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Army Regulation 735–

Property Accountability

Property

Accountability

Policies

Headquarters Department of the Army Washington, DC 9 November 2016

UNCLASSIFIED

SUMMARY of CHANGE

AR 735–

Property Accountability Policies

This expedite revision, dated 9 November 2016--

o Updates approving authority policy for assessing a final loss of $100,000 or greater, or loss of a controlled item (para 13-17 a (3)).

o Adds policy that permits officers in the grade of O-6 with promotable status and O-6 officers assigned as the deputy commander to the commanding general, to sign DD Form 200 on behalf of the commanding general (paras 13-17 a (4) and 13-17 a (5).

o Updates the authority for discrepancies incidental to shipment of property by common or contractor carrier (para 16-2).

Contents—Continued

Contents—Continued

Section II Accountable officer, page 81 Accountable officer’s action on a financial liability investigation of property loss • 13–15, page 81 Distribution of financial ability investigations of property loss by the accountable officer immediately after the document number or voucher number is assigned • 13–16, page 81

Section III Approving Authority and/or Appointing Authority, page 81 Criteria • 13–17, page 81 Conflict of interest • 13–18, page 82 Processing steps for appointing authority and/or approving authority • 13–19, page 83 Supervising the financial liability investigation of property loss system • 13–20, page 86 Initial review by the appointing authority or the approving authority • 13–21, page 87

Section IV Processing Financial Liability Investigations of Property Loss by the Approving Authority or Appointing Authority Without Appointing a Financial Liability Officer, page 87 Decision by the approving authority without further investigation • 13–22, page 87 Recommendation by the appointing authority without further investigation • 13–23, page 88

Section V Appointment of the Financial Liability Officer or AR 15–6 Investigating Officer, page 89 Review of the DD Form 200 to determine if a financial liability officer or AR 15–6 investigating officer is necessary

• 13–24, page 89 Use of an AR 15–6 investigation • 13–25, page 90 Financial liability officer • 13–26, page 91 Financial liability officer qualifications • 13–27, page 91 Time constraints for conducting the investigation by the financial liability officer • 13–28, page 92 Financial liability officer’s responsibilities • 13–29, page 93 Relief of financial liability officer • 13–30, page 94

Section VI Conducting a Financial Liability Investigation of Property Loss by the Financial Liability Officer, page 94 Conducting the investigation • 13–31, page 94 Financial liability officer’s findings and recommendations • 13–32, page 95

Section VII Actions After Financial Liability Officer’s Recommendation, page 97 Financial liability not recommended • 13–33, page 97 Financial liability recommended • 13–34, page 97 Submission of individual rebuttal statement • 13–35, page 99

Section VIII Review of Financial Liability Officer’s Findings and Recommendations by a Designated Appointing Authority, page 99 Appointing authority’s review of financial liability investigations of property loss • 13–36, page 99 Appointing authority’s decision • 13–37, page 100

Section IX Review by Approval Authority, page 100 Legal review of a financial liability investigation of property loss • 13–38, page 100 Legal review of a financial liability investigation of property loss • 13–39, page 101 Approving authority’s action after review of DD Form 200 • 13–40, page 101 Liability limits • 13–41, page 103

AR 735–5 • 9 November 2016 v

Contents—Continued

• Basic Principles, page Section I
• General requirements • 2–1, page
• Accounting for Army property • 2–2, page
• Centralized accounting • 2–3, page
• Other Service storage of Army property • 2–4, page
• Army property in possession of contractors • 2–5, page
• Inventories of personal property • 2–6, page
• Accountability and Responsibility, page Section II
• Accountability • 2–7, page
• Responsibility • 2–8, page
• Relationship between accountability and responsibility • 2–9, page
• Accountable Officer, page Section III
• Appointment of an accountable officer • 2–10, page
• Contractibility of the accountable officer • 2–11, page
• Duties of accountable officers • 2–12, page
• Property book accounts • 2–13, page
• Stock record accounts • 2–14, page
• Stock record account serial number • 2–15, page
• Sales accounts • 2–16, page
• Chapter
• Army Property and Non-Army Property, page
• Army property • 3–1, page
• Non-Army property • 3–2, page
• Liability of the Army for property on loan from other activities • 3–3, page
• Chapter
• Real Property, Capital Equipment, and Other Nonexpendable Supplies, page
• Real Property, page Section I
• General requirements and references • 4–1, page
• Real property • 4–2, page
• Real property accountable officer • 4–3, page
• Property records • 4–4, page
• Real property at contractor site • 4–5, page
• Personal Property Relocatable Buildings and/or Facilities, page Section II
• Overview • 4–6, page
• General policy • 4–7, page
• Procedures • 4–8, page
• Management of relocatable buildings and/or facilities • 4–9, page
  • page Relocatable buildings and/or facilities used as temporary real property in lieu of permanent real property • 4–10,
• Capital Equipment and Other Nonexpendable Supplies, page Section III
• General accounting and reporting policy • 4–11, page
• Valuation • 4–12, page
• Capital equipment • 4–13, page
• ii AR 735–5 • 9 November
• Capital equipment at contractor site • 4–14, page Contents—Continued
• Other nonexpendable supplies • 4–15, page
• Organizational historical artifacts • 4–16, page
• Chapter
• Transfer of Accounts, page
• General transfer of accountability policy • 5–1, page
• Change of stock record officers • 5–2, page
• Inactivating a stock record account • 5–3, page
• Other transfers of accountability • 5–4, page
• Emergency transfers of accountability • 5–5, page
• Change of station • 5–6, page
• Equipment of prisoners • 5–7, page
• Equipment of hospitalized personnel • 5–8, page
• Property impounded or held as evidence • 5–9, page
• Chapter
• Receipt, Shipment, and Issue of Property, page
• General requirements • 6–1, page
• Property receipt, shipment, and issue • 6–2, page
• Receiving property directly from a vendor • 6–3, page
• Processing of receiving reports by the stock record officer • 6–4, page
• Property accountability for discrepancies in shipment • 6–5, page
• Chapter
• Nonexpendable, Expendable, and Durable Property, page
• General accounting requirements • 7–1, page
• Nonexpendable property • 7–2, page
• Accounting for nonexpendable property • 7–3, page
• Durable property • 7–4, page
• Accounting for durable property • 7–5, page
• Expendable property • 7–6, page
• Accounting for expendable property • 7–7, page
• Chapter
• Deviations From and Waivers to Property Accounting Policy and Procedures, page
• General requirements • 8–1, page
• Deviations • 8–2, page
• Waivers • 8–3, page
• Final approving authority • 8–4, page
• Requests for waivers • 8–5, page
• Appointment of a board of officers • 8–6, page
• Preparation of the report of proceedings • 8–7, page
• Chapter
• Offer and Payment of Rewards for the Recovery of Lost Army Property, page
• General requirements • 9–1, page
• Approval or disapproval of rewards • 9–2, page
• Payment of rewards • 9–3, page
• Announcement of rewards • 9–4, page
• Funds • 9–5, page
• Chapter
• Loans, Bonding, and Other Accounting Procedures, page
• Loans and Bonding, page Section I
• Loans • 10–1, page
• Legal bonds • 10–2, page
• Reserve Officers’ Training Corps or National Defense Cadet Corps bonding • 10–3, page
• Junior Reserve Officers’ Training Corps bonding and/or insurance • 10–4, page
• Other Accounting Procedures, page Section II
• Financial inventory accounting • 10–5, page
• Summary accounting • 10–6, page
• Contractor-operated property accounts • 10–7, page
• Chapter
• Command Supply Discipline Program, page
• Introduction, page Section I
• General information • 11–1, page
• Purpose • 11–2, page
• Terms • 11–3, page
• Roles • 11–4, page
• Program Guidance, page Section II
• Intent • 11–5, page
• Implementation procedures • 11–6, page
• Monitoring • 11–7, page
• Chapter
• Methods of Obtaining Relief from Responsibility for Property, page
• General actions to protect Government property • 12–1, page
• Actions to take when individuals admit negligence • 12–2, page
• DD Form 362 • 12–3, page
• Chapter
• Financial Liability Investigations of Property Loss, page
• General, page Section I
• Financial liability investigation of property loss versus the report of survey system • 13–1, page
• Purpose of a financial liability investigation of property loss • 13–2, page
• Mandatory initiation of a financial liability investigation of property loss • 13–3, page
• Related financial liability investigations of property loss • 13–4, page
• Chain of command for processing financial liability investigations of property loss • 13–5, page
• Time constraints for processing financial liability investigations of property loss • 13–6, page
• Initiator of financial liability investigations of property loss • 13–7, page
• Time constraints for initiation of financial liability investigations of property loss • 13–8, page
• Basic requirements for DD Form 200 • 13–9, page
• Preparation requirements for DD Form 200 • 13–10, page
• Responsible officer and/or reviewing authority • 13–11, page
• Time constraints for actions by the responsible officer and/or reviewing authority • 13–12, page
• Distribution • 13–13, page
• Disposition of damaged property • 13–14, page
• iv AR 735–5 • 9 November
• Notice to Respondents on Assessment of Financial Liability, page Section X
• Respondent’s rights • 13–42, page
• Respondent’s actions • 13–43, page
• Requests for reconsideration • 13–44, page
• Requests for a hearing (civilian employees only) • 13–45, page
• Remission or cancellation of indebtedness (enlisted personnel only) • 13–46, page
• Requests for extension of the collection period • 13–47, page
• Submitting an application DD Form 149 to the Army Board for Correction of Military Records • 13–48, page
• Reopening, correcting, amending, or canceling financial liability investigations of property loss • 13–49, page
• Actions resulting from reopening a financial liability investigation of property loss • 13–50, page
• Appeal Authority’s Review of Requests for Reconsideration, page Section I
• Information regarding requests for reconsideration • 13–51, page
• Appeal authority • 13–52, page
• Chapter
• Special Procedures, page
• Exceptions to Policy Contained in Chapter 13, page Section I
• General • 14–1, page
  • other than where located • 14–2, page Financial liability investigations of property loss listing property carried on accountable records of an installation
  • • 14–3, page Financial liability investigations of property loss pertaining to inactivated installations, activities, or organizations
• Special Rules during Unique Events, page Section II
• Discrepancies involving persons carried on the rolls, but not present • 14–4, page
• Losses incident to taking part in Joint exercises and operations • 14–5, page
• Approval authority for property issued to a unit during major training exercises • 14–6, page
• Property ordered to be abandoned • 14–7, page
• Disassembled or cannibalized major items, kits, or assemblies • 14–8, page
• Property determined to be unsafe for further use or storage because of age • 14–9, page
• Destruction of contaminated clothing and equipment • 14–10, page
• Property unlawfully detained by civilians • 14–11, page
• Liability of nonappropriated fund activities • 14–12, page
  • page Accounting for lost, damaged, destroyed, or stolen Government furnished property with contractors • 14–13,
  • page Accounting for recovered property previously listed on a financial liability investigation of property loss • 14–14,
• Accounting for Other Losses or Damage, page Section III
• Aircraft accidents • 14–15, page
• Army National Guard loaned property • 14–16, page
• DD Form 1544 and money collected as payment for meals in a dining facility • 14–17, page
• Damaged property • 14–18, page
  • willful misconduct is not suspected • 14–19, page Losses of durable hand tools and components of sets, kits, and outfits at the using unit level when negligence or
  • clothing and individual equipment • 14–20, page Losses of durable and expendable items other than hand tools, components of sets, kits, and outfits, or organizational
• Government provided property • 14–21, page
• Government quarters and furnishings • 14–22, page
• vi AR 735–5 • 9 November
• Keys • 14–23, page Contents—Continued
• Losses in laundries • 14–24, page
• Leased property • 14–25, page
• Marine casualties • 14–26, page
• Personal clothing and organizational clothing and individual equipment • 14–27, page
• Nonexpendable property consumed in use • 14–28, page
• Public funds and other negotiable instruments • 14–29, page
• Subsistence accounting variances • 14–30, page
• Unserviceable supplies in depot storage • 14–31, page
• Vehicular accidents • 14–32, page
• Inventory Adjustment Reports, page Section IV
• Inventory discrepancies at a central issue facility • 14–33, page
• Inventory discrepancies at a stock record account • 14–34, page
• Joint Service Environment, page Section V
• Accounting for lost, damaged, or destroyed property in a Joint Service environment • 14–35, page
  • page Reciprocal agreement between the Army and Air Force for financial liability investigations of property loss • 14–36,
• Chapter
• Accounting for Losses of National Stock (Army Materiel Command Installations Only), page
• General information • 15–1, page
• Policy • 15–2, page
• Procedures • 15–3, page
• Chapter
• Discrepancies Incident to Shipment of Property by Common or Contractor Carrier, page
• Introduction, page Section I
• General • 16–1, page
• Authority • 16–2, page
• Scope • 16–3, page
• Property accountability for discrepancies • 16–4, page
• Actions to be taken upon discovery of discrepancies in shipment • 16–5, page
• Step 1–Discovery of discrepancies • 16–6, page
• Step 2–Classification of discrepancies • 16–7, page
• Discrepancy tolerance in receiving shipments of coal and petroleum products • 16–8, page
• Reporting and Adjusting Transportation Discrepancies, page Section II
• Step 3–DD Form 361 shipments on prepaid commercial bill of ladings • 16–9, page
• Step 3–Free-on-board origin shipments from vendors on a Government bill of lading • 16–10, page
• Step 3–Free-on-board origin for conversion to a Government bill of lading • 16–11, page
• Step 3–Shipments from the Army Stock Fund • 16–12, page
• Step 3–Shipments from the Defense Logistics Agency • 16–13, page
• Step 3–Shipments from the General Services Administration • 16–14, page
• Step 3–Responsibility at Army depots • 16–15, page
• Step 3–Responsibility at installations, depots, and terminals • 16–16, page
• Step 3–Responsibility at ocean terminals for overseas shipments • 16–17, page
• Step 3–Responsibility at aerial ports or air freight terminals • 16–18, page
• Step 3–Responsibility for shipments to commercial warehouses • 16–19, page
• Step 3–Shipments between Army and other Government agencies • 16–20, page
• Step 3–Shipments to nonmilitary activities • 16–21, page Contents—Continued
• Step 3–Shipments to the American Red Cross • 16–22, page
  • • 16–23, page Step 3–Army property damaged or destroyed before reaching intended destination in continental United States
• Step 3–Inactivated installations • 16–24, page
• Step 3–Time limitation • 16–25, page
• Step 3–Number of copies required • 16–26, page
  • • 16–27, page Step 4–Transmittal for financial liability investigation of property loss purposes by receiving transportation officer
• Step 4–Shipments from the Army Stock Fund • 16–28, page
• Step 4–Shipments from the Defense Logistics Agency • 16–29, page
• Step 4–Shipments from the General Services Administration • 16–30, page
• Step 4–Designation of appointing and approving authority • 16–31, page
• Step 4–Investigation of discrepancy general instructions • 16–32, page
• Step 4–Examination by appointing and approving authority • 16–33, page
• Step 4–Action by financial liability officer • 16–34, page
• Step 4–Disposition of damaged property • 16–35, page
• Step 5–Review and approval by appointing and approving authority • 16–36, page
• Step 5–Review and approval for installation commander • 16–37, page
• Step 6–General distribution • 16–38, page
• Step 6–Distribution of the Army Stock Fund • 16–39, page
• Step 6–Distribution of shipments from the Defense Logistics Agency • 16–40, page
• Step 6–Distribution of shipments from the General Services Administration • 16–41, page
• Step 7–Action of shipping officer • 16–42, page
• Discrepancies involving contract freight handlers • 16–43, page
• Discrepancies in shipments by parcel post and Government delivery vehicles • 16–44, page
• Shipments by ocean commercial carriers • 16–45, page
• Discrepancies in shipments received by overseas ports of debarkation • 16–46, page
• Discrepancies in domestic intercoastal shipments • 16–47, page
• Shipment of authorized baggage and household goods • 16–48, page
• Receipt of property previously reported lost or short • 16–50, page
• Discrepancies in container shipments • 16–51, page
• Reporting and Adjusting Supply Discrepancies, page Section III
• Step 4–Initiating an SF 364 • 16–52, page
• Step 4–Conducting investigations and preparing SF 364 • 16–53, page
• Step 5–Approval of SF 364 of consignee installation commanders • 16–54, page
• Step 6–Distribution of forms • 16–55, page
• Action activity requests • 16–56, page
• A. References, page Appendixes
• B. Computing the Actual Loss to the Government when property is Lost, Damaged, or Destroyed, page
• C. Loaned Army National Guard Property, page
• D. Internal Control Evaluation, page
• Table 9–1: Rewards, page Table List
• Table 12–1: Property record adjustments for damaged property, page
• Table 12–2: Property record adjustments for lost property, page
  • are for example purposes only), page Table 12–3: Method of computing financial charges against a single respondent (dollar amounts shown in this table
• viii AR 735–5 • 9 November
• Table 12–4: Methods, page Contents—Continued
  • purposes only, page Table 13–1: Protocol for military and GS civilian grade comparison for appointment of financial liability officer
• Table 15–1: Criteria for causative research, page
• Table 16–1: Actions for discrepancies in shipment, page
• Table 16–1: Acknowledgement and receipt of return of a discrepancy in shipment, page
• Figure 2–1: Five types of responsibilities and their relationship to levels of command, page Figure List
• Figure 5–1: Format for the transfer of property accountability statement by the losing stock record officer, page
• Figure 5–2: Format for the transfer of property accountability statement by the gaining stock record officer, page
  • a stock record account, page Figure 5–3: Format for the gaining accountable officer’s transfer of property accountability statement for inactivating
• Figure 9–1: Format for the announcement of rewards, page
• Figure 12–1: Accounting process for damaged property, page
• Figure 12–2: Accounting process for loss property at the property book level, page
• Figure 12–3: Accounting process for lost property at the stock record account level, page
  • changed, page Figure 12–4: Method for computing collective and individual financial liability when more than one person is
• Figure 12–5: Sample DD Form 362, page
  • supply center, page Figure 12–6: Process flowchart for cash payment and/or purchase from central issue facility and/or self-service
• Figure 12–7: Accounting process for DD Form 362, page
• Figure 12–8: Sample of DD Form 2481, page
• Figure 13–1: DD Form 200 processing time segments, page
• Figure 13–2: Sample DD Form 200 only one item, page
• Figure 13–2: Sample DD Form 200 only one item–Continued, page
  • page Figure 13–3: Sample checklist and tracking document for financial liability investigations of property loss page,
  • page–Continued, page Figure 13–3: Sample checklist and tracking document for financial liability investigations of property loss
  • page–Continued, page Figure 13–3: Sample checklist and tracking document for financial liability investigations of property loss
  • page–Continued, page Figure 13–3: Sample checklist and tracking document for financial liability investigations of property loss
• Figure 13–4: Sample of DD Form 200 when more than one item is lost, damaged or destroyed, page
• Figure 13–4: Sample of DD Form 200 when more than one item is lost, damaged or destroyed–Continued, page
• Figure 13–4: Sample of DD Form 200 when more than one item is lost, damaged or destroyed–Continued, page
• Figure 13–5: Sample of DD Form 200 when added pages are used for blocks 4 through 8, page
• Figure 13–5: Sample of DD Form 200 when added pages are used for blocks 4 through 8–Continued, page
• Figure 13–5: Sample of DD Form 200 when added pages are used for blocks 4 through 8–Continued, page
• Figure 13–6: Sample of DD Form 200 when components are missing, page
• Figure 13–7: Sample of DD Form 200 when added pages are used block 9 and 15, page
• Figure 13–7: Sample of DD Form 200 when added pages are used block 9 and 15–Continued, page
• Figure 13–7: Sample of DD Form 200 when added pages are used block 9 and 15–Continued, page
• Figure 13–7: Sample of DD Form 200 when added pages are used block 9 and 15–Continued, page
• Figure 13–8: Sample of DD Form 200 when a 15–6 investigation is required, page
• Figure 13–8: Sample of DD Form 200 when a 15–6 investigation is required–Continued, page
• Figure 13–9: Financial liability investigation processing steps with an appointing authority, page
• Figure 13–10: Financial liability investigation processing steps without an appointing authority, page
• Figure 13–11: Sample DA Form 1659, page
• Figure 13–12: Sample memorandum for appointment of a financial liability officer, page
  • intension to recommend a charge of financial liability, page Figure 13–13: Sample financial liability officer’s notification to the respondent informing respondent of their

Chapter 1

Introduction

1–1. Purpose This publication contains concepts and guidelines for establishing and maintaining the Command Supply Discipline Program (CSDP). The CSDP addresses supervisory and/or managerial responsibilities within the supply system from the user to the Army command (ACOM), Army service component command (ASCC), and/or direct reporting unit (DRU) level. AR 710–2 outlines the specific requirements for the CSDP. The CSDP is a compilation of existing regulatory requirements brought together for visibility purposes. It is directed at standardizing supply discipline throughout the Army. Also, the CSDP is meant to simplify command, supervisory, and managerial responsibilities. Simplification is accomplished by outlining the various requirements for responsible personnel, by standardizing requirements, and by formalizing follow-up procedures.

1–2. References See appendix A.

1–3. Explanation of abbreviations and terms See the glossary.

1–4. Responsibilities a. The Deputy Chief of Staff, G–4 (DCS, G–4) will ensure all detailed property accounting policy and procedures developed for specific materials or situations comply with this regulation. The DCS, G–4 is responsible for the development, supervision, and implementation of automatic identification technology (AIT) applications pertaining to property accounting policy and procedures. b. Commanders of ACOMs, ASCCs, DRUs, and commanders of U.S. Army Installation Management Command (IMCOM) regions authorized to develop specific commodity, or command unique property, accounting policies, and procedures will ensure they comply with the policies and procedures prescribed by this regulation. c. Brigade and battalion commanders and equivalent-level commanders in a table of distribution and allowance (TDA) environment will develop and implement oversight management over— (1) Financial liability investigations of property loss (see para 13–20 b ). (2) Damage statements (see para 14–18 b (2)(a)). (3) Inventory adjustment reports (see paras 14–34 b ). d. Commanders at all levels will— (1) Ensure compliance with all policies and procedures prescribed by this regulation that apply to their command. (2) Implement a command supply discipline program. (3) Ensure available AIT such as bar code, 2D bar code, optical memory cards, radio frequency identification device tags, contact buttons, satellite tracking, or electronic signature capability are fully integrated into all Government property management and accountability functions (such as, receipt, store, inventory, issue, and ship). AIT utilization applies to both formal and informal property accounting. e. Developers of standard and unique automated supply systems will ensure all systems contain the essential elements of data, and are in compliance with the policies contained herein. Computer-generated supply forms specified in prescribed forms section of this regulation must be understood by the supply level using and receiving the forms. Guidance pertaining to the forms approval process is contained in AR 25–30. Computer-generated forms approved by the proponent will replace or will be used instead of the manually prepared forms.

1–5. Statutory and Department of Defense provisions The general policies and procedures contained in this regulation are based on the following statutory authority and Department of Defense (DOD) accounting policy: a. Title 5, United States Code, Section (5 USC 5511), 5 USC 5512, and 5 USC 5514. b. 10 USC 2636, 10 USC 2775, 10 USC 4831, 10 USC 4832, 10 USC 4836, 10 USC 4837, 10 USC 4839, and 10 USC 4840. c. 10 USC 908. d. 32 USC 710. e. 37 USC 1007. f. DODM 4140.1. g. DOD 7000.14–R.

1–6. Internal management controls The key internal management controls are as follows: a. Property accountability.

AR 735–5 • 9 November 2016 1

b. Accounting for lost, damaged, and destroyed Government property.

1–7. Civil-funded property This regulation does not apply to the civil-funded property of the U.S. Army Corps of Engineers (USACE). Civil- funded property accountability is managed in accordance with 41 USC 102. However, in the interest of efficient management and Army uniformity, this regulation will be complied with when feasible for civil-funded property, as determined by the Chief, USACE. The USACE military-funded property will be managed using this regulation. The financial liability in investigation of property loss prescribed by DOD 7000.14–R and this regulation is applicable to all USACE property, regardless of funding source.

Chapter 2

Property Accounting Requirements

Section I Basic Principles

2–1. General requirements a. All persons entrusted with Government property are responsible for its proper use, care, custody, safekeeping, and disposition. b. Persons will not be assigned to a duty that will prevent them from exercising proper care and custody over the property for which they are responsible. c. When a person assumes accountability for property that is remotely located, records must be maintained to show the location of the property and the persons charged with its care and safekeeping. d. Vouchers for the issue or expenditure of property that are not specifically authorized by regulations or authoriza- tion tables will give the reason for the transaction and identify the commander who directed it. e. Army property will not be used for any private purpose except as authorized by Headquarters, Department of the Army (HQDA). f. No Government property will be sold, given as a gift, loaned, exchanged, or otherwise disposed of unless specifically authorized by law. Items replaced in-kind and payments made under the provisions of paragraph 12–1 and paragraph 12–2 for lost, damaged, or destroyed Army property do not constitute a sale of Army property. Title to such property remains with the Government. g. Giving or accepting an issue document, hand receipt, or other form of receipt to cover articles that are missing, or appear to be missing, is prohibited. h. Property documents and records maintained for stock record accounts need not show the manufacturer’s serial numbers unless specifically required by Army policy. Serial numbers, for property in use, will be shown on property books and property book supporting documents under AR 710–2. i. Army property will not be loaned or leased except as specifically authorized in Defense Finance and Accounting Service-Indianapolis Center (DFAS–IN) Regulation 37–1, AR 405–45, AR 700–131, or other appropriate regulations. j. Military members or civilian employees of the Army who occupy Government quarters, or who have been issued furnishings for use in family quarters, must properly care for such property. Military members and civilian employees occupying Government quarters are responsible for the damage caused by their dependents’ negligence to the quarters and the furnishings and equipment contained therein. k. The requisitioning or assembling of excess repair parts and/or components to create an unauthorized end item is prohibited. All excess equipment and supplies will be turned in to the appropriate supply support activity (SSA) in accordance with AR 710–2.

2–2. Accounting for Army property a. All property (including historical artifacts, art, flags, organizational property, and associated items) acquired by the Army from any source, whether bought, scrounged, or donated, must be accounted for as prescribed by this regulation and other appropriate ARs. The accounting will be continuous from the time of acquisition until the ultimate consumption or disposal of the property occurs. Supporting documents will be maintained as prescribed by appropriate regulations. b. Property is categorized for financial accounting and reporting purposes as tangible property both real and personal property. Real property consists of lands and permanent structures (see chap 4). Personal property is made up of equipment and other nonexpendable supplies, collectively called nonconsumable supplies, all consumable supplies (see chap 4), and relocatable buildings. c. All property or material, except real and contractor-acquired property, acquired in any manner will be properly accounted for on item detail accounting records and financial (dollar) item accounting records. Responsibility will be

2 AR 735–5 • 9 November 2016

contractor. PBOs will use the transfer document to establish a GFP asset listing in Property Book Unit Supply- Enhanced. This asset listing will be used to track visibility of GFP contractor equipment. (2) A Joint physical inventory of GFP will be conducted by the losing unit or agency and the contractor prior to the beginning of the contract period. On completion of the inventory and written acknowledgment of receipt by the contractor via the DD Form 250, DD Form 1149, or DD Form 1348–1A, the PBO will post the transfer document as a loss to the Army’s hand receipt and gain to a contract GFP fiduciary record. A fiduciary record will be the contractors tracking method of accounting for GFP (that is, spreadsheet or designated contractor accounting system). The PBO will continue to maintain the basic property book asset record for visibility of GFP transferred to the contractor. The contracting office’s designated representative will notify the PBO upon contractor receipt, transfer, or disposal of any GFP during the life of the contract (see AR 710–2). The PBO will update the fiduciary records as changes to GFP are communicated and in accordance with AR 710–2. (3) Upon termination or completion of the contract, a Joint physical inventory by the contractor and the property administrator will be accomplished. A transfer document transferring accountability back to the contracting officer and/ or property administrator using DD Form 250, DD Form 1149, or DD Form 1348–1A. The contracting officer will reconcile the transfer document for shortages and will approve the transfer prior to the PBO acknowledging receipt and accepting accountability for the returned GFP. Upon completion of transfer document, the GFP asset listing for that contract will be discontinued. e. For contracts awarded under FAR, accountability for GFP will be laterally transferred on DD Form 1149, per AR 710–2 to the contracting office. The official property records will be maintained by the Government. The contractor will maintain Stewardship records. These records will be kept separate and distinct from installation property book records. Responsibility for GFP will be assigned to the contractor using the technical exhibit to the contract. f. Contractor acquired property (CAP) is any property acquired, fabricated, or otherwise provided by the contractor for performing a contract, and to which the Government has title. CAP that is subsequently delivered and accepted by the Government for use on the same or another contract is considered GFP. Policy and procedures for accounting for CAP equipment is in accordance with FAR.

2–6. Inventories of personal property a. Supplies and equipment on hand at U.S. Army Materiel Command (AMC) accountable supply distribution activities and depots will be inventoried once a year according to DLM 4000.25–2. This will be done more often when prescribed by other regulatory guidance. b. A complete physical inventory of all supplies and equipment in storage at SSA awaiting issue or turn-in will be accomplished annually according to AR 710–2, as applicable. The results will be reconciled with the stock accounting records. c. At the user level, all on-hand property carried on property book records and/or hand receipt records will be inventoried annually, or upon change of the primary hand receipt holder, whichever comes first. d. Upon change of the PBO, all property not issued on hand receipt will be jointly inventoried by the outgoing and incoming PBOs. The conduct of these inventories will be documented and the results reconciled with the accounting records. See AR 710–2 for variances in the frequencies of these inventories. The above inventories will be accom- plished in accordance with AR 710–2. e. Real property heritage assets will be inventoried at least once every 3 years or upon change of the accountable officer, whichever comes first, per AR 405–45. The results will be reconciled with the accounting records. Real property, general property, and equipment and stewardship land will be inventoried at least once every 5 years. f. For Army prepositioned stocks (APS) a 100 percent inventory is required when ships are off loaded during cyclic maintenance vessel berthing. Inventories will be conducted more often when prescribed by other regulations or when directed by the commander or the accountable officer. The person having possession of, or having command and/or direct responsibility, over the property is responsible for the conduct of the inventory. The accountable officer will ensure inventories are conducted when required. A record of the inventory and all adjustment documents resulting from the inventory will be maintained with the property records for a minimum of 2 years. g. Installation support activities collocated with Army maintenance depots will inventory their materiel assets using the inventory rules of DLM 4000.25–2. h. Library materials accounted for under the provisions of AR 735–17 will be inventoried on cyclic basis so all items are inventoried at least once every 3 years. i. When and where feasible and practical, physical inventories will be accomplished using AIT.

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Section II Accountability and Responsibility

2–7. Accountability Accountability is the obligation of a person to keep records of property, documents, or funds. These records show identification data, gains, losses, dues-in, dues-out, and balances on hand or in use.

2–8. Responsibility Responsibility is the obligation of an individual to ensure Government property and funds entrusted to their possession, command, or supervision are properly used and cared for, and that proper custody, safekeeping, and disposition are provided. a. Types of responsibilities. Figure 2–1 shows the different types of responsibility and their relationship to the levels of command. (1) Command responsibility. Commanders are obligated to ensure all Government property within their command is properly used and cared for, and that proper custody, safekeeping, and disposition are provided. Command responsibil- ity is inherent in command and cannot be delegated. It is evidenced by assignment to a command position at any level and includes the following: (a) Ensuring the security of all property of the command, whether in use or in storage. (b) Observing subordinates to ensure their activities contribute to the proper custody, care, use, safekeeping, and disposition of all property within the command. (c) Enforcing all security, safety, and accounting requirements. (d) Taking administrative or disciplinary measures, when necessary. (2) Supervisory responsibility. The obligation of a supervisor to ensure all Government property issued to, or used by their subordinates is properly used and cared for, and that proper custody, safekeeping, and disposition are provided. It is inherent in all supervisory positions, is not contingent upon signed receipts or responsibility statements and cannot be delegated. It arises because of assignment to a specific position and includes the following: (a) Providing proper guidance and direction. (b) Enforcing all security, safety, and accounting requirements. (c) Maintaining a supervisory climate that will facilitate and ensure the proper care and use of Government property. (3) Direct responsibility. The obligation of a person to ensure all Government property for which they have receipted, is properly used and cared for, and that proper custody, safekeeping, and disposition are provided. Direct responsibility results from assignment as an accountable officer, receipt of formal written delegation, or acceptance of the property on hand receipt from an accountable officer. Commanders or directors of separate TDA activities will determine and assign in writing those individuals who will have direct responsibility for property. (4) Custodial responsibility. The obligation of an individual for property in storage, awaiting issue, or turn-in to exercise reasonable and prudent actions to properly care for, and ensure proper custody, safekeeping, and disposition of the property are provided. Custodial responsibility results from assignment as a supply sergeant, supply custodian, supply clerk, or warehouse person, and is rated by, and answerable directly to, the accountable officer or the individual having direct responsibility for the property. Responsibilities include the following: (a) Ensuring the security of all property stored within the supply room and storage annexes belonging to the supply room or SSA is adequate. (b) Observing subordinates to ensure their activities contribute to the proper custody, care, safekeeping, and disposition of all property within the supply room and storage annexes belonging to the supply room or SSA. (c) Enforcing all security, safety, and accounting requirements. (d) When unable to enforce any of these, reporting the problem(s) to their immediate supervisor. (5) Personal responsibility. The obligation of a person to exercise reasonable and prudent actions to properly use, care for, safeguard, and dispose of all Government property issued for, acquired for, or converted to a person’s exclusive use, with or without receipt. b. Responsibility relationships. (1) Command and supervisory responsibility depend on the location of the property within the chain of command. This responsibility is a part of a job or position and is incurred by assuming that command or supervisory position. It cannot be delegated. (2) Direct responsibility is a formal assignment of property responsibility to a person within the supply chain who has the property within their custody, but not necessarily in their possession or for their use. Accountable officers always have direct responsibility unless it has been specifically assigned to another person. Accountable officers may delegate such responsibility by written designation or by issue of the property on a hand receipt. (3) Personal responsibility always accompanies the physical possession of property. c. Responsibility for public funds. A person who receives or handles public funds has personal responsibility for

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Figure 2–1. Five types of responsibilities and their relationship to levels of command

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Section III Accountable Officer

2–10. Appointment of an accountable officer An accountable officer will be appointed in writing. The appointing authority will be the commander or the head of the activity for which the property records are being maintained. The commander or TDA activity head may designate in writing a representative to appoint the PBO or accountable officer. The designated representative may be a DOD commissioned officer or a DOD civilian manager. a. The three types of accountable officers are— (1) A transportation officer, who is accountable for property entrusted to them for shipment. (2) A stock record officer, who is accountable for supplies being held for issue from time of receipt until issued, shipped, or dropped from accountability. (3) A PBO, who is accountable for property at the using unit level on receipt and until subsequently turned in, used (consumed) for authorized purposes, or dropped from accountability. (Hand receipt holders are not accountable officers.) b. An accountable officer supervises the preparation, maintenance, and management of the document and/or voucher registers, regardless of the physical location of the registers. c. An accountable officer may be— (1) Any DOD commissioned officer or warrant officer. (Army National Guard (ARNG) officers must be federally recognized.) Brigade and battalion commanders appointing PBOs will ensure the appointee is familiar with all supply directives issued from higher headquarters. (2) A DOD civilian employee, general schedule (GS)–07 or above, if determined by the appointing official to be properly qualified. (3) A DOD enlisted person, in the grade of E–5 or above, when appointment is approved by the ACOM, ASCC, or DRU commander or the head of a HQDA agency, when personnel cited in paragraph 2–10 a (1) or 2–10 b (2) are not available. Within the ARNG, the unit supply sergeant will not be the PBO unless a traditional M-day officer is not assigned to the unit. (4) An ARNG military technician employed under 32 USC 709, who— (a) When assigned to a modification table of organization and equipment (MTOE) unit, meets the criteria of paragraph 2–10 c (1) or 2–10 c (3) based on their status as a unit member. (b) When assigned to a TDA activity, meets the criteria of paragraph 2–10 c (2) based on their technician status. ARNG military technicians appointed as PBOs in MTOE type organizations will not be appointed as a PBO in a TDA activity simultaneously. (5) Foreign national employees of the Army, in overseas areas when approved by the ACOM, ASCC, DRU, or the command two levels above the organization for which the accountable officer is appointed and does not apply to accountable records maintained for communications security (COMSEC) equipment or controlled cryptographic items (CCIs) and cryptographic high value property (CHVP). COMSEC custodians maintaining accountable records for COMSEC equipment must be U.S. citizens per AR 380–40. Foreign nationals may not act as PBOs for COMSEC, CCI, or CHVP. Storage facilities that employ foreign nationals as PBOs are not approved for storage of CHVP, CCI, or COMSEC materiel. d. Persons will not perform the functions of stock record officer (SRO), PBO, transportation officer (TO), General Services Administration (GSA) Smart Pay Purchase Card ordering officer, or blanket purchase agreement ordering officer duties simultaneously. As an exception, PBOs within U.S. Military Entrance Command (USMEPCOM) may perform duties as an ordering officer simultaneously. The following limitations apply: (1) Purchases made by the ordering officers using the GSA Smart Pay Purchase Card are limited to $3,000 per transaction. (2) There must be a primary and an alternate ordering officer designated. The primary will be the activity PBO and the alternate will be the activity budget accounting assistant. (3) Ordering officers must complete the 8–hour cardholder-training program before transacting any purchases. (4) The identity of the item(s) to be purchased, the authorization for the item(s), and the unit cost must be documented in accordance with USMEPCOM standard operating procedures (SOP). The ordering officer, the support group supervisor, and the activity commander must see SOP on requirements before purchases are made. (5) The receipt of the supplies and equipment must be documented in accordance with the USMEPCOM SOP by a receiving official other than the ordering officer. (6) Purchased items similar to those items coded nonexpendable contained in Federal Logistics Record (FEDLOG)

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