Skip to main content

Defense Supply: Inventories Contain Nonessential and Excessive Insurance Stocks

NSIAD-95-1 Published: Jan 20, 1995. Publicly Released: Jan 20, 1995.
Jump To:
Skip to Highlights

Highlights

GAO reviewed the Navy's and the Defense Logistics Agency's (DLA) management of their spare parts and supplies inventories, focusing on whether their insurance stocks are limited to: (1) mission-essential parts; and (2) one replacement unit as required by Department of Defense (DOD) regulations.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense The Secretary of Defense should direct the Secretary of the Navy and the Director, DLA, to periodically review insurance items to ensure that they are mission-essential and stocked in allowable quantities.
Closed – Implemented
DOD stated that DOD Regulation 4140.1-R already requires all DOD components to review insurance requirements prior to stock replenishment. On February 10, 1995, DOD issued a memorandum to the military services and DLA reemphasizing this policy. GAO believes that this action will be helpful, but it does not go far enough. Because insurance items are not expected to fail, most will not be reviewed if DOD only reviews those in need of stock replenishment. DOD should review all insurance items periodically to identify nonessential and excessive stocks.
Department of Defense The Secretary of Defense should direct the Secretary of the Navy and the Director, DLA, to dispose of existing nonessential and excess insurance stock.
Closed – Implemented
DOD agreed that nonessential stocks should be disposed of where these stocks are determined not to be in compliance with policy. On February 10, 1995, DOD sent a memorandum to the military services and DLA emphasizing the proper classification and processing of nonessential and excess stocks.
Department of the Navy The Secretary of the Navy should direct the Commanding Officer, Aviation Supply Office, to set the retention level for insurance items at one unit and change the disposal computer program so that the on-hand stockage floor for these items also is one unit.
Closed – Implemented
DOD stated that the Navy would direct the Aviation Supply Office to reduce its stockage of insurance items where the stockage is not in compliance with DOD Regulation 4140.1-R. On April 27, 1995, the Naval Supply Systems Command sent a memorandum to the Aviation Supply Office emphasizing the need to comply with the inventory management policies contained in this regulation.

Full Report

Office of Public Affairs

Topics

Aircraft componentsEquipment inventoriesFederal supply systemsInternal controlsInventory control systemsMilitary cost controlMilitary inventoriesProcurement regulationsSpare partsSurplus federal property