Publicly Released: June 12, 2023
Objective
The objective of this audit was to determine to what extent the Army, Navy, and Marine Corps complied with DoD and Service requirements to track and report information related to DoD owned shipping containers, and include those shipping containers in an accountable property system of record (APSR).
Background
The DoD owns shipping containers that it uses for the transportation, prepositioning, and storage of weapons and equipment. The DoD Components manage and register shipping containers using the Joint Container Management (JCM) system, which maintains a registry of shipping containers and provides the DoD with inventory, tracking, and visibility for DoD-owned shipping containers.
The Defense Transportation Regulation requires the U.S. Transportation Command, the Military Surface Deployment and Distribution Command (SDDC), and the Service Container Managers to provide oversight in conducting inventories to update the shipping container registry. Additionally, the DoD Components are required to account for shipping containers having an acquisition cost of $5,000 or more in an APSR.
Findings
The six installations we visited did not accurately track or report location or condition information related to 32 of 190 (17 percent) DoD-owned shipping containers in the JCM system as required by DoD and Service policies because the installation personnel did not prioritize updates in a timely manner.
In addition, SDDC officials who owned shipping containers at two of the six installations we visited did not use an APSR to account for 19 of 62 (31 percent) DoD-owned shipping containers with an acquisition cost of $5,000 or more as required by DoD Instruction 5000.64.
While the six installations we visited maintained visibility of the majority of shipping containers reviewed, the importance of accurate information is imperative to readiness. In addition, while reporting information related to shipping containers in the JCM system provides visibility for shipping containers, using an APSR in accordance with the DoD requirement ensures consistency in the identification, classification, and reporting of the shipping containers in the financial statements.
Recommendations
We recommend that the Commanders of the six installations develop procedures to ensure prioritization of compliance with the tracking and reporting of information related to DoD‑owned shipping containers. We recommend that the SDDC Commander provide the DoD OIG results of the 2022 biennial inventory and take actions to ensure that the SDDC reports shipping containers that have an acquisition cost of $5,000 or more in an APSR.
Management Comments and Our Response
Army, Navy, and Marine Corps officials agreed with and described actions planned and taken to address the recommendations directed to the six installation commanders; therefore, four recommendations are resolved and open and two recommendations are closed.
The SDDC Commanding General provided the results of the 2022 biennial inventory; however, the Commanding General’s comments did not identify actions taken to ensure that the SDDC reports shipping containers with an acquisition cost of $5,000 or more in an APSR. Therefore, three recommendations are unresolved. We request that the Commanding General provide additional comments on the report within 30 days.
This report is the result of Project No. D2021-D000RK-0118.000.