oversight

Air Force Budget: Potential Reductions to Fiscal Year 1991 Stock Fund Budget

Published by the Government Accountability Office on 1990-11-15.

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

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                                                               AIR FORCE BUDGET
                                                              Potential Reductions to
                                                              Fiscal Year 1991 Stock
                                                              Fund Budget



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GAO                GeneralAccounting Of’fke
                   Washington,DC. 20548
                   National Security and
                   International Affairs Division

                   B-241112

                   November 16,199O
                   The Honorable John P. Murtha
                   Chairman, Subcommittee on Defense
                   Committee on Appropriations
                   House of Representatives

                   The Honorable Earl Hutto
                   Chairman, Subcommittee on Readiness
                   Committee on Armed Services
                   House of Representatives

                   As requested, we reviewed selected aspects of the Air Force’s fiscal year
                   1991 stock fund budget to identify potential reductions for your consid-
                   eration. As agreed with your staffs, we concentrated our review on that
                   portion of the Air Force’s stock fund budget pertaining to aircraft spare
                   parts. In June and July 1990, we briefed your staffs on the preliminary
                   results of our review.


Results in Brief   lion: $996.3 million in potential reductions to the 1991 stock fund budget
                   and $92.9 million in potential rescissions to fiscal year 1990 appropri-
                   ated funds for aircraft spare parts. The major reasons and associated
                   dollar amounts for these potential reductionsand rescissions are shown
                   in table 1 and discussed in detail in appendix I.




                   Page 1                             GAO/NSIAD-9l-16BR   Air Force Budget Reductions
                                    Ba41112




Table 1: Potential Reductions and
Rmclr8ions                          Dollars in millions
                                                                                                      Fiscal year
                                    Reason for reduction/resciseion                                     1991      1990                 Total
                                    Decrease in budgeted flying hours                                 $275.88        0                $275.8
                                    Buy computations did not consider available
                                       assets                                                           199.2               0          199.2
                                    Increased costs for spare parts safety levels not
                                      justified                                                         170.0a              0          170.0
                                    Unjustified upward funding adjustment                               137.48              0          137.4
                                    Uniustified foreian military sales additive                          61.1a           59.7          120.8
                                    Unrequired war reserve material                                      90.3               0           90.3
                                    Request to pay back the “M” account                                  79.3               0           79.3
                                    Premature buv reauirements                                              0            33.2           33.2
                                    Unrequired B-l B defensive avionics system
                                      spares                                                             33.18              0           33.1
                                    Duclicate budaetina and fundina
                                                    ”     ”
                                                                                                         8.88               0            8.8
                                    Unreauired B-2 aircraft suares                                       7.7a               0            7.7
                                    Understatement of disallowed buy requirements                        2.2a               0            2.2
                                    Subtotal                                                         1,084.9             92.9        1,157.8
                                      Minus 10 percent stock fund conversion
                                        discounta                                                       - 69.6                         - 89.8
                                    Total                                                             $995.3           $92.9        $1,088.2
                                    8The Department of Defense’s Comptroller’s Office discounted the Air Force’s fiscal year 1991 budget
                                    for peacetime aircraft replenishment spares by 10 percent to reflect anticipated savings associated with
                                    the conversion from procurement appropriation funding to stock funding. Accordingly, we applied a IO-
                                    percent offset to that portion ($696.1 million) of our identified reductions applicable to the fiscal year
                                    1991 peacetime aircraft spares budget.



                                    Historically, Air Force aircraft replenishment spares were procured
Objectives, Scope,and               with funds from the procurement account, repaired with operation and
Methodology                         maintenance funds, and issued free to users. Beginning in fiscal year
                                    1991, the Air Force will fund these activities through the stock fund.
                                    Our primary objective was to identify potential reductions to the fiscal
                                    year 1991 stock fund budget and potential rescissions to fiscal year
                                    1990 procurement appropriations for aircraft spare parts. Also, we
                                    reviewed the Air Force’s compliance with congressional direction to
                                    reimburse the “M” account for money previously withdrawn to pay
                                    stock fund fuel bills and a congressional recommendation to consider on-
                                    hand depot maintenance assets in formulating the stock fund budget.

                                    This review is one of a series that examines defense budget issues. In
                                    conducting our evaluation, we reviewed the Air Force Logistics Com-
                                    mand’s and the Air Logistics Centers’ fiscal year 1991 budget requests,


                                    Page 2                                           GAO/NSIAD-Bl-16BB           Air Force Budget Reductiona
lw41112




various directives, and budget instructions. We tracked the aircraft
spares budget from the procurement account to the stock fund. We
interviewed budget and program officials at the Office of the Assistant
Secretary of Defense and Air Force Headquarters, Washington, D.C; Air
Force Logistics Command Headquarters, Wright-Patterson Air Force
Base, Ohio; and Oklahoma City Air Logistics Center, Oklahoma. We per-
formed our work between March 1990 and September 1990 in accor-
dance with generally accepted government auditing standards.

As requested, we did not obtain written agency comments on this report;
however, we discussed our findings with Department of Defense and Air
Force officials and incorporated their comments where appropriate.

We are sending copies of this report to interested congressional commit-
tees, the Secretaries of Defense and the Air Force, and the Director of
the Office of Management and Budget. Copies will be made available to
others on request.

This report was prepared under the direction of Nancy R. Kingsbury,
Director, Air Force Issues, who may be reached on (202) 275-4268 if you
or your staff have any questions. Other major contributors to this report
are listed in appendix II.




Frank C. Conahan
Assistant Comptroller General




Page 3                            GAO/NSIADBl-16BR   Air Force Budget Reductions
Contenti


Letter
Appendix I
Potential Reductions    Decrease in Budgeted Flying Hours
                        Buy Computations Did Not Consider Available Assets
to Air Force Fiscal     Increased Costs for Spare Parts Safety Levels Not
Year 1991 Stock Fund         Justified
Budget and              Unjustified Upward Funding Adjustment                                           8
                        Unjustified Foreign Military Sales Additive                                     9
Rescissionsto Fiscal    Unrequired War Reserve Material                                                 9
Year 1990               Request to Pay Back the “M” Account                                            10
                        Premature Buy Requirements                                                     11
Procurement             Unrequired B-1B Defensive Avionics System Spares                               12
Appropriation           Duplicate Budgeting and Funding                                                12
                        Unrequired B-2 Aircraft Spares                                                 13
                        Understatement of Disallowed Buy Requirements                                  13

Appendix 11                                                                                            14
Major Contributors to
This Report
Tables                  Table 1: Potential Reductions and Rescissions                                      2
                        Table 1.1: Potential Reductions to the Fiscal Year 1991                            9
                            WRM Funding Request




                        Abbreviations

                                  Air Force Logistics Command
                        AI42      Air Logistics Center
                        DOD       Department of Defense
                        WRM       war reserve material


                        Page 4                            GAO/NSLADOl-16BB   Air Force Budget Reductiona
Page 5   GAO/NSIAD-91.16BR   Air Force Budget Reductions
Appendix I

Potentid Reductionsto Air Force Fiscal Year
1991 Stock Fhd Budget and Rescissionsto
Fiscal Year 1990 ProcurementAppropriation
                       We identified $996.3 million in potential reductions to the Air Force’s
                       fiscal year 1991 stock fund budget and $92.9 million in potential rescis-
                       sions to fiscal year 1990 procurement funding for aircraft spares. These
                       potential reductions and rescissions are discussed in detail in the fol-
                       lowing sections.


                       The Air Force Logistics Command’s (AFK) latest updated fiscal year
Decreasein Budgeted    1991 computed buy requirements for peacetime aircraft replenishment
Flying Hours           spares, dated August 15, 1990, shows a $276.8 million reduction due to
                       a 13.2 percent decrease in flying hours. According to AFLCbudget per-
                       sonnel, this reduction in flying hours represents a “peace dividend”
                       resulting from the easing of East/West tensions.

                       AFLCpersonnel told us that they had not completed their manual error
                       validation of the updated fiscal year 1991 buy computation and that the
                       final validated reduction due to decreased flying hours could be some-
                       what less than $276.8 million. However, we noted that error adjust-
                       ments made by AFLCto its earlier fiscal year 1991 budgeted buy
                       computation actually resulted in a net increase of $3.1 million to the
                       computed buy requirements. Therefore, the Air Force’s fiscal year 1991
                       stock fund budget could be reduced by $276.8 million.


                       In June 1989, we reported’ that the Air Force’s fiscal year 1989 bud-
Buy Computations Did   geted buy requirements for consumable aircraft items took into consid-
Not Consider           eration depot supply level (depot maintenance) requirements valued at
Available Assets       $464.8 million but did not consider $186.2 million of applicable on-hand
                       depot supply level assets that were available to satisfy these require-
                       ments. In response to our report, the House Committee on Armed Ser-
                       vices, in its report on the 1989 National Defense Authorization Act,
                       directed the Air Force to apply depot supply level assets to applicable
                       depot maintenance requirements in buy computations.

                       We found that the Air Force considered depot maintenance require-
                       ments valued at $273.7 million when it developed its fiscal year 1991
                       stock fund budget for consumable aircraft items. However, it did not
                       consider $199.2 million of applicable on-hand depot supply level assets.
                       According to the Department of Defense (DOD), depot supply level assets,
                       like base maintenance assets, are owned by the retail system and are

                                          rce’s Management of Backordered Aircraft Items Needs Improve-
                                          , June 2,1989).



                       Page 0                                 GAO/NSIALbOl-MBR      Air Force Budget Reductiona
                      Appendix I
                      Poiential ReductIona to Air Force Fbal Year
                      1991 Stuck Fund Budget and Rescissions to
                      Fiwd Year 1999 Procurement Appropriation




                      therefore not considered available to offset wholesale requirements, We
                      do not agree with this position. Unlike base maintenance assets, depot
                      supply level assets have not been issued from wholesale storage and
                      sold to the retail system. These assets are reserved in wholesale storage
                      to satisfy forecasted depot maintenance requirements. Since wholesale
                      requirements include forecasted depot maintenance needs and depot
                      supply level assets are reserved in wholesale storage to satisfy these
                      future needs, it is reasonable to expect that these assets should be used
                      in buy computations to offset the applicable wholesale requirements.
                      Therefore, the Air Force’s fiscal year 1991 stock fund budget could be
                      reduced by $199.2 million.


                      In August 1990, we reported2 on the increased costs associated with the
Increased Costs for   Air Force’s implementation of a new model, the aircraft availability
Spare Parts Safety    model, for computing aircraft spare parts safety level requirements,
Imels Not Justified   Safety levels are quantities of stocks in addition to normal operating
                      requirements. They provide protection against shortages in the event
                      that demands or resupply time are greater than predicted.

                      The increased costs occurred because the aircraft availability model
                       used higher aircraft availability rates to compute safety level require-
                       ments than did its predecessor, the variable safety level model. An air-
                       craft availability rate for any specific type of aircraft is essentially the
                      percentage of aircraft not missing designated parts. The higher aircraft
                       availability rates were not justified on the basis of operational needs, as
                       reflected by mission capable rates. A mission capable rate is the primary
                       measure of aircraft readiness and is that portion of total time that the
                       aircraft can perform its mission. Prior to implementation of the aircraft
                       availability model, the Air Force was achieving a desired overall aircraft
                       mission capable rate of 80 percent. The Air Force reported satisfaction
                       with its ability to perform needed missions, and it neither requested nor
                      justified an increase in aircraft mission capability.

                      By reprogramming the aircraft availability model with the average air-
                      craft availability achieved under the prior model, we estimate that the
                      Air Force could reduce its fiscal year 1991 budgeted procurement and
                      repair costs for safety level stocks of aircraft spares by $170 million. In
                      its comments on our findings, DOD and the Air Force agreed that spare
                      parts safety level costs could be substantially reduced if the higher

                      ‘Air Force Logistics: Increased Costa for Spare Parts Safety Levels Are Not Justified(GAO/
                      NSIAD - _



                      Page 7                                         GAO/NSLAD-91-16BR       Air Force Budget Reduction
                     Potentisl Reductiona to Ah Force Fiscal Year
                     1991 Stock Fund Budget and Racbsio~     to
                     Fhxd Year 1990 Procmwment Appropriation




                     availability rates used in the aircraft availability model were reset at
                     the prior average level of the variable safety level model. Also, the Air
                     Force advised us that it was studying ways to better relate aircraft
                     availability rates to operational needs. Therefore, the Air Force’s fiscal
                     year 1991 stock fund budget could be reduced by $170 million.


                     During the fiscal year 1991 budget preparation process, AFLCcalculated
Unjustified Upward   its requirements for peacetime operating stock, which were lower than
Funding Adjustment   the requirements for previous years. AFU: decided to increase its fiscal
                     year 1991 budget request to bring it up to the same level as its fiscal
                     year 1990 requirement. The increase included $132.5 million for the res-
                     toration of requirement reductions and $167.5 million for an arbitrary
                     upward adjustment.

                     For fiscal years 1989 and 1990, AFLCreduced the five Air Logistics Cen-
                     ters’ (ALC) budget requests to allow for anticipated price decreases and
                     other expected changes in requirements. AFLC directed the ALCS to calcu-
                     late this reduction in their fiscal years 1991 and 1992 budget requests.
                     The AU.5 calculated a reduction totaling $132.6 million for fiscal year
                     1991, which AFLC then incorrectly restored as an upward funding adjust-
                     ment to the fiscal year 1991 budget request. Since AF’LC has made such
                     reductions of a similar magnitude in the past, initially made the reduc-
                     tions to its fiscal year 1991 budget, and again has directed the ALCS to
                     calculate this reduction in fiscal year 1992, we consider the restoration
                     of $132.6 million to be unjustified. Therefore, the Air Force’s fiscal year
                      1991 stock fund budget could be reduced by $132.5 million.

                     In addition, AFLC arbitrarily added $167.5 million to its fiscal year 1991
                     budget request to bring it up to the fiscal year 1990 level. However, AFLC
                     incorrectly cited this upward adjustment as $162.6 million in its budget
                     submission to DOD. AFLC officials could not explain why the reported
                     amount was $4.9 million less than the actual amount. DOD disallowed the
                     reported arbitrary upward adjustment of $162.6 million. Since the
                     upward adjustment was underreported by $4.9 million, the reduction
                     was $4.9 million less than it should have been. Therefore, the Air
                     Force’s fiscal year 1991 stock fund budget could be reduced by an addi-
                     tional $4.9 million, for a total potential reduction of $137.4 million for
                     the unjustified upward funding adjustment.




                     Page 9                                         GAO/NSIAD-91-16BB   Air Force Budget Reductions
                                         Appendix1
                                         Po’tenthl ReducUona to Air Force Fiscal Year
                                         1991 Stock Pund Budget and Reochiona      to
                                         FLMlal Year 1996 Procurement Appropriation




                                         The ALCS' fiscal year 1991 budget requests for peacetime aircraft spares
UNustified Foreign                       included an additive of $120.8 million for foreign military sales buy
Military Sales                           requirements-$61.1     million for fiscal year 1991 and $59.7 million for
Additive                                 fiscal year 1990. Additive buy requirements are intended to satisfy mis-
                                         cellaneous needs that are not provided for by the normal budget compu-
                                         tation process.

                                         According to AFLCofficials, these foreign military sales additive buy
                                         requirements were intended to maintain Air Force stock levels of air-
                                         craft spares for sales to foreign countries. However, we found that these
                                         additive buy requirements are unnecessary because the normal budget
                                         computation process takes into consideration the total foreign military
                                         sales stock level requirement and computes the buys needed to maintain
                                         this stock level.

                                         AFLCofficials agree that the foreign military sales additive buy require-
                                         ment is unnecessary and directed the ALCS not to include this additive in
                                         future budgets. Therefore, the Air Force’s stock fund budget could be
                                         reduced by $61.1 million for fiscal year 1991 and $59.7 million could be
                                         rescinded from the fiscal year 1990 procurement appropriation.


                                         We identified potential reductions of $90.3 million in unrequired war
Unrequired War                           reserve material (WRM) in the Air Force’s fiscal year 1991 stock fund
ReserveMaterial                          budget request for WRM as shown in table I. 1.

Table 1.1: Potential Reductions to the
Fiscal Year 1991 WRM Funding Request     Dollars in millions
                                         Unneeded WRM for F-16 and C-17 aircraft                                               $56.6
                                         Uniustified uDward fundina adiustment                                                  33.3
                                         Unsupported WRM for B-52 and MH-53 aircraft                                               .4
                                         Total                                                                                $90.3




Unneeded WRM for F-16                    The Air Force’s fiscal year 1991 funding request for aircraft spare parts
                                         includes WRM buy requirements of $36.3 million for F-16 ALQ-166
and C-17 Aircraft                        system airborne self protection jammers and $20.3 million for C-17
                                         parts. DOD recommended that these budgeted WRM buy requirements be
                                         eliminated because of (1) operational testing problems in the case of the
                   *                     F-16 jammers and (2) prematurity in the case of the C-17, which has not
                                         been flight tested. The Air Force did not eliminate this $56,6 million
                                         from its budget on the basis that it is needed to satisfy other unbudgeted


                                         Page 9                                     GAO/NSIAD-91-16BR   Air Force Budget Reductiona
                          Appendix I
                          Potential Reductione to Air Force Fiscal Year
                          1991 Stock F’und Budget and Reecieeio~ to
                          F&al Year 1990 R-acurement Appropriation




                          buy requirements. We found that the Air Force has no current plans to
                          fund these unbudgeted requirements in fiscal year 1991. Therefore, the
                          Air Force’s fiscal year 1991 stock fund WRM budget request could be
                          reduced by $66.6 million.


Unjustified Upward        To maintain fiscal year 1990 funding levels, AFLCmade an arbitrary
Funding Adjustment        upward adjustment of $33.3 million to the aircraft spares WRM funding
                          budgeted by the ALCS for fiscal year 1991. AFLCmade this upward
                          adjustment by restoring reductions it had previously directed the ALCS
                          to make to their budgets to reflect anticipated price decreases and other
                          economies. We believe the $33.3 million restoration is unjustified
                          because similar reductions were made to prior years’ budgets and AFLC
                          has directed the ALCS to make these reductions in finalizing their fiscal
                          year 1991 buy requirements and preparing their fiscal year 1992
                          budgets. Therefore, the Air Force’s fiscal year 1991 stock fund WRM
                          budget request could be reduced by $33.3 million.


Unsupported WRM for       AFIX:officials reduced peacetime requirements for B-52 control panels
B-52 and MH-53 Aircraft   and the MH-63 (helicopter) ALQ-162 electronic countermeasure system
                          spare parts because of insufficient documentation to support the
                          requirements and program slippages. However, they failed to reduce
                          $400,000 in WRM funding requirements for these items. AFLC officials
                          agreed that WRM requirements should also have been reduced for these
                          items. Therefore, the Air Force’s fiscal year 1991 stock fund WRM budget
                          request could be reduced by $400,000.


                          The Air Force’s fiscal year 1991 stock fund appropriation request
Requestto Pay Back        includes $79.3 million to partially repay the stock fund customer “M”
the “M” Account           account3 for prior years’ withdrawals to offset losses to the stock fund
                          resulting from underbilling of customers for aircraft fuel sales. In our
                          October 17,1989, letter to the Chairman of the Subcommittee on
                          Defense, House Committee on Appropriations, we reported that the Air
                          Force had transferred $238 million from the “M” account to the stock
                          fund account to offset losses of stock fund cash that resulted from
                          underbilling of customers for aircraft fuel sales during fiscal years 1981
                          to 1986.

                          3Merged account to which an agency transfers prior years’ lapsed funding authority 2 yean after
                          expiration of the period for which the funding was authorized. Balances in this account remain avail-
                          able indefinitely for payment of valid prior years’ obligations.



                          Page 10                                         GAO/NSIAD-91.16BR      Air Force Budget Reductions
                Appendix I
                Potimtbl  Reductions to Air Force Fiscal Yeax
                1991 Stock Fund Budget and Rerdsoiona to
                FIecal Year 1999 Procurement Appropriation




                We further reported that the Air Force did not have adequate documen-
                tation to support the reason for the transfer of $238 million from the
                “M” account to the stock fund. Consequently, the Congress, in its fiscal
                year 1990 conference report on appropriations for DOD, directed the Air
                Force to pay back the $238 million it had transferred from the “M”
                account by increasing stock fund charges for customer sales for fiscal
                years 1991, 1992, and 1993. Instead of adjusting its fiscal year 1991
                stock fund charges to customers to recoup the $79.3 million needed to
                make the first incremental stock fund payback to the “M” account, the
                Air Force requested an additional appropriation to the stock fund to
                make the payback.

                In our opinion, this request for $79.3 million in appropriated funds to
                payback the “M” account is not consistent with the congressional direc-
                tion and should not be appropriated for this purpose.


                In preparing its fiscal year 1991 budget, the Oklahoma City ALC added to
Premature Buy   its latest fiscal years 1989 and 1990 computed buy requirements for air-
Requirements    craft spares future years’ projected buys totaling $112.1 million. The
                Oklahoma City ALC added future years’ buy requirements to its latest
                buy computations to justify use of fiscal years 1989 and 1990 monies to
                fund outstanding purchase requests for quantities of spares that
                exceeded the latest buy computations,

                We reported in 19864 that the Air Force was incurring added procure-
                ment and storage costs of millions of dollars annually by procuring air-
                craft spares more than a year earlier than necessary. In response to our
                report, DOD directed the Air Force to limit its early procurements to 1
                year.

                We found that $33.2 million of the $112.1 million was for projected
                fiscal year 1992 buys and therefore was not valid current buy require-
                ments. The remaining $78.9 million of added requirements was deemed
                valid because they were advanced only 1 year.

                Oklahoma City AI& officials agreed that funding of fiscal year 1992 buy
                requirements was premature and advised us that their buy guidelines
                had been amended in July 1990 to preclude future early buys. The use
                of fiscal years 1989 and 1990 monies to fund fiscal year 1992 projected

                *Military Logistics: Buying Spares Too Early Increases Air Force Costs and Budget Outlays (GAO/
                         - - 49, Aug. 1,lOW.



                Page 11                                       GAO/NSIADI)l-MBR       Air Force Budget Reductions
                      Potential Reductiona to Ah Force Fircal Year
                      1991 Stock Fund Budget and Re@d#eione to
                      Fbcal Year 1990 Procurement APProPrWion




                      buy requirements indicates that the Air Force is having problems
                      spending prior years’ aircraft spares funds on valid current require-
                      ments. Therefore, a rescission of at least $33.2 million from fiscal year
                      1990 procurement funding appears warranted.


u~u~~u.~~cuu-1B       lion requested by the Warner Robins ALC for the purchase of replenish-
Defensive Avionics    ment spare parts for the B-1B’s ALQ-161 defensive avionics system. We
System Spares         found that this was not a valid funding requirement because continuing
                      design stability problems with this system preclude the purchase of
                      these spare parts in fiscal year 1991.

                      AI%Cofficials agreed that the original need for the $33.1 million funding
                      was not valid, but they stated that this funding was needed to satisfy
                      other unbudgeted requirements. However, they were unable to validate
                      this position. Therefore, the Air Force’s fiscal year 1991 stock fund
                      budget could be reduced by $33.1 million.


                      In November 1989, we reported6 that the Air Force’s fiscal year 1990
Duplicate Budgeting   funding request included $88.9 million of Oklahoma City AU: buy
and Funding           requirements that had been budgeted for and funded by the Congress in
                      fiscal year 1989. We identified this amount as a potential reduction to
                      the fiscal year 1990 budget and discussed this duplicate budgeting with
                      Air Force officials. As a result, the Oklahoma City ALC revised its proce-
                      dures for preparing the fiscal year 1991 budget. By following the
                      revised procedures, the Oklahoma City AL.Cidentified and excluded
                      $42.4 million of spares requirements from its fiscal year 1991 budget
                      that duplicated spares requirements funded in prior years.

                      While we acknowledge the Air Force’s effort to reduce duplicate
                      budgeting and funding, our review of fiscal year 1991 budget documents
                      showed that $8.8 million of the $77.1 million included in the Oklahoma
                      City ALC’Sbudget submission for first-time aircraft spares buys had been
                      budgeted for and funded by the Congress in fiscal year 1990. We believe
                      that the remaining requirements were valid because they represented
                      updated buy requirements for fiscal year 1989 and 1990 that had not
                      been included in previous budgets.


                      6Air Force Fjudget: Potential for Reducing Funding for Aircraft Spares (GAO/NSIAD-90-18,
                      Nov. 28, 1989).



                      Page 12                                        GAO/NSIAD-91-16BR    Air Force Budget Reductions
                    Appendix I
                    Pbtmtlal  Rednctio~  to Air Force Fbcal Year
                    1991 Stock Fund Budget and Ite~~io~      to
                    Fbcal Year 1999 Procurement Appropristlon




                    Oklahoma City ALCofficials agreed that the $8.8 million represents
                    items that were erroneously left in the fiscal year 1991 budget request.
                    Therefore, the fiscal year 1991 stock fund budget could be reduced by
                    $8.8 million.


                    The Air Force’s fiscal year 1991 budget included $7.7 million for replen-
Unrequired B-2      ishment spares support for the B-2 aircraft. However, according to B-2
Aircraft Spares     program officials, no funding is currently needed for B-2 replenishment
                    spares in fiscal year 1991 because of program slippage. Therefore, the
                    fiscal year 1991 stock fund budget could be reduced by $7.7 million.


                    In reviewing the fiscal year 1991 aircraft replenishment spares budgets
Understatement of   of the five ALCs, AFL.42 disallowed buy requirements totaling $62.9 million
Disallowed Buy      because of insufficient supporting data and program slippage or cancel-
Requirements        lation. However, in preparing a consolidated fiscal year 1991 budget,
                    AFLCdeducted only $60.7 million for these disallowed requirements-a
                    $2.2 million understatement.

                    Responsible AFLCaircraft spares budget personnel agreed that consoli-
                    dated budget reductions for disallowed buy requirements were under-
                    stated by $2.2 million. Therefore, the Air Force’s fiscal year 1991 stock
                    fund budget could be reduced by $2.2 million.




                    Page 13                                    GAO/NSIAD91-16BR   Air Force Budget Reductiom~
Appendix II

Major Contributors to This &port


                        Norman J. Rabkin, Associate Director
National Security and   Carl F. Bogar, Assistant Director
International Affairs   Thomas H. Wells, Assignment Manager
Division, Washington,   Andrea W. Brown, Evaluator-in-Charge
                        Howard E. Kapp, Jr., Senior Evaluator
DC.                     Melvin Wagman, Evaluator


                        Richard L. Strittmatter, Regional Assignment Manager
Cincinnati Regional     Leonard L. Benson, Site Senior
Office                  Cheryl K. Andrew, Evaluator


                        Roger Tomlinson, Regional Management Representative
Kansas City Regional    Tom Patterson, Site Senior
Office                  Bonnie S. Carter, Evaluator




(382353)                Page 14                          GAO/NSLADL)l-UBR   Air Force Budget Reductione
,I




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