Auditors at the Ministry of Defence have been unable to account for £6.6bn of equipment, covering a sixth of all vehicles, weapons, and radios used by troops.
Ministers have ordered a shake-up at the MoD as a result. Its record keeping suggests that officials have been making critical resourcing decisions for Afghanistan, but don't know where the billions of pounds of equipment is located or what state it is in, the Financial Times reports.
The move follows the National Audit Office's refusal to sign off MoD accounts due to an 'inadequate level of evidence' that £6.6bn of its assets existed, the equivalent to the entire annual defence equipment budget.
Shadow defence secretary Liam Fox, said the supply problems were part of a 'sorry tale of failure' at the MoD. 'We have an army at war and an MoD that is simply not up to the task.'
The MoD has defended its role, stating the £6.6bn in assets 'were never physically lost' and the NAO figure was an 'extrapolation' from its audit.
It said that at the time of the report, the Defence Storage and Distribution Agency, responsible for supplying the armed forces, had been unable to satisfy the NAO's demand for paperwork to verify the assets.
The NAO has also highlighted a number of serious failures in administering stock registers. In some cases, budget constraints had forced the MoD to abandon its plans for an upgraded IT system.
As a result, an internal overhaul is to be carried out of MoD procedures and its management, in order to respond to needs in Afghanistan.
A system is being introduced next month to track frontline equipment.
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