The F-35 Joint Program Office (JPO) said that it wants to have an initial inventory by next December on the way to a clean audit in 2028.
Lockheed Martin [LMT] is the prime contractor on the $1.7 trillion, tri-service and international F-35 fighter.
“The JPO is actively collaborating with OSD and our industry partners to enhance inventory control procedures and data automation processes,” the F-35 program said in an Aug. 16 email. “These efforts are preparing the JPO to have an initial trial balance by December 2025, ultimately working in support of a clean audit opinion for DoD by 2028.”
Last week, the Pentagon Inspector General’s audit of the fiscal 2023 DoD financial statements said that “DoD did not properly account for, manage, and report Joint Strike Fighter (JSF) program inventory, including program and support equipment, spare parts, contractor‑acquired property, and government‑furnished equipment and material.”
In 2022, DoD projected a four-year delay–from fiscal 2023 to fiscal 2027–in the full and accurate accounting of F-35 parts in an Accountable Property System of Record (APSR) (Defense Daily, Nov. 16, 2022).
In fiscal 2020, the F-35 JPO designated the Defense Property Accountability System (DPAS) as the official APSR, but DPAS “does not have reliable JSF asset property records for financial reporting,” according to a Government Accountability Office (GAO) report in May, 2022.
In July last year, the Pentagon IG said that 41 of 217 F-35 part numbers reviewed by the agency had at least one error, and DoD did not report any JSF values in its fiscal 2022 financial statements (Defense Daily, Aug. 10, 2023).
“In FY 2023, the DoD again could not provide reliable data to verify the existence, completeness, and valuation of its JSF program inventory,” according to the newly released audit of DOD’s fiscal 2023 financial statements. “In addition, the DoD did not report JSF program inventory on its FY 2023 financial statements, resulting in a material weakness for the fifth consecutive year and a material misstatement on the FY 2023 DoD agency‑wide financial statements.”
“Auditors could not quantify the extent of the misstatement because JSF program officials could not identify or report a complete or valid population of JSF program inventory in a timely manner due to the lack of processes or procedures to collect the information necessary to accurately report the number and value of JSF program inventory,” the report said.
Management and execution of F-35 sustainment is to shift from the F-35 JPO to the Departments of the Navy and Air Force by fiscal 2028, and F-35 acquisition is to move to those departments from the F-35 JPO by fiscal 2030, according to Section 142 of the joint explanatory statement on the fiscal 2022 National Defense Authorization Act.
“These requirements further signify the need for DoD operational leaders to work together to ensure that proper accountability controls are implemented to produce the reliable financial information,” the new DoD IG audit said.