Defense Logistics: Enhanced Policy and Procedures Needed to Improve Management of Sensitive Conventional Ammunition
Released: 2016-02-16T00:00:00

Letter

Background

Overview of SRC I Ammunition Management

Supply Chain Integration, an office under the Office of the Assistant Secretary of Defense for Logistics & Materiel Readiness, Under Secretary of Defense for Acquisition, Technology and Logistics, is the department- wide office responsible for leading the development of DOD supply chain policies as well as improving accountability, visibility, and control of all critical assets, including SRC I ammunition. In addition, the Army has a prominent role in managing SRC I ammunition, as the Army procures a majority of the department’s ammunition and provides wholesale storage for the other military services at Army depots. The Army depots ship SRC I ammunition owned by the other military services to their respective locations at their request. Also, Army depots conduct semiannual physical inventories of all SRC I ammunition as required of all installations storing SRC I ammunition. SRC I ammunition may also be located—generally in small quantities—at retail locations, such as military service installations, bases, and ammunition supply points. Each military service has entities responsible for the accountability, physical inventory, and transportation of SRC I ammunition. According to military service ammunition data, the Army, Navy, Marine Corps, and Air Force collectively had approximately 226,000 SRC I missiles and rockets in the continental United States, as of April 30, 2015, as shown in table 1.

In addition, USTRANSCOM is designated by DOD Directive as the DOD’s single manager for transportation, other than Service-unique or theater- assigned assets and as the DOD Distribution Process Owner. This designation includes transportation of SRC I ammunition. The Military Surface Deployment and Distribution Command, which falls under USTRANSCOM, tracks the movement of SRC I ammunition. Additionally, according to DOD officials, the Military Surface Deployment and Distribution Command coordinates responses to transportation issues of SRC I ammunition while in transit. Table 2 shows key stakeholders and roles in the transportation of SRC I ammunition.

Policy and Guidance for SRC I Ammunition

DODM 5100.76, Physical Security of Sensitive Conventional Arms, Ammunition, and Explosives (AA&E) sets forth DOD policy on the physical security of sensitive conventional AA&E. According to DODM 5100.76, continuous program and policy oversight is required to ensure protection of AA&E within DOD, and DOD components are required to track and conduct physical inventories of SRC I ammunition by serial number. Further, DOD policy requires SRC I ammunition to have a higher level of protection and security than that provided for SRC II through SRC IV conventional ammunition. DOD and the military services have policy and guidance on how to account for, safeguard, conduct physical inventories, adjust if necessary, track, and ship SRC I ammunition within and between services and to contractors for repair. Appendix III provides additional detail on DOD policy and military service guidance relevant to the management of SRC I ammunition.

Automated Information Systems for SRC I Ammunition

The military services have several automated information systems for managing accountability and visibility of SRC I ammunition. These automated information systems also maintain various item-specific data such as serial number, production lot number, DOD identification codes, serviceability, reporting location, ownership, quantity, and shipment information. Figure 1 shows the automated information systems.

The department is in the final stages of evaluating various automated information systems, including NLAC, to be designated as the DOD-wide authoritative source of data for conventional ammunition, including SRC I ammunition. DOD’s evaluation to select one authoritative information system for conventional ammunition comes in response to our March 2014 recommendation that the department designate an authoritative source of data on conventional ammunition, which includes SRC I ammunition. Also, the evaluation is in response to a congressional mandate to issue department-wide guidance by September 2015 to designate an authoritative source of data for conventional ammunition. According to OSD officials, the to-be-designated visibility system will serve as a repository of ammunition data collected through regular data feeds from the military services’ automated information systems.

GAO’s Prior Work on SRC I Ammunition

Since 1994, we have issued several reports about the management of SRC I ammunition, focusing on serial-number registration, physical inventories, and transportation issues. In 1994, we found that while the Navy and the Marine Corps began controlling missiles by serial number in 1990 and 1992, respectively, the Army was working on obtaining control of SRC I missiles by serial number. Further, we found that the military services were not regularly conducting physical inventories of SRC I missiles and we made recommendations to strengthen inventory accountability, which the department concurred with and implemented. In our September 1997 report, we found the military services had different procedures and requirements for maintaining oversight of SRC I rockets. Specifically, we found that the Marine Corps maintained oversight and visibility of its weapons by serial number, whereas the Army and the Navy managed their SRC I rockets by production lot and quantity. DOD concurred with our recommendation to manage SRC I rockets by serial number and reissued DOD policy in 2000. In our 2000 report, we found internal controls weaknesses at an Army ammunition depot that resulted in a loss of accountability and control over SRC I rockets. For example, serial number control of SRC I rockets was lost at the time of shipment from the contractor because serial numbers listed on receiving reports that accompanied shipments did not correspond to the actual items and quantities of the respective shipments.

In March 2014, we reported on DOD’s management of conventional ammunition, and found, among other things, some limitations of the military services’ use of automated information systems that affected their ability to facilitate efficient management of conventional ammunition. We found that NLAC, the department-wide repository of ammunition data, had limitations in providing visibility of ammunition and recommended that the department select an authoritative source of department-wide ammunition data to improve DOD’s ability to provide total asset visibility over conventional ammunition. DOD concurred and stated that it would assess the alternatives and designate the appropriate solution by the fourth quarter of fiscal year 2015. Also, we recommended that DOD identify and implement internal controls, consistent with federal internal control standards, that would provide reasonable assurance that NLAC collects comprehensive, accurate data from other service ammunition systems. DOD concurred and stated in its agency response to our report that the Army updated the performance work statement for NLAC to include analyzing new data sources to identify improved system interfacing that will improve data accuracy, completeness, quality assurance, and auditability. For more details of our findings, recommendations, and the status of actions taken by DOD relating to DOD’s management of SRC I ammunition, see appendix IV.

Military Services Have Maintained Accountability of SRC I Ammunition at Sampled Locations, but Gaps Exist in Some Service-Level Guidance and Procedures for How SRC I Ammunition Is Accounted for Across Locations

The military services have maintained accountability of SRC I ammunition at 11 sampled locations in the continental United States; however, we identified gaps in some service-level guidance and procedures for how SRC I ammunition is accounted for across locations. We found that the Air Force does not track SRC I ammunition by serial number but has plans to revise its guidance. Also, we found Air Force procedures have not maintained accountability for items owned by other services and stored at Air Force locations. Further, the military services generally recorded shipment and receipt in their accountability systems, but the receipt was not always recorded in a timely manner. Finally, we found that Army processes and information systems do not provide full accountability for in-transit items.

Military Services Have Maintained Accountability of SRC I Ammunition at Sampled Locations and Conducted Physical Inventories

We found that the military services have maintained accountability in their automated information systems of SRC I ammunition at the 11 sampled locations we reviewed. DOD policy calls for continuous program and policy oversight to ensure protection of AA&E, to include SRC I ammunition, within DOD. Likewise, military service guidance details accountability of AA&E, including maintenance of records. We found that, for our sample of 616 SRC I ammunition items, 612 of the 616 records matched the military services’ automated information systems and the remaining 4, although not recorded as required, were accounted for by service officials. Additionally, as part of our sample, we observed SRC I ammunition that was being readied for rapid deployment, as shown in figure 2, and documented the serial number and other identifying information, and verified the information in the Army’s systems.

Additionally, we found that, in accordance with DOD policy and military service guidance and at required frequencies, the military services conducted physical inventories of SRC I ammunition to ensure accountability at 22 selected military service locations in the continental United States. We analyzed inventory memorandums from all Army depots storing SRC I ammunition, as well as selected military service locations, and found that the physical inventories were recorded as being conducted. Inventory personnel stated there were no delays or challenges in completing the physical inventories of SRC I ammunition because of sequestration or other budgetary concerns.

Further, during our review, we identified instances in which the Navy and Army had taken actions to enhance the accountability of their physical inventories.

First, we found that the Army, Marine Corps, and Air Force certify completion of the physical inventory of SRC I ammunition through a signed memorandum. According to Navy officials, Navy policy does not require certification through a signed memorandum. Rather, the Navy OIS system captures a Date of Last Inventory; however, Navy officials acknowledged they did not have a business process to use this data point. After we identified this, Navy officials took action to begin developing a business process to identify late inventories.

Second, according to Navy officials, in an effort to better align with DOD policy, the Navy revised guidance in April 2015 to align with requirements in DODM 5100.76 so it would reflect specific intervals for completing physical inventories: monthly for unit levels and semiannually for non-unit level.

Third, we examined the physical inventory process at a contractor location. We found the contractor had completed physical inventories of SRC I missiles in its custody, although the contract did not specify the frequency or approach for conducting physical inventories. When we asked Army officials to provide documentation from the contractor verifying that physical inventories were completed, the officials acknowledged they do not receive verification from the contractor upon completion of physical inventories, but stated they have taken action and are evaluating methodology to ensure they receive documentation to verify that the contractor has completed physical inventories in the future.

Air Force, Army, and Marine Corps Have Gaps in Some Service-Level Guidance and Procedures for How SRC I Ammunition Is Accounted for Across Locations

Air Force Does Not Track SRC I Ammunition by Serial Number but Has Plans to Do So

We found that the military services, except the Air Force, track SRC I ammunition by serial number in their respective accountability systems, and the Air Force has plans to revise its guidance regarding tracking. The Air Force tracks SRC I ammunition in its accountability system, CAS, by quantities within production lot numbers. CAS does not have the capability to track SRC I ammunition by serial number because CAS does not have a field to enter serial numbers. With this limitation, the Air Force also cannot conduct physical inventories of SRC I ammunition by serial number. We found in September 1997 that the military services did not uniformly track SRC I rockets by serial number and recommended that the services manage SRC I rockets by serial number to have total visibility over the numbers and locations of rockets. The department concurred and reissued policy in 2000 to require DOD components to track and conduct physical inventories of SRC I ammunition by serial number. However, Air Force guidance reissued in June 2015 recognizes that CAS cannot track SRC I ammunition by serial number and will instead track by quantities within production lot numbers.

Air Force officials have recognized that they are not meeting DOD requirements for tracking SRC I ammunition by serial number, but are in the process of modernizing CAS to track by serial number. According to Air Force officials, the Air Force previously focused on the development of another enterprise information system to track, among other things, ammunition; however, the Air Force cancelled the system and is now in the process of upgrading CAS. The Air Force provided supporting documentation to confirm plans for CAS modernization by 2017. According to Air Force officials, this upgrade will modernize the system through technological upgrades that also includes provisions to improve auditability of CAS. Upon upgrading CAS to track SRC I ammunition by serial number, Air Force officials plan to reissue Air Force guidance to ensure that the Air Force tracks and conducts physical inventories of SRC I ammunition by serial number. If the Air Force does not modify CAS to include serial numbers, the Air Force will continue to lack serial number traceability of SRC I ammunition and will not meet DOD requirements. By tracking SRC I ammunition by quantities within production lot numbers, the Air Force will not have detailed information to support life-cycle traceability requirements, such as a transactional history including inventory, maintenance, repair, service records and/or supply, for each serial number, which may affect their ability to investigate instances of lost or stolen SRC I ammunition.

Air Force Policy Does Not Require Accountability in Its System of Record for Items Owned by Other Services and Stored at Air Force Locations

Air Force policy does not require accountability in its system of record for items owned by other services and stored at Air Force locations. We identified 55 SRC I ammunition items owned by the Army or Marine Corps that were in the physical custody of the Air Force, but the Air Force did not maintain accountability of these items in its system of record— CAS. DOD policy requires that the DOD component that has physical custody of materiel in storage maintain accountability for that materiel in the component’s system of record, regardless of which DOD component owns the materiel. However, we found that Air Force guidance does not require personnel to maintain accountability in its system of record for SRC I ammunition items owned by other services but in the physical custody of the Air Force, and instead allows ammunition owned by other services to be tracked in a “non-accountable” program within CAS. This non-accountable program tracks information such as net explosive weight and asset visibility; however, according to Air Force officials, the non- accountable program does not maintain an audit trail or history that would document receipt and provide a record of how the SRC I ammunition was managed while at the Air Force location. We found that, consistent with DOD policy, Army, Navy, and Marine Corps guidance generally requires that accountability for ammunition in the physical custody of the service be maintained in the service’s system of record, regardless of which service owns the ammunition.

Accountability for the 55 SRC I ammunition items we identified that were owned by the Army or Marine Corps that were shipped to and in the physical custody of the Air Force was not maintained in any service’s system of record while at the Air Force location. These items included:

40 Marine Corps-owned SRC I ammunition items that were stored at an Air Force location for approximately 11 months. Marine Corps officials were able to provide evidence that these items were shipped back to a Marine Corps location after the 11 months of storage at the Air Force location.

5 Army-owned AT4 anti-armor weapons that were shipped to an Air Force installation for Army training purposes. According to Air Force officials, these SRC I ammunition items have been expended, but Army and Air Force officials did not provide us related documentation.

10 additional Army-owned AT4 anti-armor weapons that were shipped to an Air Force installation for Army training purposes. For these 10 items, Army information systems show that the items were expended and turned in 2 and a half months after shipment, but Army and Air Force officials did not provide us documentation of accountability for the assets during the time they were in Air Force custody.

Air Force officials stated that these ammunition items were managed on the non-accountable program because the ammunition was Marine Corps or Army property of which the Air Force did not intend to take ownership. According to Air Force officials, the assets had been deleted once the items were removed from the munitions storage area. Air Force officials could not provide us key information about these shipments, such as the date the shipments were accepted into the munitions storage area, to whom the ammunition items were issued, or when the ammunition items were issued because they said that information was no longer available in the non-accountable program. Marine Corps and Army officials told us that the ammunition items would likely have been managed by the unit— for example, by using a separate system or a manual process such as a spreadsheet. However, they did not provide a copy of the document that was used.

Air Force officials updated guidance in June 2015 to place more restrictions on the use of the non-accountable program, including for SRC I ammunition items, but the guidance continues to allow the use of the non-accountable record when the Air Force does not intend to take ownership of the ammunition. According to Air Force officials, the decision of whether to maintain accountability for ammunition owned by other services in CAS depends on the operational situation and tactical environment. For example, for 20 additional SRC I ammunition items we reviewed that were owned by the Army but in the physical custody of the Air Force for testing purposes, Air Force officials maintained accountability in CAS and were able to provide transaction history. Officials told us that the Air Force is in the process of updating CAS to facilitate tracking of SRC I ammunition by owner and will move toward having most assets in CAS. However, if the Air Force does not revise guidance to clarify that accountability for all SRC I ammunition items in the Air Force’s custody—regardless of ownership—should be maintained in the Air Force’s system of record, both the Air Force and the owning service will lack a record of receipt and management of the SRC I ammunition while at the Air Force location; also the owning service will not have full assurance that accountability was maintained.

Army Depot and Marine Corps Guidance Do Not Specify a Time Frame for Receipting Shipments of SRC I Ammunition

We found that the military services generally recorded shipment and receipt of SRC I ammunition in their accountability systems; however, we found that existing Army depot and Marine Corps guidance do not specify a time frame for receipting shipments of SRC I ammunition. Marine Corps officials told us they generally adhere to the Navy’s guidance, which requires receipting of shipments within 1 business day, but Marine Corps installations are not required to follow that guidance. DOD policy emphasizes the need for continuous oversight to ensure protection of sensitive conventional arms, ammunition and explosives given that if these items are left vulnerable they have the potential to jeopardize the safety and security of personnel, activities, missions, and installations worldwide. DOD policy delegates to DOD component heads the responsibility to implement the procedures of DODM 5100.76, Physical Security of Sensitive Conventional Arms, Ammunition, and Explosives (AA&E) (Feb. 28, 2014) and develop supplemental guidance for the protection of arms, ammunition, and explosives in accordance with DODI 5100.76 Safeguarding Conventional Arms, Ammunition, and Explosives (AA&E) (May 20, 2010).

However, the military services varied in the extent to which they have developed guidance that addresses the time frame within which SRC I ammunition should be receipted on the accountable record. Air Force guidance specifies SRC I ammunition be receipted on the accountable record immediately; Army guidance for retail locations specifies within 24 hours; and Navy guidance specifies within 1 business day. In contrast, Army, at the depot-level, and the Marine Corps have not finalized guidance that addresses the required time frame for receipting SRC I ammunition. In our review, we found that, generally, for those services with guidance, SRC I ammunition was receipted on the accountable record within specified time frames, while the services without guidance were more likely to receipt SRC I ammunition days after arrival, and in some instances, more than 5 days after arrival.

In a non-generalizable sample of 104 shipments that we reviewed, we found the record of shipment in the shipper’s accountability system. For 100 of the 104 shipments, we found a corresponding receipt in the receiver’s accountability system. Of the four shipments for which we did not find a corresponding receipt, two were shipments of Army-owned items to the Air Force locations that the Air Force did not maintain in its accountable system because it did not own the items, and other two were shipments of Navy-owned SRC I items to a contractor for inspection. However, we found that approximately 20 percent of shipments of SRC I ammunition in our non-generalizable sample were not receipted within the time frames stated in military service policy or described as standard practice by military service officials.

Of the 104 shipments we reviewed, we were able to compare receipt information to arrival time for 99 shipments, and we found that 21 of these 99 shipments were not receipted on the services’ accountability system within 2 business days after the arrival of the shipment. All of the military services either have documented policy that requires receipting SRC I ammunition on the accountable record within 1 business day or less or told us that they generally adhere to that time frame, but in our analysis, we allowed for 2 business days because military services’ information systems may take an additional business day to record transactions. Table 3 provides additional details of receipting time frames for each service.

Air Force locations and Army retail locations are required by service guidance to adhere to established time frames for receipting SRC I ammunition, and all shipments we reviewed at Air Force locations for which we located receipts and all but 2 shipments we reviewed at the Army retail locations were receipted on the accountable record within 2 business days, as shown in table 3 above. In contrast, we found that the Army, at the depot-level, and the Marine Corps have not finalized guidance that addresses the required time frame for receipting SRC I ammunition. As identified in table 3, 12 of 21 shipments to Army depots and 5 of 30 shipments to Marine Corps locations were receipted more than 2 business days after arrival. An Army official told us that depots are required to receipt inbound shipments within 24 hours based on a policy letter issued prior to 2010, and that this requirement has also been in draft guidance since 2013, but that the guidance has not yet been finalized. Similarly, the Marine Corps does not have a receipting timeframe for SRC I ammunition in its guidance. Marine Corps officials told us they generally adhere to the Navy’s guidance, which requires receipting of shipments within 1 business day, but Marine Corps installations are not required to follow that guidance. Marine Corps officials told us that as of October 2015 they were in the process of incorporating a required time frame for receipting SRC I ammunition in Marine Corps guidance but did not provide a specific time frame for revising the guidance. Until the Army, at the depot-level, and the Marine Corps finalize and implement guidance that addresses the required time frame for receipting SRC I ammunition, Army and Marine Corps officials will not have the data they need to help assure accountability for all shipped SRC I ammunition.

Army Processes and Information Systems Do Not Provide Full Accountability for In-Transit Items

The Air Force and Navy have policies regarding maintaining in-transit accountability for shipped SRC I ammunition that generally adhere to DOD requirements, and the Marine Corps has planned system updates to adhere to requirements; however, the Army’s policy and processes do not fully adhere. DOD policy requires that the DOD component directing materiel into an in-transit status will retain accountability within the logistics records for that materiel until there is a formal acknowledgment of receipt. The Air Force and Navy maintain in-transit tables in their accountability systems that can be used to track ammunition that has been shipped but not yet receipted. Additionally, the Navy requires all in- transit materiel remain accountable to the issuing activity until properly receipted or resolved, and Air Force policy requires that each receiver acknowledge—orally or in writing or through other automated means— that the shipped SRC I items were received, and the date the assets were received.

The Marine Corps has planned system updates to adhere to DOD requirements to maintain accountability for in-transit SRC I ammunition items. According to Marine Corps officials, the Marine Corps tracks Marine Corps-owned assets in transit until formal acknowledgement of receipt in its OIS-MC system, but Marine Corps ammunition supply points do not maintain accountability for SRC I ammunition in transit to another service. Marine Corps officials told us that the system of record used by Marine Corps ammunition supply points is being upgraded in fiscal year 2016 to facilitate compliance with in-transit requirements.

The Army does not maintain accountability for all in-transit items within the logistics records for that materiel until there is a formal acknowledgement of receipt. Army regulations require the Joint Munitions Command to track shipments of SRC I ammunition from depot to depot, depot to unit, or unit to depot using DTTS and to monitor shipping documents and receipts to ensure they are closed or posted in a timely manner. However, officials from the Joint Munitions Command told us they do not receive confirmation of receipt from some entities, including other military services and some contractors. The Army’s systems do not maintain in-transit tables that show items that have been shipped out of one location and are due in to another. When the Army ships SRC I ammunition from depots or retail locations, it drops those items from its accountable systems without a requirement to confirm or document that the shipment was received. For SRC I ammunition shipments to other Army locations, the Army retains visibility of shipments by maintaining a record of SRC I ammunition items that have been shipped in its Worldwide Ammunition Reporting System-New Technology (WARS-NT) database, and matches up shipped items and receipted items by serial number to confirm that the items were received. However, for shipments to other military services, Army officials told us that the Army clears shipped items from its WARS-NT records upon receiving confirmation that the items were shipped.

Army officials told us that limitations in their depot-level system, called LMP, and in their retail-level system, called the Standard Army Ammunition System, prevent them from maintaining full accountability for in-transit items, and that this deficiency, which affects all classes of supply, has been identified by the Army since 2012 at both the depot and retail level but that a solution has not yet been developed because, in part, of technical complexities. However, Army officials have not evaluated or identified actions that the Army could take to enable it to retain accountability for in-transit items until acknowledgment of receipt. Unless the Army evaluates and identifies actions to retain accountability for in-transit items until acknowledgement of receipt, the Army will not have a path forward to ensure that accountability for in-transit SRC I ammunition was maintained and the ammunition was received, thereby creating a potential gap in accountability and visibility of this ammunition.

The Military Services Have Not Consistently Ensured Timely, Complete, and Accurate Information to Maintain Full Visibility of SRC I Ammunition

The military services have not consistently ensured timely, complete, and accurate information to maintain full visibility of SRC I ammunition in the continental United States. We found the Army has not ensured timely and complete information of SRC I ammunition returned to the contractor, but has begun to take action to ensure reporting to WARS-NT to improve visibility. We also found the Army had inaccurately categorized two variants of SRC I rockets, but took immediate action to add the rocket variants to the catalog listing of SRC I ammunition. Further, we identified examples of the military services not entering timely information in the Defense Transportation Tracking System (DTTS) on shipments to aid Military Surface Deployment and Distribution Command tracking by satellite, and of the services entering inaccurate or incomplete data about shipments of SRC I ammunition, which affects visibility of SRC I ammunition in transit.

The Army Did Not Have Timely, Complete, and Accurate Information of All Its SRC I Ammunition, but Has Taken Action to Improve Visibility

We found that the Army did not have timely, complete, or accurate information of its SRC I ammunition, but has taken action in two areas in order to improve visibility. In one area, we found Army officials had not ensured timely and complete information of SRC I ammunition returned to the contractor for repair, upgrade, maintenance, or testing and had not followed guidance for maintaining visibility of SRC I missiles. While the Army’s WARS-NT system, which is the Army’s official system for tracking SRC I ammunition, provided visibility of SRC I missiles located at the contractor facility, WARS-NT did not have timely or complete records to show visibility of all SRC I missiles at the contractor’s site. In January 2015, we identified an October 2014 shipment of 58 SRC I missiles sent from an Army depot to a contractor facility for repair. Although we confirmed during our site visit that the 58 missiles were located at the contractor’s facility and that the contractor’s automated information system accounted for the missiles, we found that WARS-NT did not have timely or complete data about the shipped 58 SRC I missiles. After we identified the discrepancies in records systems, Army officials acknowledged that while it is an Army requirement for a contractor to report the receipt of these items to the WARS-NT program office, this requirement was not included in the contract. Army officials are taking action and are coordinating a modification to the contract to require the prime contractor to routinely report receipt of shipments to WARS-NT per Army regulation. In the second area, we found that WARS-NT had inaccurately categorized two variants of SRC I rockets. Specifically, we found 55 SRC I ammunition items—variants of the M72 rocket—were not included in the WARS-NT system as SRC I ammunition items. After we noted the omission of the rocket variants in WARS-NT as SRC I ammunition, Army officials took action in August 2015 to add the rocket variants to the catalog listing of SRC I ammunition and in the WARS-NT system as SRC I ammunition.

The Military Services Used Satellite Tracking for Shipments of SRC I Ammunition in Our Sample, but Did Not Consistently Provide Timely, Complete, and Accurate Information to Aid Tracking

We found that the military services, as required by DOD regulation, used satellite tracking for nearly all of the 104 shipments of SRC I ammunition that we reviewed; however, the services did not always enter timely, accurate, and complete information that is required to aid tracking. The Defense Transportation Regulation requires satellite tracking of shipments of SRC I ammunition via the Defense Transportation Tracking System (DTTS). We found that 103 of 104 shipments of SRC I ammunition in a non-generalizable sample we reviewed were tracked in DTTS using satellite monitoring. DTTS, which is maintained by the Military Surface Deployment and Distribution Command, which falls under the U.S Transportation Command, provides satellite tracking capability of shipments of sensitive conventional arms, ammunition and explosives, including SRC I ammunition items, from the point of departure until the point of arrival. However, we observed problems with the timeliness, accuracy, and completeness of the data provided by the military services in DTTS, which limited the information available to aid the Military Surface Deployment and Distribution Command’s tracking of these shipments and its ability to facilitate responses to any incidents, if necessary.

Timeliness of Shipping Entries

We found that the military services did not always enter timely information in DTTS on SRC I ammunition shipments to aid the Military Surface Deployment and Distribution Command’s tracking of SRC I ammunition by satellite. We observed timeliness problems both at the point of shipment departure and the point of shipment arrival.

Shipment departure: The Defense Transportation Regulation specifies that the military services’ shipping offices must enter shipping information in DTTS prior to carrier departure. Data provided by the Military Surface Deployment and Distribution Command showed that information about 93 of 1,008 shipments identified as containing SRC I items between November 1, 2013, and April 30, 2015, were not in DTTS at the time of carrier departure. According to Military Surface Deployment and Distribution Command’s data, information was entered more than 1 hour after carrier departure for 68 of the 93 shipments. On average, information about these 68 shipments was not entered until approximately 8 hours after departure. According to Military Surface Deployment and Distribution Command officials, when information is not entered in the DTTS at the time of carrier departure, the command is still notified that these shipments are on the road when drivers turn on their satellite monitoring devices. However, the command does not have information about the contents of these shipments and therefore DTTS is unable to provide essential information to initiate rapid emergency response to in-transit accidents or incidents to minimize effect. Additionally, if a driver did not turn on the satellite monitoring device, the command would not be alerted to that situation since it would be unaware that a shipment was expected.

Shipment arrival: The Defense Transportation Regulation requires entry into DTTS of confirmation of receipt of SRC I shipments within 2 hours of the offloading of each shipment. Data provided by the Military Surface Deployment and Distribution Command for SRC I shipments between November 1, 2013, and April 30, 2015, showed that 572 of 992 shipments to the military services containing SRC I items were not confirmed within the calendar month that they arrived. Further, as of April 30, 2015, Military Surface Deployment and Distribution Command data shows a backlog of 364 SRC I shipments to the military services dating as far back as November 2011 that had not been confirmed. According to Military Surface Deployment and Distribution Command officials, shipments that are not confirmed in DTTS as required hinder their ability to ensure successful transportation of SRC I ammunition because it requires the command to rely solely on the carrier to confirm that SRC I ammunition has been delivered.

The Military Surface Deployment and Distribution Command and the military services have taken steps to improve the timeliness of data in DTTS. The Military Surface Deployment and Distribution Command works with designated military service representatives on transportation issues, and provides reports to the military representatives on timeliness of confirmation of individual SRC I shipments and SRC I shipments from prior months that have not been confirmed. Military Surface Deployment and Distribution Command officials also told us that they have been working to try to reduce systemic causes of shipments not being in DTTS at the time of shipment departure, such as system interface delays. Similarly, military service representatives told us that they have also tried to address issues of timeliness of reporting in DTTS. For example, the Army issued guidance in May 2014 reminding transportation offices and ammunition supply points of their responsibilities with regard to entering information in DTTS.

However, both Military Surface Deployment and Distribution Command officials and the military service representatives acknowledged their collaboration could be improved to determine what information is needed to improve the military services’ oversight of the timeliness of data entry in DTTS. For example:

With regard to shipments not entered in the system in a timely manner, Military Surface Deployment and Distribution Command officials told us that they provided reports to the military service representatives on shipments not in the system at the time of departure; however, they stopped notifying the military service representatives through emails to request assistance because they did not observe a decrease in the number of such shipments.

With regard to shipment confirmations, while the Military Surface Deployment and Distribution Command continues to provide reports on SRC I shipments that were not confirmed in a timely manner, military service representatives told us that the information they are provided does not include sufficient detail for them to work with receiving locations to improve compliance with confirmation requirements. For example, the report provided by the Military Surface Deployment and Distribution Command does not identify the office responsible for confirmation, and it provides arrival time rather than offload time, although confirmation requirements in the Defense Transportation Regulation cite time elapsed from offload time.

Until the Military Surface Deployment and Distribution Command and the military services collaboratively determine the specific information required for the military services to ensure timely data entry into DTTS, in accordance with the Defense Transportation Regulation, the Military Surface Deployment and Distribution Command will continue to lack full visibility of shipments of SRC I ammunition at certain points during the shipping process and the military services will not be well positioned to improve their oversight of the timeliness of data entry.

Completeness and Accuracy of Data on Shipments

We identified examples of the military services entering incomplete or inaccurate data in DTTS about shipments of SRC I ammunition.

Incomplete information:

The transportation control number for 8 of 104 shipments in our sample was not listed in DTTS, which limits the information available to the Military Surface Deployment and Distribution Command about individual shipments being tracked. For example, if one or more transportation control numbers associated with a shipment are not listed in DTTS, the Military Surface Deployment and Distribution Command may not have accurate information about the type, quantity, and security risk category of ammunition being tracked.

164 of 1,008 SRC I shipments from November 1, 2013, through April 30, 2015, which were reported to us by the Military Surface Deployment and Distribution Command, were missing data in the Department of Defense Identification Code field, which provides information about the specific type of ammunition being shipped. Inaccurate information—9 of 104 shipments in our sample had inaccurate controlled inventory items codes and were not identified in DTTS as SRC I shipments, which required us to go back to the Military Surface Deployment and Distribution Command to obtain additional information to confirm the shipment had been tracked by satellite.

According to Standards for Internal Control in the Federal Government, agencies should have relevant, reliable, and timely information for decision-making and external reporting purposes. Completeness and accuracy are key characteristics of reliable data and refer to (1) the extent to which relevant records are present and that fields in each record are populated appropriately; (2) recorded data reflect the actual underlying information. Military Surface Deployment and Distribution Command officials told us that they attempted to address completeness and accuracy issues on a shipment-by-shipment basis. According to the officials, when an operator responsible for tracking an individual shipment notices missing or inaccurate information—such as when information in the paperwork given to the driver does not match information in the system—the operator attempts to work with the military service’s shipping office to correct that information for the shipment. However, neither the military services nor the Military Surface Deployment and Distribution Command have conducted an analysis of the problems the Military Surface Deployment and Distribution Command has observed with the completeness and accuracy of data entered by the military services to identify areas for improvement on a broader scale. Until the military services, with the aid of the Military Surface Deployment and Distribution Command, conduct analysis of the completeness and accuracy of data entered into DTTS by shippers on SRC I ammunition shipments, DOD will continue to lack full visibility of shipments of SRC I ammunition and the military services will not be well positioned to improve their oversight of the completeness and accuracy of the data.

Conclusions

SRC I ammunition is treated as a higher risk than other conventional ammunition and serves as a potential threat if it were obtained and used by unauthorized individuals or groups. We found that the military services maintained accountability in their automated information systems of SRC I ammunition at 11 sampled locations. However, we found examples of SRC I ammunition items that were in the physical custody of the Air Force but owned by other services and accountability was not maintained on the Air Force’s system of record. If the Air Force does not revise guidance to clarify that accountability of all SRC I ammunition items in the Air Force’s custody—regardless of ownership—is maintained in the Air Force’s system of record, both the Air Force and the owning service will not have full assurance that accountability was maintained. Also, we found that the military services generally recorded shipment and receipt of SRC I ammunition in their accountability systems, but the Army and Marine Corps do not have guidance that required the receipting of SRC I ammunition in a timely manner, in accordance with DOD policy. Until the Army, at the depot-level, and the Marine Corps finalize and implement guidance that addresses the required time frame for receipting SRC I ammunition, Army and Marine Corps officials will not have the data they need to help assure accountability for all shipped SRC I ammunition. Further, the Air Force, Navy, and Marine Corps have policies or plans regarding maintaining in-transit accountability for shipped SRC I ammunition to generally adhere to DOD requirements, but the Army’s policy and processes do not fully adhere. Unless the Army evaluates and identifies actions to retain accountability for in-transit items until acknowledgment of receipt, the Army will not have a path forward to ensure that accountability for in-transit SRC I ammunition was maintained and the ammunition was received, thereby creating a potential gap in accountability and visibility of this ammunition.

In addition, we found that the military services have not always entered timely information in DTTS on SRC I ammunition shipments, as specified in the Defense Transportation Regulation, to aid the Military Surface Deployment and Distribution Command’s tracking and visibility of SRC I ammunition by satellite. However, the Military Surface Deployment and Distribution Command and the military services have not agreed on the specific information required for the military services to ensure timely data entry into DTTS, in accordance with the Defense Transportation Regulation. Moreover, we identified examples of the military services entering incomplete or inaccurate data in DTTS about shipments of SRC I ammunition. Until the Military Surface Deployment and Distribution Command and the military services collaboratively determine the specific information required for the military services to ensure timely data entry into DTTS, and the military services, with the aid of the Military Surface Deployment and Distribution Command, conduct analysis of the completeness and accuracy of data entered into DTTS military services’ shipping offices on SRC I ammunition shipments, the Military Surface Deployment and Distribution Command will continue to lack full visibility of shipments of SRC I ammunition and the military services will not be well positioned to improve their oversight of the timeliness, completeness, and accuracy of data entered in DTTS.

Recommendations for Executive Action

We are making six recommendations to enhance the department’s policy and procedures and improve the accountability and visibility of SRC I ammunition.

To ensure the accountability and protection of SRC I ammunition, in accordance with DOD policy, we recommend the Secretary of Defense direct the Secretary of the Air Force to revise guidance to clarify that accountability for all SRC I ammunition items in the Air Force’s custody— regardless of ownership—should be maintained in the Air Force’s system of record.

To ensure the Army and Marine Corps record the receipt of shipped SRC I ammunition in their accountability systems, and in accordance with DOD policy, we recommend the Secretary of Defense direct: the Secretary of the Army to finalize and implement guidance that addresses the required time frame for receipting SRC I ammunition at the depot level. the Commandant of the Marine Corps to finalize and implement guidance that addresses the required time frame for receipting SRC I ammunition at Marine Corps locations.

To ensure the Army retains accountability of SRC I ammunition in an in- transit status, consistent with DOD policy, we recommend the Secretary of Defense direct the Secretary of the Army to evaluate and identify actions to enable the Army to retain accountability for in-transit items until acknowledgment of receipt.

To help improve visibility and tracking of SRC I ammunition shipments, we recommend the Secretary of Defense direct the Secretaries of the military departments and the Military Surface Deployment and Distribution Command, through the Commander of the U.S. Transportation Command, to collaboratively determine the specific information required for the military services to ensure timely data entry into DTTS, in accordance with the Defense Transportation Regulation.

To help improve the completeness and accuracy of data provided by the military services to the Military Surface Deployment and Distribution Command in accordance with federal internal control standards, we recommend the Secretary of Defense direct the Secretaries of the military departments, with the aid of the Military Surface Deployment and Distribution Command, to conduct analysis of the completeness and accuracy of the data entered into DTTS.

Agency Comments and Our Evaluation

We provided a draft of this report to DOD for review and comment; the department provided technical comments that we considered and incorporated as appropriate. DOD also provided written comments on our recommendations, which are reprinted in appendix V. In commenting on this draft, DOD concurred with all six of our recommendations.

With respect to the first recommendation to ensure the accountability and protection of SRC I ammunition, DOD stated that the Air Force released a memorandum on December 24, 2015, directing Air Force units to account for all SRC I ammunition items in their custody, regardless of ownership, and to maintain them in the Combat Ammunition System. Additionally, DOD stated that such procedures will be included in Air Force guidance by September 30, 2016. With respect to our second and third recommendations to ensure the Army and Marine Corps record the receipt of shipped SRC I ammunition in their accountability systems within the required timeframes, DOD stated that the Army will include procedures on the required time frame for receipting SRC I ammunition at the depot-level in their guidance by September 30, 2016. Further, DOD stated that the Marine Corps has issued interim guidance via a Naval Message in January 2016 to address SRC I ammunition accountability along with required receipt times and that such procedures will be included in their guidance by June 30, 2016. Regarding our fourth recommendation to ensure the Army retains accountability of SRC I ammunition in an in-transit status, DOD stated that the Army will evaluate and identify by June 30, 2016, actions to enable the Army to retain accountability for in-transit items until acknowledgment of receipt. Further, DOD stated the proposed actions will then be prioritized for incorporation into any required follow-on work with Army Class V management systems, such as the Logistics Modernization Program and the Standard Army Ammunition System.

Regarding our fifth recommendation to help improve visibility and tracking of SRC I ammunition shipments, DOD stated that the military services and the Military Surface Deployment and Distribution Command will collaboratively determine the specific information the Military Surface Deployment and Distribution Command can provide to the military services to correct data missing in DTTS at the time of shipment, and to complete shipment receipts. Furthermore, to provide greater oversight of the DTTS data, DOD stated the military services and the Military Surface Deployment and Distribution Command will develop the processes required to ensure regular feedback on accuracy and timeliness. Finally, with respect to our sixth recommendation to help improve the completeness and accuracy of data provided by the military services to the Military Surface Deployment and Distribution Command, DOD stated that the military services and the Military Surface Deployment and Distribution Command will complete the necessary analysis of the completeness and accuracy of the data entered into DTTS.

We are sending copies of this report to the appropriate congressional committees, the Secretary of Defense; the Secretaries of the Army, the Navy, and the Air Force; and the Commandant of the Marine Corps. In addition, the report is available at no charge on the GAO website at http://www.gao.gov.

If you or your staff has any questions about this report, please contact me at (202) 512-5257 or merrittz@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff members who made key contributions to this report are listed in appendix VI.

Appendix I: Scope and Methodology

Our review of the Department of Defense’s (DOD) management of SRC I ammunition focused on the four military services— Army, Navy, Marine Corps, and Air Force— because each military service owns, stores, and ships SRC I ammunition. To determine the extent to which the military services have maintained accountability of SRC I ammunition in the continental United States, we reviewed DOD policy and military service guidance, including Department of Defense Manual (DODM) 5100.76, Physical Security of Sensitive Conventional Arms, Ammunition, and Explosives (AA&E), (Apr. 17, 2012), among others, detailing: continuous accountability, frequency and process for conducting physical inventories, process for making adjustments to the electronic record if necessary, tracking of SRC I ammunition by serial number, and the shipment of SRC I ammunition in the continental United States. During our review, we visited 11 military locations—including 3 Army depots and 8 military service locations, such as military service installations, bases, and ammunition supply points, with SRC I ammunition—selected based on a number of factors including the size of SRC I inventory, the number of shipments to and from the location, and the variety of SRC I ammunition being stored. We also visited a contractor with a current production contract for SRC I missiles as SRC I ammunition items are in the contractor’s custody while at the contractor’s facility for repair, maintenance, or upgrade. Additionally, we interviewed OSD and military services officials responsible for the management of SRC I ammunition, including inventory personnel and transportation officials, to gain an understanding of the frequency and process for conducting physical inventories and how shipments of SRC I ammunition are coordinated.

We compared a non-generalizable sample of over 600 SRC I ammunition items against the records in the military services’ automated information systems to verify accountability. For the Army we used the Logistics Modernization Program (LMP), Standard Army Ammunition System- Modernization (SAAS-MOD), and Worldwide Ammunition Reporting System-New Technology (WARS-NT). For the Navy and Marine Corps we used Ordnance Information System- Wholesale (OIS-W), Ordnance Information System-Retail (OIS-R), and Ordnance Information System- Marine Corps (OIS-MC). For the Air Force we used Combat Ammunition System (CAS). Specifically, during our site visits to 11 military locations and 1 contractor location, we went through storage buildings with SRC I ammunition and selected SRC I ammunition from different pallets to include a range of SRC I items as well as items from recent shipments, and documented identifying information including serial and production lot number. We verified the Army, Navy, and Marine Corps SRC I ammunition items by serial and lot number. Due to the way the Air Force maintains its records, we verified their SRC I ammunition to records based on lot number and quantity.

We analyzed DOD policy and military service guidance on frequency and process for conducting physical inventories and reviewed supporting documentation to determine whether the services were maintaining accountability by conducting physical inventories according to requirements. For Army depots, we collected documentation of completed physical inventories for three fiscal years prior to our audit work— 2012, 2013, and 2014 and conducted site visits to three Army depots to observe a walk-through of their physical inventory process. We selected the three Army depots to visit based on a number of factors, including range in quantity and type of SRC I in storage and recent shipments. To supplement our site visits, we also interviewed inventory personnel at the remaining depots regarding the physical inventory process and process for adjusting the electronic record, if necessary. For five military service locations we visited, we requested documentation of the last three completed physical inventories to obtain a variety of physical inventories (e.g., monthly, quarterly, annually, or change in command) and we also observed a walk-through of their physical inventory process. Further, to supplement our site visits, we randomly selected 10 additional Air Force locations and obtained documentation for their last three completed physical inventories. We reviewed the inventories for our non- generalizable sample of 22 selected locations to determine whether physical inventories were being conducted in accordance with DOD policy and military service guidance and at required frequencies. Finally, during our site visit with the contractor, we confirmed the contractor had completed physical inventories of SRC I missiles in its custody as well as discussed with officials how they conduct physical inventories of SRC I ammunition at their location.

We also examined the military services’ guidance and procedures for maintaining accountability for items owned by one service but in the physical custody of another service. We analyzed DOD policy and military service guidance on maintaining accountability for ammunition to determine the extent to which military services’ guidance aligned with DOD policy. We also analyzed data and documents obtained from the Air Force, Army, and Marine Corps on 55 SRC I items from 4 shipments of SRC I ammunition in the continental United States that contained ammunition owned by the Army or Marine Corps that was shipped to and held in the physical custody of the Air Force but for which we had found that accountability was not maintained on the Air Force’s system of record. We identified these items because we were unable to locate receipts for certain shipments in the Air Force’s system of record when we reviewed it for our analysis of the timeliness of receipt of shipments of SRC I ammunition described below. Information we report about the number of SRC I items or shipments we identified as being owned by another service but in the physical custody of the Air Force and not maintained on the Air Force’s accountable record is non-generalizable to the overall universe of SRC I items but provides insights on how the Air Force manages items in its physical custody that are owned by another service.

Further, we analyzed shipping documents and military service data for a non-generalizable sample of 104 SRC I shipments, and compared receipting time frames for these shipments to military service guidance to analyze how accountability was maintained. When the military services did not have documented guidance on receipting time frames, we obtained information from military service officials about standard procedures followed by the military service. Our sample was comprised of shipments that occurred between November 1, 2013, and April 30, 2015, and that were shipped to or from locations we visited or interviewed. We selected these time frames to provide an 18-month window that provided one prior year’s data and six months that coincided with the period when we were conducting field work. Further, we selected our sample to reflect shipments to or from a variety of military services, locations, and location types. Because our sample of shipments is non-generalizable, results of our analysis cannot be used to make inferences about all SRC I shipments within the continental United States but they provide insights on the military services’ adherence to DOD policy and service-level guidance or standard practice regarding the shipment of SRC I ammunition. For the 104 shipments in our sample, we obtained and reviewed shipping documents and receipt data from the receiving military services’ accountability systems. We compared the receipt data from the receiving military service’s accountability systems to data on shipment arrival time at the receiving location that we obtained from the Defense Transportation Tracking System (DTTS), maintained by the Military Surface Deployment and Distribution Command. For our analysis, we analyzed whether shipments were receipted within 2 business days of the day of arrival of the shipment even though either service guidance or standard practice generally required receipting within 1 business day or less. We allowed for 2 business days because military services’ information systems may take an additional business day to record transactions.

Also, we analyzed military service guidance related to providing accountability for in-transit items and compared that guidance to DOD policy to assess whether the military services’ policies and processes for maintaining accountability for in-transit SRC I ammunition items enabled the military services to maintain accountability of SRC I ammunition in the continental United States. When we determined that a military service’s guidance and processes did not align with DOD policy, we requested and reviewed additional documentation, such as analyses of gaps in information system capabilities and documentation of planning of system upgrades, and conducted interviews with military service officials to determine the reasons for the differences.

To determine the extent to which DOD has maintained visibility of SRC I ammunition in the continental United States, we reviewed DOD policy and military service guidance, including DODM 5100.76 and the Defense Transportation Regulation, among others, detailing procedures to maintain visibility of SRC I ammunition, including in-transit visibility during shipment, satellite tracking of shipments, and timeframes for entering shipment information into DTTS. In addition, we interviewed relevant officials at the Office of the Secretary of Defense, the military services, U.S. Transportation Command, and the Military Surface Deployment and Distribution Command to gain an understanding of how visibility is maintained in their automated information systems, how shipments of SRC I ammunition are processed for shipping and entered into DTTS, and how visibility is maintained while the shipment is in transit.

We obtained SRC I ammunition data from each of the military services’ automated information systems as of April 30, 2015, and analyzed this data for timely, complete and accurate information to maintain full visibility of SRC I ammunition in the continental United States. Specifically, we compared this data, based on a number of elements including type of SRC I ammunition, location in the continental United States, condition of the SRC I ammunition, and military service ownership codes, against information in the department’s National Level Ammunition Capability (NLAC) system, a DOD-wide repository that provides visibility of SRC I ammunition data, to identify inconsistencies across DOD and the military services.

We also analyzed DOD requirements for satellite tracking from the Defense Transportation Regulation and obtained and analyzed information from DTTS provided by the Military Surface Deployment and Distribution Command about satellite tracking of shipments of SRC I ammunition in the continental United States from November 1, 2013, through April 30, 2015, to gain an understanding of how visibility is maintained. We analyzed data from November 1, 2013, to April 30, 2015, to correspond to the time frame we used to select our non-generalizable sample of shipments for review. To examine whether the military services used satellite tracking for shipments included in our non-generalizable sample of 104 shipments described above, we compared the transportation control number for each shipment in our sample to transportation control numbers associated with SRC I shipments in DTTS. When we could not locate a shipment in DTTS by transportation control number, we followed up with the Military Surface Deployment and Distribution Command to obtain additional information about the shipment, since in some cases the transportation control number was in DTTS but not in the data provided to us since the data was provided based on a bill-of-lading number. For the shipments that neither we nor the Military Surface Deployment and Distribution Command could locate in DTTS, we requested additional information about the shipment from military service officials to attempt to locate the shipment in DTTS through a means besides the transportation control number. For example, in some cases, the shipper had not identified the shipment in DTTS by transportation control number, and we were able to obtain and search on the bill-of-lading number to confirm that the shipment had been tracked in DTTS.

We also examined the extent to which the military services provided timely data in DTTS, in accordance with the Defense Transportation Regulation, to ensure visibility. We analyzed data and reports provided by the Military Surface Deployment and Distribution Command from DTTS to identify the number of SRC I shipments between November 1, 2013, and April 30, 2015, for which information had not been entered into the system at the time of shipment departure and the number of shipments that were not confirmed within the calendar month of arrival. Further, we examined the extent to which the military services provided accurate and complete data in DTTS. We compared values for key data fields in DTTS, such as the DOD Identification Code and transportation control number, to shipping documents for selected shipments from our sample of 104 shipments. We also analyzed the number of missing values for selected data fields in DTTS for the 1,008 SRC I shipments in the continental United States between November 1, 2013, and April 30, 2015, reported to us by the Military Surface Deployment and Distribution Command. While we identified some issues related to the accuracy and completeness of DTTS data that are described in this report and may affect the reliability of the overall number of SRC I shipments during this time frame, we determined that the data were sufficiently reliable for our purposes of analyzing information about individual shipments in our sample and general trends in the timeliness, accuracy, and completeness of data entry in DTTS. To obtain additional information about the timeliness, accuracy, and completeness issues we identified and steps that were being taken to address these issues, we conducted interviews with U.S Transportation Command and Military Surface Deployment and Distribution Command officials, as well as representatives from each of the military services who are assigned to coordinate with the Military Surface Deployment and Distribution Command on transportation issues and reviewed additional documentation provided by the Military Surface Deployment and Distribution Command and the military services, such as reporting provided by the Military Surface Deployment and Distribution Command to the military services.

Table 4 lists the offices that we visited or contacted during our review.

We conducted this performance audit from September 2014 to February 2016 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: Selected Security Risk Category I Ammunition

Appendix III: Overview of Policy and Guidance of SRC I Ammunition in the Continental United States

Department of Defense Manual (DODM) 5100.76, Physical Security of Sensitive Conventional Arms, Ammunition, and Explosives (AA&E) sets forth DOD policy on the physical security of sensitive conventional AA&E. According to DODM 5100.76, continuous program and policy oversight is required to ensure protection of AA&E within DOD, and DOD components are required to track and conduct physical inventories of SRC I ammunition by serial number. DOD policy requires SRC I ammunition to be treated as a higher risk than other conventional ammunition which requires a higher level of protection and security. DOD and the military services have policy and guidance on how to account for, safeguard, conduct physical inventories, adjust if necessary, track, and ship SRC I ammunition within and between services and to contractors for repair, as shown in table 5 below.

Appendix IV: GAO’s Prior Work on SRC I Ammunition

Defense Transportation: DOD Needs to Take Actions to Improve the Transportation of Hazardous Material Shipments

In May 2014, we found that the department has experienced some challenges in implementing hazardous materials (HAZMAT) regulations and other guidance, which can adversely affect the safe, timely, and cost- effective transportation of HAZMAT. For example, we found that at least 44 times during fiscal years 2012 and 2013, DOD installations did not provide commercial carriers with access to secure hold areas for arms, ammunition, and explosives shipments or assist them in finding alternatives, as required by DOD regulations. We made 3 recommendations and all 3 have been closed as implemented. Table 7 summarizes our recommendations and their implementation status.

Defense Logistics: Actions Needed to Improve Department-Wide Management of Conventional Ammunition Inventory

In March 2014, we found that the military services’ automated information systems used to maintain accountability for ammunition inventory have some limitations that affect their ability to facilitate efficient management of conventional ammunition. For example, the systems cannot directly exchange ammunition data because they use different exchange formats that require extra time and resources to ensure data efficiency when exchanging between systems. We also found that Army reports of ammunition inventory data, used in the process for collecting and sharing ammunition data among the military services do not include information on certain missiles. We concluded that without incorporating these items in the Army’s report, DOD may lack full transparency about all available items and may miss opportunities to avoid procurement costs for certain usable items that may already be available in the Army’s stockpile. We made 7 recommendations, of which 2 have been implemented and 5 remain open. Table 8 summarizes our recommendations and their implementation status.

DOD Inventory: Weaknesses in Controls Over Category I Rockets

In April 2000, we found internal controls weaknesses at an Army ammunition depot that resulted in a loss of accountability and control over SRC I rockets. For example, serial number control of SRC I rockets was lost at the time of shipment from the contractor because serial numbers listed on receiving reports that accompanied shipments did not correspond to the actual items and quantities of the respective shipments. We also noted that these control weaknesses indicate that the depot’s inventory business processes for these sensitive items do not fully comply with federal accounting and systems requirements. We made 10 recommendations, of which 9 have been implemented and 1 has not been implemented. Table 9 summarizes our recommendations and their implementation status.

Inventory Management: Vulnerability of Sensitive Defense Material to Theft

In September 1997, we found oversight weaknesses with SRC I rockets and that the military services have different procedures and requirements for maintaining oversight of the rockets. Further, we found that discrepancies existed between records of the number of missiles and a physical count we conducted. In addition, we identified that some facilities were not fully complying with DOD physical security requirements. We made 5 recommendations, of which all 5 have been closed as implemented. Table 10 summarizes the recommendations and their implementation status.

Inventory Management: Handheld Missiles Are Vulnerable to Theft and Undetected Losses

In September 1994, we found discrepancies in the quantities, locations, and serial numbers of SRC I missiles inventories, which we concluded indicated that the services’ oversight and recordkeeping for the missiles is poor. We also noted, among other findings, that the services did not know how many missiles they should have in their possession because they lacked systems to track the missiles by serial number. We made 6 recommendations, all of which have been implemented. Table 11 summarizes the recommendations and their implementation status.

Appendix V: Comments from the Department of Defense

Appendix VI: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Marilyn Wasleski (Assistant Director), Laura Czohara, Martin de Alteriis, Amie Lesser, Felicia Lopez, Sean Manzano, Anne McDonough-Hughes, Steve Pruitt, and Richard Powelson made key contributions to this report.