Attachment J - Accountability Requirements.doc

Attachment J

BEP-10-0001

BUREAU OF ENGRAVING AND PRINTING

ACCOUNTABILITY REQUIREMENTS

FOR DISTINCTIVE CURRENCY PAPER

(JULY 2009)

The following requirements provide for essential accountability measures for implementation by contractors. These measures apply to all prime and sub contractors whom, as a result of a contract with the Bureau of Engraving and Printing (BEP), will receive, utilize or produce United States securities for the United States Government. United States securities hereafter referred to as US Securities, include: US Currency Paper, distinctive features, i.e., film, threads, fibers, and watermarks.

The contractor’s responsibilities regarding accountability requirements for US Securities encompass a broad scope of controls. These include, but are not limited to, adequate separation of duties, properly documented and authorized transactions, controlled and limited access to Government security items, and complete documentation of all internal control procedures. Accordingly, it is the responsibility of the contractor to establish and maintain effective accountability controls, which will ensure the integrity of US Securities throughout all phases of the contract.

The BEP’s Office of Compliance reserves the right to conduct periodic site surveys to evaluate the adequacy of the control system and to determine conformance with the approved accountability plan.

The contractor’s accountability system and overall system of internal controls shall, at a minimum, provide for the following:

1. ACCOUNTABILITY SYSTEM

The contractor shall have a comprehensive accountability system in place for tracking the manufacture of paper. This system shall provide a means to track the production of the product through the entire manufacturing process from receipt of raw material to delivery of finished goods. The system shall provide for identifying inventory, both work in process and finished goods, as it moves through the process. It shall also provide a perpetual record of inventory locations and quantities at any given point in time. The system shall be capable of tracking location and quantity of finished inventory by product type and unique individual paper load number.

2. INSTRUMENTS OF REPRODUCTION

The contractor’s accountability system shall provide for comprehensive accountability control over all instruments of reproduction. The contractor shall ensure that all artwork, dies, covers, waxes, screens and moulds are individually numbered with a unique control number and that the control number is used for tracking and identifying these items in the perpetual inventory systems.

3. DOCUMENTATION

The contractor’s control system shall provide for source documentation sufficient to provide an audit trail of all material events throughout the process. Additionally, the contractor shall maintain documentation of the destruction of any securities and/or distinctive features. The documentation shall include, at a minimum, the date and method of destruction, destruction location, a complete description of the item(s), and the quantity destroyed. The destruction of the item(s) shall be accomplished in the presence of at least two cleared persons and both shall sign the documentation attesting to the complete destruction. The documentation shall be maintained until a subsequent review of the system has been performed by the BEP, and formal written notification stating that the documentation is no longer needed by BEP.

4. INVENTORIES

The contractor shall perform monthly physical inventories of all US securities in their possession. The Office of Compliance reserves the right to observe the physical counts of the inventories. The physical count shall then be reconciled against the approved accountability system. The physical count and subsequent reconciliation shall be documented and a report of the results prepared and forwarded, within ten working days of completing the inventory to:

Contracting Officer's Technical Representative

Office of Materials Technology

Bureau of Engraving and Printing

14th and C Streets, SW

Washington, DC 20228

Additionally, the Inventory Report should also identify the next scheduled inventory date.