oversight

Financial Management: Accuracy of Air Force Aircraft and Missile Data Could Be Improved

Published by the Government Accountability Office on 1997-08-15.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

B-275035

data in the three tables, which should generally be consistent. This type of
analysis is an effective and efficient means of identifying inconsistencies or
anomalies in the data.

Examples of the inconsistencies we identified in aircraft and missile information
contained in the three tables included the following.

      Over 200 ground launched cruise missiles were identified in the
      assignment table as active combat coded missiles, but did not appear in
      either of the other two tables. According to REMIS program office
      officials, these missiles had been destroyed years ago as part of a treaty
      with the Soviet Union.

-     Twelve aircraft and missile records were erroneously included in the
      inventory table, although they did not appear in the assignment and
      possession tables. These aircraft and missile records had invalid serial
      numbers (for example, several serial numbers had less than the required
      characters) and did not represent actual equipment items and, therefore,
      should have been deleted from the system.

-     Twenty-five aircraft and eight air-launched cruise missiles were identified
      in the inventory and assignment tables that had assigned command and
      purpose codes, but were missing from the possession table. This is a
      concern from a visibility standpoint as the physical location of the assets
      cannot be readily identified if the possession data are not complete. We
      later learned that these aircraft and missiles had been transferred from
      one unit to another, but the receiving unit did not promptly update
      REMIS for the receipt of these assets.

-     Serial numbers for 10 helicopters were each in the inventory table twice,
      under two different type/model/series designators. These helicopters
      appropriately appeared only once for each serial number in the other two
      tables. We learned that these aircraft had undergone a type/model/series
      modification that had been input improperly into REMIS.

Once inconsistencies or discrepancies are identified by this type of database
analysis, the next step would be to research the problem and take the actions
necessary to correct it and thereby improve the accuracy of the database.
REMIS program office officials advised us that they did not perform this type of
systematic analysis to identify inaccuracies on a regular basis. One Aerospace
Vehicle Distribution Officer said that he reviews the database on a case-by-case
basis but did not perform a systematic review. When we brought these and
other discrepancies to the attention of REMIS officials, the officials corrected


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several of them and advised us that they would initiate actions to correct the
other errors we identified.

IMPROVED REMIS INFORMATION NEEDED
TO PREPARE ACCURATE FINANCIAL STATEMENTS

In addition to the inaccuracies we identified that could affect the myriad of
operational and logistical functions that REMIS data are used to support, we
identified two issues that affect the accuracy of the Air Force's financial
statements. At the end of each fiscal year, the REMIS program office provides
a report to DFAS' Denver Center, which prepares the Air Force's financial
statements, showing the number and value of Air Force aircraft and missiles.
However, the report provided is based on the possession table, which tends to
understate assets because it does not include assets in transit or assets that
have not yet been reported as received by the new command. DFAS was
unaware that the list provided did not include all Air Force aircraft and
missiles.

Also, in some cases, DFAS was not able to distinguish between U.S. Air Force
and foreign-owned aircraft that are included in the REMIS reports for
maintenance tracking purposes. As a result, the Air Force's fiscal year 1996
financial statements included 82 foreign-owned aircraft. DFAS was able to
exclude some foreign-owned aircraft from Air Force financial statements
because the REMIS report clearly identified these aircraft as being under
foreign command. However, the REMIS program office did not point out to
DFAS that the 82 foreign.owned aircraft were assigned to U.S. commands
operating under international training agreements. The REMIS report contained
an aircraft configuration data field that identifies foreign-owned aircraft and
could have allowed DFAS to identify the 82 foreign-owned aircraft. DFAS
officials stated that they were not aware of these foreign-owned aircraft and
were not aware that the report identified these aircraft under U.S. command as
foreign-owned.

CONCLUSIONS

Because REMIS data are relied upon by over 1,700 users for many purposes,
from strategic planning and maintenance tracking to financial reporting, it is
imperative that the data be as accurate as possible. The database analysis we
performed, which identified several errors, could be easily replicated by the
REMIS program office on a regular basis-for example, monthly. By performing
such a regular analysis, the REMIS program office could help ensure that the
system's many users have access to more accurate data at any point in time.
This type of proactive and systematic approach to identifying and then resolving
errors or discrepancies would help improve and maintain the accuracy of the

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database. Ensuring data accuracy is particularly important as the Air Force
moves to implement its new equipment tracking system over the next several
years.

In addition, the accuracy of the Air Force's financial statements and reports
would be improved if DFAS Denver received reports that included (1) all
aircraft and missiles and (2) information necessary to identify and eliminate
from its reports all foreign-owned aircraft.

RECOMMENDATIONS

We recommend that you ensure that the REMIS program office performs an
automated analysis on a regular basis, for example monthly, to identify internal
inconsistencies or discrepancies, such as the mismatches we identified. Once
identified, the problems should then be researched and resolved to help
improve the accuracy of the database and identify systemic problems. It is
especially important that such analysis and corrective follow-up action be
performed at the end of each fiscal year, prior to submitting the data to DFAS
Denver for financial statement preparation.

We also recommend that you ensure that the REMIS program office
(1) provides DFAS Denver complete information on all aircraft and missiles and
(2) either excludes foreign-owned aircraft from the data provided to DFAS
Denver for its use in preparing the Air Force's financial statements or provides
guidance to DFAS Denver for identifying and eliminating all foreign-owned
aircraft from the REMIS data

AGENCY COMMENTS AND OUR EVALUATION

In written comments on a draft of this letter, the Department of Defense
concurred with our two recommendations. (See enclosure.) In response to our
recommendation to regularly identify, research, and correct REMIS mismatches
and other discrepancies, DOD stated that the Air Force Aviation Vehicle
Distribution Officer will perform a quarterly review process. DOD stated that
efforts are underway to complete the first quarterly review by the end of fiscal
year 1997. DOD stated that this process would be documented in a local
operating instruction and that these actions would be completed by October 31,
1997. DOD also agreed with our recommendation to ensure that the REMIS
program office provides DFAS-Denver with complete and accurate information
on all aircraft and missiles. DOD also indicated that by October 31, 1997, the
DFAS-Denver Center will document procedures for eliminating foreign-owned
aircraft from the REMIS data used to prepare the Air Force's financial
statements.


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This report contains recommendations to you. Within 60 days of the date of
this letter, we would appreciate receiving a written statement on actions taken
to address these recommendations.

We are sending copies of this letter to the Chairmen and Ranking Minority
Members of the Senate Committee on Armed Services, House Committee on
National Security, Senate Committee on Appropriations, and House Committee
on Appropriations. We are also sending copies to the Director of the Office of
Management and Budget, the Acting Under Secretary of Defense (Comptroller),
the Acting Director of DFAS, and the Director of DFAS Denver. Copies will be
made available to others upon request.

Please contact me at (202) 512-9095 if you or your staff have any questions
concerning this letter. Cleggett Funkhouser, Tim Fairbanks, Odi Cuero, Gary
Wiggins, and West Coile were major contributors to this letter.

Sincerely yours,




Lisa G. Jacobson
Director, Defense Audits

Enclosure




6                     GAO/AIMD-97-141R Accuracy of Aircraft and Missile Data
ENCLOSURE                                                                                           ENCLOSURE

                   COMMENTS FROM THE DEPARTMENT OF DEFENSE




                                   UNDER SECRETARY OF DEFENSE
                                         1100 DEFENSE PENTAGON
                                        WASHINGTON, DC 20301-1100



      COMPTROLLE                                                                     -




           Mr. Gene L Dodaro
           Assistant Comptroller General
           Accounting and Information Management Division
           United Staes General Accounting Office
           Washington, DC 20548

           Dear Mr. Dodao:

                   This is the Department of Defense response to the Geneal Accounting Office (GAO)
           draft report entitled, "Fmancial Management Accuracy of Air Force Aircraft and Missile Data
           Could Be Improved," dated July 23, 1997 (GAO Code 918881/OSD Case 1418).

                The Department generally concurs with the subject letter. Enclosed are specific
           comments on the two    m dations addressed in the GAO daft report

                   The Deprment appreciates the opporumity to comment on the subject draft report

                                                   Sincerely,




                                                 Alice C. Maroni
                                         Acting Under Secretary of Defense
                                                  (Comptroller)

           Enclosure




7                                       GAO/AIMD-97-141R Accuracy of Aircraft and Missile Data
ENCLOSURE                                                                                                ENCLOSURE


                                  GAO DRAFT REPORT - DATED JULY 23,1997
                                      OSD CASE 1418, GAO CODE 918881

                         "FINANCIAL MANAGEMENT: ACCURACY OF AIR FORCE
                          AIRCRAFT AND MISSILE DATA COULD BE IMPROVED"

                                 DEPARTMENT OF DEFENSE COMMENTS ON
                                     THE GAO RECOMMENDATIONS


            Recommendatton 1: The GAO recommended that the Commander, Air Force Materiel
           Command ensure that the Reliability and Maintaiability Information Systems (REMIS)
           Program Office performs an automated analysis on a regular basis, for example monthly, to
           identify internal inconsistencies or discrepancie such as the mismatches we identified. Once
           identified, the problems should then be researched and resolved to help improve the accuacy of
           the database and identify systemic problems. It is especially important that such analysis and
           corrective follow-up action be performed at the end of each fiscal year, prior to submitting the
           data to the Defense Finance and Accounting Service (DFAS)-Denver Center for financial
           statement preparation. ( 7/GAO Draft Report)

           DoD Response: Concur. The Air Force Aerospace Vehicle Distribution Officer (AVDO) at
           Wright-Patterson Air Force Base, Ohio, will request that the REMIS Program Office produce an
           automated analysis quanrery that the AVDO will use to identify, rsearch and correct mismatches
           and other discrepancies. Efforts are underway to accomplish the first quartery review in con-
           junction with the upcoming end of fiscal year. The quarterly reconciliation process will be
           documented in a local operating instruction. Estimated completion date is October 31, 1997.


           Recommendat.on: The GAO recommended that the Commander, Air Force Materiel
           Command, ensure that the REMIS Program Office (1) provides the DFAS-Denver Center
           complete information on all aircraft and missiles and (2) either excludes foreign-owned aircraft
           from the data provided to the DFAS-Denver Center for its use in preparing the Air Force's
           financial statments or provides guidance to the DFAS-Denver Center for identifying and
           eliminating all foreign-owned aircraft faom the REMIS. (p. 7/GAO Draft Report)

           DoD Response Concur. The AVDO will perform quarterly reconcilations and take other action
           as appropriate to ensure that the REMIS ports provide complete and accurate information on all
           aircraft and missiles to the DFAS-Denver Center. During the audit, the DFAS-Denver Center
           received guidance to identify and eliminate all foreign-owned aircraft from the REMIS data By
           October 31, 1997. the DFAS-Denver Center will document the agreed-upon procedures in
           DFAS-DE 7400.1R "General Funds General Ledger Accounting Procedures."



                                                                              Enclosure to Letter - GAO
                                                                            Draft Report - OSD Case 1418
                                                                                     Page 1 of 1



(918881)


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