VERIFICATION OF RECEIPT OF GOODS PAID FOR UNDER THE FEDSTRIP/MILSTRIP SYSTEMS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00107A000100040014-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 14, 2016
• Document Release Date: March 20, 2003
• Sequence Number: 14
• Publication Date: September 8, 1967
• Content Type: MF

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