CHAPTER 3 MATERIAL RECEIPTS AND EXPENDITURES

The term receipt refers to material and services received for stock and direct turnover (DTO). The term expenditure refers to transactions involving either an issue, transfer, cash sale, or survey of material. This chapter contains information about procedures involving material receipts and expenditures.

The two most important management functions of any supply department organization are material receipt and expenditure. These functions are part of the daily routine operations in the supply environment. The prompt and accurate processing of material receipts and expenditures greatly contributes to effective supply operations.

A properly planned layout of the work area and a smooth flow of documents and material make an effective receiving operation.

Material issue is the most common method used for expending items of supply stock. In general, the issue transaction for a consumable item will result in an expenditure to an end-use fund. These funds are then used to requisition replacement items for stock. However, the procedures for expending aviation depot level repairable (AVDLR) items are different. When processing AVDLR, the expenditure will be processed only when the turn-in is beyond the repair capability of the supporting aviation maintenance activity. In this case, the retrograde is shipped off and the stock replenishment requisition is submitted to the supply source.

As a senior AK, you must know the procedures for processing receipts and expenditures because you will perform supervisory duties, either directly or indirectly, in all phases of these tasks. To properly perform these duties, both ashore and afloat, you should be familiar with your organization and its duties. You must also know the following information:

receiving operations, types of receipt, methods of delivery, format of various forms used in receipts and expenditures,

l filing system,

l receipt preparation, inspection, and verification, and

l disposition of material and documents.

The procedures for processing receipts and

expenditures vary depending upon the systems or laborsaving devices used. The availability of computer .

systems such as the Shipboard Uniform Automated Data Processing System-Real Time (SUADPS-RT) saves processing time. The aviation community in the Navy uses the Naval Aviation Logistics Command Management Information System (NALCOMIS). The Naval Integrated Storage, Tracking, and Retrieval Systems (NISTARS) and Integrated Barcode System (IBS) are used for receipt processing. Although automated systems are being used, there are times when transactions must be processed manually. You must know the contingency procedures used for processing receipts and expenditures manually to continue operating and prevent backlog.

MATERIAL RECEIPT

Material receipt is the gaining of possession of an item of Navy property through acceptance of physical custody. Receiving activities must have full control of the material after receipt and before it is forwarded to its ultimate destination. It is estimated that losses that occur during this cycle range from 40 to 70 percent of total material losses in the supply system. The control procedures must include the following processes:

l Identification of quantity received

l Source and date of receipt

l The unit to which physical custody was transferred at the completion of the Receiving process and the date on which the received material was released

Material may be received from several transportation sources such as the U.S. Postal Service, commercial or government air freight, commercial trucking firms, the United Parcel Service (UPS), vendor deliveries, commercial or government water freight, DOD-owned vehicles, or direct pickup from a vendor. This material may be designated for stock, DTO to a department or local supported activity, to a holding area for pickup by a Navy contractor, or to a packing and shipping unit when further consignment is required.

RECEIPT OF MATERIAL ASHORE

Material receipt functions normally are more extensive ashore than those afloat because of the variety and large quantities of receipts. In a supply department organization, the receiving branch or section is responsible for the receiving operations. The receiving branch includes a receipt processing section, are receiving operations section, and a returned material section. At large naval supply activities, these sections may be further broken down into units depending on the workload.

In a large supply organization such as a fleet and industrial supply center (FISC), the receiving function may be the responsibility of the receiving branch under the Defense Distribution Depot of the Defense Logistics Agency (DLA). The receiving branch under the DLA plans and directs operations necessary to physically receive and control incoming material for storage, _{DTO, or transshipment.} Material that needs to be delivered to customers in the local area is transferred to the custody of the FISC for further distribution.

The supply department procedures discussed in this section have been designed to quickly move material for stock replenishment directly from the receiving area to the appropriate storage location without preliminary processing of receipt documents by the receipt control section. Receipts for material DTO to a work center or department may require preliminary processing of receipt documents by the receipt control section so that proper documentation may be obtained to effect disposition of the material.

Receipt Processing Section

The receipt processing section establishes and maintains the open order files for receipts from purchase and the requisition and order tiles for receipts from other supply officers and other government departments (referred to as redistribution sources); maintains contact and follow-up procedures to guarantee prompt receipt of material; processes procurement and receipt documents; and certifies dealers' invoices for payment. This section also prepares and distributes rejection notices, inspection reports, and invoices covering receipts of government material furnished to contractors. In addition, the receipt processing section provides information relative to unmatched vouchers and summarizes invoices from the financial accounting office.

Receiving Operations Section

The receiving operations section receives, verifies, inspects (when required) material received by the activity, except for returned material; segregates material by proper destination for ultimate movement to storage or for transshipment; maintains liaison and control over inbound cargo destined for the activity; and coordinates incoming and outgoing freight movements, including maintenance of necessary records. This section also maintains advance copies and completed government bill of lading files as well as carrier's freight bill files; performs necessary investigation of overages, shortages, damaged and rejected material; and initiates correspondence relating to these areas of responsibility.

Returned Material Section

The returned material section receives, verifies, and identifies all returned material; arranges inspection of material as necessary; and arranges for disposition of returned material to local Navy stock, to other activities as necessary, or to the Defense Reutilization and Marketing Office (DRMO).

Layout

Various factors at each supply activity ashore determine the actual layout for receiving operations. However, it is recommended that the sections of the receiving branch be located as near as possible to the initial point of receipt for the material. Receiving office spaces with appropriate files should be located within or adjacent to receiving terminals. Additional information on layout is contained in chapter 2 of this training manual (TRAMAN).

Receiving Branch Functions

The receiving branch receives and controls all incoming material for storage, DTO, or transshipment. The functions normally assigned to the receiving organization at a local supply activity include receipt and inspection of incoming material, segregation and delivery of incoming material, preparation of reports, preservation and packaging of material for storage or shipment, initiation of tracer action for incoming material when required, and maintenance of files relating to all receiving functions.

The general flow of material receipts and documentation for incoming material from external sources must follow a closed loop receipt processing procedure. This means the material is transferred to the ultimate consignee, the documents are signed/dated, and the receipt transaction is recorded in the ledger or file. As stated previously, these procedures may vary from one activity to another depending on local policy.

NOTE: Activities using NISTARS processes receipts by using a computer scanner that reads the barcode on the receipt document and transmits the information to the main computer.