PRELIMINARY RESEARCH.- All potential inventory adjustments in excess of $500 per line item are subject to preliminary research to determine the

correct asset and record balance. This research should consider all recent transactions, any unposted or rejected documentation, a thorough search of adjacent or temporary locations, and the verification of catalog data such as unit of issue or stock number changes.

CAUSATIVE RESEARCH.- Causative research is an in-depth investigation of specific physical inventory discrepancies to determine why they occurred so that corrective action can be taken. This consists of a complete review of all transactions including receipts, issues, change action location changes, and unposted or erroneous documentation. Causative research is conducted for any one of the following situations:

When classified or sensitive items are involved

For adjustments of $500 or more for pilferable items

For any adjustment of $2,500 or more

When there is an indication of fraud, negligence, or theft

For all adjustments of depot level repairable

Causative research is normally conducted after posting an adjustment to the master stock record. The research must be completed within 30 days from the date of the adjustment posted to the master stock record. Any adjustments selected for causative research are made in

the following priority basis

1. Adjustments of controlled items (sensitive, classified or pilferable)

2. Items pending survey transactions

3. All other adjustments, grouped together based on dollar value with the highest dollar value errors researched first

The supply officer reviews the results of causative research on a periodic basis and initiates actions to eliminate the recurrence of such discrepancies.

INVENTORY ADJUSTMENTS.- An inventory adjustment is a gain by inventory (GBI) or loss by inventory (LBI). Preliminary or causative (as applicable) research is conducted for inventory adjustments after the adjustments are posted to the master stock record. Inventory adjustments are not authorized before performing a spot inventory for the following file maintenance actions: . Requisition file maintenance . Requisition history file maintenance l Unmatched listings . Suspended and error listing processing

ADJUSTMENT REVERSAL.- In the case where the causative research reveals that an inventory discrepancy was caused by a previous adjustment, the previous adjustment must be reversed. The reversal can only be processed if the adjustment is within the allowed look-back period The look-back period is defined as a minimum of 12 months or back to the last major inventory, whichever is longer. Reversals are based on research of documents used in a previous erroneous adjustment. Offsetting gains and losses posted in a previous fiscal year may not be reversed without evidence of a corresponding current year inventory transaction. Process the reversals as follows: . Reverse the adjustment by a credit loss or credit

gain to the erroneous adjustment l Process the reversal against the original

transaction. A reversal is not permitted when the original adjustment cannot be identified.

SUPPORTING DOCUMENTATION.- All supporting documentation is maintained for 3 years for all adjustment reversals greater than $100 and in all cases where causative research is required. This documentation is signed by the person responsible for performing the research. The documentation is used to provide a clear and reasonable cause and effect relationship in justification of a specific inventory adjustment or reversal.

Unless delegated to the supply officer, the commanding officer signs the supporting documentation (DD Form 200) for the following cases . The physical gain or loss by inventory is greater

than $2,500 per line item l The item is a depot level repairable . The commanding officer is responsible for

signing the DD Form 200 in all the following cases: l When there is an indication of frau, negligence,

or theft l When the physical gain or loss by inventory is

greater than $10,000 l When the adjustment involves classified or

sensitive items, arms, ammunition, or explosive items

The supporting documentation may vary by circumstances but should consist of the following documents:

1. For adjustments or reversals requiring preliminary research, a checklist of actions taken during preliminary research such as search of adjacent locations, research of unposted or erroneous transactions, or verification of catalog data.

2. For adjustments or reversals requiring causative research, the following is a list of the necessary supporting documentation:

l A checklist of actions taken during preliminary research

l Receipt, issue, or transfer documents relating to the investigation

l Cumulative transaction ledger or master stock record probes

l Survey documents

l Unmatched listings

l Repair parts petty officer (RPPO) or AIMD logs

l Mandatory turn-in repairable (MTR) or carcass tracking documents (including beyond capability maintenance [BCM] log)

l Detailed list of DLRs

l Any other supporting documentation

Inventory Count Procedures

A complete and correct item count is basic to a physical inventory which, in turn, results in greater stock record accuracy and better inventory control. Detailed procedures for the inventory count afloat are described in Automated SNAP 1 Supply Procedures, NAVSUP P-567, and Afloat Supply Procedures, NAVSUP P-485.

The inventory options available for use on SUADPS-RT ships readily adapt to the inventory schedule and needs of the inventory supervisor. In automated ships, the inventory supervisor can tailor the inventory in anyway that fits the applicable needs. You should familiarize yourself with all the applicable document identifiers to perform a specific task.

Recording Inventory Results

The results of physical inventory must be recorded on the manual or automated files used by the activity.

For manual procedures, refer to NAVSUP P-485. For automated procedures, refer to SUADPS-RT support procedures or other supporting publications.