Apparently, the Defense Logistics Agency's Hotline to report "Fraud Waste and Abuse" is not working!
In a recent report by Fox News, the audit and accounting firm Ernst & Young found the Defense Logistics Agency (DLA)failed to properly document more than $800MM in US Taxpayer dollars that was spent on construction projects, merely one of a series of examples where the Agency could produce no paper trail for millions of dollars in property and equipment.
Think of the DLA as a quasi Walmart for the Defense Department and our military. IT employs approximately 25,000 employees who handle a wide variety of supply chain functions, providing everything from poultry and beef; medical supplies and pharmaceuticals; fuel supplies; and parts for aircraft, marine vessels, ground vehicles, and weapons systems. We're talking about "physical stuff" that you can see, feel, and get your hands on.
In comparison, Walmart, which employs some 2.3 million people and manages 11,700 retail and warehouse facilities throughout the world, has proven quite capable at managing its enormous supply chain. So what gives at the DLA? Why has the Agency had a track record and of fraud, waste and abuse issues with it supply chain dating back for years? A December 2017 Forbes article pointed out that “on July 26, 2016, the Office of the Inspector General (OIG) issued a report "Army General Fund Adjustments Not Adequately Documented or Supported.' That report alone indicated for fiscal year 2015 the Army failed to provide adequate support for $6.5 trillion in accounting journal voucher adjustments.” This would be cause to fire every person in the accounting department were it a firm in the private sector.
While its understandable that with such a large Government agency with so many moving parts, locations, and employees -- none of whom are "paid for performance" where financial stewardship is a part of the compensation model -- is bound to have some issues with tracking materiel, the problem appears to be getting worse, not improving. It's time the DLA took a reset and leveraged technologies to help reduce financial waste and loss. Blockchain ledger-based financial provisioning systems offer an innovative solution for DLA to transform its supply chain system once and for all. Before they lose the next $100MM, perhaps the DLA should consider setting an equivalent amount for a program to develop a supply chain solution developed on blockchain technologies. I wonder if I can submit that idea in to their Fraud, Waste and Abuse Hotline. Now that's a thought!