UNCLASSIFIED (U)

14 FAH-1 H-620

INVENTORY REQUIREMENTS FOR DEPARTMENT AND FIELD OFFICES

(CT:PPM-25; 04-12-2018)
(Office of Origin: A/LM)

14 FAH-1 H-621 GENERAL

(CT:PPM-25; 04-12-2018)
(Domestic State Only)

a. Inventories are taken and reconciled on an annual basis. The inventory provides information on the physical existence, location, condition, and use of property items. Problem areas can be identified when the inventory reveals that:

(1) Property is not located, or not found at the location indicated on the property records;

(2) Property that has been damaged or is missing has not been reported;

(3) Alterations, and related costs, to property such as major equipment modifications have not been recorded on the property records; or

(4) Differences exist between quantities of items recorded during the inventory and those shown in the property records.

b. Upon completion of the reconciliation the principal custodial officer (PCO) prepares the Certification of Inventory Reconciliation (Part A, of Form DS-1875, Property Management Report). The certification is signed by the PCO and forwarded to the accountable property officer (APO) for signature. A copy is kept in the physical inventory and reconciliation file, and the original is submitted to the Logistics Management office (A/LM/PMP/PM) in accordance with 14 FAM 429.

14 FAH-1 H-621.1 Scheduling

(CT:PPM-1; 08-11-2004)
(Domestic State Only)

Notice to employees: To minimize the disruptive influence on the office routine, the inventory should be announced in advance so that offices expect the inventory team. The notice should include the following:

(1) The starting and projected completion dates of the inventory;

(2) Movement of property between offices should be restricted during the inventory;

(3) Property on loan to employees should be available and identified as a loan item; and

(4) Privately owned property, demonstration-property, and leased-property items are to be identified as such.

14 FAH-1 H-621.2 Inventory Control

(CT:PPM-4; 07-03-2006)
(Domestic State Only)

a. Normally, the principal custodial officer (PCO) does not participate in the physical count but does coordinate the activities of the inventory team.

b. The PCO should give the inventory team a definite time frame for taking the inventory.

c. The inventory should be scheduled in time to ensure that the inventory will be completed and reconciled, inventory shortages are reported, and property record adjustments approved, before the March 15 reporting deadline.

d. Accountable property received while the inventory is in progress should not be counted. The receiving reports for this property should be entered in the Integrated Logistics Management Systems (ILMS) Asset Management database after the inventory process has been completed.

14 FAH-1 H-621.3 Pre-Inventory Meeting

(CT:PPM-9; 12-19-2011)
(Domestic State Only)

The principal custodial officer (PCO) should hold a pre-inventory meeting with the area custodial officers (ACOs) to:

(1) Discuss property locations. Review the layout of areas to be inventoried and establish an orderly movement through locations to avoid property being overlooked;

(2) Discuss procedures, including the starting and completion dates;

(3) Identify a contact to resolve any questions;

(4) Discuss follow-up procedures which may be required if any areas are restricted to the inventory team;

(5) Instruct that leased property is to be inventoried and identified as such;

(6) Discuss property-condition codes used and how to apply them. Because the condition of the property is important for the replacement process, the inventory team should appraise the condition of each item counted. The condition codes indicated in 14 FAH-1 Exhibit H-621.3 must be used; and

(7) Ensure that all data on the property records is current.

14 FAH-1 H-621.4 Reconciliation

(CT:PPM-25; 04-12-2018)
(Domestic State Only)

a. When discrepancies are found between the physical inventory and the property records, the principal custodial officer (PCO) takes action to reconcile these discrepancies. The process may necessitate recounting and/or checking acquisition documents, receiving reports, disposal reports or other action-related documents to determine whether incorrect entries or omissions have been made to the property records. The PCO will determine whether a recount is necessary. The value of the property involved should justify the time and expense of recount and reconciling action.

b. During the reconciliation process, the following Integrated Logistics Management Systems (ILMS) Asset Management reports will assist in resolving problems encountered during the inventory:

(1) The Comprehensive Report provides a review of the entire inventory;

(2) The Inventory Completion Report will list property in problem areas (i.e., missing, unrecorded, displaced, and any manual entries recorded on the scanner) and will identify the specific report to be used in taking corrective action;

(3) The Unrecorded Property Report will identify items that were inventoried but are not recorded in Asset Management;

(4) The Visual Report identifies any manual entries made to the scanner. The PCO should question all manual entries;

(5) The Displaced Property Report will identify items that were found but are not in the location indicated in Asset Management. When reviewing this report, the PCO decides whether the property remains at its current location or is returned to its recorded location; and

(6) The Inventory Coverage Report is used to confirm that property at all locations has been inventoried.

c. Discrepancies:

(1) Documenting overages: Property found during the physical count that is not recorded on the property records is an overage. Overages are added to the property records. Examples of this might be new property received earlier but not added to the Asset Management database, or property that has been removed from the records as a result of a disposal action, but has not yet been physically removed from the premises. Inventory overages do not offset shortages. The receiving files should be reviewed in an effort to locate the original acquisition document and receiving report for information to establish a property record. If these documents cannot be found, Form DS-127, Receiving and Inspection Report, is prepared, listing the property and stating that the property was discovered during the physical inventory;

(2) Reporting shortages:

(a) The PCO prepares Form DS-132, Property Disposal Authorization and Survey Report, listing all shortages. A statement explaining actions taken to resolve shortages and adjust the property records should be included on the Form DS-132. The PCO retains a copy and forwards the original to the accountable property officer (APO). After APO action is complete, the original is returned to the PCO with appropriate comments/instructions;

(b) When property survey board action is required, the APO includes comments to the board, signs, dates, and forwards the original to the property survey board. After property survey board action is complete, the secretary of the board returns the original to the APO. The board should address relief from responsibility and records adjustments in its comments; and

(3) In cases where theft is suspected, the APO shall notify the Office of the Inspector General, Office of Investigations (OIG/INV) immediately.

14 FAH-1 H-622 REPORTING LOST OR DAMAGED PROPERTY

14 FAH-1 H-622.1 Principal Custodial Officer (PCO) Action

(CT:PPM-25; 04-12-2018)
(Domestic State Only)

a. To obtain relief of accountability for lost or damaged property, the area custodial officer (ACO) prepares Form DS-132, Property Disposal Authorization and Survey Report. The report is submitted to the principal custodial officer (PCO). To facilitate control, the ACO obtains a report number from the PCO, at the time of form preparation. The PCO will need to establish a numbering system for use with survey actions; for example, the prefix SR for survey report could be used in conjunction with the fiscal year (e.g., SR/2002-1 SR/2002-2, etc.).

b. Form preparation: The ACO prepares Form DS-132, retains a copy and forwards the original and one copy to the PCO.

c. The PCO keeps a copy of Form DS-132 and forwards the original to the accountable property officer (APO).

14 FAH-1 H-622.2 Accountable Property Officer (APO) Action

(CT:PPM-25; 04-12-2018)
(Domestic State Only)

a. The facts as reported should be verified and any necessary actions to strengthen operating procedures or management controls to avoid a repetition should be taken.

b. On reports involving property costing $1,000 or more per item, reports covering program property regardless of cost, and where theft is suspected regardless of cost, the accountable property officer (APO) includes comments to the property survey board, keeps a copy and forwards the original to the property survey board.

c. On those reports handled by the APO, where the decision goes against the employee and the employee wishes to appeal, the APO keeps a copy of the report and forwards the original to the secretary of the property survey board.

d. After the property survey board has examined the evidence, conducted any inquiry necessary, and made a decision, the board secretary keeps a copy of Form DS-132, Property Disposal Authorization and Survey Report, and copies of any related documents for the property survey boards files. The original of Form DS-132 and any related documents are returned to the APO who notifies the employee of the decision.

14 FAH-1 H-623 EMPLOYEE LIABILITY

(CT:PPM-1; 08-11-2004)
(Domestic State Only)

a. In certain circumstances, an employee might be held liable for damaged or missing property. For example, property on loan to an employee may be damaged or stolen while in the possession of the employee. If negligence or misuse in allowing this to happen is established, the employee might be required to pay for the value of the property, or for repairs to damaged property.

b. The accountable property officer (APO) or property survey board, as appropriate, should take into consideration the fact that damage to U.S. Government property incurred in the course of an employees official duties is property chargeable to the U.S. Government not the employee, except in cases of neglect or misuse. Before charging the loss to the U.S. Government, however, the property management officer (PMO) should be certain that the loss was clearly incurred in the course of official duties.

14 FAH-1 H-623.1 Establishing Liability Amount

(CT:PPM-25; 04-12-2018)
(Domestic State Only)

Missing or destroyed property:

(1) The amount of liability for damaged, missing, or destroyed property is based on the depreciated value (using straight-line method) of the item. Minimum liability is set at 10 percent of the acquisition cost of the item, except for antiques, works of art, and cultural heritage objects that are not depreciated. If a deliberate or preventable action, such as unauthorized repair, results in diminished or negated value, the employee may be assessed up to the fair market value;

(2) To establish depreciated value, first calculate the accumulated depreciation based on a straight-line method (i.e., the incremental reduction of an items value in equal segments over the years of useful life). Start by establishing the items estimated useful life and annual depreciation rate. An item with a $2,000 acquisition cost and an expected useful life of 10 years, for example, would have an annual depreciation rate of $180 ($2,000, minus 10 percent representing the scrap value, divided by 10 years). If the acquisition cost is not recorded on the property records, estimate the cost at the time acquired;

(3) See 14 FAM 412.3, Replacement Standards, which are U.S. Government-wide minimum replacement standards for various items, and 14 FAH-1 H-213, paragraph d, for personal property replacement standards may be used for determining the useful life period of an item. However, the cycles indicated are averages and each office is encouraged to establish its own estimated life-cycle for the property. When estimating useful life, consider such factors as physical wear and tear and technological change that bear on the economical usefulness of the item; and

(4) The depreciated value is determined by subtracting accumulated depreciation from acquisition cost. The accumulated depreciation is determined by multiplying the annual depreciation by the age of the item. For example, if the above example is six years old, the accumulated depreciation would be $1,080 ($180 times six).

14 FAH-1 H-623.2 When Employee Is not Held Liable

(CT:PPM-25; 04-12-2018)
(Domestic State Only)

a. In cases where an employee is involved in a survey action but is found to be not liable for damaged or missing property, the APO provides the employee with a photocopy of the final Form DS-132, Property Disposal Authorization and Survey Report.

b. If an employee, other than the employee responsible for the loss or damage, has signed Form DS-584, Nonexpendable Property Transaction, covering property on loan, that employee should also receive a photocopy of the final Form DS-132.

14 FAH-1 H-623.3 When Employee Is Held Liable

(CT:PPM-25; 04-12-2018)
(Domestic State Only)

a. When it is determined that an employee is financially liable for damaged or missing property, the accountable property officer (APO) provides the employee with a copy of the final Form DS-132, Property Disposal Authorization and Survey Report, and copies of any other documents which contain the findings of the APO or the property survey board. The APO keeps all originals until reimbursement is made. Provided reimbursement has been made by the employee, all documents may be disposed of three years after the loss or disposal of the property.

b. The copy of Form DS-132 sent to the employee should be accompanied by a memorandum containing instructions that payment is to be made (in cash or by check payable to the Department of State) to the APO. Payment of such a billing does not convey title of the property.

14 FAH-1 H-624 EMPLOYEE APPEAL

(CT:PPM-2; 07-27-2005)
(Domestic State Only)

See 14 FAM 428.3.

14 FAH-1 H-625 REIMBURSEMENT BY EMPLOYEE

(CT:PPM-25; 04-12-2018)
(Domestic State Only)

When payment for damage or loss is received, the accountable property officer (APO) keeps a copy of Form DS-132, Property Disposal Authorization and Survey Report, and forwards the original to the Bureau of the Comptroller and Global Financial Services (CGFS) with instructions that deposit is to be made to the appropriate account, and that Form DS-132 is to be completed and returned to the APO, who includes any final comments and returns it to the principal custodial officer (PCO). The copy is discarded.

14 FAH-1 H-626 PRINCIPAL CUSTODIAL OFFICER (PCO) FINAL ACTION

(CT:PPM-25; 04-12-2018)
(Domestic State Only)

a. Upon receipt of the final Form DS-132, Property Disposal Authorization and Survey Report, from the accountable property officer (APO), the pending copy is discarded. If adjustments are made to the property records, the principal custodial officer (PCO) completes the final field on Form DS-132.

b. A copy of the final Form DS-132 is made and forwarded to the area custodial officer (ACO).

c. The ACO maintains a file on all documents relating to the case for three fiscal years. The documents may be disposed of at that time, providing that reimbursement has been made by the employee.

14 FAH-1 H-627 THROUGH H-629 UNASSIGNED

14 FAH-1 Exhibit H-621.3
Property Disposal Condition Codes

(CT:PPM-10; 12-23-2011)
(State Only)

Code Definition

1 New. Property that is in new condition or unused condition and can be used immediately without modifications or repairs.

4 Usable. Property that shows some wear, but can be used without significant repair.

7 Repairable. Property that is unusable in its current condition but can be economically repaired.

S Scrap. Property that has no value except for its basic material content.

X Salvage. Property that has value in excess of its basic material content, but repair or rehabilitation is impractical and/or uneconomical.

UNCLASSIFIED (U)