equipment management process updates edlouie s. ortega, msm, cdfm equipment and technology...
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Equipment Management Equipment Management Process UpdatesProcess Updates
Edlouie S. Ortega, MSM, CDFM
Equipment and Technology Management
Medical Equipment and Logistics Solutions
Naval Medical Logistics Command
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Federal Managers’ Financial Integrity Act (FMFIA)
The Department of Defense has identified real and personal property accounting as a high-risk area. The Annual Statement of Assurance continues to report on the open status and progress in financial accounting for real and personal property as one of the five high-risk areas within the Department.
GAO-03-168, MILITARY TREATMENT FACILITIES , Internal Control Activities Need Improvement
Above 10 percent inventory and valuation error is considered ineffective internal control.
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DODI 5000.64 - Accountability and Management of DoD Equipment and Other Accountable, May 2011
Ensure electronic interfaces are used between the APSR and mandated enterprise systems (e.g., Wide Area Workflow).Establish and maintain records and accountability for property (of any value) furnished to contractors as Government furnished property (GFP). This requirement also includes property that is loaned to outside entities such as Federal agencies, State and local governments, and foreign governments.Account for Information technology property such as desktops, laptops, and mobile computing devices, including, but not limited to, mobile information storage devices and auxiliary hard drives, regardless of cost, containing personally identifiable information.Add data element: Unique item identifier (UII) or DoD recognized IUID equivalent, if available and necessary for unique identification.
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DODI 5000.64 - Accountability and Management of DoD Equipment and Other Accountable, May 2011
Ensuring readiness, testing for existence and completeness, maintaining internal controls, or meeting other mission objectives.Physical inventories may take different forms, including wall-to-wall, cyclic, sampling, and “by exception” methodologies.A minimum 98 percent physical inventory accuracy rate (100 percent for classified or sensitive property) shall be achieved and maintained.Inventory by exception may be authorized by the DoD Component APO. This type of inventory uses actions or transactions, (e.g., move orders, maintenance actions, calibration checks, usage logs (or flight logs)) where the items are “touched” by disinterested parties (i.e.,persons without stewardship responsibilities), with supporting documentation directly associated with an accountable asset.
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ASN-FMO Memo dated Oct 5, 2011
Effective immediately until further notice, the Department of the Navy (DON) must retain all document in support of a financial statement audit.Evaluate the source documents supporting the existence, completeness, accuracy/valuation, and rights and obligations of documentation to support the amount reported on DON financial statements.
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Financial Improvement and Audit Readiness (FIAR)
The Department of Defense (DoD) is committed to having fully auditable financial statements by 2017, the deadline established by Congress in the National Defense Authorization Act of 2010. In addition, Secretary Panetta outlined an accelerated goal of achieving an auditable Statement of Budgetary Resources (SBR) for General Funds in 2014.
Personal Property
Land
PP&E Inventory/OM&S
Real Property Repairables
Facilities
Internal Use Software
Consumables
Equipment
Military Equipment
General Purpose Equipment
Structures
Buildings
Linear
Assets(Financial World)
2017: DoD audit readiness goal!
2017
Concerns
Output: Clinical review
Acquisition Devices
Network Switches
Network
Network Gateway Network
Switches
Repair Parts/ Special Tooling
Cost of an Image
MaintenanceMonitoring
System
– Lack of cross-cutting/integrated thought; i.e., logisticians not required to know acquisition rules; acquisition specialists not required to know property accountability
– Poor communication between acquisition (Contracting Officers) and logistics (accountable property officers)
– Property accountability simply not in the top 3
– Ad hoc interrelationships between domains (acquisition, property, financial)
– Lack of inter-operative business rules
DOD Opinion
The “Solution”
Everyone wants:– Property lists. Why?
• Lists make us happy
• Any information (even bad) will quell our fear
– A 100% wall-to-wall physical inventory. Why?• Helps us sleep at night
• Auditors love them
• Lets us “catch up”
The Truth: – Property lists are a poor proxy for good records
– Physical inventories are usually not necessary and a waste of time if not done effectively• Always conduct a compliant inventory process
The Latest GFP Memo…
OSD memorandum issued on January 7, 2012
Goals– Promote the current clause
requirements
– Demonstrate the relationship betweenthe clauses, the DoD policy, and thesystem capabilities (IUID Registry)
– Get a starting point for equipment already used by contractors
– Increase visibility and awareness ofthe “mystery” surrounding GFE
– Highlight the criticality to auditability
Major Command PPE Major Command PPE ResponsibilitiesResponsibilities Establish a personal property management organization within Headquarters that provides personal property management oversight for the claimancy. Disseminate current personal property guidance and information throughout the claimancy including the latest policies, procedures, standards and mandates established by DoD, DON, Federal regulation, and/or the laws that pertain to personal property accountability and financial requirements.
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Per SECNAVINST 7320.10A
Major Command PPE Major Command PPE ResponsibilitiesResponsibilities Verify that activities within the claimancy are performing physical inventories as required.
Activities are required to submit letters to their major claimants substantiating physical inventory completion.
Collect/review claimancy personal property financial information on a quarterly basis for reasonableness and accuracy. Compile and report all personal property financial information to ASN Financial Management Office (FMO) on a quarterly basis.13
Major Command PPE Major Command PPE ResponsibilitiesResponsibilities Establish procedures to monitor usage of the claimancy personal property database (may include implementation of additional internal controls) to ensure: activities are using the mandated system,
data is complete and accurate, and financial information is being reported properly.
Reconcile personal property financial information from the personal property system with the general ledger account balance. Retain a copy of the summary/detailed personal property information to support the reconciliation performed for 3 years.
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Echelon 2Echelon 2
Echelon 3Echelon 3
Echelon Echelon 44
Navy Medicine Support Command Support
Functions MOU
BUMED-PMO Organization BUMED-PMO Organization StructureStructure
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BUMED M46NMLC/PMO
BUMED M4Installation and
Logistics
BUMED M42Logistics
Provides Execution Guidance
BUMED M8Comptroller
Supports Policy Development
Provides Financial Reporting Guidance
Accounting and Accountability
M46 Responsibilities - M46 Responsibilities - ExecutionExecution Provide day-to-day personal property management
oversight. Conduct BSO-18 wide monthly Property, Plant &
Equipment (PP&E) telcon brief to disseminate updates to property accounting and financial reporting requirements.
Monitor inventory process to make sure physical inventories are conducted as required.
Monitor Defense Medical Logistics Standard Support-Equipment Module (DMLSS-EM) usage.
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M46 Responsibilities - M46 Responsibilities - ExecutionExecution Monitor and compile DMLSS-EM System
Authorization Access Request-Navy (SAAR-N) forms. Run and analyze BSO-18 wide Monthly Quality
Assurance (QA) reports. Verify receipt of Centrally Funded Equipment (CFE),
especially Capital Equipment. Monitor equipment reutilization.
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M46 Responsibilities – Policy M46 Responsibilities – Policy DevelopmentDevelopment Draft the PPE Annual Inventory Letter to include
timeline, requirements, and business rules. Compile and validate inventory results. Collaborate discrepancies with the Regions and
recommend re-inventory as needed. Mitigate and address conflicting guidance ensuring that
higher Echelon guidance is met. Issue FY Logistics Guidance bi-annually to include
property management updates (to be posted on NMLC “Home (MIL/GOVT)” website.
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M46 Responsibilities – Policy M46 Responsibilities – Policy DevelopmentDevelopment Provide training on property accountability to the
Regions. Manage training requirements. Compile copies of training certificates. Provide SME input to the accessible units that are
distributed. Conduct LAVs to provide logisticians with total asset
visibility and ensure best business practices are being implemented for Equipment and Technology Management processes.
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M46 Responsibilities – Financial M46 Responsibilities – Financial ReportingReporting Collect/review BSO-18 wide personal property
financial information on a quarterly basis for reasonableness and accuracy.
Compile and report all personal property financial information to Assistant Secretary of the Navy Financial Management Office (FMO) on a quarterly basis via the Defense Departmental Reporting System (DDRS) Data Collection Module (DCM).
Retain a copy of the summary personal property information to support the reconciliation performed for 3 years.
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Related Sessions
LO-W-3-E Annual Inventory Process and Requirements