Spvgg. Erkenschwick - SC Westfalia 04 Herne eV

• In its fiscal year 1999 financial reporting, the Navy included for the firsttime, several key categories of inventory, such as sponsor-ownedmaterial 13 valued at $5.5 billion and inventory items at redistribution sitesvalued at $600 million. At the same time, deficient logistics systemscontinue to impair the Navy’s ability both to maintain visibility andprepare reliable financial reports for these assets effectively. For example,one command could only estimate a value for its sponsor-owned inventorybecause it did not have a system in place to capture and report thismaterial. The command’s estimate of $2 billion represented over a third ofthe Navy’s reported $5.5 billion of sponsor-owned material. Further, whilethe Navy’s inclusion of several key inventory categories has substantiallyimproved the completeness of its inventory reporting, not all categories ofNavy inventory are yet included. Specifically, Navy auditors reported inFebruary 2000 14 that the Navy’s fiscal year 1999 reporting omitted$9.2 billion of shipboard inventories because logistical systems could notfully support the required accounting methodology. Lacking effectivefinancial management systems that can provide the information needed toproduce financial reports, various Navy commands rely on data calls anderror-prone manual reentry of inventory data. For example, one Navycommand did not report any inventory. However, after a follow-up reviewby Navy auditors, the command reported inventory of $550 million. Duringfiscal year 1999, the Navy began an effort to identify and evaluate thelogistics systems used to account for and control its inventories. The Navyestablished a working group of senior Navy financial and programmanagers and audit community representatives to address this issue. Tostart, the working group is focused on evaluating existing systems toidentify opportunities to consolidate and substantially reduce the numberof systems. In the next phase, the group is to work on improving the assetvisibility and financial reporting capabilities of the remaining systems.• Air Force auditors could not verify the accuracy of $2.9 billion in inventoryin the hands of contractors. 15 The Air Force extracted that amount fromthe Contract Property Management System for financial reporting.However, the auditors could not determine whether the $2.9 billion ofinventory shown in the system was reliable because the system did notprovide a sufficient audit trail.13 The Navy defines sponsor-owned materials as items outside of the supply fund that support weaponsystems and equipment.14 Fiscal Year 1999 Department of the Navy Principal Statements for Fiscal Year 1999 (Naval AuditService Report No. N2000-0018, Feb. 10, 2000).15 Opinion on Fiscal Year 1999 Air Force Consolidated Financial Statements (Air Force Audit AgencyReport No. 9953002, Feb. 9, 2000).Page 8GAO/T-AIMD/NSIAD-00-163