Summary

Pursuant to a congressional request, GAO evaluated the Air Force's: (1) physical inventory procedures to determine their accuracy and completeness; (2) research into differences between inventory counts and records; and (3) physical security over inventory.

GAO found that, although the Air Force has implemented a variety of policies and practices that have improved the Air Force Logistics Command's (AFLC) inventory management and accuracy, it: (1) cited inventory management controls as a material weakness in its fiscal year 1986 Federal Managers' Financial Integrity Act (FMFIA) report; (2) adopted a new physical inventory statistical sampling approach which may have overstated inventory accuracy, since it assumed that zero-balance item records with no storage location were correct; (3) adopted, without specific Department of Defense (DOD) authority or sufficient support, a policy for researching and adjusting potential inventory variances; (4) continues to experience problems in conducting adequate causative research into the differences between physical inventory counts and its records; (5) did not routinely conduct trend analysis of causative research at air logistics centers; and (6) allowed privately owned and contractor vehicles to park adjacent to warehouse facilities.