Audit of Military Department Materiel Returns to the Defense Logistics Agency Distribution Depots

摘要

DLA records showed that during FY 1997, field organizations returned at least 458,521 DLA-managed items that were valued at about $427 million to the 21 distribution depots. Our overall objective was to evaluate whether field organizations returned DLA-managed items to the distribution depots in accordance with DoD policy. We also evaluated applicable management controls. During FY 1997, 114,057 (about 25 percent) of the 458,521 DLA-managed items that Military Department field organizations returned to the 21 distribution depots were not authorized for return by DLA Inventory Control Points. As a result, DLA incurred unnecessary processing costs and lost approximately $2.2 million annually because it did not bill the Military Departments for unauthorized returns. Also, the quality and efficiency of distribution operations were adversely affected. The recommendations in this report, if implemented, will improve management controls, result in more efficient distribution operations, and improve the reporting of inventory and revenue in the financial statements of the DLA Working Capital Fund. We recommend that the Director, DLA, identify the Military Department organizations that are making unauthorized returns to the distribution depots and provide them with additional guidance on DoD policy for materiel returns. We also recommend that the Director, DLA, begin billing the Military Departments for unauthorized returns.