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The Services Need To Improve Accuracy When Initially Assigning Demilitarization Codes

DODIG-2015-031

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Objective

This report is one in a series of reports concerning the DoD Demilitarization (DEMIL) program. The audit objective was to determine whether the Services were properly evaluating DoD property and assigning accurate DEML codes when property enters the DoD supply system. We also determined whether the Defense Logistics Agency was validating the accuracy of DEMIL codes when property was sent to the Defense Logistics Agency after being identified as excess.

Finding

The Services were not properly coding DoD property when initially registering items in the DoD supply system. Specifically, of the 33,364 DEMIL codes assigned during the 2-year period ending September 30, 2012, the DoD Demilitarization Coding Management Office determined that 8,872 codes were inaccurate. According to the DoD Demilitarization Coding Management Office officials, inaccurate coding still existed as of June 2014. The inaccurate coding occurred because personnel responsible for assigning DEMIL codes were not properly trained, no emphasis was placed on ensuring the codes were accurate when initially assigned, DoD and Service guidance did not clearly define the responsibilities and qualifications for the inventory control point DEMIL administrator position, and Service guidance lacked specific training requirements.

Although the Defense Logistics Agency had controls in place to ensure that the initially assigned DEMIL codes were reviewed and validated, resources expended to challenge inaccurate DEMIL codes limited the Defense Logistics Agency’s ability to reduce a backlog of about 12.1 million items needing a DEMIL code review. According to the DoD Demilitarization Coding Management Office officials, a backlog of about 12 million items still existed as of June 2014. Such a large backlog increases the risk that sensitive military technology could be improperly released or that funds could be unnecessarily expended by over controlling items that do not require DEMIL.

Recommendations

Among other recommendations, we recommend that the Assistant Secretary of Defense for Logistics and Materiel Readiness revise DEMIL guidance, establish metrics, and require the Services to revise their respective DEMIL guidance and establish controls.

Management Comments

Comments from the Principal Deputy Assistant Secretary of Defense for Logistics and Materiel Readiness addressed all specifics of the recommendations, and no further comments are required. Although not required to comment, the Air Force Director of Logistics, Deputy Chief of Staff for Logistics, Installations and Mission Support agreed with the recommendations and provided comments.

This report is a result of Project No. D2012-D000LD-0201.000.