93

UNITED STATES

AIR FORCE

CHIEF

FINANCIAL

OFFICER

ANNUAL

FINANCIAL

STATEMENT

GENERAL FUNDS

FY 1998

REQUIRED

SUPPLEMENTAL

STEWARDSHIP

INFORMATION

FEBRUARY 28, 1999
94

1. AIRCRAFT

a. The Air Force,as of September 30,1998,had 10,251 aircraft in their inventory. This consists of the

8,970 reported above and 1,281 aircraft at the Aerospace Maintenance and Regeneration Center

(AMARC) in various stages of being dismantled.The aircraft added to the inventory were acquired

by means of contracts from the private sector. The methods of withdrawal consisted of sales (foreign military), reclamation projects at AMARC (dismantled),and crashes (23). All active and inactive

aircraft, except for reclamation aircraft at AMARC,are accounted for in the Equipment Inventory,

Multiple Status,and Utilization Reporting System (EIMSURS),which is part of the Reliability &

Maintainability Information Management System (REMIS).Inventory is maintained on a daily basis as

to assignment,possession,and condition.

b. Aircraft principal end items,consisting of uninstalled engines,are maintained in the

Comprehensive Engine Management System (CEMS).The engine managers reported a 1998 beginning balance of 7,644,acquisitions of 987,deletions of 244,and an ending balance 8,387 as of

September 30,1998.The uninstalled aircraft engines in the inventory are exchanged with installed

engines on the aircraft on an “as needed”basis.Consequently,the deletions reported do not include

exchanges,just complete losses.

REQUIRED SUPPLEMENTAL

STEWARDSHIP INFORMATION

National Defense Property, Plant and Equipment

For Fiscal Year Ending September 30, 1998

(Stated in Number of Systems or Items)

(a) Category/Major Types (b) As Of (c)Additions/ (d) As Of (e)Condition

10/01/97 (Deletions) 9/30/98 % Operational

1. Aircraft

A. Combat 5,357 8/(88) 5,277 69

B. Airlift 1,329 9/(21) 1,317 86

C. Other Aircraft 2,448 11/(83) 2,376 67

2. Missiles

A. Ballistic Missiles 3,264 0/(646) 2,618 92

B. Other Missiles N/A N/A 66,713 85

3. Space Systems

A. Satellites 53 9/(1) 61 100
95

2. MISSILES

a. The Air Force currently has 2,618 Intercontinental-range Ballistic Missiles in their active and inactive inventory, consisting of Minuteman, Peacekeeper, and air-launched cruise missiles. All complete

missiles are accounted for, as to quantities and readiness, by the Equipment Inventory, Multiple

Status and Utilization Reporting System (EIMSURS).In addition,the AF accounts for all missile

motors, by serial number, in the Missile Motor Tracking and Reporting System (MMTRS).This

includes all motors associated with complete missiles and extra missile motors.In 1998,629 of the

ICBM were removed from the inactive inventory, 27 are still maintained in EIMSURS, (per START

requirements) and 17 from the active inventory. The motors from these missiles are accounted for

in the MMTRS as part of the Rocket System Launch Program.In addition,the Air Force reported

66,713 tactical missiles having some form of guidance system that allows it to steer towards,rather

than be aimed at,the target.Included are surface-to-air, air-to-air, and air-to-surface missiles,consisting

of Sparrows,Sidewinders, AMRAAMs,Mavericks,Harpoons,and Harms.Not included in the above

data are quantities of other tactical missiles considered secret.The tactical missile inventories are

maintained in the Combat Ammunition System,and at least one other system.Of the 66,713 total

tactical missiles,15% are unserviceable for a variety of reasons.

b . The amendments to the Statement of Fe d e ral Financial Accounting Standards Number 6 and

Number 8 re q u i re the department of defense to separa t e ly re p o rt additions and deletions of National

D e fe n s e PP&E.Since the AF Financial Inventory Accounting and Billing system does not capture

and/or retain additions and deletions information,the AF cannot separately report such amounts.

Therefore,beginning inventories,acquisitions,and deletions made during 1998 for tactical missiles

could not be obtained due to time constraints and system changes needed to acquire the data.

c. All missiles,whether considered ICBM or tactical,are obtained from the private sector, by means

of contracts.Deletions of missiles from inventory were the result of complying with treaties (dismantled) or were used in testing.The dismantled missile motors were turned over to the Rocket

System Launch Program,where they will be used to place satellites into orbit.

d. Missile principal end items being reported this year consist of ICBM motors.The Air Force uses

some of these motors as part of the rocket system launch program,while others are retained for

replacement spares. As of September 30,1998,the Air Force had 1,611 missile motors (not associated with complete missiles) in their inventory, consisting of Minuteman (MM) I,II,and III,stages 1,2,

and 3 and Peacekeepers,stages 1,2,and 3s. This excludes approximately 60 fired motors that consist only of a shells (salvage/scrap). The Air Force also has numerous other mission-support end

items that are not reported (see note 4 below).

REQUIRED SUPPLEMENTAL

STEWARDSHIP INFORMATION
96

3. SPACE SYSTEMS

a. The Air Force currently has 61 unclassified satellites in either operational orbit (43) or storage

with contractors (18).The 61 unclassified satellites consist of 9 DMSP, 14 DSCS,36 GPS and 2 MILSATCOM. During 1998,the last DSCS-II satellite (F-16) was declared non-operational,while 7 GPS

and 2 DMSP satellites were acquired from contractors.The Air Force also has other classified satellites (DSP) in operational orbit or storage that are not reported in the above quantitative data.

During FY 1998,one DSP satellite was destroyed during launch.In addition to the above satellites,

the Air Force has other miscellaneous satellites (quantity unknown) that are not reported. These are

classified satellites,in most cases. All Air Force national defense satellites reported as additions to the

quantitative data were obtained by means of private-sector contracts,while all satellites reported as

deleted were the results of obsolescence,destruction during launch or transfer to others for further

research and development,test or evaluation projects. All satellites in operational orbit are considered to be in workable condition and are not subject to deferred maintenance.

b. The Air Force also has seven unexpended launch vehicles (Titan II) that are considered to be

principal end items to the satellite program.The costs associated with these launch vehicles will be

added to the value of the satellites,based on each successful launch.

4. MISSION SUPPORT EQUIPMENT

The Air Force has National Defense mission support equipment items that are not being reported

separately. This includes all items acquired from aircraft and missile procurement funding (appropriations 3010,3020) with budget codes of “A” - Aircraft Support Equipment,“E”- Missile Replacement

Equipment,“H”- Munitions Principal End Items and Replenishment Spares,“P”- Missile Weapon systems and Peculiar Support Equipment,and “Q” - Aircraft Weapon Systems and Peculiar Support

Equipment.All these items were acquired from the private sector by means of various contracts.

The FASAB proposal dealing with quantity reporting occurred too late to implement.It is anticipated that full disclosure and compliance will be made in the FY 1999 financial statements.

5. REAL PROPERTY

The Air Force has 3,731 ammunition bunkers and 951 missile launch facilities.These are also considered National Defense PP&E.

6. DEFERRED MAINTENANCE

See Note 17C for deferred maintenance on National Defense Property, Plant and Equipment.

REQUIRED SUPPLEMENTAL

STEWARDSHIP INFORMATION
UNITED STATES AIR FORCE FY 1998 FINANCIAL STATEMENT—STEWARDSHIP 97

7. ACCOUNTING POLICIES

The Department of Defense elected to implement in FY 1998 the Federal Accounting Standards

Advisory Board’s (FASAB) amendments to the Statement of Federal Financial Accounting Standards

(SFFASs) Number 6 and Number 8,as was recommended by the FASAB.In accordance with such

decision and the amendments,the quantities of National Defense Property, Plant,and Equipment are

disclosed in this report.

REQUIRED SUPPLEMENTAL

STEWARDSHIP INFORMATION

National Defense Property, Plant and Equipment

Yearly Investments

FY98 and 4 Preceding Fical Years

(In Millions of Dollars)

(a) Category/Major Types (b) FY 1998

1. Aircraft

A. Combat $2,028

B. Airlift 3,381

C.Other Aircraft 1,129

2. Missiles

A. Ballistic Missiles $113

B. Other Missiles . Space Systems

3. Space Systems

A. Satellites $517

B. Satellite Support Principal End Items 537

4. Mission Support PP&E N/A

5. Weapon Systems Support Real Property None
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1. AIRCRAFT, MISSILES AND SATELLITES

a. The yearly investment costs for aircraft,missiles,and satellites were extracted from the DOLARSStatus of Funds System,which prepares the ACCT-RPT(M)1002 report.To arrive at the costs reported,Budget Program Activity Codes (BPACs) were identified for each major category, by type (combat,airlift,other, ICBM,other missiles,and satellites).Using these BPACs,an extract was prepared to

obtain the values reported.Excluded from our extract were BPACs reported for aircraft spares,

repair parts,aircraft support equipment, facilities,reimbursable program cost and undistributed

costs. These values were then compared to column G, Gross Disbursement in Current FY, on the

AR1002 report.

b. The Air Force also developed costs for launch vehicles,a major component to the satellite program. These costs were developed as explained in (a) above. The dollar value associated with

launch vehicles amounts to $537 million.Investment costs were not obtained for mission support

PP&E.No investments were made in weapon systems support real property during the year.

2. ACCOUNTING POLICIES

The Department of Defense elected to implement in FY 1998 the Federal Accounting Standards

Advisory Board’s (FASAB) amendments to the Statement of Federal Financial Accounting Standards

Number 6 and Number 8,as was recommended by the FASAB.In accordance with such decision

and the amendments,the investment for FY 1998 in National Defense Property, Plant and

Equipment is disclosed in this report.

REQUIRED SUPPLEMENTAL

STEWARDSHIP INFORMATION
99

REQUIRED SUPPLEMENTAL

STEWARDSHIP INFORMATION

Heritage Assets

For Fiscal Year Ending September 30,1998

Quantities in Actual Amounts Except for Battlefields,

Cemeteries,and Land Which Are in the Number of Sites and (Thousands of Acres)

(a) (b) (c) (d) (e) 

Collection Type As Of Additions Deletions As Of

10/01/97 9/30/98

1. Documents 2 2

2. Works of Art 2 2

3. Military Artifacts 1 1

4. Non-Military Artifacts

5. Classic Weapon Systems 1 1

6. Other

Total Collection Type 6 6

Noncollection Type

7. Buildings and Structures 1,223 0 97 1,126

8. Monuments 1,554 4 1,558

9. Battlefields

10. Cemeteries and Other Burial

Grounds

11. Land

12. Other

Total Noncollection Type 2,777 4 97 2,684

Total Heritage Assets 2 ,783 4 97 2,690

____________ ________ ________ ________ ______

________ ________ ________ ______

________ ________ ________ ______

________ ________ ________ ______

________ ________ ________ ________ ________ ________ ______ ______
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REQUIRED SUPPLEMENTAL

STEWARDSHIP INFORMATION

1. DOCUMENTS

The Air Force has two document collections.These are located at Wright-Patterson Air Force Base

and the USAF Academy. The quantities are reported as a portion of military artifacts (below). All

documents are in acceptable condition.

2. WORKS OF ART

a. The USAF art collection consists of paintings,drawings,sketches,and sculptures.During FY 1998,

the AF reported a beginning inventory of 7,690 works of art,45 additions and no deletions, for an

ending balance of 7,735.The new works of art acquired during FY 1998 were paintings donated by

the respective artists or by others.Most of the Air Force art collection is considered to be in good

condition. The Air Force estimates that it would take approximately $25,000 to $30,000 to return

the Air Force art collection to an acceptable condition.

b . The USAF A c a d e my art collection also consists of paintings, d raw i n g s ,s ke t ches and sculpture s .T h e

USAF A c a d e my re p o rted a beginning inve n t o ry of 863 wo rks of art , 6 additions to the collection , n o

d e l e t i o n s , and an ending balance of 869. The new wo rks of art acquired we re paintings donated by the

re s p e c t i ve art i s t s . The USAF A c a d e my art collection re p o rts that all art is in acceptable condition.

3. MILITARY ARTIFACTS

The military artifacts collected by the USAF Academy consists of such things as guns,swords,uniforms,and gifts from foreign countries.The FY 1998 beginning inventory for this collection amounted to 1,763 artifacts. Acquisitions made during the year amounted to 39 artifacts,which left a ending inventory of 1,802 artifacts.The method of acquisition is through gifts or donations.During FY

1998,no reductions in quantities were reported. All items are considered in acceptable condition.

4. CLASSIC WEAPON SYSTEMS

The AF Museum collection,located at Wright-Patterson AFB,consists of aerospace vehicles,aerospace engines, weapons,ordnance, clothing and documents.These items are acquired from the Air

Force as the weapon system is declared surplus.Some items are one-of-a-kind,prototype,or products of the Research,Development,Test and Evaluation program.The condition of most items in the

collection is rated good.However, a very small percentage could be rated as fair condition.No cost

estimate was available to bring the total collection up to a good condition rating.During FY 1998,

the AF Museum collection beginning inventory amounted to 62,239 items.There were 554 items

added and 2,698 items deleted,leaving a ending inventory of 60,095 items.
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5. BUILDINGS

a. The Air Force reported 90 museum buildings on the real property records as heritage assets. The

bulk of the collections in these facilities are not of sufficient historical significance to qualify for

stewardship reporting. The items displayed in these museums that do qualify as heritage assets are

items on loan from the Air Force museum at Wright-Patterson AFB,OH.This collection is reported

above.No additions or deletions were reported for these buildings during FY 1998. Acquisitions for

this type of building are usually made by contract.See Note 17B for the buildings deferred maintenance.

b. The Air Force currently has 1,036 buildings considered to be multi-use heritage assets. These

buildings are all on the historical register, but are still being used as general-purpose buildings.As

such,these buildings are being capitalized,depreciated and reported as general PP&E.During FY

1998,97 multi-use buildings were removed from the inventory. These buildings were the result of

BRAC base closings.Deferred maintenance for these buildings are included as part of the real property dollar values reported in Note 17B.

Stewardship Land

For Fiscal Year Ending September 30, 1998

(Acres in Thousands)

(a) (b) (c) (d) (e)

As of As of

Land Use 10/01/97 Additions Deletions 9/30/98

1. Mission 7,700 7,700

2. Freestanding

3. Heritage

4. Other

Totals 7,700 7,700

______ ________ ______ ______

______ ______ ________ ________ ______ ______ ______ ______

REQUIRED SUPPLEMENTAL

STEWARDSHIP INFORMATION
102

Nonfederal Physical Property

Yearly Investment in State and Local Governments

For FY 1998 through FY 1994

(In Millions of Dollars)

(a) (b) (c) (d) (e) (f) 

Categories FY94 FY 95 FY 96 FY97 FY 98

1. National Defense Mission Related

2. Environmental Improvements

3. Base Closure and Realignment

4. Other

____________________________________________________

Total ____________________________________________________

6. MONUMENTS

In FY 1998,the Air Force reported 1,558 memorials and monuments as part of heritage assets.This

includes such things as static displays and various other types of monuments.The static displays are

usually aircraft retired from the Air Force fleet. All are reported in satisfactory condition.

The Air Force has 7,699,524 acres of mission-essential land,which was acquired through public

domain rather than purchases.Purchased land is considered general PP&E and is reported on the

balance sheet.During the past year, no additions or deletions were recorded.The land as reported is

in acceptable condition.

The Air Force makes no investments in nonfederal physical property. Therefore, the Air Force has

no report to make on this subject.

REQUIRED SUPPLEMENTAL

STEWARDSHIP INFORMATION
103

Investments in Research and Development

Yearly Investment in Research and Development

For Fiscal Years (Preceding 4th Fiscal Year) through FY 1998

(In Millions of Dollars)

(a) (f)

Categories FY 98

1. Basic Research

Defense Research Sciences $207

Subtotal $207

2. Applied Research

Materials 77

Aerospace Flight Dynamics 59

Human Systems Technology 75

Aerospace Propulsion 64

Aerospace Avionics 57

Hypersonic Flight Technology 11

Advanced Weapons 113

Conventional Munitions 38

Command/Control/Communications 89

Subtotal $583

Grand Total $790

__________ ____

______

______

______

______

______ ______

REQUIRED SUPPLEMENTAL

STEWARDSHIP INFORMATION

1. BASIC RESEARCH

Defense Research Sciences. The Defense Research Sciences Program supports Air Force research

efforts comprised of in-house investigations in Air Force laboratories and extramural activities in academia and industry. The program funds broad-based scientific and engineering basic research in

technologies critical to the Air Force mission.These technologies include aerospace structures,aerodynamics,materials,propulsion,power electronics,computer science directed energy, conventional

weapons,life sciences,and atmospheric and space sciences.

2. APPLIED RESEARCH

a. Materials.The Applied Research program is the primary source of advanced materials and 

processes to reduce life cycle costs and improve performance,affordability,supportabililty, reliability, and survivability of current and future Air Force systems.Structural,propulsion,an sub-systems

materials and processes are developed for aircraft,missile,space,satellite,and launch systems applications.
104

REQUIRED SUPPLEMENTAL

STEWARDSHIP INFORMATION

b. Aerospace Flight Dynamics. The Aerospace Flight Dynamics program determines the technica feasibility of aerospace vehicle technologies in aeromechanics,structures, flight control,air vehicle-pilot

interface, vehicle subsystems,and air base technologies to reduce life cycle costs and improve the performance of existing and future manned and unmanned aerospace vehicles,and the maintenance and

survivability of air bases.

c. Human Systems Technology. The Human Systems Technology program establishes technology feasibility and develops the technology base for Air Force human interface needs required for weapon systems,operational readiness,and environmental quality. The program addresses crew systems;manpower, personnel,training,and logistics;aerospace physiology investigation;occupational and environmental safety;and environmental compliance,site remediation,and pollution prevention.

d. Aerospace Propulsion.The Aerospace Propulsion program develops airbreathing propulsion and

aerospace power technologies. The prime areas of focus are turbine engines,dual-mode ramjets,combined cycle engines,fuels,lubricants,and aerospace power technologies.

e. Aerospace Avionics. The Aerospace Avionics program determines the feasibility of active and passive electronic countermeasure technologies and explores,develops, expands,and refines the most

promising and cost-effective technologies. The technologies pursued support passive sensing of the

entire electromagnetic spectrum in order to provide signal collection,detection,recognition,analysis,

identification,location,and countering of enemy electronic emissions whether intentional or unintentional.

f. Hypersonic Flight Technology. The Hypersonic Flight Technology program develops advanced

hypersonic technologies and will provide revolutionary technology options to satisfy future Air Force

needs such as future hypersonic weapons and space launch concepts.This program will focus on

hydrocarbon fueled hypersonic vehicle technologies and demonstrate their feasibility.

g. Advanced Weapons.This is the Advanced Weapons program for space technology, rocket propulsion,and directed energy for the Air Force Research Laboratory.

h. Conventional Munitions.The conventional Munitions program investigates,develops and establishes the technical feasibility and military utility of advanced guidance and ordnance technologies for

conventional munitions.

i. Command,Control and Communication. The Command,Control and Communication program is

the primary source of new concepts, feasibility demonstrations,and advanced technology for Air Force

Command,Control and Communications.Current developments include:improving effectiveness and

survivability through secure communication;improving surveillance range and detection capabilities

against low-observable threats and enemy electronic countermeasures;and improving the timeliness

and quality of data acquisition for decision making.