Property Accounting Basics Elizabeth Erdman Medical Equipment and

Property Accounting Basics Elizabeth Erdman Medical Equipment and Logistics Solutions Directorate Naval Medical Logistics Command

Context • Property Accounting is a high-visibility area for Audit Readiness Purpose • Discuss property accounting requirements and best business practices Objectives • Provide an overview of property accounting from cradle-to-grave • Discuss required documentation for audit readiness 2 FOR OFFICIAL USE ONLY

References SECNAVINST 7320. 10 a DODI 5000. 64 DOD FMR Volume 4 and Volume 12 Chapter 7 BUMED Guidance • NAVMED P-5132 • FY 12 Logistics Guidance • BUMED SOP

The Defense Medical Logistics Standard Support (DMLSS) System is the accountable system of record for Navy Medicine.

Custodian Q: Who is responsible for assigning Custodians in DMLSS? A: The Equipment Manager (EM) • • EM’s should validate their Custodian List regularly. Custodians must be appointed in writing and be properly assigned in DMLSS to ensure proper accountability of assets in the department. 5 FOR OFFICIAL USE ONLY

Scenario: Equipment Lifecycle • • A package arrives at your warehouse marked for “MATMAN. ” The packing slip says that it is a Pelton & Crane Delta Q Sterilizer from Henry Schein. Do you sign for it? • Procurement Validation Wait! How do you know this equipment belongs to your Command? You will need to find the Purchase Order, DD 1155, DD 250, or other procurement information before signing for the equipment. 6 FOR OFFICIAL USE ONLY

Scenario: Equipment Lifecycle • • You have located the DD form 1155 which shows that the equipment was purchased by NAVMEDLOGCOM. You sign for the item and bring it to your office. What is the next step? Contact NAVMEDLOGCOM to confirm receipt so the invoice can be paid and interest payments will not accrue. • Procurement Validation • Receipt Documentation 7 FOR OFFICIAL USE ONLY

Scenario: Equipment Lifecycle • • • You must gain the equipment in DMLSS and barcode the equipment within 7 calendar days. Because this item was centrally procured, upon completion of the gain send a copy of the equipment record to NAVMEDLOGCOM for verification. The item is over $5, 000. What must be affixed to the equipment? • • Procurement Validation • Receipt Documentation Virtual UID (UII). DMLSS will automatically generate this for you at the EOD after the item is gained. Affix the barcode to the equipment and check the “UID Label Affixed” on the Approval/Acquisition tab. 8 FOR OFFICIAL USE ONLY

Gain Transaction Reasons Accountability Changed to Required: property and does not meet the required accountability threshold but the command decided to account for the property, i. e. pilferable items. Borrowed equipment, Government: loaner property borrowed from another government entity. Return date is required to complete this transaction. Borrowed Equipment, Non-Government: loaner property borrowed from a non-government entity. Return date is required to complete this transaction. 9 FOR OFFICIAL USE ONLY

Gain Transaction Reasons, Cont. Capital Leased Equipment: Leased property that meets the capitalization threshold and satisfies at least one of the criteria listed in SECNAVINST 7320. 10 A. Normally, ownership is transferred to the lessee by the end of the lease term. Component Gain: Component of a system or part of an assembly. Cost Per Test: cost per test item and risk of ownership is not transferred to the government at the end of the contract. Contract number is required to complete this transaction. 10 FOR OFFICIAL USE ONLY

Gain Transaction Reasons, Cont. Donated Property: Accountable property that is received from a non-federal entity without exchange or payment. Equipment Inventory Adjustment Gain: Accountable property, other than capital or operating lease Found on Installation: Accountable property found during physical inventory and with no visible trace of ownership. 11 FOR OFFICIAL USE ONLY

Gain Transaction Reasons, Cont. Gain From Another MTF: Property transferredin from another MTF. You must use this transaction reason to complete a lateral transfer in DMLSS Gain from DRMO: Property transferred-in from DRMO. Gain from Non-Do. D Organization: Property transferred-in coming from Non-Do. D Organization. 12 FOR OFFICIAL USE ONLY

Gain Transaction Reasons, Cont. Operating Leased Equipment: Leased property with lease agreement where the NPV of the lease payments is less than $100, 000 or the lease term is less than 2 years or none of the capital lease criteria are met. Operating leases are leases that do not transfer the risk of ownership to the Department of the Navy DON. Research/Grant Equipment: Non-government funded property. User Test: Equipment for test and evaluation use. Return date is required to complete this transaction. 13 FOR OFFICIAL USE ONLY

Anatomy of an Equipment Record Procurement Request • Customer • Maintenance Activity • Transaction Reason • Asset Control Number Contract • Contract/PO Number • Acquisition Date • Acquisition Cost • Manufacturer • Common Model • Warranty Information • System. Components Equipment Research • Common Model • Item ID/Device Code • Nameplate Model • Commodity Class • Serial Number • Installation Date • Acquisition Fund Code • Location • Acquisition Specialty 14 FOR OFFICIAL USE ONLY

Commodity Class • • • “EQUIPMENT” use for all personal property “CAPITAL” use for equipment with an acquisition cost $100 K and over “EXPENSE” use for equipment with an acquisition cost <$100 K “CENT PROC” use for equipment procured by NAVMEDLOGOM or another higher echelon “MEDICAL” equipment with a medical application (includes laboratory equipment) “NON-MEDICAL” equipment without a medical application Examples: MRI will be “EQUIPMENT CAPITAL CENT PROC MEDICAL” Laptop will be “EQUIPMENT EXPENSE NON-MEDICAL” 15 FOR OFFICIAL USE ONLY

System/Component Relationship • • • Required for equipment that functions as a System For capital items, the total acquisition cost should be recorded on the System Record. Examples: • • • DDI PACS Endoscopy Towers Rad Rooms Mobile Dental Units 16 FOR OFFICIAL USE ONLY

Acquisition Cost Purchase Price: Unit Price Discounts: Discount cost when acquiring an item or system Trade-ins: Trade-in cost when acquiring an item or system Transportation Costs: Transportation Cost of an item or system Other Costs: Other costs or miscellaneous costs Upgrades: The cost to upgrade the equipment item or system when acquired Acquisition Cost: Total cost of acquisition ***Changes to the acquisition cost are to be completed after the gain process. Changes in the acquisition cost “money bag” will be reflected in the transaction history. 17 FOR OFFICIAL USE ONLY

Scenario: Equipment Lifecycle • This equipment is Maintenance Significant. BIOMED will have to perform an Acceptance Inspection. • Procurement Validation • Receipt Documentation 18 FOR OFFICIAL USE ONLY

Scenario: Equipment Lifecycle • The item has now been received, gained in DMLSS, and Acceptance Tested by BIOMED. It is ready to go to the Department. • Procurement Validation • Receipt Documentation 19 FOR OFFICIAL USE ONLY

Scenario: Equipment Lifecycle • Do you want to print the Custodian Action List? • Yes! Take both copies to the Custodian for signature. Leave one with them, and place the other in your Equipment Folder • Procurement Validation • Receipt Documentation • Custodian Action List 20 FOR OFFICIAL USE ONLY

Scenario: Equipment Lifecycle • • • The item has been in your Command’s inventory for several months. The Department has informed you that it will be transferred to an outlying clinic. Print the e-mail or other confirmation of transfer from the department if available. Perform the transfer in DMLSS. Do you want to print the Custodian Action List? • • • Procurement Validation Receipt Documentation Custodian Action List Supporting E-mails Custodian Action List Yes! The losing and receiving Custodians will their respective copies. Keep each Custodian Action list in your Equipment Folder. 21 FOR OFFICIAL USE ONLY

Scenario: Equipment Lifecycle • • • After several years the Clinic informs you that they no longer have a need for the equipment and it can be turned into DRMO. Can the item be turned in to DRMO? Not yet - Items over $500 with a condition code of A, B, or C (prefer condition code A) and at least 6 months of useful life left must be reported to Excess. Transfer the item to your “EMHOLD” Account in DMLSS. Do you want to print the Custodian Action List? Yes! Take both copies to the Custodian for signature. Leave one with them, and place the other in your Equipment Folder • • • Procurement Validation Receipt Documentation Custodian Action List Supporting E-mails Custodian Action List 22 FOR OFFICIAL USE ONLY

Scenario: Equipment Lifecycle • • • You have reported the item to Excess for 45 days and no one has requested it. The item is ready to be turned into DRMO. You fill out the ETID required by your local DRMO. Can you remove the item from DMLSS? No! You must have the signed or stamped ETID in hand from DRMO before performing a loss in DMLSS. • • Procurement Validation Receipt Documentation Custodian Action List Supporting E-mails Custodian Action List Disposal Paperwork 23 FOR OFFICIAL USE ONLY

Loss Transaction Reasons • • • Component Loss – Loss of a system’s component. For example, if a repair was done and a single component was replaced. Equipment Inventory Adjustment Loss – For equipment removed as a result of inventory. This includes equipment for which a DD 200 was initiated but no Financial Liability Investigation was conducted. Financial Liability Investigation – Use when a Financial Liability Investigation was conducted upon discovery of missing, lost, stolen, or damaged equipment. 24 FOR OFFICIAL USE ONLY

Loss Transaction Reasons, Cont. • • • Item Changed to Not Accountable – Use when accountability requirements change. For example, you can use this transaction reason when removing computer monitors from DMLSS. Loss to Deployment – Use for equipment that was deployed and could not be recovered. Loss to Natural Disaster – For example, if there was flooding in a facility and equipment was damaged beyond repair. 25 FOR OFFICIAL USE ONLY

Loss Transaction Reasons, Cont. • • • Ship to Another MTF – Use for transfers to the Navy, Army, and Air Force facilities using DMLSS. You must use this transaction reason in order to complete the lateral transfer process in DMLSS. Trade-In Equipment – Transfer to vendor outside of the Federal Government. Turn-in to DRMO – Use this transaction reason for items turned in to DRMO. DMLSS will automatically generate a DD 1348 -1 A when using this transaction reason. Do not use this DD 1348 -1 A because the signed or stamped ETID or DTID should have already been returned to you before performing a loss in DMLSS. 26 FOR OFFICIAL USE ONLY

Scenario: Equipment Lifecycle • • You now have the complete, cradle-to-grave lifecycle of your equipment from procurement to disposal. All actions performed in DMLSS are justified by your DD Forms and Custodian Action Lists. You will pass an audit with flying colors! • • Procurement Validation Receipt Documentation Custodian Action List Supporting E-mails Custodian Action List Disposal Paperwork 27 FOR OFFICIAL USE ONLY

Scenario: Equipment Lifecycle • • • It has been 18 months since the equipment was turned into DRMO. You have limited space in your office and are looking to purge your records. Can you dispose of this Equipment Folder? No! All documentation must be maintained for at least 36 months after the item has been disposed. If physical space is a concern, consider scanning the file folder onto a shared drive that is backed-up regularly. FOR OFFICIAL USE ONLY • • Procurement Validation Receipt Documentation Custodian Action List Supporting E-mails Custodian Action List Disposal Paperwork 28

Metrics QA Reports Gain-Loss Report Removed from Inventory With Life UID Discrepancies Invalid Nomenclature Including General Purpose Commodity Class Review Spotlight Metrics Capital Asset Reports Monthly Capital Gain and Loss Report Monthly Capital Depreciation Report 29 FOR OFFICIAL USE ONLY

Further Information Q: Where can I find more information about: • • Device Code Determination? Automated Data Processing Equipment? System/Component Relationship? UID Errors? Government Furnished Equipment? Lateral Transfer of Equipment? DDI/PACS Property Accounting? A: FY 12 Logistics Guidance: https: //gov_only. nmlc. med. navy. mil/guidance. asp 30 FOR OFFICIAL USE ONLY

ETM POCs Program Manager • Edlouie Ortega – ETM Supervisor Analytics/Equipment Management • HM 1 Sherwin Villagracia – Data Quality Management • Elizabeth Erdman – Inventory Management/LAV Equipment Management • HA Denise Matamoro – Property Accounting Support NMLC-ETM@med. navy. mil BUMED-PMO@med. navy. mil 31

Related Sessions LO-M-1 -D LO-M-1 -E LO-M-1 -F LO-T-3 -B LO-W-3 -C LO-W-3 -D LO-W-3 -E Government Furnished Equipment Inventory Management Process Using DMLSS Business Objects Training for Equipment Managers Equipment Management Self Assessment - Conduct Your Own LAV Automatic Identification Technologies (AIT) /IUID and RTLS Equipment Management Process Annual Inventory Process and Requirements 32 FOR OFFICIAL USE ONLY