Attachment 0002 PWS attachments.pdf

Army Regulation 735–5

Property Accountability

Property Accountability Policies

Headquarters Department of the Army Washington, DC 9 November 2016

UNCLASSIFIED

SUMMARY of CHANGE

AR 735–5

Property Accountability Policies

This expedite revision, dated 9 November 2016--o Updates approving authority policy for assessing a final loss of $100,000 or greater, or loss of a controlled item (para 13-17a(3)).

o Adds policy that permits officers in the grade of O-6 with promotable status and O-6 officers assigned as the deputy commander to the commanding general, to sign DD Form 200 on behalf of the commanding general (paras 13-17a(4) and 13-17a(5).

o Updates the authority for discrepancies incidental to shipment of property by common or contractor carrier (para 16-2).

Headquarters Department of the Army Washington, DC 9 November 2016

Property Accountability

Property Accountability Policies

*Army Regulation 735–5

Effective 9 December 2016

H i s t o r y . T h i s p u b l i c a t i o n i s a n e x p e d i t e r e v i s i o n . T h e p o r t i o n s a f f e c t e d b y t h i s expedite revision are listed in the summary of change.

S u m m a r y . T h i s r e g u l a t i o n p r o v i d e s b a s i c p o l i c i e s f o r a c c o u n t i n g f o r A r m y p r o p e r t y a n d a c c o u n t i n g f o r l o s t , d a m -aged, or destroyed Army property.

Applicability. This regulation applies to t h e A c t i v e A r m y , t h e A r m y N a t i o n a l Guard/Army National Guard of the United States, and the U.S. Army Reserve, unless otherwise stated. During mobilization, the proponent may modify chapters and poli-cies contained in this regulation.

Proponent and exception authority.

The proponent of this regulation is the Deputy Chief of Staff, G–4. The propo-nent has the authority to approve excep-tions or waivers to this regulation that are consistent with controlling law and regu-lations. The proponent may delegate this approval authority, in writing, to a divi-sion chief within the proponent agency or a direct reporting unit or field operating agency of the proponent agency in the grade of colonel or the civilian equivalent.

Activities may request a waiver to this regulation by providing justification that includes a full analysis of the expected benefits and must include formal review by the activity’s senior legal officer. All waiver requests will be endorsed by the commander or senior leader of the requ-e s t i n g a c t i v i t y a n d f o r w a r d e d t h r o u g h t h e i r h i g h e r h e a d q u a r t e r s t o t h e p o l i c y proponent. Refer to AR 25–30 for specific guidance.

Army internal control process. This regulation contains internal control provi-sions in accordance with AR 11–2 and identifies key internal controls that must be evaluated (see appendix D).

S u p p l e m e n t a t i o n . S u p p l e m e n t a t i o n o f this regulation and establishment of com-mand and local forms are prohibited with-out prior approval from the Deputy Chief of Staff, G–4 (DALO–SUS), 500 Army Pentagon, Washington, DC 20310–0500.

Suggested improvements. Users are invited to send comments and suggested improvements on DA Form 2028 (Recom-m e n d e d C h a n g e s t o P u b l i c a t i o n s a n d Blank Forms) directly to the Deputy Chief of Staff, G–4 (DALO–SUS), 500 Army Pentagon, Washington, DC 20310–0500.

Distribution. Distribution of this publi-cation is made in electronic media only and is intended for command levels C, D, and E for the Active Army, the Army National Guard/Army National Guard of t h e U n i t e d S t a t e s , a n d t h e U . S . A r m y Reserve.

Contents (Listed by paragraph and page number)

Chapter 1 Introduction, page 1 Purpose • 1–1, page 1 References • 1–2, page 1 Explanation of abbreviations and terms • 1–3, page 1 Responsibilities • 1–4, page 1 Statutory and Department of Defense provisions • 1–5, page 1 Internal management controls • 1–6, page 1 Civil-funded property • 1–7, page 2

Chapter 2 Property Accounting Requirements, page 2

*This publication supersedes AR 735–5, dated 10 May 2013.

AR 735–5 • 9 November 2016 i

UNCLASSIFIED

Contents—Continued

Section I Basic Principles, page 2 General requirements • 2–1, page 2 Accounting for Army property • 2–2, page 2 Centralized accounting • 2–3, page 3 Other Service storage of Army property • 2–4, page 3 Army property in possession of contractors • 2–5, page 3 Inventories of personal property • 2–6, page 4

Section II Accountability and Responsibility, page 5 Accountability • 2–7, page 5 Responsibility • 2–8, page 5 Relationship between accountability and responsibility • 2–9, page 6

Section III Accountable Officer, page 8 Appointment of an accountable officer • 2–10, page 8 Contractibility of the accountable officer • 2–11, page 9 Duties of accountable officers • 2–12, page 9 Property book accounts • 2–13, page 10 Stock record accounts • 2–14, page 10 Stock record account serial number • 2–15, page 10 Sales accounts • 2–16, page 10

Chapter 3 Army Property and Non-Army Property, page 11 Army property • 3–1, page 11 Non-Army property • 3–2, page 11 Liability of the Army for property on loan from other activities • 3–3, page 11

Chapter 4 Real Property, Capital Equipment, and Other Nonexpendable Supplies, page 11

Section I Real Property, page 11 General requirements and references • 4–1, page 11 Real property • 4–2, page 11 Real property accountable officer • 4–3, page 12 Property records • 4–4, page 12 Real property at contractor site • 4–5, page 12

Section II Personal Property Relocatable Buildings and/or Facilities, page 12 Overview • 4–6, page 12 General policy • 4–7, page 13 Procedures • 4–8, page 14 Management of relocatable buildings and/or facilities • 4–9, page 15 Relocatable buildings and/or facilities used as temporary real property in lieu of permanent real property • 4–10, Section III Capital Equipment and Other Nonexpendable Supplies, page 16 General accounting and reporting policy • 4–11, page 16 Valuation • 4–12, page 16 Capital equipment • 4–13, page 16 ii AR 735–5 • 9 November 2016

Capital equipment at contractor site • 4–14, page 17 Other nonexpendable supplies • 4–15, page 17 Organizational historical artifacts • 4–16, page 17

Chapter 5 Transfer of Accounts, page 17 General transfer of accountability policy • 5–1, page 17 Change of stock record officers • 5–2, page 17 Inactivating a stock record account • 5–3, page 17 Other transfers of accountability • 5–4, page 20 Emergency transfers of accountability • 5–5, page 21 Change of station • 5–6, page 21 Equipment of prisoners • 5–7, page 21 Equipment of hospitalized personnel • 5–8, page 21 Property impounded or held as evidence • 5–9, page 21

Chapter 6 Receipt, Shipment, and Issue of Property, page 22 General requirements • 6–1, page 22 Property receipt, shipment, and issue • 6–2, page 22 Receiving property directly from a vendor • 6–3, page 22 Processing of receiving reports by the stock record officer • 6–4, page 22 Property accountability for discrepancies in shipment • 6–5, page 23

Chapter 7 Nonexpendable, Expendable, and Durable Property, page 23 General accounting requirements • 7–1, page 23 Nonexpendable property • 7–2, page 23 Accounting for nonexpendable property • 7–3, page 23 Durable property • 7–4, page 24 Accounting for durable property • 7–5, page 24 Expendable property • 7–6, page 24 Accounting for expendable property • 7–7, page 25

Chapter 8 Deviations From and Waivers to Property Accounting Policy and Procedures, page 26 General requirements • 8–1, page 26 Deviations • 8–2, page 26 Waivers • 8–3, page 26 Final approving authority • 8–4, page 27 Requests for waivers • 8–5, page 27 Appointment of a board of officers • 8–6, page 27 Preparation of the report of proceedings • 8–7, page 27

Chapter 9 Offer and Payment of Rewards for the Recovery of Lost Army Property, page 28 General requirements • 9–1, page 28 Approval or disapproval of rewards • 9–2, page 29 Payment of rewards • 9–3, page 29 Announcement of rewards • 9–4, page 29 Funds • 9–5, page 29

Chapter 10 Loans, Bonding, and Other Accounting Procedures, page 30 iiiAR 735–5 • 9 November 2016

Section I Loans and Bonding, page 30 Loans • 10–1, page 30 Legal bonds • 10–2, page 30 Reserve Officers’ Training Corps or National Defense Cadet Corps bonding • 10–3, page 30 Junior Reserve Officers’ Training Corps bonding and/or insurance • 10–4, page 31

Section II Other Accounting Procedures, page 32 Financial inventory accounting • 10–5, page 32 Summary accounting • 10–6, page 32 Contractor-operated property accounts • 10–7, page 32

Chapter 11 Command Supply Discipline Program, page 32

Section I Introduction, page 32 General information • 11–1, page 32 Purpose • 11–2, page 33 Terms • 11–3, page 33 Roles • 11–4, page 33

Section II Program Guidance, page 34 Intent • 11–5, page 34 Implementation procedures • 11–6, page 34 Monitoring • 11–7, page 35

Chapter 12 Methods of Obtaining Relief from Responsibility for Property, page 35 General actions to protect Government property • 12–1, page 35 Actions to take when individuals admit negligence • 12–2, page 42 DD Form 362 • 12–3, page 44

Chapter 13 Financial Liability Investigations of Property Loss, page 51

Section I General, page 51 Financial liability investigation of property loss versus the report of survey system • 13–1, page 51 Purpose of a financial liability investigation of property loss • 13–2, page 51 Mandatory initiation of a financial liability investigation of property loss • 13–3, page 51 Related financial liability investigations of property loss • 13–4, page 52 Chain of command for processing financial liability investigations of property loss • 13–5, page 52 Time constraints for processing financial liability investigations of property loss • 13–6, page 52 Initiator of financial liability investigations of property loss • 13–7, page 52 Time constraints for initiation of financial liability investigations of property loss • 13–8, page 52 Basic requirements for DD Form 200 • 13–9, page 53 Preparation requirements for DD Form 200 • 13–10, page 60 Responsible officer and/or reviewing authority • 13–11, page 80 Time constraints for actions by the responsible officer and/or reviewing authority • 13–12, page 80 Distribution • 13–13, page 80 Disposition of damaged property • 13–14, page 80 iv AR 735–5 • 9 November 2016

Section II Accountable officer, page 81 Accountable officer’s action on a financial liability investigation of property loss • 13–15, page 81 Distribution of financial ability investigations of property loss by the accountable officer immediately after the document number or voucher number is assigned • 13–16, page 81

Section III Approving Authority and/or Appointing Authority, page 81 Criteria • 13–17, page 81 Conflict of interest • 13–18, page 82 Processing steps for appointing authority and/or approving authority • 13–19, page 83 Supervising the financial liability investigation of property loss system • 13–20, page 86 Initial review by the appointing authority or the approving authority • 13–21, page 87

Section IV Processing Financial Liability Investigations of Property Loss by the Approving Authority or Appointing Authority

Without Appointing a Financial Liability Officer, page 87 Decision by the approving authority without further investigation • 13–22, page 87 Recommendation by the appointing authority without further investigation • 13–23, page 88

Section V Appointment of the Financial Liability Officer or AR 15–6 Investigating Officer, page 89 Review of the DD Form 200 to determine if a financial liability officer or AR 15–6 investigating officer is necessary

• 13–24, page 89 Use of an AR 15–6 investigation • 13–25, page 90 Financial liability officer • 13–26, page 91 Financial liability officer qualifications • 13–27, page 91 Time constraints for conducting the investigation by the financial liability officer • 13–28, page 92 Financial liability officer’s responsibilities • 13–29, page 93 Relief of financial liability officer • 13–30, page 94

Section VI Conducting a Financial Liability Investigation of Property Loss by the Financial Liability Officer, page 94 Conducting the investigation • 13–31, page 94 Financial liability officer’s findings and recommendations • 13–32, page 95

Section VII Actions After Financial Liability Officer’s Recommendation, page 97 Financial liability not recommended • 13–33, page 97 Financial liability recommended • 13–34, page 97 Submission of individual rebuttal statement • 13–35, page 99

Section VIII Review of Financial Liability Officer’s Findings and Recommendations by a Designated Appointing Authority, Appointing authority’s review of financial liability investigations of property loss • 13–36, page 99 Appointing authority’s decision • 13–37, page 100

Section IX Review by Approval Authority, page 100 Legal review of a financial liability investigation of property loss • 13–38, page 100 Legal review of a financial liability investigation of property loss • 13–39, page 101 Approving authority’s action after review of DD Form 200 • 13–40, page 101 Liability limits • 13–41, page 103 vAR 735–5 • 9 November 2016

Section X Notice to Respondents on Assessment of Financial Liability, page 104 Respondent’s rights • 13–42, page 104 Respondent’s actions • 13–43, page 110 Requests for reconsideration • 13–44, page 111 Requests for a hearing (civilian employees only) • 13–45, page 111 Remission or cancellation of indebtedness (enlisted personnel only) • 13–46, page 112 Requests for extension of the collection period • 13–47, page 112 Submitting an application DD Form 149 to the Army Board for Correction of Military Records • 13–48, page 112 Reopening, correcting, amending, or canceling financial liability investigations of property loss • 13–49, page 115 Actions resulting from reopening a financial liability investigation of property loss • 13–50, page 116

Section I Appeal Authority’s Review of Requests for Reconsideration, page 116 Information regarding requests for reconsideration • 13–51, page 116 Appeal authority • 13–52, page 116

Chapter 14 Special Procedures, page 118

Section I Exceptions to Policy Contained in Chapter 13, page 118 General • 14–1, page 118 Financial liability investigations of property loss listing property carried on accountable records of an installation other than where located • 14–2, page 118 Financial liability investigations of property loss pertaining to inactivated installations, activities, or organizations

• 14–3, page 118

Section II Special Rules during Unique Events, page 118 Discrepancies involving persons carried on the rolls, but not present • 14–4, page 118 Losses incident to taking part in Joint exercises and operations • 14–5, page 119 Approval authority for property issued to a unit during major training exercises • 14–6, page 119 Property ordered to be abandoned • 14–7, page 119 Disassembled or cannibalized major items, kits, or assemblies • 14–8, page 123 Property determined to be unsafe for further use or storage because of age • 14–9, page 123 Destruction of contaminated clothing and equipment • 14–10, page 123 Property unlawfully detained by civilians • 14–11, page 123 Liability of nonappropriated fund activities • 14–12, page 123 Accounting for lost, damaged, destroyed, or stolen Government furnished property with contractors • 14–13, Accounting for recovered property previously listed on a financial liability investigation of property loss • 14–14, Section III Accounting for Other Losses or Damage, page 125 Aircraft accidents • 14–15, page 125 Army National Guard loaned property • 14–16, page 125 DD Form 1544 and money collected as payment for meals in a dining facility • 14–17, page 125 Damaged property • 14–18, page 128 Losses of durable hand tools and components of sets, kits, and outfits at the using unit level when negligence or willful misconduct is not suspected • 14–19, page 130 Losses of durable and expendable items other than hand tools, components of sets, kits, and outfits, or organizational clothing and individual equipment • 14–20, page 131 Government provided property • 14–21, page 131 Government quarters and furnishings • 14–22, page 131 vi AR 735–5 • 9 November 2016

Keys • 14–23, page 132 Losses in laundries • 14–24, page 132 Leased property • 14–25, page 132 Marine casualties • 14–26, page 132 Personal clothing and organizational clothing and individual equipment • 14–27, page 132 Nonexpendable property consumed in use • 14–28, page 133 Public funds and other negotiable instruments • 14–29, page 133 Subsistence accounting variances • 14–30, page 133 Unserviceable supplies in depot storage • 14–31, page 133 Vehicular accidents • 14–32, page 134

Section IV Inventory Adjustment Reports, page 134 Inventory discrepancies at a central issue facility • 14–33, page 134 Inventory discrepancies at a stock record account • 14–34, page 135

Section V Joint Service Environment, page 136 Accounting for lost, damaged, or destroyed property in a Joint Service environment • 14–35, page 136 Reciprocal agreement between the Army and Air Force for financial liability investigations of property loss • 14–36, Chapter 15 Accounting for Losses of National Stock (Army Materiel Command Installations Only), page 138 General information • 15–1, page 138 Policy • 15–2, page 138 Procedures • 15–3, page 140

Chapter 16 Discrepancies Incident to Shipment of Property by Common or Contractor Carrier, page 147

Section I Introduction, page 147 General • 16–1, page 147 Authority • 16–2, page 147 Scope • 16–3, page 147 Property accountability for discrepancies • 16–4, page 147 Actions to be taken upon discovery of discrepancies in shipment • 16–5, page 148 Step 1–Discovery of discrepancies • 16–6, page 148 Step 2–Classification of discrepancies • 16–7, page 148 Discrepancy tolerance in receiving shipments of coal and petroleum products • 16–8, page 149

Section II Reporting and Adjusting Transportation Discrepancies, page 149 Step 3–DD Form 361 shipments on prepaid commercial bill of ladings • 16–9, page 149 Step 3–Free-on-board origin shipments from vendors on a Government bill of lading • 16–10, page 149 Step 3–Free-on-board origin for conversion to a Government bill of lading • 16–11, page 150 Step 3–Shipments from the Army Stock Fund • 16–12, page 150 Step 3–Shipments from the Defense Logistics Agency • 16–13, page 150 Step 3–Shipments from the General Services Administration • 16–14, page 150 Step 3–Responsibility at Army depots • 16–15, page 150 Step 3–Responsibility at installations, depots, and terminals • 16–16, page 150 Step 3–Responsibility at ocean terminals for overseas shipments • 16–17, page 150 Step 3–Responsibility at aerial ports or air freight terminals • 16–18, page 150 Step 3–Responsibility for shipments to commercial warehouses • 16–19, page 150 Step 3–Shipments between Army and other Government agencies • 16–20, page 150 viiAR 735–5 • 9 November 2016

Step 3–Shipments to nonmilitary activities • 16–21, page 150 Step 3–Shipments to the American Red Cross • 16–22, page 151 Step 3–Army property damaged or destroyed before reaching intended destination in continental United States

• 16–23, page 151 Step 3–Inactivated installations • 16–24, page 151 Step 3–Time limitation • 16–25, page 151 Step 3–Number of copies required • 16–26, page 152 Step 4–Transmittal for financial liability investigation of property loss purposes by receiving transportation officer

• 16–27, page 152 Step 4–Shipments from the Army Stock Fund • 16–28, page 152 Step 4–Shipments from the Defense Logistics Agency • 16–29, page 152 Step 4–Shipments from the General Services Administration • 16–30, page 152 Step 4–Designation of appointing and approving authority • 16–31, page 152 Step 4–Investigation of discrepancy general instructions • 16–32, page 152 Step 4–Examination by appointing and approving authority • 16–33, page 152 Step 4–Action by financial liability officer • 16–34, page 152 Step 4–Disposition of damaged property • 16–35, page 153 Step 5–Review and approval by appointing and approving authority • 16–36, page 153 Step 5–Review and approval for installation commander • 16–37, page 153 Step 6–General distribution • 16–38, page 154 Step 6–Distribution of the Army Stock Fund • 16–39, page 154 Step 6–Distribution of shipments from the Defense Logistics Agency • 16–40, page 155 Step 6–Distribution of shipments from the General Services Administration • 16–41, page 155 Step 7–Action of shipping officer • 16–42, page 155 Discrepancies involving contract freight handlers • 16–43, page 155 Discrepancies in shipments by parcel post and Government delivery vehicles • 16–44, page 155 Shipments by ocean commercial carriers • 16–45, page 155 Discrepancies in shipments received by overseas ports of debarkation • 16–46, page 155 Discrepancies in domestic intercoastal shipments • 16–47, page 156 Shipment of authorized baggage and household goods • 16–48, page 156 Receipt of property previously reported lost or short • 16–50, page 157 Discrepancies in container shipments • 16–51, page 157

Section III Reporting and Adjusting Supply Discrepancies, page 157 Step 4–Initiating an SF 364 • 16–52, page 157 Step 4–Conducting investigations and preparing SF 364 • 16–53, page 158 Step 5–Approval of SF 364 of consignee installation commanders • 16–54, page 158 Step 6–Distribution of forms • 16–55, page 158 Action activity requests • 16–56, page 158

Appendixes

A. References, page 163

B. Computing the Actual Loss to the Government when property is Lost, Damaged, or Destroyed, page 169

C. Loaned Army National Guard Property, page 171

D. Internal Control Evaluation, page 172

Table List

Table 9–1: Rewards, page 28 Table 12–1: Property record adjustments for damaged property, page 37 Table 12–2: Property record adjustments for lost property, page 37 Table 12–3: Method of computing financial charges against a single respondent (dollar amounts shown in this table are for example purposes only), page 42 viii AR 735–5 • 9 November 2016

Table 12–4: Methods, page 46 Table 13–1: Protocol for military and GS civilian grade comparison for appointment of financial liability officer purposes only, page 92 Table 15–1: Criteria for causative research, page 140 Table 16–1: Actions for discrepancies in shipment, page 148 Table 16–1: Acknowledgement and receipt of return of a discrepancy in shipment, page 153

Figure List

Figure 2–1: Five types of responsibilities and their relationship to levels of command, page 7 Figure 5–1: Format for the transfer of property accountability statement by the losing stock record officer, page 18 Figure 5–2: Format for the transfer of property accountability statement by the gaining stock record officer, page 19 Figure 5–3: Format for the gaining accountable officer’s transfer of property accountability statement for inactivating a stock record account, page 20 Figure 9–1: Format for the announcement of rewards, page 29 Figure 12–1: Accounting process for damaged property, page 39 Figure 12–2: Accounting process for loss property at the property book level, page 40 Figure 12–3: Accounting process for lost property at the stock record account level, page 41 Figure 12–4: Method for computing collective and individual financial liability when more than one person is changed, page 43 Figure 12–5: Sample DD Form 362, page 47 Figure 12–6: Process flowchart for cash payment and/or purchase from central issue facility and/or self-service supply center, page 48 Figure 12–7: Accounting process for DD Form 362, page 49 Figure 12–8: Sample of DD Form 2481, page 50 Figure 13–1: DD Form 200 processing time segments, page 53 Figure 13–2: Sample DD Form 200 only one item, page 54 Figure 13–2: Sample DD Form 200 only one item–Continued, page 55 Figure 13–3: Sample checklist and tracking document for financial liability investigations of property loss page, Figure 13–3: Sample checklist and tracking document for financial liability investigations of property loss page–Continued, page 57 Figure 13–3: Sample checklist and tracking document for financial liability investigations of property loss page–Continued, page 58 Figure 13–3: Sample checklist and tracking document for financial liability investigations of property loss page–Continued, page 59 Figure 13–4: Sample of DD Form 200 when more than one item is lost, damaged or destroyed, page 67 Figure 13–4: Sample of DD Form 200 when more than one item is lost, damaged or destroyed–Continued, page 68 Figure 13–4: Sample of DD Form 200 when more than one item is lost, damaged or destroyed–Continued, page 69 Figure 13–5: Sample of DD Form 200 when added pages are used for blocks 4 through 8, page 70 Figure 13–5: Sample of DD Form 200 when added pages are used for blocks 4 through 8–Continued, page 71 Figure 13–5: Sample of DD Form 200 when added pages are used for blocks 4 through 8–Continued, page 72 Figure 13–6: Sample of DD Form 200 when components are missing, page 73 Figure 13–7: Sample of DD Form 200 when added pages are used block 9 and 15, page 74 Figure 13–7: Sample of DD Form 200 when added pages are used block 9 and 15–Continued, page 75 Figure 13–7: Sample of DD Form 200 when added pages are used block 9 and 15–Continued, page 76 Figure 13–7: Sample of DD Form 200 when added pages are used block 9 and 15–Continued, page 77 Figure 13–8: Sample of DD Form 200 when a 15–6 investigation is required, page 78 Figure 13–8: Sample of DD Form 200 when a 15–6 investigation is required–Continued, page 79 Figure 13–9: Financial liability investigation processing steps with an appointing authority, page 84 Figure 13–10: Financial liability investigation processing steps without an appointing authority, page 85 Figure 13–11: Sample DA Form 1659, page 87 Figure 13–12: Sample memorandum for appointment of a financial liability officer, page 90 Figure 13–13: Sample financial liability officer’s notification to the respondent informing respondent of their intension to recommend a charge of financial liability, page 98 ixAR 735–5 • 9 November 2016

Figure 13–14: Financial liability investigation processing steps from assessment of financial liability to receipt at FAO and/or USPFO, page 103

Figure 13–15: Sample approving authority’s notification to the respondent that financial liability is being assessed, Figure 13–15: Sample approving authority’s notification to the respondent that financial liability is being assessed–Continued, page 107

Figure 13–16: Sample approving authority’s respondent notification of relief from responsibility, page 108 Figure 13–17: Time constraints for a military respondent, page 109 Figure 13–18: Time constraints for DOD or Army civilian employee respondent, page 110 Figure 13–19: Sample request for reconsideration, page 112 Figure 13–20: Sample request for a hearing by DOD civilian employee, page 113 Figure 13–21: Sample request for extension of the collection period, page 114 Figure 13–22: Sample memorandum from the approving authority to the appeal authority, forwarding request for reconsideration for review as the appeal authority, page 115 Figure 14–1: Example of a property abandonment approval memorandum, page 120 Figure 14–2: Sample DD Form 200 for property abandoned, page 121 Figure 14–2: Sample DD Form 200 for property abandoned–Continued, page 122 Figure 14–3: Process flow for financial liability investigation when a contractor is involved, page 126 Figure 14–4: Sample DD Form 200 when GFP equipment is lost, damaged, destroyed, or theft is suspected, Figure 14–5: Sample memorandum to accountable officer to reestablish accountability of items contained on a financial liability investigation and document numbers, page 128 Figure 15–1: Sample DA Form 444, page 144 Figure 15–2: Sample DD Form 200, page 145 Figure 15–2: Sample DD Form 200–Continued, page 146 Figure 16–1: SF 364 and related actions, page 159 Figure 16–2: Sample of SF 364 by block or column, page 160 Figure 16–2: Sample of SF 364 by block or column–Continued, page 161 Figure 16–3: Sample of SF 368, page 162

Glossary x AR 735–5 • 9 November 2016

Chapter 1 Introduction

1–1. Purpose This publication contains concepts and guidelines for establishing and maintaining the Command Supply Discipline Program (CSDP). The CSDP addresses supervisory and/or managerial responsibilities within the supply system from the user to the Army command (ACOM), Army service component command (ASCC), and/or direct reporting unit (DRU) level. AR 710–2 outlines the specific requirements for the CSDP. The CSDP is a compilation of existing regulatory requirements brought together for visibility purposes. It is directed at standardizing supply discipline throughout the Army. Also, the CSDP is meant to simplify command, supervisory, and managerial responsibilities.

Simplification is accomplished by outlining the various requirements for responsible personnel, by standardizing requirements, and by formalizing follow-up procedures.

1–2. References See appendix A.

1–3. Explanation of abbreviations and terms See the glossary.

1–4. Responsibilities

a. The Deputy Chief of Staff, G–4 (DCS, G–4) will ensure all detailed property accounting policy and procedures developed for specific materials or situations comply with this regulation. The DCS, G–4 is responsible for the development, supervision, and implementation of automatic identification technology (AIT) applications pertaining to property accounting policy and procedures.

b. Commanders of ACOMs, ASCCs, DRUs, and commanders of U.S. Army Installation Management Command (IMCOM) regions authorized to develop specific commodity, or command unique property, accounting policies, and procedures will ensure they comply with the policies and procedures prescribed by this regulation.

c. Brigade and battalion commanders and equivalent-level commanders in a table of distribution and allowance (TDA) environment will develop and implement oversight management over—

(1) Financial liability investigations of property loss (see para 13–20b).

(2) Damage statements (see para 14–18b(2)(a)).

(3) Inventory adjustment reports (see paras 14–34b).

d. Commanders at all levels will—

(1) Ensure compliance with all policies and procedures prescribed by this regulation that apply to their command.

(2) Implement a command supply discipline program.

(3) Ensure available AIT such as bar code, 2D bar code, optical memory cards, radio frequency identification device tags, contact buttons, satellite tracking, or electronic signature capability are fully integrated into all Government property management and accountability functions (such as, receipt, store, inventory, issue, and ship). AIT utilization applies to both formal and informal property accounting.

e. Developers of standard and unique automated supply systems will ensure all systems contain the essential elements of data, and are in compliance with the policies contained herein. Computer-generated supply forms specified in prescribed forms section of this regulation must be understood by the supply level using and receiving the forms.

Guidance pertaining to the forms approval process is contained in AR 25–30. Computer-generated forms approved by the proponent will replace or will be used instead of the manually prepared forms.

1–5. Statutory and Department of Defense provisions The general policies and procedures contained in this regulation are based on the following statutory authority and Department of Defense (DOD) accounting policy:

a. Title 5, United States Code, Section (5 USC 5511), 5 USC 5512, and 5 USC 5514.

b. 10 USC 2636, 10 USC 2775, 10 USC 4831, 10 USC 4832, 10 USC 4836, 10 USC 4837, 10 USC 4839, and 10

USC 4840.

c. 10 USC 908.

d. 32 USC 710.

e. 37 USC 1007.

f. DODM 4140.1.

g. DOD 7000.14–R.

1–6. Internal management controls The key internal management controls are as follows:

a. Property accountability.

1AR 735–5 • 9 November 2016

b. Accounting for lost, damaged, and destroyed Government property.

1–7. Civil-funded property This regulation does not apply to the civil-funded property of the U.S. Army Corps of Engineers (USACE). Civil-funded property accountability is managed in accordance with 41 USC 102. However, in the interest of efficient management and Army uniformity, this regulation will be complied with when feasible for civil-funded property, as determined by the Chief, USACE. The USACE military-funded property will be managed using this regulation. The financial liability in investigation of property loss prescribed by DOD 7000.14–R and this regulation is applicable to all USACE property, regardless of funding source.

Chapter 2 Property Accounting Requirements

Section I Basic Principles

2–1. General requirements

a. All persons entrusted with Government property are responsible for its proper use, care, custody, safekeeping, and disposition.

b. Persons will not be assigned to a duty that will prevent them from exercising proper care and custody over the property for which they are responsible.

c. When a person assumes accountability for property that is remotely located, records must be maintained to show the location of the property and the persons charged with its care and safekeeping.

d. Vouchers for the issue or expenditure of property that are not specifically authorized by regulations or authoriza-tion tables will give the reason for the transaction and identify the commander who directed it.

e. Army property will not be used for any private purpose except as authorized by Headquarters, Department of the

Army (HQDA).

f. No Government property will be sold, given as a gift, loaned, exchanged, or otherwise disposed of unless specifically authorized by law. Items replaced in-kind and payments made under the provisions of paragraph 12–1 and paragraph 12–2 for lost, damaged, or destroyed Army property do not constitute a sale of Army property. Title to such property remains with the Government.

g. Giving or accepting an issue document, hand receipt, or other form of receipt to cover articles that are missing, or appear to be missing, is prohibited.

h. Property documents and records maintained for stock record accounts need not show the manufacturer’s serial numbers unless specifically required by Army policy. Serial numbers, for property in use, will be shown on property books and property book supporting documents under AR 710–2.

i. Army property will not be loaned or leased except as specifically authorized in Defense Finance and Accounting Service-Indianapolis Center (DFAS–IN) Regulation 37–1, AR 405–45, AR 700–131, or other appropriate regulations.

j. Military members or civilian employees of the Army who occupy Government quarters, or who have been issued furnishings for use in family quarters, must properly care for such property. Military members and civilian employees occupying Government quarters are responsible for the damage caused by their dependents’ negligence to the quarters and the furnishings and equipment contained therein.

k. The requisitioning or assembling of excess repair parts and/or components to create an unauthorized end item is prohibited. All excess equipment and supplies will be turned in to the appropriate supply support activity (SSA) in accordance with AR 710–2.

2–2. Accounting for Army property

a. All property (including historical artifacts, art, flags, organizational property, and associated items) acquired by the Army from any source, whether bought, scrounged, or donated, must be accounted for as prescribed by this regulation and other appropriate ARs. The accounting will be continuous from the time of acquisition until the ultimate consumption or disposal of the property occurs. Supporting documents will be maintained as prescribed by appropriate regulations.

b. Property is categorized for financial accounting and reporting purposes as tangible property both real and personal property. Real property consists of lands and permanent structures (see chap 4). Personal property is made up of equipment and other nonexpendable supplies, collectively called nonconsumable supplies, all consumable supplies (see chap 4), and relocatable buildings.

c. All property or material, except real and contractor-acquired property, acquired in any manner will be properly accounted for on item detail accounting records and financial (dollar) item accounting records. Responsibility will be

2 AR 735–5 • 9 November 2016 fixed as prescribed by this regulation or other Army policy. The local commander may direct more stringent controls for expendable material.

d. All Army property, except real property, will be classified for property accounting purposes as expendable, durable, or nonexpendable. The criteria for the assignment of each accounting requirements code are shown in chapter

7. The physical characteristics and the anticipated use are the main factors in classifying an item. However, unit price will be considered to ensure that the costs of the accounting procedures being required are not out of proportion to the cost of the item being controlled. Items classified as—

(1) Nonexpendable will require formal property book accounting at the user level.

(2) Expendable or durable items require no formal accounting after issue to the user level unless these items specifically fall under the criteria of paragraph 7–7b and AR 710–2.

(3) All durable property will be controlled at the user level using hand-receipt procedures or managed using inventory lists. The brigade and battalion commander or the head of the activity will monitor items coded durable in accordance with paragraph 7–5b. In addition, the commander or the head of the activity will conduct management reviews annually, in accordance with paragraph 7–7d.

e. Accountable officers will establish accountability for any property not accounted for as soon as the discrepancy is discovered.

f. Employees of the Army, both military and civilian, will turn in all found Government property to the supply system.

2–3. Centralized accounting Where accountability is maintained at a central location and the property is physically stored at other installations, the property will not be included in the installation accountable records kept at the storage locations. Locator cards or other needed management records will be maintained at the storage location.

2–4. Other Service storage of Army property Accountability for Army approved “packages” of production equipment and other equipment stored at a Defense Logistics Agency (DLA) installation will be established and maintained in a separate Army property account. The equipment will bear an Army account serial number. An officer or civilian employee of DLA will be the accountable officer. Financial (general ledger) control over the equipment will be maintained by the Army commodity command that supports and justifies the packages (see DFAS–IN Regulation 37–1).

2–5. Army property in possession of contractors

a. Government property may be furnished to, or acquired by contractors, under the provisions of a contract.

(1) Property provided to a contractor under the terms of a contract assigned or transferred to the Defense Contract

Management Agency for administration remains Army property.

(2) Contractor accountability and responsibility will be as set forth in the contract clause (see Federal Acquisition

Regulation (FAR)). Army property in the hands of the contractor can be items that have been transferred to the contractor by the authority of the appointed Government contracting official. In some cases, some Army equipment is considered reportable under the terms and conditions of the contract.

(3) If the current contract does not require the contractor to report the on hand Army property, the contract will be amended to add specific Army reporting requirements.

b. The contracting office that awarded the contract will maintain direct responsibility and control over the property.

The contractor will retain stewardship responsibility for property assigned to them via the contract (see FAR and DOD 7000.14–R). Internal and external Army reporting requirements to include but not limited to procedures in DFAS–IN Regulation 37–1 and AR 710–3 will be satisfied by use of the data required to be maintained and reported by the FAR and/or Defense Federal Acquisition Regulation Supplement (DFARS).

c. When contracts are not assigned to Defense Contract Management Agency and Government-furnished equipment or Government-furnished property (GFP) is authorized and stipulated in the contract clause the issuing contracting officer will appoint a property administrator using the evaluation criteria in DFARS to administer, oversee, and maintain property accountability for the Government-furnished equipment or GFP issued to the contactor.

d. For contracts awarded under FAR Government property clause, accountability for GFP will be transferred to the contracting office having jurisdiction over the contract; however, the property book office will create and maintain a GFP transfer listing in Property Book Unit Supply-Enhanced which will have authorization quantity and on hand quantity on the property book for fiduciary reporting and/or asset visibility purposes.

(1) Property book officers (PBOs), when directed through proper channels by the official having command responsi-bility over the property required by a contract, will release the Government property to a contractor as GFP. The transfer of accountability of property provided to a contractor will be accomplished by using a DD Form 1149 (Requisition and Invoice/Shipping Document) or DD Form 250 (Material Inspection and Receiving Report) or DD Form 1348–1A (Issue Release/Receipt Document). The document transferring accountability will be approved by the same contracting office that approved the contract, or the representative, prior to the GFP being provided to the

3AR 735–5 • 9 November 2016 contractor. PBOs will use the transfer document to establish a GFP asset listing in Property Book Unit Supply- Enhanced. This asset listing will be used to track visibility of GFP contractor equipment.

(2) A Joint physical inventory of GFP will be conducted by the losing unit or agency and the contractor prior to the beginning of the contract period. On completion of the inventory and written acknowledgment of receipt by the contractor via the DD Form 250, DD Form 1149, or DD Form 1348–1A, the PBO will post the transfer document as a loss to the Army’s hand receipt and gain to a contract GFP fiduciary record. A fiduciary record will be the contractors tracking method of accounting for GFP (that is, spreadsheet or designated contractor accounting system). The PBO will continue to maintain the basic property book asset record for visibility of GFP transferred to the contractor. The contracting office’s designated representative will notify the PBO upon contractor receipt, transfer, or disposal of any GFP during the life of the contract (see AR 710–2). The PBO will update the fiduciary records as changes to GFP are communicated and in accordance with AR 710–2.

(3) Upon termination or completion of the contract, a Joint physical inventory by the contractor and the property administrator will be accomplished. A transfer document transferring accountability back to the contracting officer and/ or property administrator using DD Form 250, DD Form 1149, or DD Form 1348–1A. The contracting officer will reconcile the transfer document for shortages and will approve the transfer prior to the PBO acknowledging receipt and accepting accountability for the returned GFP. Upon completion of transfer document, the GFP asset listing for that contract will be discontinued.

e. For contracts awarded under FAR, accountability for GFP will be laterally transferred on DD Form 1149, per AR 710–2 to the contracting office. The official property records will be maintained by the Government. The contractor will maintain Stewardship records. These records will be kept separate and distinct from installation property book records. Responsibility for GFP will be assigned to the contractor using the technical exhibit to the contract.

f. Contractor acquired property (CAP) is any property acquired, fabricated, or otherwise provided by the contractor for performing a contract, and to which the Government has title. CAP that is subsequently delivered and accepted by the Government for use on the same or another contract is considered GFP. Policy and procedures for accounting for CAP equipment is in accordance with FAR.

2–6. Inventories of personal property

a. Supplies and equipment on hand at U.S. Army Materiel Command (AMC) accountable supply distribution activities and depots will be inventoried once a year according to DLM 4000.25–2. This will be done more often when prescribed by other regulatory guidance.

b. A complete physical inventory of all supplies and equipment in storage at SSA awaiting issue or turn-in will be accomplished annually according to AR 710–2, as applicable. The results will be reconciled with the stock accounting records.

c. At the user level, all on-hand property carried on property book records and/or hand receipt records will be inventoried annually, or upon change of the primary hand receipt holder, whichever comes first.

d. Upon change of the PBO, all property not issued on hand receipt will be jointly inventoried by the outgoing and incoming PBOs. The conduct of these inventories will be documented and the results reconciled with the accounting records. See AR 710–2 for variances in the frequencies of these inventories. The above inventories will be accom-plished in accordance with AR 710–2.

e. Real property heritage assets will be inventoried at least once every 3 years or upon change of the accountable officer, whichever comes first, per AR 405–45. The results will be reconciled with the accounting records. Real property, general property, and equipment and stewardship land will be inventoried at least once every 5 years.

f. For Army prepositioned stocks (APS) a 100 percent inventory is required when ships are off loaded during cyclic maintenance vessel berthing. Inventories will be conducted more often when prescribed by other regulations or when directed by the commander or the accountable officer. The person having possession of, or having command and/or direct responsibility, over the property is responsible for the conduct of the inventory. The accountable officer will ensure inventories are conducted when required. A record of the inventory and all adjustment documents resulting from the inventory will be maintained with the property records for a minimum of 2 years.

g. Installation support activities collocated with Army maintenance depots will inventory their materiel assets using the inventory rules of DLM 4000.25–2.

h. Library materials accounted for under the provisions of AR 735–17 will be inventoried on cyclic basis so all items are inventoried at least once every 3 years.

i. When and where feasible and practical, physical inventories will be accomplished using AIT.

4 AR 735–5 • 9 November 2016

Section II Accountability and Responsibility

2–7. Accountability Accountability is the obligation of a person to keep records of property, documents, or funds. These records show identification data, gains, losses, dues-in, dues-out, and balances on hand or in use.

2–8. Responsibility Responsibility is the obligation of an individual to ensure Government property and funds entrusted to their possession, command, or supervision are properly used and cared for, and that proper custody, safekeeping, and disposition are provided.

a. Types of responsibilities. Figure 2–1 shows the different types of responsibility and their relationship to the levels of command.

(1) Command responsibility. Commanders are obligated to ensure all Government property within their command is properly used and cared for, and that proper custody, safekeeping, and disposition are provided. Command responsibil-ity is inherent in command and cannot be delegated. It is evidenced by assignment to a command position at any level and includes the following:

(a) Ensuring the security of all property of the command, whether in use or in storage.

(b) Observing subordinates to ensure their activities contribute to the proper custody, care, use, safekeeping, and disposition of all property within the command.

(c) Enforcing all security, safety, and accounting requirements.

(d) Taking administrative or disciplinary measures, when necessary.

(2) Supervisory responsibility. The obligation of a supervisor to ensure all Government property issued to, or used by their subordinates is properly used and cared for, and that proper custody, safekeeping, and disposition are provided.

It is inherent in all supervisory positions, is not contingent upon signed receipts or responsibility statements and cannot be delegated. It arises because of assignment to a specific position and includes the following:

(a) Providing proper guidance and direction.

(b) Enforcing all security, safety, and accounting requirements.

(c) Maintaining a supervisory climate that will facilitate and ensure the proper care and use of Government property.

(3) Direct responsibility. The obligation of a person to ensure all Government property for which they have receipted, is properly used and cared for, and that proper custody, safekeeping, and disposition are provided. Direct responsibility results from assignment as an accountable officer, receipt of formal written delegation, or acceptance of the property on hand receipt from an accountable officer. Commanders or directors of separate TDA activities will determine and assign in writing those individuals who will have direct responsibility for property.

(4) Custodial responsibility. The obligation of an individual for property in storage, awaiting issue, or turn-in to exercise reasonable and prudent actions to properly care for, and ensure proper custody, safekeeping, and disposition of the property are provided.