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Document Number (FOIA) /ESDN (CREST): 
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Document Creation Date: 
December 14, 2016
Document Release Date: 
March 20, 2003
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Publication Date: 
September 8, 1967
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PDF icon CIA-RDP79-00107A000100040014-4.pdf307.32 KB
Approved Far Release 2003/05/14: CIA-RDP79-00"7A000100040014-4 8 EP 1967 MEMORANDUM FOR: Director of Finance SUBJECT . Verification of Receipt of Goods Paid For Under the FEDSTRIP/MILSTRIP Systems 1. The attached report represents the second review the Certification and Liaison Division made of the FEDSTRIP/MILSTRIP payments for property. 2. In essence we say that we are getting the materiel paid for; that we can in good conscience continue to pay these billings on the basis of "constructive evidence of receipt"; and, we need new general ledger accounts to make verification efficient and workable. 25X1 / Acting C'Elief., Certification and Liaison Division Office of Finance I-- .Gflg~UP-11 Approved For Release 2003/05/14: CIA-R oeQ Qu7 0100040014-4 h dowagsadl*g and T destassltle t CRET Approved For Release 2003/05/14: CIA-RDP79-00T 7A000100040014-4 VERIFICATION OF THE PROPERTY PAID FOR UNDER THE FIDSTRIP/MILS'IRIP SYSTEMS I. Selection of Items to be Verified A. There we 2.612 FEDSTRIP/MILSTRIP transactions with a dollar value of recorded. in general ledger account No. 606 for the period 1 pril - 30 June 1967. Of these transac- tions there were 1,079 in excess of $100 with a dollar value of d 1,533 of less than $100 with a dollar value ofl _J The transactions in excess of $100 repre- sented 41 0 of the total transactions and 98% of the total dollar value. The transactions of less than $100 represented 59% of the total transactions and less than 2% of the total dollar value. B. From this broad base of data, approximately 5% of the trans- actions over $100 and approximately 3% of the transactions less than $100 were selected for review. There were sixteen "unmatched" transactions and one hundred and six "matched" transactions with a dollar value of n the over $100 group. There were nine "unmatched transaction and eighty "matched" transactions with a dollar value of in the less than $100 group C. Working papers were prepared on the selected items and provided the basis for the verification of the receipt of property paid for under the FEDSTRIP/MILSTRIP systems. The verification pro- gram also identified causes of differences requiring remedial action and/or policy changes. The examination of the source material represents the second review completed under this activity. II. Findings A. Verification of Receipt of Property The related property for each test transaction was found to have been received, however, 15% were improperly recorded for the reasons shown below: Approved For Release 2003/0P/L' 4~LcIA-RPPM 1 1 0100040014-4 7 - Approved-For Release 20014D5L4 : CIA-RDP79-0O07A000100040014-4 1. Failure to Change Unit Price - 4 Instances Failure of the Office of Logistics Stock Control Unit to change the receiving report to the unit price on vendors packing slips caused a nominal difference between payment and acquisition price. The "constructive receipt" concept applied to the FEDSTRIP/MILSTRIP program permits acceptance of vendors prices shown on packing slips as the amount to be billed. 2. Transportation, Packing and Handling (TPH) - 14 Instances The most significant factor in the development of "unmatched" entries is the variable use of TPH charges. In some instances the TPH charge was included in the general ledger 606 entry but omitted in the 607 portion or vice versa. There were also instances of computation errors in computing and adding the TPH charge to the price of the acquisition. Another factor causing slight differences is the application of the 6.5% TPH to the unit price as compared to adding it to the overall total price. 3. Coding Errors - 5 Instances Contributing to "unmatched" entries were coding errors in the preparation of the posting voucher. All of these were ad- justed during the period of the review. 4. Quantities Billed and Received - 4 Instances The discrepancies noted were cases of overbilling or under- billing resulting from quantities shown to have been received by a warehouseman not in agreement with the applicable quan- tities listed on the billings. In such instances amended receiving reports or inventory adjustment should be made or the difference should be written off as an inconsequential discrepancy by the Office of Logistics. 5. Receiving Information in Archives - 4 Instances There were four transactions totaling $2,209.25 for which the Debit Voucher Information had already been transferred to Archives. 6. Unresolved Transaction Purchase Order 027049 totaling 's unsettled at this time. Material requisitions has been received; however, 1,200 units were billed @ $18.50 each whereas the correct Approved For Release 2003/ A-RDP wnry00040014-4 - 2- declassiflcailan 25X1 Approved For Release 200 r IA-RDP79-001074P0100040014-4 price should have been'er unit. The formal receiving report is being held in abeyance pending a price adjustment by the Army. III. Conclusions A. All property paid for has been received. B. Payment prior to verification should continue to be made on the basis of "constructive evidence of receipt". C. Although the discrepancies noted under "Findings" above need correcting they are not sufficiently serious to warrant cancelling this program. D. The Office of Logistics is retiring receiving information to Archives too soon. IV. Recommendations A. A consistent and uniform method is needed for recording Transportation., Packing and Handling costs. B. The establishment of new general ledger accounts to record only property procured under the FEDSTRIP/MILSTRIP system (per VIII B of previous report) is essential to the efficiency of the verification program. C. Differences in quantities shipped with quantities listed as having been received should be adjusted by the Office of Logistics. D. Receiving records for fiscal year. 1965 activity had been retired to Archives whereas-Finance had not completed payments in every instance. Recommend these records not be retired until.. Finance has effected complete payment. E. Cost per unit as shown on receiving reports should tally with the related cost per unit on packing slips. F. Since results of the first and second quarter "Verification of the Property Paid. for under FEDSTRIP/MILSTRIP Systems" show that between 97% and 98% of the dollar value was found to be in transactions of over $100 that only those transactions be considered for future tests. .s..... OBOUP 1 3' VxCWded tom aaautmutic Approved For Release 2003/05/14~' P79 00 ~ 4 -a,~, ~ 49 k ~itu~Id 1 0 40014-4 25X1 lMnn Approved ft f Release 2003/ A-RDP79-00107A000100040014-4 G. The verification program be discontinued until the new general ledger accounts are provided as recommended above. 25X1 'aison Division Recommendations as Stated in Para IV are Hereby Approved: Distribution: Orig. - C/C&L 1 - D/F 1-PPS 1 - OL 2 - FSSB 25X1 7 *Reference Para IV G, above: The verification program will be continued on a non.-scheduled basis until new accounts are provided. Upon provision of new accounts, verification will be on a regularly scheduled basis. -4- GROUP I Excided tram automat Approved For Release 2003/05/14: CIA-RDP7 -084444090i 0040014-4 r7. r n I- decla IPI~'la^^. UNCLASSIFIED Appro -ERNAL 06Mplise 2003/05/14 NTIAL SECRET ROUTING AND RECORD SHEET FROMA/Chief, Certification & Liais Div. 513 Key Bldg. rA? , TO: (Officer designation, room number, and building) 1. Director of Finance 1212 Key Bldg. OFFICER'S INITIALS COMMENTS (Number each comment to show from whom to whom. Draw a line across column after each comment.) tf )U41'11 3. Chief, C&L Division 513 Key Bldg. RD 7 9 =0944 4 I/_ z24-.d' --- "- -- "- )7 Approved For RI lease 2003/05/141: CI," : " FORM USE PREVIOUS INTERNAL UNCLASSIFIED 3-62 610 EDITIONS E] SECRET ^ CONFIDENTIAL 1:1 USE ONLY r-1 SENDER WILL CHECK CLASSIF rin.. TOP AND 13(~TjqW Approved Approv OFFICIAL ROUTING SLIP TO NAME AND ADDRESS DATE INITIALS 1 Director of Finance ey Bldg, 2 3 G. a~ rt.G w / 4 5 6 ACTION DIR T REPLY PREPARE REPLY APPROVAL DISPATCH RECOMMENDATION COMMENT FILE _ _ RETURN CONCURRENCE INFORMATION SIGNATURE Remarks : 1. I have reviewed the attached C&L report on verification of receipt of goods paid for under the FEDSTRIP/MILSTRIP system for the quarter ended 30 June-1967.. I believe the resoluti of recommendation IV-A, B and d is dependent and may well,be deferred A until procedural reviews now under consideratio are completed. 2: The recommendationsin IV-D and E would appear to be subject to ad hoc negotiatio with the-Office of Logistics without the need for a formal action by Director of Finance, FOLD HERE TO RETURN TO SENDER FROM: NAME. ADDRESS AND PHONE NO. DATE 9/12/67 FORM NO. 237 Use previous editions 1-67 I Approved For Release 2003/05/14: CIA-RDP79-00107A000100040014-4 3. IV-F - I believe this recommendation should be accepted for immediate implementation. 4; IV-G - I do.not, concur, I believe the present verification program modified on the basis of IV-F should be continued.. It is probable that it will be several months before separate general ledger accounts can be made effective if, in fact,., it is determined that they ;are warranted. Chief, o icy an anning a 25X1 Approved For Release 2003/0504: CIA-RDP79-00107A000100040014-4