials about measures taken to account for restricted and
hazardous property.
In accordance with Army regulation, the Army Affiliate Radio System
retains excess property records for 2 years after an item has been
disposed of, transferred to another member, or returned to a Defense
reutilization facility. Because we could not determine with certainty
an item's status that was obtained before the 2-year limit, we limited
our review of items to 2 years instead of 5-1/2 years. This reduced
the number of supplies that we tried to match from 5,986 to 127.
Because the Navy Affiliate Radio System does not account for its
property centrally, we selected a sample of items from the Defense
Reutilization and Marketing Service records and relied on Navy
Affiliate Radio System personnel in each of its seven regions.
The Patrol follows Air Force supply policy and only tracks
nonexpendable items (i.e., items that can be used more than once).
This reduced the excess property the Patrol is required to track from
1.2 million expendable and nonexpendable supplies to 34,000
nonexpendable supplies-—a 97-percent reduction. An additional 5,000
supplies were eliminated based on discussions with Civil Air Patrol
and Air Force supply officials, reducing the number of supplies that
should be tracked to 29,000.
To determine whether similar conditions existed in other special
programs, we examined recent work by our Office of Special
Investigations.
We conducted our review from November 2000 through September 2001 in
accordance with generally accepted government auditing standards. We
performed our other investigative work during the same period in
accordance with investigative standards established by the President's
Council on Integrity and Efficiency.
[End of section]
Appendix II: Descriptions of the Three Special Programs:
Military Affiliate Radio System:
The Military Affiliate Radio System is a Department of Defense-funded
organization of volunteer amateur radio operators with an interest in
military communications. Its beginnings can be traced to 1925 with the
formation of the Army Amateur Radio Systems. The Air Force program and
the Navy program-—which includes the Marine Corps and the Coast Guard—-
were established in 1948 and 1962, respectively. On November 30, 1968,
the Department issued a directive formalizing the composition, the
mission, the functions, and the organization of the Military Affiliate
Radio System.
Membership requirements for each of the programs are similar: be at
least 17 years old, be a U. S. citizen or resident alien, possess a
valid Federal Communications Commission license for the frequencies to
be used, and agree to participate in Affiliate Radio System activities
a minimum of 12 hours every 3 months.
The Affiliate Radio System's mission includes:
* providing emergency communications on a local, national, or
international basis;
* providing auxiliary communications during periods of emergency and
under all hazard conditions;
* creating interest and training Affiliate Radio System members in
military communications procedures;
* providing a potential reserve of trained radio communications
personnel;
* handling personal communications for Armed Forces personnel
stationed throughout the world; and;
* conducting an amateur radio program as part of the annual
celebration of Armed Forces Day.
Within the past 20 years, its primary mission has shifted from one of
handling personal communications to providing emergency and auxiliary
communications.
The Office of the Assistant Secretary of Defense for Command, Control,
Communications, and Intelligence provides overall policy guidance, but
the responsibility for managing and operating the individual Affiliate
Radio System programs-—including acquiring, storing, distributing, and
maintaining accountability over equipment-—falls to the secretaries of
the military departments. To satisfy this requirement, each of the
Affiliate Radio System programs has established a headquarters office
and appointed a program chief. The headquarters location and current
size of the three programs are shown in table 8.
Table 8: Military Affiliate Radio System Locations and Membership:
Program: Army;
Office location: U.S. Army Signal Command, Fort Huachuca, Arizona;
Approximate number of volunteer members in 2000[A]: 2,700.
Program: Navy;
Office location: Naval Computer and Telecommunications Command,
Washington, D.C.
Approximate number of volunteer members in 2000[A]: 1,900.
Program: Air Force;
Office location: Air Force Communications Agency, Scott Air Force
Base, Illinois;
Approximate number of volunteer members in 2000[A]: 1,850.
[A] This represents volunteer, licensed, amateur radio operators. The
Army, Navy, and Air Force Affiliate Radio Systems also have a small
number of contingency radio stations staffed by active-duty military,
reserve, and National Guard personnel.
Source: Program data.
[End of table]
The Army and Air Force Affiliate Radio System programs are centrally
managed from their headquarters; the Navy program is headquartered in
Washington, D.C., but day-to-day management is performed at its seven
geographic regional headquarters.
In fiscal year 2000, there were 4,600 reutilization organizations. The
Army, Navy, and Air Force Affiliate Radio Systems ranked 229th, 266th,
and 54th, respectively, as measured by the value of excess property
obtained.
Civil Air Patrol:
Congress established the Civil Air Patrol as a federally chartered,
private, nonprofit corporation in 1946, and the Patrol is recognized
by 10 U.S.C. 9441 as a volunteer civilian auxiliary of the Air Force.
As such, the Air Force is authorized to provide financial and material
assistance and advice. To accomplish these responsibilities, the Air
Force relies on the Civil Air Patrol-Air Force, a unit of the Air
Force's Air Education and Training Command that is collocated with the
Patrol's national headquarters at Maxwell Air Force Base, Alabama.
The Civil Air Patrol has three primary missions:
Emergency services. The Patrol participates in search and rescue,
disaster relief, and humanitarian assistance. The Patrol flies more
than 85 percent of all inland search and rescue missions directed by
the Air Force. It provides air and ground transportation and
communications resources in support of local, state, and federal
agencies during disaster relief and humanitarian assistance efforts.
The Patrol also provides aerial reconnaissance and airborne
communications support for counter drug operations.
Aerospace education. The Patrol provides its members and the general
public an appreciation for and knowledge of aviation and space issues.
External programs are primarily conducted through the nation's school
systems. Each year, the Patrol sponsors workshops to provide teachers
materials on basic aerospace knowledge and advances in aerospace
technology to use in their classrooms.
Cadet training. The purpose of the Cadet Program is to provide youth
between the ages of 12 and 18 an opportunity to develop their
leadership skills through their interest in aviation. Cadets progress
through a 15-step program, including aerospace education, leadership
training, and physical fitness.
The Patrol is organized into 8 geographic regions consisting of 52
wings--1 wing for each state, Puerto Rico, and the District of
Columbia. Wings are then subdivided into groups, squadrons, and
sometimes flights, depending on their size. Collectively, there are
about 61,000 Patrol members and 1,700 individual Patrol units.
In fiscal year 2000, there were 4,600 reutilization organizations. The
Civil Air Patrol ranked 106th, as measured by the value of excess
property obtained.
12th Congressional Regional Equipment Center:
The 12th Congressional Regional Equipment Center was established in
1992 as an infrastructure demonstration project in Cambria County, in
western Pennsylvania. Participation in the project by the Department
of Defense is mandated.[Footnote 26] The project's purpose is to
assist municipalities and nonprofit organizations in Pennsylvania
complete specific public projects that would otherwise be too costly
to undertake. The Center acquires Department excess heavy equipment,
such as dump trucks, backhoes, front-end loaders, snowplows,
forklifts, and rollers, and restores them to acceptable working
condition. It then leases the equipment for land reclamation, site
preparation, road repair, soil conservation, garbage and snow removal,
and other community improvements.
The Center leases equipment on a daily, weekly, monthly, or yearly
basis and continues to maintain the equipment during the leasing period.
Recently, the Center began to provide operators with the equipment for
an additional fee and added a lease-with-an-option-to-buy provision.
To be eligible to lease equipment, an organization must be
governmental or nonprofit and pay a $300 annual membership fee. Since
its inception, the Center's membership has increased each year, and in
calendar year 2000 it totaled 283 members.
The Center's headquarters is in Blairsville, Pennsylvania. A 12-member
Board of Directors oversees the Center; a paid managing director and
staff handle day-to-day business activities. The Center's principal
sources of revenue were equipment lease fees and auction proceeds.
In fiscal year 2000, there were 4,600 reutilization organizations. The
Center ranked 15th, as measured by the value of excess property
obtained.
[End of section]
Appendix III: Location of Defense Reutilization and Marketing Offices:
Department of Defense excess property is managed by Defense
reutilization and marketing offices located on or near major U.S.
military facilities around the world. At the time we concluded our
review, there were 97 Defense reutilization facilities (see figures 6,
7, and 8).
Figure 6: Defense Reutilization and Marketing Offices in the Western
Hemisphere and the Pacific Zone:
[Refer to PDF for image: map of Western Hemisphere and the Pacific
Zone]
Defense Reutilization and Marketing Service reutilization sites are
indicated geographically on the map.
Source: Defense Reutilization and Marketing Service.
[End of figure]
Appendix III: Location of Defense Reutilization and Marketing Offices
Figure 7: Defense Reutilization and Marketing Offices in the Southeast
and Asia Zones and the Pacific Zone:
[Refer to PDF for image: map of the Southeast and Asia Zones and the
Pacific Zone]
Guam: 1;
Japan: 4;
Korea: 2;
Thailand: 1.
Note: The numbers indicate the number of Defense reutilization and
marketing offices located in that country.
Source: Defense Reutilization and Marketing Service.
[End of figure]
Figure 8: Defense Reutilization and Marketing Offices in the Atlantic,
Central European, and Mediterranean Zones:
[Refer to PDF for image: map of the Atlantic, Central European, and
Mediterranean Zones]
Belgium: 1;
Germany: 8;
Iceland: 1;
Italy: 3;
Portugal: 1;
Spain: 1;
Turkey: 1;
United Kingdom: 1.
Notes:
1. The numbers indicate the number of Defense reutilization and
marketing offices located in that country.
2. The locations of two additional sites, United Arab Emirates and
Site Alpha, are not included. Site Alpha is a mobile, nonpermanent
reutilization facility that is established when and where needed.
Source: Defense Reutilization and Marketing Service.
[End of section]
Appendix IV: Processes Used by the Department of Defense and Two
Special Programs to Track Excess Property:
Military Affiliate Radio System:
The three Military Affiliate Radio System programs follow similar
procedures to maintain accountability over the excess property issued
to their members. Members are held accountable for the property and
are expected to safeguard it from misuse, theft, loss, and damage.
Further, members cannot modify or remove any part of the equipment
without advance approval or dispose of it for personal financial gain.
When property is no longer required, it is to be turned in to the
nearest Defense reutilization facility, if economically feasible, as
determined by Affiliate Radio System officials.
Each Affiliate Radio System program tracks the excess property from
the Defense reutilization facilities to its final disposition. The
Army and Air Force Affiliate Radio Systems have automated databases to
track excess property. Information in these databases links each item
to a member and includes the item's name, the national stock number,
the acquisition date, and a unique transaction number. To ensure that
the information in the databases corresponds with the physical
property the members have, the two programs conduct an annual
inventory by tasking each property holder to verify the accuracy of
the descriptive information in the databases. The Navy Affiliate Radio
System tracks excess property at its seven regional headquarters with
varying degrees of automation and does not require an annual inventory.
Civil Air Patrol:
Like the Military Affiliate Radio System, the Civil Air Patrol has
created an automated database to track its excess property. The
database includes an item's name, federal supply class, transaction
number, and location, but not its national stock number. Without a
national stock number, it is difficult to get information about an
item, including whether the item is restricted or hazardous. Patrol
officials recognize this deficiency, and they are considering
including an item's national stock number in the property database
that is under development. The Patrol uses the database to prepare an
annual inventory report that is provided to the Air Force. If property
held by the Patrol is no longer needed, it is redistributed within the
Patrol or returned to a reutilization facility. The Air Force grants
waivers on a case-by-case basis to dispose of this property by other
means (e.g., landfill and donation) if it is economical to do so. When
excess property cannot be accounted for, an investigation is conducted
under the stewardship of the wing commander.
Tracking of Restricted and Hazardous Property:
When a Defense activity no longer requires a restricted item, it turns
the item over to a Defense reutilization facility. The activity is
required to indicate the item's demilitarization code in the
accompanying documentation. This code identifies the degree of
demilitarization necessary before the item can be released from the
Department's control. Reutilization facilities are not supposed to
accept any property unless the documentation contains a
demilitarization code. When a reutilization facility issues an item,
however, its demilitarization code is not included in the accompanying
documentation.
An item is not demilitarized if it is transferred to a civilian
federal agency, donated to a qualified organization, or reused within
the Department. Before a transfer is made, a representative of the
civilian agency or donee organization must sign an agreement that
outlines the agency's responsibilities for safeguarding the restricted
item. An agreement is not required when a restricted item is reused by
another Defense agency because the attendant requirements are assumed
to be known by the recipient and are enforceable. Because the 12
special programs are considered to be a part of the Department of
Defense, they are eligible to receive restricted items-—unless program-
specific restrictions are imposed-—and are not required to execute an
agreement. According to the Department's Demilitarization Program
Office, like the Department, these programs are responsible for
preventing unauthorized access and use of these military-unique and
dual-use items.
When an item with hazardous properties is issued, the Defense
reutilization facility provides the receiving organization with
information on the item's physical and chemical characteristics, the
precautions for its safe handling and use, and the environmental and
health hazards it poses. We did not assess the ability of the three
special programs to store, handle, and dispose of hazardous property
in accordance with applicable environmental, health, and safety laws
and regulations.
[End of section]
Appendix V: Comments From the Department of Defense:
Office Of The Under Secretary Of Defense:
Acquisition, Technology And Logistics:
3000 Defense Pentagon:
Washington, DC 20301-3000:
January 23, 2002:
Mr. David R. Warren, Director:
Defense Capabilities and Management:
U.S. General Accounting Office:
Washington, DC 20548:
Dear Mr. Warren:
This is the Department of Defense (DoD) response to the GAO draft
report GAO-02-75, Defense Inventory: Control Weaknesses Leave
Restricted and Hazardous Excess Property Vulnerable to Improper Use,
Loss, and Theft, dated October 5, 2001 (GAO Code 350011). It is our
understanding that you are considering, for inclusion in the final
report, technical comments provided directly by the Defense Logistics
Agency and the Army. The DoD generally concurs with the draft report.
Detailed comments on the draft report recommendations are included in
the enclosure. The DoD appreciates the opportunity to comment on the
draft report.
Sincerely,
Signed by:
Allen W. Beckett:
Principal Assistant Deputy Under Secretary of Defense:
(Logistics & Materiel Readiness)
Enclosure:
[End of letter]
GAO Code 350011/GAO-02-75:
"Defense Inventory: Control Weaknesses Leave Restricted And Hazardous
Excess Property Vulnerable To Improper Use, Loss, And Theft"
Department Of Defense Comments To The Recommendations:
Recommendation 1: The GAO recommended that the Secretary of Defense
direct the Director of the Defense Logistics Agency (as part of the
Department's redesign of its activity code database), to establish a
process for rejecting requests for excess property--by federal supply
class--that each special program is not eligible to obtain and provide
accountable program officers access to appropriate information to
identify any inconsistencies between what was approved and what was
received.
DOD Response: Partially concur. The program officers of the special
programs are responsible for ensuring inconsistencies are minimal and
are corrected expeditiously. However, a process for rejecting
requests, if determined to be feasible, would assist the program
manager in ensuring only valid requests are filled. The Defense
Logistics Agency will review the possibility of including a capability
to electronically reject requisitions for ineligible property, by
federal supply class. If the recommendation to change existing systems
is determined not to be feasible, alternative approaches to achieving
the intent of this recommendation will be explored.
Currently, the Defense Reutilization and Marketing Service (DRMS) has
placed an inventory query on its website that is available to all
reutilization customers to assist them in monitoring their
reutilization transactions. This query searches by requisition DoD
Acquisition Advice Code and includes federal stock classes,
demilitarization codes and hazardous property indicators. This query
can be modified if the special program has a valid need. This query
provides a means for special program officers to have immediate
visibility if there is a problem.
Recommendation 2: The GAO recommended that the Secretary of Defense
direct the Director of the Defense Logistics Agency to reiterate
policy stressing that Defense reutilization facility staff must notify
special program officials of the specific tracking and handling
requirements of hazardous items and items with military
technology/applications.
DOD Response: Concur. The Defense Logistics Agency will reiterate
policy as requested by the GAO.
Regarding hazardous materials, Defense Reutilization and Marketing
Offices (DRMOs) already provide material safety data sheets (MSDS) and
hazardous chemical warning labeling as required by the Occupational
Safety and Health Act (OSHA), as well as hazardous classification
labeling as required by the Department of Transportation. The OSHA
label provides the name of the manufacturer and an emergency telephone
number, as well as the types of hazards (i.e. health, contact, fire,
reactivity) and any specific hazards or precautions involved in use of
the item. It refers the user to the MSDS and recommends such things as
protection for eyes, skin, and respiration. Providing any further
handling, which GAO defined in discussions as "the use of the
hazardous materiel" is beyond the scope of DLA's mission.
Regarding items with military technology/applications, the DLA will
request that the Defense Materiel Disposition Manual (DoD 4160.21-M)
be modified. This modification request will recommend inclusion of a
Recipient Notification for Demil Code B and Q property and a Demil-
Required Recipient Notification and Certification Agreement for Demil
Code C, D, E, F, G and P property issued to non DoD-monitored special
screeners such as the 12th Congressional Regional Equipment Center.
Recommendation 3: The GAO recommended that the Secretary of Defense
ensure that accountable program officers within the Department verify,
prior to approving the issuance of excess property, the eligibility of
special programs to obtain specific types and amounts of property,
including items that are hazardous or have military
technology/applications. According to the GAO this could be
accomplished, in part, through the Department's ongoing redesign of
its activity code database.
DOD Response: Partially concur. As stated in the DoD Response to
Recommendation 1, the program officers of the special programs are
responsible for ensuring inconsistencies are minimal and are corrected
expeditiously. However, a process for rejecting requests, if
determined to be feasible, would assist the program manager in
ensuring only valid requests are filled. The Defense Logistics Agency
will review the possibility of including a capability to
electronically reject requisitions for ineligible property, by FSC. If
the recommendation to change existing systems is determined not to be
feasible, alternative approaches to achieving the intent of this
recommendation will be explored.
DRMS has placed an inventory query on its website that is available to
all reutilization customers to assist them in monitoring their
reutilization transactions. This query includes columns for
demilitarization codes and hazardous property indicators. An email
containing instructions for pulling the transaction listings has been
sent to GAO audit team members, exit briefing attendees, and the 12th
Congressional Regional Equipment Center. DLA anticipates that special
program officials will use this tool to maintain accountability and
oversight of their programs.
Recommendation 4: The GAO recommended that with regard to the 12th
Congressional Regional Equipment Center, the Secretary of Defense
direct the Director of the Defense Logistics Agency to review and
amend, as necessary, its agreement with the Center in the following
areas:
* the Center's financial responsibility for the cost of shipping
excess property obtained under the experimental project,
* the ancillary items the Center is eligible to receive,
* the rules concerning the sale of property and procedures for the
Center to notify the Agency of proposed sales of excess property,
* the Center's responsibility for tracking items having military
technology)/application and hazardous items, and,
* the need for Agency approval of the Center's orders for excess
property.
DOD Response: Concur. The Defense Logistics Agency and the 12th
Congressional Regional Equipment Center are currently in process of
developing a new agreement. Completion of the agreement is pending
publication of this final report. The issues highlighted in this
recommendation will be addressed in the new agreement. \
Recommendation 5: The GAO recommended that with regard to the Army,
the Navy, and the Air Force Military Affiliate Radio Systems, the
Secretary of Defense direct the Chairman of the Joint Chiefs of Staff
to have the Joint Staff Directorate for Command, Control,
Communications, and Computer Systems review which items these systems
are eligible to receive, on the basis of their mission and needs, and
direct each of the Military Affiliate Radio Systems to accurately
track excess property, including pilferable items, items with military
technology/applications, and hazardous items.
DOD Response: Concur. The Communications & Computer Networks Division
(J6T), Joint Staff Directorate for Command, Control, Communications,
and Computer Systems, in coordination with ASD(C31) and Service
Military Affiliate Radio Systems Chiefs will review the method of
acquiring, tracking, and eventual disposal of excess property by the
Military Affiliate Radio System (MARS).
Additionally, the Defense Logistics Agency will review the possibility
of including a capability to electronically reject requisitions for
ineligible property, by FSC. If the recommendation to change existing
systems is determined not to be feasible, alternative approaches to
achieving the intent of this recommendation will be explored.
Recommendation 6: The GAO recommended that with regard to the Civil
Air Patrol, the Secretary of Defense direct the Secretary of the Air
Force to have the Civil Air Patrol-Air Force review which items the
Patrol is eligible to receive, on the basis of its mission and needs,
and direct the Patrol to accurately track its excess property,
including pilferable items, items with military
technology/applications, and hazardous items.
DOD Response: Concur. The Air Force had already taken action on the
intent of the recommendation prior to this report. On July 12, 2000,
the Secretary of the Air Force signed a Cooperative Agreement with the
Civil Air Patrol (CAP). It contained a Statement of Work that
specified in detail, under the DOD Grant and Agreement Regulations,
OMB Circular A-110, the precise tasks and the level of detail with
which the CAP must manage. Additionally, the Air Force will work with
CAP to modify the Statement of Work to include direct references to or
specific language from appropriate Air Force Instructions dealing with
excess property, including pilferable items, items with military
technology/applications, and hazardous items.
[End of section]
Appendix VI: Comments From the 12th Congressional Region Equipment
Center:
12th Congressional Region Equipment Center:
339 Walnut St.
Centertown Mall:
Johnstown, PA 15901:
(814) 536-0367:
FAX (724) 459-8501:
600 Indiana Ave.
Blairsville, PA 15717:
(724) 459-8575:
FAX (724) 459-8501
E-mail: gws@twd.net:
Website: [hyperlink, http://www.12threc.com]
November 21, 2001:
Mr. David R. Warren:
Director, Defense of Capabilities and Management Team:
United States General Accounting Office:
Washington, D.C. 20548:
Subject: GAO Draft Report #GAO-02-75:
Dear Mr. Warren:
Thank you for providing the 12th Congressional Region Equipment Center
(REC) the opportunity to respond to your subject report entitled,
Defense Inventory: Control Weaknesses Leave Restricted and Hazardous
Excess Property Vulnerable to Improper Use, Loss, and Theft (GAO-02-
75). The REC believes the General Accounting Office strongly
recognized the REC is a necessary and important program. Further, as
has been suggested, the success of the 12th Congressional Region
Equipment Center can be improved with a revised contract with DLA.
The GAO has addressed certain items, which have been characterized as
ineligible and hazardous property and can be readily resolved with
revised contract language in accordance with the terms of a new
agreement with DLA. Specifically with regard to the letter dated
November 21, 1996, from Colonel Robert W. Ralston, "favoring a more
generic listing rather than specific quantities tied to prescribed
commodities," this amplification by Colonel Ralston created, for the
benefit of the REC, inventory that was more directly related to the
needs of the school districts, fire companies, municipalities, and
other non-profit corporations which the REC serves pursuant to its
enabling Articles of Incorporation as amended.
Imposing a restriction on the quantity of items, which are available
to the REC, would impede the ability of the REC to accomplish its
mission as described in its enabling legislation. As acknowledged by
the General Accounting Office, the members of the REC include
municipal government agencies, federal and state agencies, fire
departments, school districts, and other 501© non-profit entities, a
majority of which are located in the Appalachia region of
Pennsylvania. To a certain extent, the existence and perpetuation of
the REC is fundamental to the above-referenced entities being able to
fulfill its responsibility to the public.
The REC does not have any objection to notifying the DLA prior to any
sale. However, if a certain period of time passes without an action
being taken by the DLA, the proposed sale should be understood to be
approved. Relative to the shipping costs; the REC unequivocally agrees
that these costs should not be imposed upon the REC, where the
Recycling Control Point program provides shipping costs to other
identified Department of Defense projects.
The acceptance of items later determined to be ineligible per the
agreement with DLA, we believe to be the result of miscommunication
between the REC and the Defense Reutilization Marketing Offices
(DRMO). Initially, the DRMO's were rejecting some equipment requested
from the REC because these items were not on the list of equipment
subsequent to the receipt of correspondence from DLA which increased
the amount of equipment and types of equipment the REC was allowed to
have. The DRMO's allowed the REC to receive all requested equipment.
The REC anticipates its new contract with DLA will include a broader
base of items to be transferred to better accommodate various 501© non-
profit entities which the REC serves. The REC strongly believes that
items such as paper products, fire fighting supplies, etc... are
fundamental to the REC providing an added value service to 501©
entities. The ability to sell these items provides the REC with the
opportunity to demonstrate to various members what is available at the
REC and gives it the opportunity to lease equipment to those entities.
The memorandum received from Colonel Charles W. Masters, dated
December 23, 1994, specifically enables the REC to sell its members
oil, grease and other supplies.
There are certain items that had been considered to be hazardous
items, which the REC had authorization to maintain as part of its
inventory including, but not limited to oil, antifreeze, etc. This is
evidenced by the memo from Colonel Charles W. Masters, dated
December 23, 1994.
GAO has acknowledged the REC's contract with DLA was amended to
included all 501© non-profit organizations versus the original
agreement that included only 501©3 non-profit organizations. As a
result of this substantial change, the need for the REC to possess
various items available for lease to these entities changed in order
to accommodate its members. For example: passenger vans were needed
for church youth groups and boy scout troops; fire-fighting equipment
was fundamental to the operation of the fire departments.
Again, we appreciate the opportunity to provide our input to the draft
report. If there are any additional questions concerning the
information provided, please do not hesitate to contact our office at
(724) 459-8575.
Sincerely,
Signed by:
Gary W. Stuchal:
Managing Director:
[End of section]
Appendix VII: GAO Staff Acknowledgments:
Acknowledgments:
In addition to those named above, Lawson Gist, Jr.; John J. Ryan; Marc
J. Schwartz; David S. Epstein; Richard C. Newbold; Norman M. Burrell;
George J. Ogilvie; Cahn M. Wyche; John G. Brosnan; Alan S. Goldberg;
Kord H. Basnight, Peter Iannicelli, Stefano Petrucci, and Frank A.
Papineau, Jr. made key contributions to this report.
[End of section]
Related GAO Products:
Inventory Management: Better Controls Needed to Prevent Misuse of
Excess DOD Property [hyperlink,
http://www.gao.gov/products/GAO/OSI/NSIAD-00-147], Apr. 28, 2000.
Concerns Raised About Use of Unreconciled Activity Codes to
Requisition New and Excess Government Property [hyperlink,
http://www.gao.gov/products/GAO-01-86R], Dec. 6, 2000.
Department of the Army: Unauthorized Activity Codes Used to
Requisition New DOD Property [hyperlink,
http://www.gao.gov/products/GAO-01-85R], Dec. 6, 2000.
Department of the Air Force: Unauthorized Activity Codes Used to
Requisition New and Excess DOD Property [hyperlink,
http://www.gao.gov/products/GAO-01-196R], Jan. 8, 2001.
Department of the Navy: Unauthorized Activity Codes Used to
Requisition New and Excess DOD Property [hyperlink,
http://www.gao.gov/products/GAO-01-206R], Jan. 8, 2001.
General Services Administration: Unauthorized Activity Codes Used to
Requisition New and Excess Government Property [hyperlink,
http://www.gao.gov/products/GAO-01-221R], Jan. 8, 2001.
High-Risk Series: An Update [hyperlink,
http://www.gao.gov/products/GAO-01-263], Jan. 2001.
[End of section]
Footnotes:
[1] The Department defines this as property that a military service or
Defense agency no longer needs. The Department lists the value of its
excess property as the cost of items when last purchased. This
probably overstates the true value of items because they are not all
new. The figures cited in this report are the Department's.
[2] Inventory Management: Better Controls Needed to Prevent Misuse of
Excess DOD Property [hyperlink,
http://www.gao.gov/products/GAO/OSI/NSIAD-00-147], Apr. 28, 2000 and
High-Risk Series: An Update [hyperlink,
http://www.gao.gov/products/GAO-01-263], Jan. 2001.
[3] The Military Affiliate Radio System consists of Army, Navy, and
Air Force components.
[4] This program is sometimes referred to as the Cambria Regional
Equipment Center.
[5] Here and throughout this report, "items" refers to the number of
containers of items issued. For example, if canteens are issued by the
box, 1 box of 50 canteens constitutes 1 item. If cable is issued in
1,000-foot lengths, 12,000 feet of cable constitute 12 items.
[6] Certain items, such as classified material and ammunition, are
disposed of by other means.
[7] The Department defines this as any substance that may be hazardous
to human health and the environment and whose use or disposal is
regulated by federal and state safety and environmental laws.
[8] Demilitarization is the act of destroying the military offensive
or defensive advantages inherent in certain types of equipment or
material.
[9] One program official questioned whether some items classified as
restricted were indeed restricted. We did not verify the accuracy of
the restricted or the hazardous codes reported by the Department
because the Department expects the recipients of these items to handle
them as if they were.
[10] Defense Reutilization and Marketing Service Instruction 4160.14,
vol. III, ch. 8 (Jan. 4, 2000).
[11] Inventory Management [hyperlink,
http://www.gao.gov/products/GAO/OSI/NSIAD-00-147], Apr. 28, 2000.
[12] An activity address code is a unique six-position alphanumeric
code that identifies a specific activity or account authorized to
receive Department of Defense material.
[13] Inventory Management [hyperlink,
http://www.gao.gov/products/GAO/OSI/NSIAD-00-147], Apr. 28, 2000.
[14] Concerns Raised About Use of Unreconciled Activity Codes to
Requisition New and Excess Government Property [hyperlink,
http://www.gao.gov/products/GAO-01-86R], Dec. 6, 2000.
[15] A list of related GAO products appears at the end of this report.
[16] Defense Reutilization and Marketing Service Instruction 4160.14,
vol. III, ch. 4 (Jan. 4, 2000).
[17] Prior to July 1, 1997, the number of authorized federal supply
classes was 54. The Department assigns a federal supply class to items
it requires on a regular basis. Each of the 639 supply classes covers
a relatively homogeneous group of items with respect to their physical
or performance characteristics.
[18] Civil Air Patrol-Air Force Regulation 67-2 (June 15, 1990) and
Civil Air Patrol Regulation 67-1(E) (Aug. 15, 2000).
[19] Under the agreement between the Defense Logistics Agency and the
Center, the Agency can request the return of any property covered by
the agreement, at which time title would revert to the Agency.
[20] According to Army regulation, the Army Affiliate Radio System is
required to retain excess property records for 2 years after an item
has been disposed of, transferred to another member, or returned to a
Defense reutilization facility. This reduced the number of items that
should have been tracked from 5,986 to 127.
[21] Some of this property is vulnerable to misuse. In one recent
case, the wing vice commander of a Civil Air Patrol wing fraudulently
obtained excess property with an acquisition value of over $450,000
and subsequently sold the property for personal gain. The case was
presented for prosecution in 1999, and the vice commander pled guilty
to converting to his own use and selling government property.
[22] Administration and Management of the Civil Air Patrol, Report No.
D-2000-075 (Feb. 15, 2000).
[23] The Department assigns a national stock number to identify an
item and distinguish it from other items that the Department uses on a
recurring basis. The first four digits of an item's national stock
number identify the item's federal supply class.
[24] A Center official pointed out that the Center's 1999 and 2000
sales figures have not been audited.
[25] The Navy Military Affiliate Radio System obtained 34 hazardous
items that it was eligible to receive. See table 3.
[26] P.L. 102-396, sec. 9148.
[End of section]
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Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
E-mail: fraudnet@gao.gov:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Public Affairs:
Jeff Nelligan, managing director, NelliganJ@gao.gov:
(202) 512-4800:
U.S. General Accounting Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548: