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GAO-01-85R 1 (2000-12-06)

handle is hein.gao/gaobaalrk0001 and id is 1 raw text is: I Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 December 6, 2000 The Honorable Duncan L. Hunter House of Representatives Subject: Department of the Army: Unauthorized Activity Codes Used to Requisition New DOD Property Dear Mr. Hunter: This letter is part of our continuing effort to address inventory management activities within the Department of Defense (DOD) as a high-risk area.' During our recent investigation of the vulnerability of DOD activity address codes,2 we determined that Army activity codes designated as unauthorized to requisition had been inappropriately used to requisition excess property. Subsequently, you asked that we determine whether this type of Army activity code had been used to requisition new government property through the military supply system. As discussed with your office, we will report separately on our investigations of whether the Air Force, Navy, Marine Corps, and federal agencies (such as the General Services Administration) used unauthorized activity codes to requisition excess and new go vernment pro perty. We interviewed Army service point personnel and activity code coordinators. We obtained a list of Army activity codes, identified as unauthorized to requisition, from the Defense Automatic Addressing System Center and asked the Center to determine whether any of the codes had been used to requisition new government property. We obtained a list of all requisitions associated with these codes from the Defense Automatic Addressing System Center. We performed our investigative work from March 2000 to August 2000 in accordance with investigative standards established by the President's Council on Integrity and Efficiency. Our audit work was conducted during the same period and in accordance with generally accepted government auditing standards. In brief, about 15 percent of Army activity codes identified as unauthorized to requisition, according to Army regulation, were inappropriately used to requisition over $2.6 billion in In 1990, we began a special effort to review and report on the federal program areas we identified as high risk because of vulnerabilities to fraud, waste, abuse, and mismanagement. This effort, supported by the Senate Committee on Governmental Affairs and the House Committee on Government Reform, resulted in a much-needed focus on problems that were costing the government billions of dollars. We identified DOD's inventory management as a high-risk area at that time because levels of unneeded inventory were too high and systems for determining inventory requirements were inadequate. 'Inventory Management: Better Controls Needed to Prevent Misuse of Excess DOD Property (GAO/OSI/NSIAD-00-147, Apr. 28, 2000). Army activities and contractors are assigned activity codes to requisition property in the military supply system. In some instances, activity codes are identified as unauthorized to requisition and are primarily used as a ship-to address-to transport an item from one location to another. These codes are not to be used to requisition property. GAO-01-85R Army Unauthorized Activity Codes

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