Status of the Defense Logistics Agency Plan to Measure Inventory Record Accuracy at the Distribution Depots Using Statistical Sampling

摘要

This report focused on DoD inventories because of their significance to the DoD consolidated financial statements and the Government-wide financial statements. This report is the first in a series of reports from our audit of the DoD inventory accounts. Inventory is the most significant DoD asset managed by the Defense Logistics Agency. The FY 1997 DoD Consolidated Statement of Financial Position reported DoD inventory at about $61.3 billion. Approximately 75 percent of the inventory is located at 20 distribution depots managed by the Defense Logistics Agency. Accurate inventory records are needed to prepare reliable financial statements and make effective supply management decisions. DoD managers are responsible for establishing policies and procedures to make sure the inventory records are accurate. According to DoD policy, statistical sampling techniques are to be used to measure the accuracy of the distribution depot inventory records to meet the goals of the logistics community (record accuracy) and the financial community (dollar value accuracy) Objectives. The overall audit objective was to evaluate management assertions pertaining to the valuation, completeness, and existence of DoD inventory accounts and to determine whether these accounts were presented fairly and in accordance with Office of Management and Budget Bulletin No. 97-01, 'Form and Content of Agency Financial Statements', October 16, 1996, as amended November 29, 1998. For this part of the audit, we evaluated the status of the DLA plan to use statistical sampling to measure the accuracy of inventory records at its 20 distribution depots. We also assessed relevant internal controls.