Audit unable to account for $68m in Army parts

WASHINGTON -- The Army can't account for $68 million in parts and tools shipped to contractors for repairs in 2004 because it doesn't demand receipts, congressional auditors said yesterday.

In earlier audits, the Government Accountability Office found a similar lack of basic accounting oversight with Navy and Air Force parts and tool shipments.

Looking at data from two inventory control points, the GAO investigators said 15 percent -- or $68 million -- of the unclassified shipments they analyzed ''could not be confirmed as being received."

The GAO said an additional $481.7 million in unclassified items shipped for repair, about 42 percent, couldn't be reconciled with shipping records.

Discrepancies also were found in records for 37 percent, or about $8.1 million, in shipments of classified parts and tools.

''These data show that the Army, on the basis of records receipts maintained in its inventory management systems, cannot confirm that a substantial portion of its inventory items shipped to repair contracts were in fact received," the audit said.

The GAO said the head of the Army's Material Command should look at providing contractors with advance notice of shipments, require quarterly status reports, and better document contractors' receipt of shipments.

Jack Bell, the deputy undersecretary of defense for logistics and material readiness, agreed with the GAO recommendations in a Nov. 29 letter responding to a draft of the report.

The Army had no response late yesterday to the final report.