Types of Property
All property (including historical artifacts, art, flags, organizational property, and associated items) acquired by the Army from any source-bought, scrounged, donated, and so forth-must be accounted for as prescribed by Department of the Army (DA) Pamphlet (Pam) 710-2-1, Using Unit Supply System (Manual Procedures), para 4-1. The accounting must be continuous from the time of acquisition until consumption or disposal of the property occurs. All Army property, except real property, is classified for property accounting purposes as expendable, durable, or nonexpendable.
Nonexpendable property is not consumed in use and retains its original identity during the period of use. This includes all nonconsumable major end items authorized by DA-recognized authorization documents (Army Regulation [AR] 71-32, Force Development and Documentation-Consolidated Policies, para 8-23). Nonexpendable property is managed by property book officers (PBOs).
Expendable property is consumed or loses its identity in use. It also includes items not consumed in use with a unit cost of less than $300 and is unclassified. Supply sergeants manage expendable property, but commanders have command supervision over the spending according to AR 735-5, Policies and Procedures for Property Accountability, para 7-4.
Durable property is not consumed during use, but does not require formal property book accountability. Its unique characteristics require control when issued to the user. Specific instructions on how to account for durable property are found in AR 735-5, para 7-7.
Assignment of Property
One of the most critical aspects of maintaining good supply discipline is assigning responsibility for equipment to users. By ensuring property is assigned and 100 percent accounted for, commanders increase their chance of maintaining supply discipline. The following are a few tools used to assign responsibility for property: property books, hand receipts, sub-hand receipts, temporary hand receipts, and equipment receipts.
Property book officer
The property book officer (PBO) accepts responsibility for the unit's property as prescribed in AR 710-2, Supply Policy Below the National Level. The PBO is responsible for assigning property on a primary hand receipt to a PHRH or commander.
Hand receipts and sub-hand receipts are required whenever nonexpendable or durable items are issued (DA Pam 710-2-1, chapter 5, figure 5-1). The hand receipt lists the property that was issued. The signature of a person on a hand receipt establishes direct responsibility. Prepare separate hand receipts for installation and organization property. Sub-hand receipts are used to assign property down to the user level. Supply sergeants are responsible for making sure all of the commander's equipment is signed for down to the user. Hand receipts and sub-hand receipts can be generated by using the computerized record-keeping system used in the supply room called the unit supply enhanced (USE) system. The USE system is derived from the property book-level record system called the property book use supply enhanced system. Specific procedures on preparing hand receipts can be found in DA Pam 710-2-1, para 5-1.
Commanders should review the reconciliation report and the commander's hand receipt in the USE system. These two reports will show what discrepancies are currently on the commander's entire hand receipt and also show what property isn't sub-hand receipted. The only items on the commander's hand receipt should be those items that have an active suspense such as receipt of new equipment, equipment that is being turned in, or equipment that has adjustment documents pending. (Note: U.S. Army Reserve [USAR] commanders should ensure annual equipment concentration site [ECS] and central storage facilities [CSF] hand receipts are updated.)
Commanders should request roles and permissions as the company commander in USE from the PBO as soon as possible. This is the only way the commander will be able to access critical reports and become familiarized with the system.
Temporary hand receipts are used to account for property that is loaned out for 30 days or less. A request for the USAR and Army National Guard (ARNG) to loan equipment to the active component must be initiated at Army command level and approved by the reserve component headquarters (DA Pam 710-2-1, para 5-4).
Equipment receipts are used to assign responsibility for property that is issued to the same person for brief recurring periods. Examples are the nuclear, biological, and chemical masks, individually assigned weapons, and radiological equipment issued for training. Specific instructions on preparing equipment receipts (DA Form 3749, Equipment Receipt) can be found in DA Pam 710-2-1, chapter 5, figure 5-5.
Inventories are mandatory instruments used to assist commanders in their duties maintaining accurate accountability of property and sustaining supply discipline. The key inventories commanders need to conduct in order to maintain supply discipline are: change of PHRH (also known as change of command), annual/cyclic, and sensitive items. Other inventories are listed in DA Pam 710-2-1, chapter 9. Understanding the different inventory types and conducting them as required will allow commanders to keep track of their assigned property.
Change of PHRH or change of command inventory
Change of PHRH inventory is conducted when the hand receipt holder is replaced. All property listed on hand receipts will be inventoried by the incoming and outgoing PHRH. Thirty days are allotted to conduct the joint inventory. When the inventories cannot be completed in the allotted time, a request for extension must be made in writing to the next higher commander/supervisor (AR 710-2, para 2-12 and table 2-1 contain specific instructions). Conducting a meticulous change of command inventory will aid commanders in correcting discrepancies and boosting supply discipline. Commanders should always look for ways to reduce excess and shortages while performing inventories. When commanders have property that is not type authorization code 1 or 2, then the quantity on hand should also be the quantity authorized. This will reduce the amount of common table of allowances equipment that is being identified as either excess or short. (See Appendix C for helpful hints on conducting a successful change of command.)
Annual inventory is a 100 percent inventory of all property assigned to the organization. (Note: For USAR, commanders should make an appointment at the supporting ECS and CSF to update hand receipts.) The officer responsible for the unit's property will ensure that this inventory is conducted according to DA Pam 710-2-1, para 9-6. A cyclic inventory may be performed in lieu of the annual officer inventory. When the cyclic inventory option is chosen, use one of the following procedures:
Table 2. Cyclic inventory procedures
Annual/Cyclic inventories assist commanders in preserving supply discipline by capturing and correcting discrepancies early resulting in accurate accountability. Although commanders may designate a person to conduct the cyclic inventory, it is strongly encouraged that commanders be present during the inventories.
Sensitive items and other inventories
Sensitive items and unclassified controlled cryptographic items (CCI) will be inventoried quarterly. Explosives (ammunition), firearms, and hazardous items must be inventoried monthly. Sensitive items and CCI are identified with a controlled inventory item code of 1-6, 8-9, $, N, P, Q, R, or Y (night-vision devices, navigation systems, and global positioning systems). Conduct inventories according to DA Pam 710-2-1, para 9-9. Although commanders may designate a person to conduct the sensitive items inventories, it is strongly encouraged that commanders be present during the inventories. Sensitive items inventories are often the most stressful inventories for commanders so emphasis must be placed on attention to detail. The most vital point to remember when conducting sensitive items and CCI inventories is to physically account for items by serial number and report any discrepancies immediately to the PBO. All serial number discrepancies will be corrected according to AR 735-5. As with the other types of inventories, conducting thorough sensitive items inventories will play a key role in supply discipline.
Split hand receipt inventory
Commanders are required to split the organization's hand receipt for deployments. Equipment remaining at home station will be placed on a left behind equipment (LBE) hand receipt managed by the Army Sustainment Command (ASC). Commanders should not take this requirement lightly. Procedures for splitting hand receipts are provided by the supporting property book office. Commanders must put forth a good effort to identify nondeploying equipment. (Note: USAR and ARNG units do not laterally transfer LBE equipment to the ASC. For USAR, commanders should seek guidance from their higher headquarters to transfer equipment to a rear detachment. For the ARNG, commanders should refer to the unit mobilization data that will either guide units to transfer equipment to a rear detachment or to the United States Property Fiscal Office [USPFO].)
Accounting for property before, during, and after deployment can be very challenging to commanders. Accounting for property during deployment is the same as when in garrison; however, there are some differences when accounting for theater provided equipment (TPE). When accounting for TPE, units must follow instructions in the TPE standing operating procedure (SOP) located online at "https://weblog.logsa.army.mil/SBE/Files/TPB_SOP_2_MAR_08.pdf".
Army Sustainment Command
The ASC plays a large role assisting commanders maintain good supply discipline for LBE. For active duty units, ASC government employees and contractors are subject to following the same regulations dealing with property accountability listed in Appendix B of AR 710-2. Commanders, PBOs, and supply sergeants must communicate constantly with the ASC to retain status of the LBE. The ASC will conduct a joint inventory of all equipment inducted into the LBE program. Equipment will be inventoried by major item and its components. During the turn in of equipment, commanders and ASC hand receipt holders need to ensure all of the required components and shortages are noted. Units will receive equipment from the ASC in the same manner it was transferred to the ASC. More instructions on the use of component hand receipts and shortage annexes are in DA Pam 710-2-1. (Note: USAR and ARNG units will refer to local SOP for unique operating dynamics.)
Government Purchase Card
The Government Purchase Card (GPC) is used to make micro-purchases of supplies and services in accordance with the Federal Acquisition Regulation (FAR) which can be found online at: "http://www.arnet.gov/far/current/pdf/far.pdf". The GPC is a payment tool for supplies or services in which the aggregate amount does not exceed $3,000 except for the following: (1) acquisitions of construction, $2,000; (2) acquisitions of services, $2,500; (3) acquisitions of supplies or services that, as determined by the head of the agency, are used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, and radiological attack as described in FAR 13.201(g)(1), $15,000 in the case of any contract to be awarded and performed, or purchase to be made, inside the United States, and $25,000 in the case of any contract awarded and performed or purchase made outside the United States. All purchases exceeding purchase limits require formal contracts through the Directorate of Contracting. Commanders can maintain good supply discipline of the GPC by including an evaluation of the unit's cardholders in the Command Supply Discipline Program (CSDP) checklist. To ensure compliance, all units must have a copy of the installation GPC SOP on hand and a copy of the appointment memorandum on file from the Director of Contracting for the cardholders. Units should also develop an internal SOP for the GPC and make sure all cardholders are in compliance. Further guidance on the GPC can be found at "http://www.arnet.gov/far/current/pdf/far.pdf".
Contracts are applied when military support channels cannot provide the required support within the required time frame or do not have the capability to satisfy the request. Units must also use contracts for supplies and services that exceed the limits of the GPC. Contract requests begin with preparing a Purchase Request and Commitment (DA Form 3953). Due to the increase in ethics violations surrounding contracts, it is imperative that commanders understand when to use contracts and how they are resourced. As with the GPC, units should include contract evaluations in their CSDP checklist. It will keep commanders informed and can be used to intercept potential problems. Maintaining good supply discipline in reference to contracts will definitely pay great dividends to all units. Further information on preparing and managing contracts is in FAR 2.101. Figure 2 is an example of the basic flow for requesting supplies and services via contracts.
Figure 2. Requesting supplies and services via contracts. Note: Alternate to PBO is the supply and logistics officer.
Financial Liability Investigations of Property Loss
Financial liability investigations of property loss (FLIPL) document the circumstances concerning the loss, damage, or destruction (LDD) of government property. It serves as a supporting document for adjusting the property from accountable records. It also documents a financial liability charge assessed against an individual or entity, or provides relief from financial liability. The hand receipt holder, accountable officer, or the person with the most knowledge will initiate a financial liability investigation when negligence or willful misconduct is suspected, when an individual or entity does not admit liability, or when the item lost is a controlled item. A FLIPL includes LDD of government property that involves a change of the accountable officer's inventory and the outgoing accountable officer does not make voluntary payments for the full government property loss. It also includes LDD of government property, real property, and furnishings that exceed an individual's one-month pay. For additional guidance, see AR 735-5.