DOD Has Improved Oversight of Category I Missiles

DOD has taken actions to correct the deficiencies cited in our September 1994 report. Weaknesses Still Exist in DOD’s Oversight of Category I Missiles

Although the services established a baseline inventory count of category I missiles as of December 31, 1994, updates to the baseline continue to be made as additional missiles are located or errors are discovered. Also, DOD has not fully complied with physical security regulations at all of its sites. All containers had a missile, but the serial number on one container did not match the one on the missile. Oversight Weaknesses Also Exist for Category I Rockets

The services have different procedures and requirements for maintaining oversight of AT4 and LAW rockets. Although we found no missing rockets in our physical count, three AT4 rockets that were sent to the Persian Gulf for Operation Desert Storm are missing from the Marine Corps’ inventory. The investigations were closed on these three missing rockets, but no conclusions were reached by the Naval Criminal Investigative Service on whether the rockets were missing, lost, or stolen. In accordance with the CFO Act of 1990, each agency is to establish an integrated financial management system. Establishing an integrated, general ledger controller system, which ties together DOD’s accounting systems with its logistics and other key management systems, is critical if DOD is to effectively ensure oversight and control over its sensitive materials. Audit reports have repeatedly pointed out, however, that DOD’s existing accounting and related systems, including its logistics systems, are not integrated and lack a general ledger. No Evidence of Thefts From U.S. Military Arsenals by Terrorists or Extremists

We did not find any documentation that terrorists or other extremists had stolen category I handheld missiles or rockets or category II grenades, mines, and explosives from DOD arsenals. There have been thefts of category II munitions and explosives by uniformed and DOD civilian employees that involved quantities of items such as grenades, C-4 explosives, and TNT. Therefore, we recommend that the Secretary of Defense direct the Secretaries of the Army, the Navy, and the Air Force and the Commandant of the Marine Corps to develop a cost-effective procedure for periodically revalidating the category I inventory baseline by, for example, matching item managers’ records with site records annually at a representative sample of storage sites; develop a cost-effective procedure for opening containers of missiles and rockets, for example, by selecting a representative sample of pallets, rather than individual missiles and rockets, to inspect; manage category I rockets by serial number so that the item managers will have total visibility over the numbers and locations of rockets; establish procedures for ensuring that serial numbers are not changed during upgrades and modifications of category I missiles and rockets; and continue to emphasize compliance with physical security requirements. II).
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the actions taken by the Department of Defense (DOD) to correct weaknesses cited in GAO's September 1994 report on the military services' most sensitive category I missiles and to determine if problems still remained. GAO also reviewed DOD's oversight of category I rockets and the vulnerability of category I missiles and rockets and category II grenades, mines, and explosives to theft from U.S. military arsenals by terrorists or extremists.

What GAO Found

GAO noted that: (1) DOD has taken actions to improve the oversight of category I handheld missiles; (2) it conducted a worldwide inventory of handheld missiles; established a new baseline inventory count as of December 31, 1994; and implemented procedures to track changes to the baseline; (3) DOD also established procedures to check containers to ensure that each had a missile and verify serial numbers; (4) DOD reemphasized physical security procedures to be followed at its facilities; (5) despite DOD's progress toward better oversight of handheld missiles, some weaknesses remain; (6) adjustments continue to be made to the baseline as additional missiles are located and errors are discovered; (7) discrepancies still exist between records of the number of missiles and GAO's physical count; (8) the missiles may be vulnerable to insider theft because DOD is not always selecting a representative sample of containers to be opened during maintenance checks; (9) some facilities are not fully complying with DOD physical security requirements; (10) although GAO was able to match the physical count of AT4 and light antitank weapon (LAW) rockets at each site visited with the item manager's records, GAO also found oversight weaknesses with the category I rockets; (11) the Marine Corps reported three AT4 rockets missing from shipments returning from the Persian Gulf after Operation Desert Storm; (12) the Naval Criminal Investigative Service reached no conclusions on whether the rockets were missing, lost, or stolen, and the investigations were closed; (13) the services have different procedures and requirements for maintaining oversight of the rockets; (14) DOD's accounting and related systems, including its logistics systems, are not integrated; (15) in accordance with the Chief Financial Officer's (CFO) Act of 1990, each agency is to establish an integrated financial management system; (16) establishing an integrated, general ledger controller system, which ties together DOD's accounting systems with its logistics and other key management systems, is critical if DOD is to effectively ensure oversight and control over its sensitive material; (17) GAO did not find any documentation that terrorists or other extremists had stolen any category I handheld missiles or rockets or category II munitions or explosives from DOD arsenals; (18) some weapons continue to be vulnerable to insider theft as quantities of various category II items have been stolen by uniformed or DOD civilians; and (19) DOD and intelligence sources did not have any indication that the stolen items were intended for terrorists.