United States General Accounting Office

GAO Report to Congressional Requesters

January 1995 DEFENSE SUPPLY

Controls Over Hand

Tools Can Be Improved

GAO/NSIAD-95-44

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-259057 

January 27, 1995

The Honorable Floyd D. Spence

Chairman

The Honorable Ronald V. Dellums

Ranking Minority Member

Committee on National Security

House of Representatives

The Honorable James V. Hansen

The Honorable Norman Sisisky

House of Representatives

The Department of Defense (DOD) buys hand tools (such as wrenches and

screwdrivers) for use in performing maintenance and repair work at

military installations worldwide. In fiscal year 1993, DOD spent about

$155 million to purchase tools from the General Services Administration

(GSA), the federal manager for hand tools. Military units spent an additional

undeterminable amount for local tool purchases.

As requested by the former Chairman and Ranking Minority Member of the

Subcommittee on Oversight and Investigations, House Committee on

Armed Services, we reviewed the controls over hand tools in each of the

military services. Specifically, we determined (1) the adequacy of policies

and procedures for preventing the loss or unnecessary purchase of hand

tools; (2) if information is available on the costs associated with missing,

lost, and stolen hand tools; (3) how well installations and operating units

are controlling these tools; and (4) the extent these controls are being

reviewed. The specifics of our scope and methodology appear in 

appendix I.

Results in Brief DOD buys significant quantities of hand tools each year. However, we were

not able to determine the extent of unnecessary purchases and losses of

hand tools because DOD has insufficient cost data at the headquarters,

command, and installation levels to identify and track tool purchases and

inventory levels, as well as costs associated with missing, lost, and stolen

tools. DOD and the military services have not provided sufficient guidance

and oversight to ensure that hand tools are adequately safeguarded and

controlled at military operating units.

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B-259057 

Military units, in turn, do not have adequate internal controls and records

to properly account for tool purchases and inventories. We visited selected

military units and found situations where (1) personnel were allowed to

purchase tools without prior authorization; (2) tool purchases could not be

identified and traced to inventory records; and (3) discrepancies existed

between available inventory records and actual tool quantities.

We also found that Air Force operating units were buying new warranted

tools to replace perfectly good tools and, contrary to regulations, were

using local purchases to buy the same warranted tools that were available

through normal DOD supply channels. On July 28, 1994, we sent a letter to

the Secretary of the Air Force recommending that she direct Air Force

units to (1) replace only unserviceable tools with warranted tools so that

existing tool inventories can be effectively used and (2) use local

purchases only when needed tools cannot be obtained through normal

supply channels. On August 25, 1994, Air Force headquarters sent a

message to all of the major commands advising them of our findings and

recommendations and reminding them to comply with established policies

and procedures.

Background DOD buys hand tools for a wide range of maintenance and repair activities

that include maintaining everything from facilities and vehicles to aircraft

and ships. DOD buys tools either from GSA or by local purchase. DOD

regulations state that use of established supply sources, such as GSA,

should be maximized. If the supply system cannot be used, local purchases

may be considered if they are in the best interest of the government in

terms of the combination of quality, timeliness, and cost.

DOD aircraft maintenance units use silhouetted tool boxes and displays,

which contain shadow drawings of the tools, to control tools at the user

level and prevent foreign object damage to aircraft resulting from tools left

in or on an aircraft during maintenance. Generally, the tool box or kit has

a foam insert in each drawer that is cut and shaped to the size of the tools

to facilitate the physical inventories taken at the time a mechanic checks

out and returns the tool box to the tool room (see fig. 1.) Other military

units, such as artillery and transportation units, use tool boxes that do not

maintain the tools as neatly and are less easily inventoried.

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B-259057 

Figure 1: Composite Tool Box at

Langley Air Force Base Illustrating the

Cut Out Silhouette for Each Tool

Executive agencies are required to establish and maintain systems of

internal controls that provide reasonable assurance that resource use is

consistent with applicable laws, regulations, and policies; resources are

safeguarded to prevent waste, loss, and misuse; transactions and other

events are adequately documented and fairly disclosed; and resources are

accounted for. With regard to hand tools, basic internal controls should

include prior authorization of specific tool purchases by an individual

knowledgeable of a unit’s tool needs; independent checks to ensure that

tool purchases are properly received; and accurate inventory records to

reflect tool receipts, issues, and on-hand quantities.

DOD Does Not

Provide Adequate

Guidance

DOD has not issued guidance establishing controls over hand tools at the

user level. DOD does have overall guidance for the physical security of

government property located at military installations, but the guidance

does not contain specific procedures for controlling tool purchases,

inventories, and related receipts and issues.

The military services also have not provided adequate guidance to

installations and operating units. Other than requiring periodic physical

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B-259057 

inventories, the guidance does not provide specific controls over hand

tools. The Air Force has recognized the need for better guidance and, in

November 1993, established an Air Force Tool Committee to develop new

guidance for use Air Force-wide.

Although guidance on tool purchases and inventories is lacking, the

military services have issued guidance to prevent foreign object damage to

aircraft from tools left on or in aircraft during maintenance. Air Force

mechanics are required to sign out for tool kits or individual tools, and an

inventory of the tools is performed. After the work is completed, the

mechanics return the tools, and the contents again are inventoried to

ensure that none are left in the aircraft. The Navy and the Marine Corps

use a similar system to prevent foreign object damage.

Cost Information Is

Not Uniformly

Maintained

DOD has insufficient cost data at the headquarters, command, and

installation levels to identify and track hand tool purchases, inventory

levels, and losses. Also, because the military services consider hand tools

to be expendable items representing small dollar values, losses that are

identified by operating units often are not reported to investigative

organizations and higher commands.

DOD headquarters does not maintain cost information reflecting hand tool

purchases, inventory levels, and losses. DOD does report information on

losses of all government property annually to the Congress, but DOD

officials told us that the reported information includes very limited data on

hand tools because such losses often get little visibility and generally do

not meet the minimum reporting threshold of $1,000 per incident.

Representatives at the headquarters of all of the military services and the

commands we visited also told us that they do not receive or maintain

information that reflects hand tool purchases, inventory levels, or losses.

The representatives stated that they do not manage down to that level and

that such information only would be available at the installation level.

However, we visited Fort Bragg, Oceana Naval Air Station, Langley Air

Force Base, and Camp Lejeune Marine Corps Base and found that data

were very limited at the installation and operating unit levels.

At our request, certain units compiled data on the amount of recent tool

purchases. For example, one unit at the Oceana Naval Air Station was able

to provide lists of individual tool purchases for 20 months that totaled

$25,844. However, most of the installations and units visited did not know

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B-259057 

the value of the tool inventories and could not provide complete data on

tool purchases. For example, units at Camp Lejeune had data reflecting

the number and types of tools owned but did not know the value of the

tool inventories.

Agents at the security investigating organization of each installation told

us that they maintain a log of all investigations of suspected stolen

government property but do not report such losses to anyone. The logs,

which are used to monitor trends in thefts and other crimes, include very

little information on tool losses. Reports prepared to document losses of

government property and provide the basis for an investigation of the

reasons for the losses generally were not prepared for tools due to the

small dollar values involved. At Langley Air Force Base, for example, these

reports had not included any hand tools for the past 2 years.

Tool Purchases and

Inventories Are Not

Properly Accounted

for

The absence of adequate management guidance has contributed to a

general lack of basic internal controls at individual installations and

operating units. We identified weaknesses in basic internal controls at

each of the four installations and eight operating units we visited. These

weaknesses related to purchase authorizations and inventory

record-keeping.

Authorization for Specific

Purchases Not Required at

Air Force Units

All units we visited required prior authorization for specific tool purchases

except for the two units at Langley Air Force Base. Instead, personnel

used a blanket authorization from the unit that was entered into the base

service store’s computer system. One squadron we visited authorized six

persons to buy tools at the base service store, and the other, smaller unit

we visited authorized two persons to buy tools.

Some of the personnel authorized to purchase tools also were responsible

for establishing the tool requirements for the unit. Further, unit personnel

not involved in the purchases did not routinely check to see that the unit

actually received the tools. Without these controls, there was no assurance

that the purchases were necessary or that the unit received the tools.

Inventory Records Are

Inadequate

At all units we visited, either inventory records were inaccurate or no

records were available that could be used to identify and track hand tool

purchases and related receipts, issues, and on-hand quantities.

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The only records the Army units we visited at Fort Bragg could provide

were (1) copies of a register showing a list of all items purchased by the

units, including hand tools, and (2) hand receipts showing the authorized

and on-hand quantities of tools in tool rooms, trailers, and boxes that were

assigned to specific individuals in the units. No inventory records were

available to show tool receipts and issues or the disposition of the

purchases.

The Air Force units we visited at Langley Air Force Base did not have

records showing receipts and issues. They only had computer-generated

lists of the current inventory of tools in each tool box or tool room drawer.

Some of these lists were not dated and did not accurately reflect the total

number of tool boxes on hand. For example, one unit’s undated

documentation stated that six avionics tool boxes with 65 tools in each

box were on hand. However, our physical inspection disclosed that 10 tool

boxes were on hand.

The Marine Corps units we visited at Camp Lejeune did not have inventory

records showing tool purchases and related receipts and issues. Both units

had stock lists of tools in each tool box. One unit also had hand receipts

for spare tools in the tool room, and the other unit had inventory cards for

the spare tools.

One Navy unit at Oceana Naval Air Station had established an automated

system for monitoring on-hand quantities of tools in its tool room and tool

kits. However, this system did not reflect tool receipts and issues. The

other Oceana unit had set up a manual inventory record system about 

6 months prior to our visit to get better control over purchases, receipts,

issues, and inventory levels for the tool room. However, we found that the

records were not accurate. For example, some tool purchases were not

entered on the inventory record cards before they were issued to users. In

June 1994, the squadron commander revised the unit’s procedures to

tighten the controls over tool purchases and inventories.

We made several physical counts at each operating unit we visited to test

the accuracy of the records that were available. We found inaccuracies at

each unit, with discrepancy rates of up to 68 percent. In total, the records

for 99 of 515 tools in the tool rooms (19 percent) were inaccurate, and the

records for 173 of 2,700 tools in the tool boxes (6 percent) were

inaccurate. For example, the inventory records at one unit indicated that

nine diagonal cut pliers were on hand, but our physical count showed that

six pliers actually were on hand.

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B-259057 

We requested the results of physical inventories by the military services

and found that they often were not documented. Personnel in the Air

Force and Navy units and one of the Marine Corps units stated that they

conducted physical inventories but did not maintain documentation of the

results of these inventories. Personnel in the Army units and one of the

Marine Corps units told us that they conducted the required periodic

physical inventories and that the results were reflected on hand receipts.

We reviewed the documents and noted that some missing tools had been

identified.

Oversight Efforts

Have Been Limited

DOD has provided only limited oversight to determine how effectively

installations and operating units control tool purchases and inventories

since the last comprehensive DOD Inspector General review of this area

was performed over 10 years ago. This review identified a need for better

procedures and controls. No comprehensive reviews have been made

since that time, and audit efforts have been limited to local reviews at

individual installations. During recent years, the Army and Navy audit

agencies have done only one or two local audits while the Air Force audit

agency has performed 35 local audits since 1989. The audits identified

problems with the controls over hand tools.

Routine inspections and surveys by command level management and

inspector general staff also generally do not include an evaluation of tool

procedures and controls. For example, an inspector general representative

of the Air Force’s Air Combat Command told us that the inspector

general’s policy is not to perform compliance type inspections and reviews

and that the staff did not have any knowledge of the adequacy of hand tool

controls. We did find that the Marine Corps’ Field Supply and Maintenance

Analysis Office performs periodic inspections at units, which include tool

controls. The inspections disclosed deficiencies in these controls during

the past 3 years relating to the lack of inventory records, absence of

physical inventories, and accumulation of excess tools.

Recommendations We recommend that the Secretary of Defense take the following actions to

ensure that hand tool purchases and inventories are adequately controlled:

• Require that the military services and major commands provide guidance

to installations and operating units specifying the needed internal controls

over hand tools. These controls should include requirements for prior

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B-259057 

authorization of tool purchases and maintenance of accurate inventory

records that reflect tool receipts, issues, and quantities on hand.

• Require that inspector general and internal audit staffs incorporate

controls over hand tools into the periodic inspections that are performed

at installations and operating units.

We are not recommending that DOD and the military services obtain and

report overall cost information on tool purchases, inventory levels, and

losses. If military units put adequate internal controls in place, including

accurate inventory records, such information should be readily available

at the installation and unit levels.

Agency Comments

and Our Evaluation

DOD agreed that, to varying degrees, the military services’ policies and

procedures governing the purchase and accountability of hand tools are

inadequate (see app. II). DOD also agreed that internal controls should be

reviewed by the services and strengthened as necessary. By March 31,

1995, DOD expects to issue a memorandum to the military services

directing that closer scrutiny be paid to hand tool accountability and that

regulations, policies, and procedures governing hand tool purchases be

strengthened. The memorandum also will direct that each military service

secretary advise their inspector general and internal audit staffs to

incorporate control of hand tools in periodic inspections at installations

and operating units.

Although generally agreeing with our report, DOD did question some

aspects. DOD believes that our findings were insufficient to indicate a

systemic problem with inadequate inventory accountability and

record-keeping. DOD also believes that our findings reflect a problem with

implementation of existing guidance and that no additional guidance is

needed for existing hand tool inventories.

Because our review was limited to four installations and eight operating

units, we cannot state unequivocally that our findings indicate a systemic

problem. However, we did identify problems at each location visited,

which would indicate to us that similar problems may exist elsewhere.

With regard to the adequacy of guidance, we continue to believe that

additional guidance is needed. Personnel at the units visited consistently

stated that one of the reasons for the problems we noted was the lack of

guidance specifying the internal controls needed for receipts, issues, and

inventories at the operating units. Furthermore, individual services, such

as the Air Force, acknowledge the need for better guidance.

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B-259057 

We are sending copies of this report to the Chairmen and Ranking

Minority Members, House and Senate Committees on Appropriations,

Senate Committees on Armed Services and on Governmental Affairs, and

House Committee on Government Reform and Oversight; the Secretaries

of Defense, the Army, the Navy, and the Air Force; and the Director, Office

of Management and Budget.

Please contact me at (202) 512-5140 if you have any questions. The major

contributors to this report are listed in appendix III.

Mark E. Gebicke

Director, Military Operations and

 Capabilities Issues

Page 9 GAO/NSIAD-95-44 Hand Tool Controls
Contents

Letter 1

Appendix I 

Scope and

Methodology

12

Appendix II 

Comments From the

Department of

Defense

14

Appendix III 

Major Contributors to

This Report

23

Figure Figure 1: Composite Tool Box at Langley Air Force Base

Illustrating the Cut Out Silhouette for Each Tool

3

Abbreviations

DOD Department of Defense

GSA General Services Administration

Page 10 GAO/NSIAD-95-44 Hand Tool Controls
Page 11 GAO/NSIAD-95-44 Hand Tool Controls
Appendix I 

Scope and Methodology

We reviewed the Department of Defense’s (DOD) and the military services’

policies and procedures for controlling hand tools. We discussed program

operations, guidance, and oversight with officials at the headquarters of

DOD and each of the military services and obtained overall program data

when available. We also visited the General Services Administration to

discuss its functions as federal manager for hand tools and to obtain

available information on tool sales to DOD.

We visited one installation in each of the military services—Langley Air

Force Base, Virginia; Oceana Naval Air Station, Virginia Beach, Virginia;

Fort Bragg, Fayetteville, North Carolina; and Camp Lejeune Marine Corps

Base, Jacksonville, North Carolina—to review controls over hand tools. At

each installation, we (1) requested overall information on hand tool

purchases, inventories, and losses and (2) visited two operating units to

evaluate internal controls over hand tools. We visited the following units

at each installation:

Langley Air Force Base

 94th Fighter Squadron, 1st Fighter Wing

 72nd Helicopter Squadron, 1st Fighter Wing

Oceana Naval Air Station

 Aircraft Intermediate Maintenance Department

 Fighter Squadron VF-41, Fighter Wing, U. S. Atlantic Fleet

Fort Bragg

 2nd Battalion, 504th Parachute Infantry Regiment, 82nd Airborne

 Division

 546th Transportation Company, 189th Maintenance Battalion, 1st Corps

 Support Command

Camp Lejeune Marine Corps Base

 1st Battalion, 10th Artillery Regiment, 2nd Marine Division

 464th Helicopter Squadron, 29th Marine Air Group, 2nd Marine Aircraft

 Wing

Page 12 GAO/NSIAD-95-44 Hand Tool Controls
Appendix I 

Scope and Methodology

At each unit, we (1) discussed internal controls with unit personnel,

(2) reviewed available documents related to tool purchases and

inventories, and (3) made physical counts to test the accuracy of inventory

records.

We also contacted the major command responsible for each installation

visited and obtained overall information related to hand tools. As part of

our evaluation of management oversight, we contacted inspector general

offices, military audit services, and investigative organizations to discuss

their oversight of hand tool controls and review audit, inspection, and

investigative reports.

We performed our review between February and October 1994 in

accordance with generally accepted government auditing standards.

Page 13 GAO/NSIAD-95-44 Hand Tool Controls
Appendix II 

Comments From the Department of Defense

Page 14 GAO/NSIAD-95-44 Hand Tool Controls
Appendix II 

Comments From the Department of Defense

Now on pp. 1-3.

Page 15 GAO/NSIAD-95-44 Hand Tool Controls
Appendix II 

Comments From the Department of Defense

Now on pp. 3-4.

Page 16 GAO/NSIAD-95-44 Hand Tool Controls
Appendix II 

Comments From the Department of Defense

Page 17 GAO/NSIAD-95-44 Hand Tool Controls
Appendix II 

Comments From the Department of Defense

Now on pp. 4-5.

Page 18 GAO/NSIAD-95-44 Hand Tool Controls
Appendix II 

Comments From the Department of Defense

Page 19 GAO/NSIAD-95-44 Hand Tool Controls
Appendix II 

Comments From the Department of Defense

Now on pp. 5-7.

Page 20 GAO/NSIAD-95-44 Hand Tool Controls
Appendix II 

Comments From the Department of Defense

Now on p. 7.

Page 21 GAO/NSIAD-95-44 Hand Tool Controls
Appendix II 

Comments From the Department of Defense

Now on pp. 7-8.

Now on p. 8.

Page 22 GAO/NSIAD-95-44 Hand Tool Controls
Appendix III 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

James Murphy, Assistant Director

Norfolk Regional

Office

Larry Peacock, Evaluator-in-Charge

Linda Koetter, Evaluator

Dawn Godfrey, Evaluator

(703060) Page 23 GAO/NSIAD-95-44 Hand Tool Controls
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