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GAO-01-206R 1 (2001-01-08)

handle is hein.gao/gaocrptamxk0001 and id is 1 raw text is: I GAO Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 January 8, 2001 The Honorable Duncan L. Hunter House of Representatives Subject: Department of the Navy: Unauthorized Activity Codes Used to Requisition New and Excess DOD Property Dear Mr. Hunter: This letter is part of our continuing effort to address inventory management activities as a high-risk area' within the Department of Defense (DOD). We recently reported that the U.S. Air Force and the U.S. Army had used unauthorized activity codes2 to requisition nearly $3 billion in new and excess government property during the past 5 years. As a consequence, this property was vulnerable to fraud, waste, and abuse. You asked that we determine whether the other military services and other federal agencies maintained activity codes that were unauthorized to requisition and, if so, whether any were used to requisition new and excess government property. As discussed with your office, this letter focuses on the U.S. Navy's use of unauthorized activity codes3 from January 1995 to June 2000. We have reported separately on our investigation of whether the General Services Administration used unauthorized activity codes to requisition new and excess government property. Scope and Methodology We interviewed Navy service point personnel and obtained a list of Navy activity codes identified as unauthorized to requisition (i.e., for shipping purposes only). We provided these codes to the Defense Automatic Addressing System Center and the Defense Reutilization and Marketing Service to determine whether any had been used ' 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. 2 Department of the Air Force: Unauthorized Activity Codes Used to Requisition New and Excess DOD Property, (GAO-01-196R, Jan. 8, 2001); Department of the Army: Unauthorized Activity Codes Used to Requisition New DOD Property (GAO-01-85R, Dec. 6, 2000); and Inventory Management: Better Controls Needed to Prevent Misuse of Excess DOD Property (GAO/OSI/NSIAD-00-147, Apr. 28, 2000). 3 According to the Marine Corps service point, the Marine Corps does not create or maintain activity codes that are unauthorized to requisition. 4 General Services Administration: Unauthorized Activity Codes Used to Requisition New and Excess Government Property(GAO-01-221R, Jan. 8, 2001). GAO-01-206R Navy Unauthorized Activity Codes

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