Navy Mislaid $319 Million in Parts : But Reforms Expected to Cut Carriers’ Inventory Problems

The Navy acknowledged Friday that severe problems in its supply system caused it to lose track of $319.7 million in aviation spare parts aboard its 14 aircraft carriers last year.

But, in releasing an audit detailing the shortcomings of the massive system, Navy officials said that reforms will reduce the inventory variances aboard carriers to less than $75 million in fiscal 1986, about half of a Navy-wide total of $160 million.

The study by the Naval Audit Service was ordered 13 months ago after disclosure that a San Diego-centered ring of thieves and smugglers had penetrated the supply system to steal millions of dollars in sophisticated aircraft parts needed by Iran to continue its war against Iraq. Eight individuals, including two storekeepers aboard Navy ships and a civilian employee of a Navy depot, are awaiting sentencing after pleading guilty in the case.

Lists Multiple Causes

Rather than theft, though, auditors blamed the inventory problems on poor bookkeeping, mismanagement, a lack of modern computer equipment and a shortage of trained personnel.

The problems developed, they said, during a period of rapid growth in the quantity, value and complexity of material stockpiled on aircraft carriers.

The typical aircraft carrier now has an authorized inventory of $2.8 billion, more than triple the level 10 years ago, the report said. In addition, it said, the 66,500 line items aboard the smallest carrier exceed the 55,000 line items stocked at the largest air station on the East Coast.

‘Did an Excellent Job’

The auditors said in the report, delivered to Congress on Friday, that the Navy “did an excellent job” in developing a 149-point list of supply system improvements and “has made reasonable progress toward completing its actions.” But, the auditors said, “solutions may require months or years to be implemented in the fleet.”

The report said that the $319.7 million in “inventory adjustments” for the year ending last November included $168.9 million in inventory “gains”--parts the Navy did not know it had--and $150.8 million in inventory “losses”--parts the Navy was supposed to have but could not find.

Navy Secretary John F. Lehman Jr., interviewed by The Times in San Diego before the report was released, said of the missing parts: “We know we are going to find them. We know they are there because we see the heaps of boxes of them.”

Not Always Orderly

He added: “If you are going to launch a raid on Libya, you root through the box until you find the right part, and you dash up to the deck with it, and you may have time the next day to go back and sort out three boxes you overturned to try to get to the right one. Or you may not, and we’ve got a lot of overturned boxes that have just not been put back in the right bin.”

The audit report identified five “major root causes” for supply system problems:

--”An obsolete and overburdened computer system, running complex and difficult to understand software, supported by poorly documented written procedures that few aircraft carrier supply department personnel ever fully understood.”

--”A severe shortage of trained and experienced personnel.”

--”A shipboard environment not conducive to, in fact hostile to, the conduct of stable, businesslike supply operations” because demands for operational readiness often override the “orderly, timely and deliberate supply transaction processing necessary for accuracy.”

--”A lack of computer system tools and comprehensive, detailed guidance for researching and reconciling inventory discrepancies.”

--”An apparent lack of supply discipline” that resulted in “unrecorded and erroneously recorded supply transactions and, hence, inventory inaccuracies.”

In commending the Navy for the corrective steps it has announced, the auditors said: “Much has been started, but much more must be completed before the Navy’s afloat inventory management problems can be brought under control.”