The report states that the systems used by the Army and Navy are, for the most part, working satisfactorily. However, the Air Force has been accepting all unserviceable equipment and giving foreign governments credit (75 percent of the equipment's current inventory price) for it, without determining whether the Air Force had a need for it, as required. As a result, the Air Force accepted for credit millions of dollars of unneeded worn and broken equipment for which it has no use. The report discusses the scope of its review, the background of the foreign military sales program, credits granted for unneeded unserviceable equipment from foreign governments, and Air Force actions to implement a new system. The report states that the new, improved system, if effectively implemented, could save the U.S. Government as much as $28 million annually. It recommends that (1) the Secretary of Defense direct the Secretary of the Air Force to designate a representative to see that the system is effectively implemented, and (2) that the Air Force Audit Agency be required to review the system after it becomes operational, to determine its effectiveness.