Army Logistics Systems: Opportunities to Improve the Accuracy of the
Army's Major Equipment Item System (Letter Report, 01/23/98,
GAO/AIMD-98-17).
Pursuant to a legislative requirement, GAO reviewed the Army's
Continuing Balancing System-Expanded (CBSX) logistics system, focusing
on: (1) the primary causes for the numerous adjustments to correct
discrepancies between the Army's CBSX system and its primary property
book system; (2) whether the Army's ongoing improvement efforts will
correct the causes of these discrepancies; and (3) whether the Army's
current method of assessing CBSX accuracy, referred to as the rate, is
adequate.
GAO noted that: (1) while the Army ensures that CBSX equipment balances
accurately reflect the balances in its primary property book system
twice a year, the Army does not identify the causes of adjustments made
to CBSX balances to correct discrepancies; (2) GAO's analysis of the
causes of CBSX adjustments has identified opportunities to correct
process weaknesses and computer software problems that would reduce the
number of adjustments and, consequently, increase the accuracy of CBSX
throughout the year; (3) the Army does not have an effective process to
ensure that equipment transactions from Army units are received by CBSX;
(4) GAO's statistically projectable sample of adjustments made to CBSX
to bring it into agreement with the Army's primary property book system,
showed that over 40 percent of the adjustments were due to transactions
not received by CBSX; (5) other reasons for adjustments included
software errors and incorrectly posted transactions; (6) the lack of
reconciliations performed between CBSX and unit property books, an
outdated regulation, and incomplete training also were underlying
factors that contributed to differences between CBSX and the primary
property book system; (7) the Army's ongoing efforts to improve CBSX
address some of the causes of adjustments such as those related to
certain software errors and incorrectly posted transactions; (8)
however, these efforts do not fully address property book transactions
that were not received by CBSX, the largest cause of adjustments; (9)
the Army also does not have an effective mechanism to measure CBSX
performance; and (10) the Army-wide CBSX compatability rate, the factor
used to measure the extent to which CBSX and property book records
agree, is overstated because it does not count all adjustments made to
CBSX balances to correct discrepancies.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: AIMD-98-17
TITLE: Army Logistics Systems: Opportunities to Improve the
Accuracy of the Army's Major Equipment Item System
DATE: 01/23/98
SUBJECT: Logistics
Equipment inventories
Equipment management
Internal controls
Army supplies
Data integrity
Computer software
Inventory control systems
Accounting errors
Accounting procedures
IDENTIFIER: Army Continuing Balance System-Expanded
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Cover
================================================================ COVER
Report to the Acting Secretary
of the Army
January 1998
ARMY LOGISTICS SYSTEMS -
OPPORTUNITIES TO IMPROVE THE
ACCURACY OF THE ARMY'S MAJOR
EQUIPMENT ITEM SYSTEM
GAO/AIMD-98-17
Army Logistics Systems
(918875)
Abbreviations
=============================================================== ABBREV
AAA - Army Audit Agency
CBSX - Continuing Balance System-Expanded
LOGSA - Logistics Support Activity
SPBS-R - Standard Property Book System-Redesign
Letter
=============================================================== LETTER
B-275187
January 23, 1998
The Honorable Robert M. Walker
The Acting Secretary of the Army
Dear Mr. Secretary:
As part of our responsibility to audit the consolidated financial
statements of the federal government, we are reviewing the accuracy
of data in the military services' financial/logistical systems that
are used to provide property, plant, and equipment information to the
financial statements. The Army uses the Continuing Balance
System-Expanded (CBSX) as its central logistics system for reporting
the types, quantities, and location of equipment; monitoring the
equipment readiness of its warfighting units; and filling equipment
shortages in those units scheduled for mobilization. In addition,
information in this system is used for financial reporting.
In the past, we and the Army Audit Agency (AAA) have reported
inaccuracies in CBSX data.\1 Inaccurate CBSX data have hampered Army
readiness and decision-making by causing equipment distribution
delays and affecting efforts to identify major items that require
accelerated procurement. For this review, our objectives were to
determine (1) the primary causes for the numerous adjustments to
correct discrepancies between the Army's CBSX system and its primary
property book system, (2) whether the Army's ongoing improvement
efforts will correct the causes of these discrepancies, and (3)
whether the Army's current method of assessing CBSX accuracy,
referred to as the compatibility rate, is adequate.
--------------------
\1 Financial Management: Army Lacks Accountability and Control Over
Equipment (GAO/AIMD-93-31, September 30, 1993), Financial Reporting
of Equipment In Transit (AAA audit report AA 96-156, June 17, 1996),
and Total Asset Visibility: U.S. Army, Europe and Seventh Army (AAA
audit report
AA 97-233, June 30, 1997).
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
While the Army ensures that CBSX equipment balances accurately
reflect the balances in its primary property book system twice a
year, the Army does not identify the causes of adjustments made to
CBSX balances to correct discrepancies. Our analysis of the causes
of CBSX adjustments has identified opportunities to correct process
weaknesses and computer software problems that would reduce the
number of adjustments and, consequently, increase the accuracy of
CBSX throughout the year. In particular, the Army does not have an
effective process to ensure that equipment transactions from Army
units are received by CBSX. Our statistically projectable sample of
adjustments made to CBSX to bring it into agreement with the Army's
primary property book system, showed that over 40 percent of the
adjustments were due to transactions not received by CBSX. Other
reasons for adjustments included software errors and incorrectly
posted transactions by CBSX analysts and Army units. The lack of
reconciliations performed between CBSX and unit property books, an
outdated regulation, and incomplete training also were underlying
factors that contributed to differences between CBSX and the primary
property book system.
The Army's ongoing efforts to improve CBSX address some of the causes
of adjustments such as those related to certain software errors and
incorrectly posted transactions. However, these efforts do not fully
address property book transactions that were not received by CBSX,
the largest cause of adjustments. Without addressing improvements in
unit processes to ensure that transactions are received by CBSX in a
timely manner, the Army's efforts to improve CBSX will not correct
the largest cause of CBSX adjustments.
The Army also does not have an effective mechanism to measure CBSX
performance. The Army-wide CBSX compatibility rate, the factor used
to measure the extent to which CBSX and property book records agree,
is overstated because it does not count all adjustments made to CBSX
balances to correct discrepancies. Moreover, the Army does not
measure other relevant CBSX characteristics, such as the timeliness
of transaction submissions.
BACKGROUND
------------------------------------------------------------ Letter :2
CBSX provides worldwide asset visibility over the Army's reportable
equipment items, including the Army's most critical war fighting
equipment. The objective of CBSX is to provide accurate, timely, and
auditable equipment balances for major items\2 necessary for the
direct support of troops, such as armored personnel carriers, battle
tanks, helicopters, rifles, and gas masks. Operated and maintained
by the Army's Logistics Support Activity (LOGSA), CBSX furnishes the
Army with an official inventory figure used to assess the overall
preparedness of the force, determine the validity of unit equipment
requisitions, distribute/redistribute equipment throughout the Army,
and maintain worldwide asset visibility of deployed assets.
As a result, if CBSX equipment balances are overstated, the Army may
procure too few items, possibly resulting in reduced readiness.
Conversely, if CBSX equipment balances are understated, the Army may
procure too many items, potentially creating excess and wasting
financial resources that could have been otherwise used to maintain
and improve readiness. Moreover, Army planners and logisticians use
equipment balances originating from CBSX to redistribute equipment to
deploying units and estimate secondary item and other requirements to
sustain this equipment. Therefore, if unit equipment balances are
misstated, mobilization and deployment planning could be more
difficult and inefficient.
CBSX covers over 9,300 National Stock Numbers, which are primarily
major items but also include other selected items, such as medical
equipment, for which the Army requires worldwide visibility. CBSX
seeks to mirror the official accountable records of equipment
balances, such as property book records, held by various types of
Army activities, including divisions subject to deployment, depots
that repair or upgrade equipment, and storage sites. As of September
30, 1996, CBSX contained information on 13.5 million items whose
reported value was over $116 billion. While some of this property is
held at wholesale distribution centers, such as depots, the vast
majority of these items, valued at about $94 billion, are maintained
at the retail level.\3 Of this retail equipment, about 80 percent,
valued at a reported $75 billion, was accounted for by units that use
the Standard Property Book System - Redesign (SPBS-R), an automated
property book system, which is maintained by the U.S. Army
Information Systems Software Development Center, Fort Lee, Virginia
(see figure 1).
Figure 1: Relationship of Army
Equipment Maintained Under
SPBS-R to Total Army Equipment
in CBSX (reported as of
September 30, 1996)
(See figure in printed
edition.)
Source: Extract of CBSX data from LOGSA's Requisition and Validation
System. We did not independently verify this information.
Since CBSX is the Army's centralized equipment asset visibility
system, the Army plans to use it as a primary source for
supplementary stewardship information, as prescribed by the Statement
of Federal Financial Accounting Standard No. 8, Supplementary
Stewardship Reporting. Beginning in fiscal year 1998, this standard
requires agencies with federal mission property, plant, and equipment
to disclose the value and condition of these assets as supplemental
stewardship information.\4 The standard specifically includes
military weapons as federal mission property, plant, and equipment.
In the past, military equipment has been misstated on the Army's
financial statements. For example, according to AAA, the Army's
fiscal year 1996 financial statements misstated its property, plant,
and equipment by a material but unknown amount and major problems
with the processes used to report and value military equipment
precluded AAA from attesting to the reported value of military
equipment.\5
Army regulations require all activities to maintain accurate property
books and ensure that they agree with CBSX. However, past audits by
AAA and GAO found that CBSX balances for equipment items fluctuated
for reasons that responsible officials could not explain, differed
from records maintained by the units possessing equipment, and were
substantially inaccurate for equipment in transit between units (see
footnote 1). Moreover, a January 1992 Army Materiel Command Lessons
Learned report on Operation Desert Storm demonstrated that inaccurate
or unreliable CBSX data (1) hampered equipment distribution
decisions, resulting in some deployed units receiving equipment in
excess of their authorizations while others were short critical
equipment, (2) delayed the distribution of major items to units that
did not deploy to Southwest Asia, thus diminishing the readiness of
those units, and (3) significantly affected efforts to identify major
items that required accelerated procurement.
SPBS-R is a stand-alone personal computer system operated
independently at over 2,000 Army units. Figure 2 illustrates the
three methods units can use to provide SPBS-R data to CBSX: (1)
downloading data to diskettes that are hand-carried to another
computer, which transmits the data to CBSX, (2) transmitting via
modem from the property book computer directly to CBSX, and (3)
downloading data to diskettes that are mailed to LOGSA where the data
is loaded into CBSX. For submissions provided electronically to CBSX
(methods 1 and 2 above), the system transmits a confirmation of
receipt that contains the total number of transactions received by
CBSX. In addition, listings of transactions that affect unit
balances are printed by CBSX and mailed to the units by LOGSA
monthly.
Figure 2: Methods of Sending
SPBS-R Data to CBSX
(See figure in printed
edition.)
Figure 3 shows the three types of SPBS-R data units sent to CBSX
during the time the adjustments in our review were made: catalog
data, transaction data, and validation data.
-- Catalog Data: The Army provides units with an updated automated
catalog semiannually that designates which supply items in
SPBS-R are reportable to CBSX.\6 When a unit runs the catalog
update process in SPBS-R, the system generates a listing of the
unit's equipment balances for items that have become reportable
due to catalog changes. Units are supposed to transmit these
balances to CBSX, which, in turn, records the new balances.
-- Transaction Data: Units are required to transmit their SPBS-R
equipment transactions (such as additions and transfers) to
LOGSA at least monthly to update CBSX. If these transactions
pass various edits to detect common types of errors, CBSX
updates unit asset balances.
-- Validation Data: Units transmit SPBS-R balances to CBSX (called
validation data) twice a year. As part of the validation
process, CBSX compares these SPBS-R balances to CBSX balances,
identifies discrepancies, and adjusts the CBSX balances to agree
with SPBS-R. CBSX is adjusted to agree with SPBS-R because
SPBS-R is the Army's official accountable record.
As also shown in figure 3, in September 1996, after the time frame of
the adjustments that we reviewed, SPBS-R was changed to allow units
to begin providing SPBS-R unit identifier data to CBSX.\7 Both CBSX
and SPBS-R contain unit identifier data, which are used to ensure
that unit transactions are posted to the proper accounts. If SPBS-R
and CBSX unit identifier data are inconsistent, property book
transactions will be either rejected by CBSX or posted to the wrong
accounts. In the past, CBSX and SPBS-R unit identifier data have
been inconsistent, which has led to differences between the two
systems. Consequently, in the new process, CBSX compares the data
from the SPBS-R unit file to the unit identifier data in CBSX and
provides LOGSA analysts with a report of differences for review.
Figure 3: Types of SPBS-R Data
Sent to CBSX
(See figure in printed
edition.)
After the validation process, LOGSA calculates a compatibility rate,
which measures the extent to which CBSX and the unit records agree.\8
According to the CBSX user manual, Army headquarters adopted the
compatibility rate as the yardstick to measure the degree of property
book officer compliance with CBSX asset reporting requirements.
--------------------
\2 A major item, such as a main battle tank, is a final combination
of parts and materiel ready for its ultimate use. In contrast, a
secondary item is a component of a major item, such as a
transmission.
\3 Retail-level assets are those held by field user-level activities
in the Active Army, Army Reserve, and Army National Guard.
\4 The Statement of Federal Financial Accounting Standard No. 8,
Supplementary Stewardship Reporting defines federal mission property,
plant, and equipment as possessing at least one of the following
characteristics related to (1) its use, in that it has no expected
nongovernmental uses, is held for use in the event of emergency, war,
or natural disaster, or is specifically designed for use in a program
for which there is no other program or entity using similar property,
plant, and equipment with which to compare costs and (2) its useful
life, in that it has an indeterminate or unpredictable useful life or
is at a very high risk of being destroyed during use or of premature
obsolescence.
\5 Army's Principal Financial Statements for Fiscal Years 1996 and
1995: Report on Internal Controls and Compliance With Laws and
Regulations (AAA audit report AA 97-145, June 30, 1997).
\6 The Army requires CBSX reporting for certain equipment items for
which worldwide asset visibility is desired. The Army's Supply
Bulletin 700-20, commonly referred to as the catalog, specifies which
items are centrally reportable.
\7 The unit identifier data include the Unit Identification Code and
the Department of Defense Activity Address Code. The Unit
Identification Code represents authorized Army units with their
individual mission, structure, personnel, and equipment requirements.
The Department of Defense Activity Address Codes are used by units
for requisitioning, receipt, issue, shipment, and billing of
materiel.
\8 The CBSX compatibility rate is the ratio of the total number of
adjusted equipment items to the total number of equipment items on
hand, expressed as a percentage. The Army's management goal is for
CBSX to maintain 98-percent compatibility with unit records.
SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3
To determine the primary causes for adjustments to correct
discrepancies between CBSX and SPBS-R, we analyzed a statistically
projectable sample of 150 adjustments from our sample universe of
32,649 adjustments. The sample was selected to identify common,
recurring problems that caused adjustments to CBSX between January
1996 and August 1996 as a result of the validation process. We chose
this time period in order to cover a complete validation period, from
the time units submitted validation balances until the semiannual
CBSX validation process was completed. We excluded adjustments that
were made during the conversion of manual property books to SPBS-R
because we considered these adjustments as nonrecurring. We also
excluded adjustments to non-equipment National Stock Numbers, such as
clothing.
Our analysis consisted of reviewing applicable SPBS-R reports, such
as the CBSX Transaction Listing, and CBSX reports, such as the Proof
of Shipment report. We also provided documentation to, and discussed
the results of our analysis with, applicable property book officers,
LOGSA officials, and/or Software Development Center, Fort Lee,
officials and reached consensus with these officials about the causes
of adjustments. Appendix I identifies the various Army activities
that were part of our sample. We also interviewed officials from the
Office of the Deputy Chief of Staff for Logistics, LOGSA, and the
Army Quartermaster Center and School.
To determine if the Army's improvement efforts adequately address the
causes of CBSX errors, we reviewed and analyzed the Army's plans and
related documentation. We also interviewed LOGSA, Software
Development Center at Fort Lee, and contractor officials.
To determine whether the CBSX compatibility rate is an adequate
measure of performance, we reviewed LOGSA compatibility reports,
which quantify the extent to which CBSX agrees with unit records,
analyzed LOGSA's methodology for calculating the rate, and
interviewed LOGSA officials.
We conducted our review between July 1996 and October 1997 in
accordance with generally accepted government auditing standards. We
requested comments on a draft of this report from the Secretary of
Defense or his designee. On December 18, 1997, the Army's Deputy
Chief of Staff for Logistics provided us with written comments, which
are discussed in the "Agency Comments and Our Evaluation" section and
are reprinted in appendix II.
CAUSES FOR LARGE UNRECONCILED
DIFFERENCES BETWEEN CBSX AND
SPBS-R
------------------------------------------------------------ Letter :4
From January 1996 through August 1996, LOGSA made more than 32,000
adjustments to CBSX to bring it into agreement with SPBS-R balances.
We reviewed a representative sample of 150 adjustments and identified
the causes of 124 of them. The adjustments in our sample covered
differences between CBSX and SPBS-R for items such as M-16 rifles,
night vision goggles, howitzers, and cargo trucks. As shown in
figure 4, the principal causes of adjustments were transactions not
received by CBSX, software problems, and erroneous transactions
posted by LOGSA or units.
Figure 4: Causes of CBSX
Adjustments
(See figure in printed
edition.)
Note: This figure shows 127 causes of the 124 adjustments we
identified causes for (3 of these adjustments had 2 causes).
We could not determine the causes for 26 of the adjustments primarily
because units had not retained all of the records to establish the
audit trail needed to perform the analysis. In most cases, Army
regulations did not require units to retain the records needed to
determine the underlying causes for these adjustments or the Army's
record retention period had expired. For example, the CBSX
confirmations of receipt are not required to be retained and the
SPBS-R manual requires that one critical SPBS-R report, the listing
of transactions reportable to CBSX, be retained for only 60 days
after the validation process. Also, in some cases, units did not
retain records in accordance with Army regulations. Specifically,
units are required to retain the inactive document register (a
listing of all archived transactions that were posted to the property
book) for 2 years but units could not find these documents in 12
cases. If units do not determine the causes of their adjustments
prior to discarding the records needed to assess these causes, the
Army is left with little information on specific causes of these
adjustments so that corrective actions can be taken to prevent their
recurrence.
The following sections provide additional detail for each of the
causes of adjustments identified.
SPBS-R TRANSACTIONS NOT
RECEIVED BY CBSX
---------------------------------------------------------- Letter :4.1
Army regulations require that LOGSA and Army Major Commands ensure
that units submit complete and accurate data to CBSX. However, our
sample of 150 adjustments found that 64 (43 percent) occurred because
SPBS-R transactions were not received by CBSX\9 and thus were posted
to SPBS-R, but not CBSX, causing discrepancies between CBSX and
SPBS-R balances. We could not determine with certainty whether
property book officers failed to send their transactions to CBSX or
if some other event in the process prevented CBSX from receiving the
transactions because neither LOGSA nor the units had effective
monitoring processes to ensure that transactions were sent and
received in a timely manner. Examples include the following.
-- Army Regulation 710-3, Asset and Transaction Reporting System,
requires LOGSA to (1) ensure that activities submit CBSX input
data by the date scheduled and that the data are correct and (2)
take appropriate follow-up action if data are not accurate or
submitted by the scheduled date. However, LOGSA had neither
scheduled dates for units to report their CBSX transactions nor
kept a log or schedule of expected transmissions. Therefore,
without such reporting schedules, LOGSA could not detect when
units failed to submit transactions and the major commands
lacked appropriate data to measure unit compliance. Moreover,
according to LOGSA's analysts, they have not routinely followed
up on and corrected rejected transactions. In addition, while
LOGSA requested that units submit transactions weekly (exactly
when transactions are submitted is left to the discretion of the
unit), in practice, we found that reporting frequency varied
greatly. Some units reported several times a week while others
did not report to CBSX for months.
-- Although LOGSA transmits to units confirmations of receipt that
contain the total number of transactions received, neither Army
regulations nor their implementing guidance require units to
verify the total, investigate discrepancies, and retain the
receipt confirmations.\10 Property Book Officers for several
units in our sample told us that while they review and retain
for various periods the LOGSA receipt confirmations, they do not
always compare these confirmations with their lists of
CBSX-reportable transactions to ensure that all data transmitted
were received by CBSX. Moreover, in cases where units provided
their data to a central collection point which transmitted data
to CBSX (see figure 2), the central collection point often did
not provide the units with the receipt confirmation. Unless
units verify and retain their receipt confirmations, they are
unlikely to discover that transactions were not received by CBSX
and therefore will not be in a position to take corrective
action such as retransmitting the transactions. Also, the
SPBS-R report that lists the CBSX-reportable transactions--which
units could use to verify the total number of transactions
transmitted--does not display a total. Therefore, when large
numbers of transactions are sent, verifying the CBSX
confirmation totals of transactions received can be onerous
because property book officers must manually count the total
number of SPBS-R reportable transactions. This can involve
hundreds of transactions.
-- LOGSA mails to each property book officer monthly reports
showing transactions posted to CBSX. LOGSA expects property
book officers to review these reports to ensure that their
property book transactions were posted to CBSX and to review
transactions rejected or questioned by CBSX edit checks. By
performing this procedure, the property book officer could
detect when reportable transactions were not received by CBSX or
other problems that prevented transactions from posting to CBSX.
However, many property book officers we interviewed told us that
they did not perform this review process. Further, this process
can be burdensome. Specifically, (1) these reports contain all
transactions submitted throughout the month (which can involve
hundreds of transactions) rather than reporting exceptions
separately and (2) transactions with errors may not be readily
identifiable. Further, the error codes in these reports are
difficult to interpret. For example, the report does not define
the error-type codes it contains.
--------------------
\9 The range of our confidence interval at a 95-percent confidence
level is that between 11,705 and 16,230 of the 32,649 CBSX
adjustments in our sample universe made during the 8-month period of
our review were due to transactions not received by CBSX.
\10 When data are electronically transmitted to CBSX, LOGSA returns
to the sender a confirmation of receipt showing the number of records
received, which the property book officer can compare to the number
sent. Only three of the units in our review did not electronically
transmit data to CBSX.
SOFTWARE PROBLEMS
---------------------------------------------------------- Letter :4.2
Thirty-five adjustments (23 percent) in our sample were caused by
problems in CBSX or SPBS-R software.\11 Because of these software
errors, CBSX (1) posted incorrect adjustments, (2) posted invalid
transactions, or (3) did not post valid transactions. In some of
these cases, errors in the validation process itself created
inaccurate balances in CBSX that were not corrected until LOGSA
conducted its next 6-month validation process. The following were
the specific software problems found.
--------------------
\11 The range of our confidence interval at a 95-percent confidence
level is that between 5,798 and 9,703 of the 32,649 CBSX adjustments
in our sample universe made during the 8-month period of our review
were due to software problems.
CBSX VALIDATION PROCESS
ERROR
-------------------------------------------------------- Letter :4.2.1
Twenty-one adjustments were caused by a software error in the CBSX
validation process which resulted in invalid adjustments being posted
to unit balances. The CBSX validation process compares the unit's
SPBS-R equipment balances to the unit's adjusted equipment balances
in CBSX and changes the CBSX balances to mirror the SPBS-R balances.
For validation purposes, the CBSX equipment balance is adjusted to
remove transactions received after the unit's validation cutoff date,
which is the date when each unit runs the SPBS-R validation process
for submission of balance data to LOGSA. This process is necessary
to account for timing differences between the dates the units and
CBSX ran their respective validation processes.
However, when a unit's asset balances were reduced to zero in CBSX by
transactions subsequent to the unit validation date, the CBSX
validation process did not adjust the unit's equipment balances for
these transactions. Therefore, in these cases, the unit's unadjusted
CBSX balances were compared to the semi-annual SPBS-R balance data,
which caused CBSX to post erroneous adjustments, record inaccurate
Army unit equipment balances, and report inaccurate unit
compatibility rates. For example, in one sample case, a unit
submitted to CBSX a validation balance of seven for a particular
equipment item as of April 25, 1996, and CBSX ran its validation
process on June 4, 1996. That unit also submitted a transaction for
that item on May 17, 1996, which reduced the balance for the
equipment item in CBSX to zero. A software problem caused CBSX not
to add back this transaction in order to calculate the adjusted CBSX
balance (which is compared to the SPBS-R validation data). As a
result, the CBSX validation process adjusted CBSX to agree with the
April 25, 1996, SPBS-R validation balance, thereby overstating the
unit's balance for that particular equipment item by seven. After we
brought this problem to LOGSA's attention, they completed a software
change to fix the problem.
VALID TRANSACTIONS
REJECTED AS DUPLICATES
-------------------------------------------------------- Letter :4.2.2
Five adjustments were due to CBSX rejecting valid property book
transactions because edit processes incorrectly identified them as
duplicate transactions. For example, if the unit corrected an error
in a transaction (i.e., if the wrong serial number was entered) and
the original and corrected transaction was sent in the same
submission to CBSX, CBSX would reject one of the transactions as a
duplicate. The Army was aware of this software problem. To fix it,
in 1997, the Software Development Center, Fort Lee, modified SPBS-R
to add new data fields to the SPBS-R input to CBSX that will include
the date and time of transactions. These SPBS-R software
modifications, along with planned modifications to CBSX to use these
data, are expected to correct this problem.
SPBS-R CAUSED ERRORS
-------------------------------------------------------- Letter :4.2.3
Four adjustments were caused by software errors in SPBS-R that
resulted in invalid transactions being posted to CBSX. Three
adjustments occurred when a software error in SPBS-R caused it to
report a wrong activity address code to CBSX. When a unit is
reorganized and transfers assets to a different unit identification
code, the unit inputs the gaining and losing units' unit
identification codes in SPBS-R, which uses them to automatically
record both the gaining and losing units' Department of Defense
Activity Address Codes. However, a software problem in SPBS-R caused
the system to assign the gaining unit's activity address code to the
losing unit. As a result, the wrong activity address code was
reported to CBSX, which caused CBSX to mistakenly post the loss
transaction to the gaining rather than losing unit. Neither LOGSA
nor the Software Development Center, Fort Lee, were aware of this
SPBS-R software problem. The CBSX Project Manager told us that this
error is a significant problem, particularly during times of frequent
deployments when these types of transactions are common.
The fourth adjustment caused by a software error in SPBS-R occurred
when a unit incorrectly posted a transaction to reverse a prior
transaction. While SPBS-R edits prevented the transaction from
updating the SPBS-R asset balance, SPBS-R did not reject this
transaction, instead passing along the incorrect reversal transaction
as a valid CBSX reportable transaction. While researching another
adjustment (which was caused by a transaction not received by CBSX),
we found a second unit that performed an incorrect reversal
transaction. Neither LOGSA nor the Software Development Center, Fort
Lee, were aware of this SPBS-R software problem. An SPBS-R analyst
stated that a software change would correct this problem.
Because the Software Development Center, Fort Lee, plans to replace
SPBS-R, additional software improvements are not being made to SPBS-R
except for changes related to the Year 2000 problem.\12 However, the
errors in SPBS-R discussed in this section, which caused CBSX to have
incorrect asset balance data, could be fixed in conjunction with the
planned modification to SPBS-R to correct the Year 2000 problem.
--------------------
\12 See Year 2000 Computing Crisis: Time Is Running Out for Federal
Agencies to Prepare for the New Millennium (GAO/T-AIMD-97-129, July
10, 1997) for a discussion on the Year 2000 problem.
CBSX CATALOG UPDATE
PROCESS ERROR
-------------------------------------------------------- Letter :4.2.4
Three adjustments caused by the catalog update process resulted in
invalid transactions being posted to CBSX. As previously discussed,
when a unit runs the catalog update process in SPBS-R, the system
generates a listing of the unit's equipment balances for newly
reportable items, which the unit is supposed to transmit to CBSX.
CBSX then records these new balances as part of the unit's asset
balance. In three cases, units transmitted catalog balances for
items with existing CBSX balances.\13 As a result, CBSX added the
newly reported and existing balances together, thus overstating the
units' equipment balances in CBSX. We brought this problem to the
attention of the CBSX Project Manager, who stated that LOGSA would
fix this problem by adding an edit to the CBSX catalog update process
to check whether the unit had a preexisting balance for the catalog
item.
--------------------
\13 These items had existing CBSX balances because (1) the unit
erroneously reported the same catalog transaction twice and (2) one
item had been previously reported as a substitute item for another
reportable item. Units are authorized certain types of equipment for
which they can substitute similar items. When units make such
substitutions, these items are reported to CBSX even though the
substituted item may not be designated as a CBSX reportable item.
CBSX ERRONEOUSLY POSTED
TRANSACTIONS
-------------------------------------------------------- Letter :4.2.5
Two adjustments were caused when CBSX erroneously posted
transactions. In these cases, transactions were processed in SPBS-R
prior to the unit running the validation process (therefore the
transactions were included in the unit's validation balances) but
were not received and processed by CBSX until after LOGSA ran the
CBSX validation process. According to a LOGSA programmer, this error
occurred because CBSX was reading the incorrect validation date. The
programmer further stated that LOGSA had discovered and, in early
1996, fixed this error.
LOGSA POSTED ERRONEOUS
TRANSACTIONS
---------------------------------------------------------- Letter :4.3
Fourteen adjustments (9 percent) were caused by LOGSA actions.\14 For
13 of these adjustments, LOGSA analysts posted erroneous transactions
to unit asset balances in CBSX. LOGSA analysts can manually enter
transactions in CBSX to adjust unit asset balances. Analysts input
these transactions when units notify LOGSA of changes to their unit
identification or activity address codes or when analysts identify
cases where unit property book transactions were not posted correctly
in CBSX. For example, when a unit requested that LOGSA change its
unit identifier codes, LOGSA analysts often also transferred the
asset balances for the affected units without investigating whether
the units had already submitted the appropriate SPBS-R unit transfer
transactions. Therefore, if the unit had performed the transfer
transactions in SPBS-R and submitted this data to CBSX, the
LOGSA-generated transaction doubled the unit's asset balances in
CBSX. The final adjustment in this category occurred because LOGSA
did not update the unit identifier data in CBSX in a timely manner.
The CBSX Project Manager agreed that LOGSA-generated transactions can
cause adjustments and said that LOGSA should only make these
transactions when units do not submit SPBS-R unit transfer
transactions. The Project Manager said that LOGSA plans to institute
an internal review process to approve LOGSA-generated changes to unit
balances. This process will include determining whether units have
submitted the appropriate unit transfer transactions. However,
unless this process includes coordinating with the applicable unit
prior to making changes to unit asset balances, units could still
submit duplicate unit transfer transactions at a later time.
--------------------
\14 The range of our confidence interval at a 95-percent confidence
level is that between 1,871 and 4,639 of the 32,649 CBSX adjustments
in our sample universe made during the 8-month period of our review
were due to LOGSA errors.
UNITS POSTED TRANSACTIONS
INCORRECTLY
---------------------------------------------------------- Letter :4.4
Fourteen adjustments (9 percent) we reviewed were caused when units
incorrectly entered property book transactions.\15 Some of these
transactions related to unit reorganizations that caused a lack of
synchronization between unit identifier data in CBSX and SPBS-R.
Other incorrectly entered transactions were due to various other
errors such as the unit entering an invalid unit identification code.
Errors such as these can be reduced by placing additional emphasis on
training, which we discuss in the next section.
Deployment situations often cause unit reorganizations. As a result
of these reorganizations, new unit identifier codes are created and
existing unit assets are moved to these new unit identifier codes.
These changes are made in order to maintain asset accountability when
units are deployed. Therefore, if CBSX and SPBS-R do not contain the
same unit identifier data, visibility over these assets is lost. For
example, one unit's reorganization adjustments occurred as a result
of its deployment to Haiti. During the deployment, the unit
transferred a large number of its assets to another property book in
Haiti. However, CBSX did not recognize this transfer because the
unit did not follow the designated procedure for posting to a new
unit identification code established for the deployment. As a
result, when the unit submitted its validation balances, which no
longer included the assets deployed to Haiti, CBSX deleted those
assets in order to match the property book balances submitted. These
deleted assets, which included 6 trucks, 12 ambulances, 13 pistols,
and 62 M-16 rifles, remained unreported in CBSX until the next
validation was performed 4 months later--after the deployed equipment
had been transferred back to the unit's original property book.
In another example of an adjustment caused by a unit reorganization,
a unit property book officer attempted to transfer assets between two
Army companies. However, the property book officer performed this
transfer incorrectly, which resulted in both companies' assets being
incorrectly combined in CBSX in one company's account.
Other incorrectly entered transactions were due to a variety of
circumstances such as the unit entering an invalid unit
identification code. For example, in one case, the unit incorrectly
used a unit identification code assigned to another unit, which
resulted in transactions being incorrectly posted to the other unit's
account.
--------------------
\15 The range of our confidence interval at a 95-percent confidence
level is that between 1,871 and 4,639 of the 32,649 CBSX adjustments
in our sample universe made during the 8-month period of our review
were due to unit errors.
UNDERLYING FACTORS AFFECTING
THE ACCURACY OF DATA IN CBSX
---------------------------------------------------------- Letter :4.5
In addition to the specific cause of each adjustment, we believe
other underlying factors contributed to CBSX not being compatible
with SPBS-R. These factors primarily related to the lack of
reconciliations, outdated and unclear regulations, and the lack of
training.
First, although Army Regulation 710-3, Asset and Transaction
Reporting System, requires all activities to maintain accurate asset
balances in CBSX, the regulation is unclear about the respective
roles of LOGSA and the property book officer for reconciling
automated property books with CBSX and refers to a reconciliation
process that LOGSA no longer conducts. Instead, LOGSA's practice is
to adjust the CBSX database to agree with SPBS-R without a detailed
analysis of the causes for these adjustments. In addition, as
previously discussed, many units do not retain the documents, such as
the inactive transaction register and the receipt confirmations, that
would be necessary to perform such reconciliations. As a result, the
Army has little of the information it would need on specific causes
of adjustments to take corrective actions to prevent their
recurrence. Moreover, reconciliations could detect instances where
CBSX balances were incorrectly changed. For example, as previously
discussed, 21 adjustments in our sample (14 percent) resulted from
software problems that led to erroneous adjustments that caused CBSX
balances to be incorrect. In addition, Army record retention periods
with respect to CBSX contain time frames associated with the
validation process that may not be sufficient to support a
reconciliation process. Procedures only require that units retain
applicable records until a period of time subsequent to the time when
adjustments are processed.
Second, Army Regulation 710-3, which contains requirements for
reporting to CBSX, has not been updated since May 1992 and does not
reflect current CBSX reporting processes. For example, the
regulation requires property book officers to report to CBSX once a
month, whereas LOGSA requests weekly reporting. In addition, the
regulation does not require confirming LOGSA's receipt of the unit's
property book transactions (i.e., using the confirmation of receipt
report). According to Department of Army officials, Army Regulation
710-3, Asset and Transaction Reporting System, is under revision and
is scheduled to be completed shortly. We reviewed the draft
regulation and it includes new requirements such as requiring unit
data to be submitted to LOGSA weekly during peacetime and daily
during wartime. However, the draft regulation does not require units
to (1) verify their receipt confirmations and research any
differences, (2) perform reconciliations of the differences
discovered during the validation process, (3) review the monthly
reports they receive from LOGSA, or (4) follow up on transactions
that were rejected by CBSX.
Finally, we found that several issues related to training contributed
to the problems we identified. For example, property book officers
in about 12 percent of the units in our sample, primarily those in
the Army Reserves and Army medical activities, had received no formal
training on how to operate SPBS-R. For example, one property book
officer did not know he was required to send transactions to CBSX.
In addition, the Army's SPBS-R training does not cover analyzing CBSX
reports such as confirmations of receipt and monthly transaction
listings. According to Army training officials at the Army
Quartermaster Center and School, these subjects are not covered
because receiving these reports from LOGSA cannot be simulated and
other topics would not be covered if CBSX reporting was emphasized.
The CBSX Project Manager stated that the Office of the Deputy Chief
of Staff for Logistics was responsible for working with the
Quartermaster Center and School to obtain additional emphasis on
CBSX. Officials from the Office of the Deputy Chief of Staff for
Logistics stated that they had not started this effort. In its
comments on the draft report, the Army stated that the Office of the
Deputy Chief of Staff for Logistics would request that SPBS-R
training be revised to incorporate how to analyze CBSX reports and
confirmations of receipt.
Another training issue related to LOGSA's annual conference.
Property book officers at 16 units in our sample did not attend the
conference, and other methods to disseminate the training provided at
this conference, such as videotape, were not employed. LOGSA's
annual conferences are an important mechanism to obtain information
on current CBSX processes and problems. Accordingly, it may be
beneficial to videotape and distribute the tapes of these conferences
to the property book officers not in attendance. In its response to
the draft report, the Army stated that LOGSA is developing a training
video based on its annual conference that will be used as a training
aid for property book officers.
Also, in 1994, LOGSA discontinued site visits to property book
officers to provide technical assistance and training. LOGSA's CBSX
Project Manager stated that, in 1997, CBSX analysts began performing
site visits and that they would continue these visits as funding
permits. However, LOGSA has not established a formal site visit
program to visit sites with low CBSX compatibility rates.
CBSX IMPROVEMENT INITIATIVES
ARE WORTHWHILE BUT ADDITIONAL
EFFORTS ARE NEEDED
------------------------------------------------------------ Letter :5
LOGSA and the Software Development Center, Fort Lee, have initiated a
CBSX improvement effort to correct problems in keeping the CBSX asset
balances current and compatible with SPBS-R. This improvement effort
contains worthwhile initiatives. At the same time, the modifications
being made under this improvement effort will not correct many of the
causes of adjustments to CBSX that we identified. In particular,
adjustments caused by transactions not received by CBSX, the largest
problem, will not be corrected unless additional efforts are made.
In 1995, the Army established an Improvement Team (which included
representatives from LOGSA and the Software Development Center, Fort
Lee) to develop initiatives to improve data accuracy in CBSX.
According to the team, among the most significant contributing
factors to CBSX inaccuracies were (1) the lack of synchronization of
unit identifier data between CBSX and SPBS-R, (2) data lag time in
reporting and update processes, and (3) nonsubmission or incomplete
reporting. These contributing factors were consistent with some of
the previously discussed causes of sample adjustments, such as
incorrectly posted transactions that resulted from unit
reorganizations that caused a lack of synchronization between unit
identifier data in CBSX and SPBS-R. In September 1996, the Army
awarded a contract to address the problems the Improvement Team had
identified that could be corrected at LOGSA.
To fix the CBSX problems identified by the Improvement Team, the
Software Development Center, Fort Lee, and LOGSA (and its contractor)
initiated several improvement efforts. For example, to fix the lack
of synchronization between CBSX and SPBS-R unit identifier
information, the Software Development Center, Fort Lee, and a LOGSA
contractor modified SPBS-R and CBSX, respectively. In the case of
SPBS-R, a July 1997 change allowed units to download the CBSX
Customer Identification Control File (which includes the unit
identification and activity address codes) that SPBS-R uses to edit
transactions. This edit causes units to receive an automated notice
when they enter an unrecognized unit identifier code. However, units
can override this edit and the frequency that units update the CBSX
unit file in SPBS-R is at the discretion of the unit. As part of a
September 1996 SPBS-R change, units now transmit unit identification
and activity address codes to CBSX. In May 1997, the LOGSA
contractor completed a CBSX modification that compares the CBSX and
SPBS-R unit identification and activity address codes and provides
reports of differences to LOGSA analysts. According to the CBSX
Project Manager, desk procedures will be written requiring LOGSA
analysts to resolve these differences.
LOGSA has recognized that CBSX had problems maintaining current
information because updates were too infrequent. To address this
data lag problem, in October 1997, LOGSA's CBSX contractor completed
a CBSX modification to allow more frequent SPBS-R batch updates to
the CBSX asset balances.\16 In addition, the contractor, in
conjunction with LOGSA programmers, is also implementing an automated
error correction process. Currently, units receive information on
rejected transactions in hard copy reports that are mailed to the
units monthly and there is no automated mechanism for units to
resubmit corrected transactions to CBSX. Under the automated error
correction process being developed, CBSX would electronically
transmit rejected transactions to applicable SPBS-R users, who would
be expected to correct and retransmit these transactions to CBSX,
where applicable. To be effective, this unit error correction
process should be combined with LOGSA follow-up to ensure that
rejected transactions are corrected and resubmitted. The CBSX
modification, which will encompass reporting CBSX transaction errors
electronically to the units, is expected to be completed shortly.
However, in order for units to correct these errors electronically,
LOGSA will have to modify another system--LOGSA's Distribution
Execution System--that it uses to obtain SPBS-R data. The CBSX
Project Manager stated that a time frame for modifying the
Distribution Execution System has not been set.
These improvements are worthwhile and will improve the accuracy of
CBSX when combined with changes LOGSA and the Software Development
Center, Fort Lee, have made or agreed to make to fix software
problems and erroneous LOGSA transactions previously discussed.
However, we remain concerned that the main cause of CBSX adjustments,
transactions not received by CBSX, will continue to be a problem. As
illustrated in figure 2, CBSX and SPBS-R are not integrated and,
therefore, CBSX will continue to rely on units to submit data in a
timely manner. As previously discussed, our review of adjustments
caused by transactions not received by CBSX indicated that the Army's
processes were neither adequately controlled nor documented to ensure
that all transactions were transmitted to CBSX. This is consistent
with the CBSX Improvement Team's finding that nonsubmission or
incomplete reporting was a significant contributing factor to CBSX
inaccuracies. LOGSA's CBSX contractor is developing a report
identifying units that have not submitted data in a given period
which will be provided to CBSX analysts for follow up action.
However, this report would not identify transactions that were not
received by CBSX if the unit had other CBSX transmissions received
during the period covered. Therefore, to eliminate the adjustments
caused by transactions not received by CBSX, this LOGSA report would
need to be coupled with other control mechanisms, such as unit review
and reconciliation of confirmations of receipt and reconciliations of
differences between CBSX and SPBS-R data.
--------------------
\16 While units can transmit SPBS-R data to LOGSA anytime, LOGSA
generally ran the batch CBSX asset update process twice a week.
Under the improvement plan, LOGSA runs the batch CBSX asset update
process every 2 hours during LOGSA business hours for SPBS-R
transactions.
THE CBSX COMPATIBILITY RATE IS
AN INCOMPLETE PERFORMANCE
INDICATOR
------------------------------------------------------------ Letter :6
The Army's initiatives to improve CBSX discussed in the previous
section are intended to help the Army achieve its management goal of
a 98-percent compatibility rate, which the Army uses to measure the
extent that CBSX and property book records agree. However, the
Army's current method of calculating this rate is flawed and until
this method is changed, the Army will not know whether its
improvement efforts will achieve its 98-percent goal. Moreover, the
compatibility rate is an incomplete indicator of CBSX performance
because it does not address other types of measurements, such as the
frequency of unit submissions. LOGSA plans to implement other types
of performance measures.
As of July 1997, the Army reported an Army-wide CBSX compatibility
rate of about 92 percent. However, that rate is overstated because
LOGSA assigns a 100-percent compatibility rate to those units where
(1) LOGSA believes the validation adjustments were not the fault of
the local property book officer (such as cases where a unit
incorrectly posted a transaction to another unit's account) or (2)
the validation adjustments occurred when the unit converted from a
manual system to SPBS-R. If these units were factored into the
compatibility rate, the Army-wide rate would fall to about 87
percent. In addition, if a unit does not submit current balances for
validation, the Army continues to report the unit's prior
compatibility rate, which can be several years out of date, thus
distorting the Army-wide compatibility rate. In the April 1997
validation process, 191 reporting entities in the Active Army and
Army Reserve did not provide validation data to LOGSA. As of March
1997, there were 1,096 Active Army and Army Reserve entities
reporting to CBSX, meaning that current performance data were
unavailable for over 17 percent of these entities.
In addition, even if the compatibility rate measured all current
differences between CBSX and unit property books, it does not serve
as a complete indicator of CBSX accuracy. The compatibility rate
does not measure (1) the degree to which CBSX agrees with
non-property book systems, such as those that account for
wholesale-level assets and (2) errors associated with equipment
in-transit between locations.\17 The in-transit exclusion is
significant, since in June 1996, the Army Audit Agency reported a
69-percent error rate in CBSX balances of in-transit assets resulting
from problems with system interfaces, duplicate unit identification
codes, redirected shipments, shipment performance notification
procedures, and document number changes (see footnote 1). LOGSA also
does not measure other indicators of performance, such as the
timeliness of unit transaction submissions.
LOGSA has drafted proposed additional CBSX performance measures, such
as timeliness of unit submissions and frequency of errors, which it
plans to implement shortly. We believe that these additional
performance measures are more indicative of compliance with CBSX
reporting requirements than the compatibility rate alone. Further,
if implemented, these measures could be used to help evaluate
property book officers' and their commanders' performance. However,
the proposed performance measures do not include a measure of LOGSA
and Army units' abilities to successfully close in-transit
transactions, which is needed to measure the Army's progress in
reducing its 69-percent in-transit error rate. Moreover, the
proposed measures do not include a measurement of planned new
processes resulting from the Army's CBSX improvement effort, such as
the planned error correction process. Such performance indicators
could include measuring the timeliness of units in correcting
transaction errors.
--------------------
\17 As illustrated by figure 1, wholesale equipment and in-transit
equipment constituted 17.5 percent and 1.8 percent, respectively, of
CBSX total assets as of September 30, 1996.
CONCLUSION
------------------------------------------------------------ Letter :7
Until the Army addresses the major causes for CBSX adjustments, its
system for providing worldwide asset visibility for major equipment
assets will continue to contain inaccurate, untimely, and incomplete
data, which may cause erroneous monitoring of equipment status and
improper equipment acquisition or redistribution decisions.
Financial statements will also continue to be misstated. To its
credit, LOGSA, both at its own initiative and as a result of our
bringing previously unknown problems to its attention, plans to make
software and process changes to address many of the causes of CBSX
adjustments. However, these changes do not address the primary cause
of CBSX adjustments--transactions not received by CBSX. The
responsibility for ensuring that CBSX contains accurate, timely, and
complete data rests jointly with property book officers under the
Army's major commands and LOGSA. However, neither the major commands
nor LOGSA have established adequate processes to ensure that property
book officers correctly report all transactions. Accordingly, the
Army's property book officers do not ensure that all reportable
transactions are received by CBSX or identify specific causes of
validation adjustments so that corrective actions can be taken to
prevent their recurrence.
RECOMMENDATIONS
------------------------------------------------------------ Letter :8
To ensure that CBSX receives applicable SPBS-R transactions, we
recommend that the Secretary of the Army ensure that
-- LOGSA establish a standard SPBS-R reporting schedule and follow
up on missing submissions;
-- the major commands require property book officers to, following
each data transmission to CBSX, (1) compare the total number of
SPBS-R transactions transmitted to the LOGSA confirmation of
receipt, (2) investigate and resolve discrepancies, and (3)
retain the confirmations;
-- the Software Development Center, Fort Lee, add a total line to
the SPBS-R CBSX reportable transaction report to readily permit
it to be matched to the CBSX receipt confirmation; and
-- LOGSA redesign CBSX reports to unit property book officers to
make them more user friendly, such as by providing exception
reports with easily understood error codes.
To correct software problems in CBSX and SPBS-R causing
incompatibilities between the two systems, we recommend that the
Secretary of the Army ensure that
-- LOGSA proceed with its planned modification to CBSX to correct
the adjustments that were caused by valid transactions being
incorrectly rejected as duplicate transactions;
-- the Software Development Center, Fort Lee, add edits to SPBS-R
software to prevent (1) SPBS-R from reporting incorrect activity
address codes for unit transfer transactions and (2) incorrect
reversal transactions; and
-- LOGSA add edits to CBSX software to identify instances where
units submit catalog beginning balances for items that have an
existing balance in CBSX.
To prevent inaccurate transactions from being posted to unit accounts
in CBSX by LOGSA, we recommend that the Secretary of the Army ensure
that, prior to LOGSA modifying unit data in CBSX, LOGSA proceed with
its planned implementation of an approval and documentation process
which should include coordinating with applicable units before making
changes to unit balances.
To improve the transaction audit trail and enhance unit understanding
of CBSX reporting, we recommend that the Secretary of the Army ensure
that
-- LOGSA update Army Regulation 710-3, Asset and Transaction
Reporting System, to require units to (1) verify their
confirmations of receipt and research and resolve any
differences, (2) reconcile differences between property books
and CBSX and investigate reasons for adjustments, (3) retain
property book transaction records (including receipt
confirmations) relating to CBSX to determine the causes of
adjustments and support the reconciliation, (4) review the
monthly reports they receive from LOGSA, and (5) follow up on
transactions that were rejected by CBSX;
-- the major commands require that all property book officers using
SPBS-R, including those assigned to medical and Reserve units,
successfully complete SPBS-R training;
-- the Army Quartermaster Center and School revise the SPBS-R
training to include how to analyze CBSX confirmations and
monthly reports;
-- the major commands enhance property book officer training by
requiring ongoing and up-to-date CBSX training such as that
provided by LOGSA's annual CBSX conference or, alternatively,
LOGSA videotape its annual CBSX conference and provide on-site
training using this tape at Army units to train those unable to
attend the CBSX conference; and
-- LOGSA establish a formal site visit program to conduct periodic
assistance/training for property management personnel.
To improve the effectiveness of LOGSA's plans to improve CBSX, we
recommend that the Secretary of the Army ensure that LOGSA (1)
proceed with the planned development of desk procedures to require
LOGSA analysts to resolve differences between CBSX and SPBS-R unit
identification and activity address codes, (2) require its analysts
to follow up on rejected transactions to ensure that they are
corrected, and (3) modify the Distribution Execution System to allow
units to correct and resubmit rejected CBSX transactions.
To improve the effectiveness of CBSX performance measurement, we
recommend that the Secretary of the Army ensure that
-- LOGSA calculate the Army-wide CBSX compatibility rate based on
all differences between property books and CBSX;
-- LOGSA proceed with the planned implementation of additional CBSX
performance measures and (1) develop and implement CBSX
performance indicators that measure LOGSA and Army unit
abilities to successfully close in-transit transactions and the
timeliness of corrections of unit transaction errors and (2)
provide results to Army major commands for their use in
evaluating the property book function; and
-- the major commands include performance measurement data related
to CBSX, such as the timeliness and accuracy of transaction
submissions, in overall commander and property book officer
performance criteria.
AGENCY COMMENTS AND OUR
EVALUATION
------------------------------------------------------------ Letter :9
In commenting on a draft of this report, the Army stated that it
concurred with the intent of all of the recommendations and that it
will do all that it can in as timely a manner as possible to satisfy
them. In particular, the Army stated that some of the
recommendations will be implemented when the CBSX Improvement Plan,
Phase I, is completed in April 1998. To address several other
recommendations, the Army plans to produce, and seek funding for, a
CBSX Improvement Plan, Phase II. In addition, the Army stated that
it plans to meet in February 1998 to determine what can be done to
satisfy our recommendations with current resources while funding is
being sought to implement the CBSX Improvement Plan, Phase II.
The Army partially concurred with two of our recommendations related
to modifying SPBS-R. These modifications are necessary to correct
software errors that caused incorrect data to be reported to CBSX.
The Army plans to replace SPBS-R with the Integrated Combat Service
Support System, which Army stated will be a seamless, integrated
retail supply system that will combine the functions of several
existing systems. Because it plans to replace SPBS-R, the Army has
decided not to modify SPBS-R, except for changes pertaining to the
Year 2000 problem. However, the Army said that software change
requests will be submitted to incorporate our recommendations into
the Integrated Combat Service Support System. This system is
currently scheduled to be fielded by the end of fiscal year 2003,
although the Army stated that if funding is accelerated, it will be
fielded by the end of fiscal year 2001. In addition, the Army stated
that LOGSA, the Office of the Deputy Chief of Staff for Logistics,
and property book officers will meet before April 1998 to determine
if there are any workarounds that can be implemented to accomplish
these recommendations.
Because the errors in the SPBS-R software cause inaccuracies in CBSX,
which the Army uses to monitor the equipment readiness of its
warfighting units and fill equipment shortages, these errors must be
corrected expeditiously. We are particularly concerned with the
software error that caused SPBS-R to report the wrong activity
address code to CBSX during unit reorganizations, which in turn
caused incorrect unit balances in CBSX. The CBSX Project Manager
told us that this error is a significant problem, particularly during
times of frequent deployments when such transactions are common.
Army planners and logisticians use equipment balances originating
from CBSX to redistribute equipment to deploying units; therefore,
inaccurate unit equipment balances in CBSX could hinder the Army's
assessment of the equipment needs of the deployed unit.
We support the Army's plans to try to develop workarounds to
accomplish the goals of our recommendations. If the Army can develop
effective workarounds to use until the Integrated Combat Service
Support System is fielded, then it can avoid modifying SPBS-R.
However, if the Army determines that such workarounds cannot be
developed, it must modify SPBS-R software promptly because the
Integrated Combat Service Support System may not be fielded until
2003. While we did not independently estimate the effort required to
correct the SPBS-R errors, an October 1997 Software Development
Center, Fort Lee, proposal to modify SPBS-R to fix the most
significant problem--the software error that caused SPBS-R to report
the wrong activity address code to CBSX during unit
reorganizations--included a recommended solution which indicated that
only a minor software modification was needed. Therefore, while
modifying SPBS-R to fix the Year 2000 problem, the Software
Development Center, Fort Lee, could also correct the errors found in
our review without significantly impacting Army's plans to ensure
that SPBS-R is Year 2000 compliant.
---------------------------------------------------------- Letter :9.1
We are sending copies of this report to the Chairmen and Ranking
Minority Members of the Senate Committee on Armed Services, the House
Committee on National Security, the Senate and House Committees on
Appropriations, the Senate Committee on Governmental Affairs, the
House Committee on Government Reform and Oversight, and the Secretary
of Defense; and the Director of the Office of Management and Budget.
Copies will be made available to others upon request.
The head of a federal agency is required by 31 U.S.C. 720 to submit
a written statement on actions taken on these recommendations to the
Senate Committee on Governmental Affairs and the House Committee on
Government Reform and Oversight within 60 days of the date of this
report. You must also send a written statement to the House and
Senate Committees on Appropriations with the agency's first request
for appropriations more than 60 days after the date of this report.
Please contact me at (202) 512-9095 if you or your staff have any
questions concerning this letter. Major contributors to this report
are listed in appendix III.
Sincerely yours,
Lisa G. Jacobson
Director, Defense Audits
LIST OF ARMY ACTIVITIES IN OUR
SAMPLE
=========================================================== Appendix I
U.S. ARMY CENTRAL COMMAND
Army Central Command-Kuwait, Doha, Kuwait
U.S. ARMY FORCES COMMAND
4th Mechanized Infantry Division, Ft. Hood, Texas
1st Cavalry Division, Ft. Hood, Texas
10th Transportation Battalion, Ft. Eustis, Virginia
31st Air Defense Artillery Brigade, Ft. Bliss, Texas
108th Air Defense Artillery Brigade, Ft. Bliss, Texas
III Corps Artillery, Ft. Sill, Oklahoma
19th Maintenance Battalion, Ft. Sill, Oklahoma
3rd Mechanized Infantry Division, Ft. Stewart, Georgia
10th Mountain Division, Ft. Drum, New York
546th Ordnance Battalion, Ft. Sam Houston, Texas
46th Engineer Battalion, Ft. Polk, Louisiana
519th Military Police Battalion, Ft. Polk, Louisiana
2nd Armored Cavalry Regiment, Ft. Polk, Louisiana
937th Engineer Group, Ft. Riley, Kansas
Directorate of Information Management, Ft. McPherson, Georgia
3rd Brigade, 2nd Infantry Division, Ft. Lewis, Washington
85th Medical Evacuation Battalion, Ft. Lewis, Washington
29th Signal Battalion, Ft. Lewis, Washington
1st Brigade, 25th Infantry Division, Ft. Lewis, Washington
19th Engineer Battalion, Ft. Knox, Kentucky
XVIII Airborne Corps Artillery, Ft. Bragg, North Carolina
189th Maintenance Battalion, Ft. Bragg, North Carolina
507th Corps Support Group, Ft. Bragg, North Carolina
20th Engineer Brigade, Ft. Bragg, North Carolina
55th Medical Group, Ft. Bragg, North Carolina
50th Signal Battalion, Ft. Bragg, North Carolina
82nd Airborne Division, Ft. Bragg, North Carolina
5th Mobile Army Surgical Hospital, Ft. Bragg, North Carolina
28th Combat Support Hospital, Ft. Bragg, North Carolina
Aviation Brigade, 4th Mechanized Infantry Division, Ft. Carson,
Colorado
3rd Armored Cavalry Regiment, Ft. Carson, Colorado
101st Airborne Division, Ft. Campbell, Kentucky
U.S. ARMY INTELLIGENCE AND
SECURITY COMMAND
297th Military Intelligence Battalion, Ft. Gordon, Georgia
U.S. ARMY SPECIAL OPERATIONS
COMMAND
JFK Special Warfare Center, Ft. Bragg, North Carolina
528th Special Operations, Support Battalion, Ft. Bragg, North
Carolina
7th Psychological Operations Group, Ft. Bragg, North Carolina
5th Special Forces Group, Ft. Campbell, Kentucky
160th Special Operations Aviation Regiment, Ft. Campbell, Kentucky
U.S. ARMY TRAINING AND DOCTRINE
COMMAND
282nd Army Band, Ft. Jackson, South Carolina
U.S. ARMY RESERVES
388th Medical Logistics Battalion, Hays, Kansas
100th Battalion, 442nd Infantry, Ft. Derussy, Hawaii
324th Signal Battalion, Ft. Gordon, Georgia
172nd Support Group, Broken Arrow, Oklahoma
316th Quartermaster Battalion, Okmulgee, Oklahoma
7th Squadron, 6th Cavalry Regiment, Conroe, Texas
448th Engineer Battalion, Ft. Buchanan, Puerto Rico
1st Battalion, 158th Aviation Regiment, Grand Prairie, Texas
313th Transportation Battalion, Baltimore, Maryland
77th Army Reserve Command, Ft. Totten, New York
854th Engineer Battalion, Kingston, New York
804th Hospital Center, Ft. Devens, Massachusetts
378th Corps Support Battalion, Ft. Indiantown Gap, Pennsylvania
143rd Medical Company, Salt Lake City, Utah
592nd Ordnance Company, Billings, Montana
24th Military Intelligence Battalion, Ft. Wadsworth, New York
854th Quartermaster Company, Logan, Utah
463rd Engineer Battalion, Wheeling, West Virginia
844th Engineer Battalion, Knoxville, Tennessee
337th Military Intelligence Battalion, Atlanta, Georgia
841st Engineer Battalion, Miami, Florida
326th Maintenance Battalion, Owings Mills, Maryland
475th Quartermaster Group, Farrell, Pennsylvania
138th Military Intelligence Battalion, Rosemont, Illinois
3rd Battalion, 92nd Field Artillery, Akron, Ohio
352nd Evacuation Hospital, Oakland, California
521st Maintenance Battalion, Milwaukee, Wisconsin
391st Engineer Battalion, Greenville, South Carolina
842nd Signal Company, Pensacola, Florida
U.S. ARMY EUROPE AND SEVENTH U.S.
ARMY
32nd Signal Battalion, Darmstadt, Germany
22nd Signal Brigade, Darmstadt, Germany
233rd Base Support Battalion, Darmstadt, Germany
94th Air Defense Artillery Brigade, Darmstadt, Germany
417th Base Support Battalion, Kitzingen, Germany
1st Mechanized Infantry Division, Kitzingen, Germany
100th Area Support Group, Grafenwoehr, Germany
Combat Maneuver Training Center, Hohenfels, Germany
302nd Military Intelligence Battalion, Wiesbaden, Germany
212th Mobile Army Surgical Hospital, Wiesbaden, Germany
12th Aviation Brigade, Wiesbaden, Germany
39th Transportation Battalion, Kaiserslautern, Germany
Kaiserslautern Industrial Center, Kaiserslautern, Germany
51st Maintenance Battalion, Mannheim, Germany
22nd Area Support Group, Vicenza, Italy
3rd Battalion, 325th Infantry, Vicenza, Italy
U.S. ARMY PACIFIC
Light Infantry Brigade (North), Ft. Wainwright, Arkansas
Light Infantry Brigade (South), Ft. Richardson, Arkansas
59th Signal Battalion, Ft. Richardson, Arkansas
25th Infantry Division, Schofield Barracks, Hawaii
58th Signal Battalion, Okinawa, Japan
U.S. Army Garrison, Schofield Barracks, Schofield Barracks, Hawaii
EIGHTH U.S. ARMY
2nd Infantry Division, Tongduchon, Korea
21st Transportation Company, Seoul, Korea
1st Battalion, 501st Aviation Regiment, Seoul, Korea
175th Finance Center, Seoul, Korea
U.S. Army Garrison, Camp Page, Chunchon, Korea
23rd Chemical Battalion, Taegu, Korea
168th Area Support Medical Battalion, Taegu, Korea
1st Battalion, 43rd Air Defense Artillery, Suwon, Korea
U.S. ARMY SOUTHERN COMMAND
228th Aviation Regiment, Ft. Clayton, Panama
106th Signal Brigade, Ft. Clayton, Panama
(See figure in printed edition.)Appendix II
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
=========================================================== Appendix I
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III
ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C.
Janett P. Smith, Assistant Director
Linda J. Lambert, Senior Auditor
DALLAS FIELD OFFICE
James D. Berry, Jr., Senior Evaluator
Ronald M. Haun, Senior Evaluator
Cary B. Russell, Senior Auditor
Elaine C. Coleman, Evaluator
*** End of document. ***