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B-180220 1 (1974-01-23)

handle is hein.gao/gaobaagrx0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 LJOGISTICS AND COMMUNICATIONS DIVISION ? /-x B-180220 JAN 2 3 1974 The Honorable James R. Schlesinger I/11II11/111/i11III/III11////11///111/I///11 The Secretary of Defense LM096778 Dear Mr. Secretary: Our survey of DOD's car-o security ------- showed that the services have established what appear to be reasonable procedures to control pilferage. These procedures provide for extra safeguards over sensitive and highly pilferable items and for systematic inspection of vehicles leaving storage areas. However, because of weaknesses in accounting controls at all levels of the supply pipeline, we could not determine the extent of cargo loss. Therefore we cannot now evaluate the overall effectiveness of DOD's cargo security program. WEAKNESSES IN ACCOUNTING CONTROLS AT DEPOTS The large number of inventory adjustments at depots prevented us from determining the extent of cargo losses. During fiscal year 1972, the depots at New Cumberland and Mechanicsburg, Pennsylvania, each made over $5 million in inventory adjustments. These adjustments were the result of differences between stock-record balances and items actually on hand. The depots did not investigate most of the adjustments. For those that were investigated--valued at about $335,800-- the cause of loss in most instances could not be determined because receipt and issued documents were no longer available. In addition, we found that shortages reported to the depots by consignees were frequently not investigated. For example, one depot had investigated only 556, or about 25 percent, of the estimated 2,244 shortages the consignees 7z0 , ( o 967 7?