1. 2014 NPMA Spring Seminar Value Through Professional Asset Management best practices and alternative techniques for property inventories Al Green, CPPM CF April 2014

2. 2014 NPMA Spring Seminar Value Through Professional Asset Management Opinions or Facts 2 What are the best practices and alternative techniques for property inventories?

3. 2014 NPMA Spring Seminar Value Through Professional Asset Management Property Inventories This session will include a discussion regarding best practices and alternative techniques for property inventories 3 The primary purpose of a physical inventory is to establish a current, accurate baseline of existing assets.

4. 2014 NPMA Spring Seminar Value Through Professional Asset Management Property Types 4 Personal Real Land Property, Plant and Equipment (PP&E) The focus of this presentation is on personal property assets

5. 2014 NPMA Spring Seminar Value Through Professional Asset Management Who are your Stakeholders? Subject Matter Experts Personal Property Staff Property Management Officers Accountable Property Officers Custodial Property Officers Cognizant Employees Receiving and Disposal Officers Warehousing Specialists Inventory Counters Senior Executives and Managers Acquisition Officers Grant and Cooperative Agreement Officials Contractors and Sub-Contractors Auditors General Accounting Office (GAO) Office of Inspector General (OIG) Public – Tax Payers Other Stakeholders???? 5

6. 2014 NPMA Spring Seminar Value Through Professional Asset Management Examples of Personal Property Assets 6

7. 2014 NPMA Spring Seminar Value Through Professional Asset Management Breakdown Your Inventory Process Purchaser Receiver Tagger Locator Records Custodian Inventory Counters Researchers to Resolved Errors Certifiers Reporters If possible separate the duties. Centralized receiving within the organization greatly facilities the inventory process. – Control. Tag all capitalized and controlled assets. Tag all leased equipment. Serialized equipment – why tag? 7

8. 2014 NPMA Spring Seminar Value Through Professional Asset Management What Impacts Property Inventories Appropriations Working Capital Fund Non- Appropriations Gifts - Donations Sale and Exchange Transfers Excess Surplus Loans Contractors Sub-Contractors Grants Cooperative Agreements Take-Back Programs 8 Lease vs. Purchase Missing and Stolen -Report of Survey Certified Recycling Thresholds Depreciation Transport, Shipping and Maintenance Salvage Warehousing Open Storage

9. 2014 NPMA Spring Seminar Value Through Professional Asset Management Inventory Frequencies Impacts Daily Weekly Monthly Quarterly Semi-Annual Annual Special Inventories FY - BOY and FY - EOY Transactional Network APP - Mobile Smart Card 9

10. 2014 NPMA Spring Seminar Value Through Professional Asset Management Other Inventory Planning Elements  Data collection and related standards – data security  Tag placement in a uniform fashion  Communications  Building and location access  Schedules  Daily sweeps  Information management  Contingency plans  Post inventory deliverables and timeframes 10

11. 2014 NPMA Spring Seminar Value Through Professional Asset Management Asset Tags  Tags incorporate human readable numbers. Serial number. Model number. Asset number. Location. Cost or Responsible Center.  Tag placement on the front of each asset.  Classifications – group to track various types of assets independently 11

12. 2014 NPMA Spring Seminar Value Through Professional Asset Management Use Various Data Collections Methodologies  Provide pictures of each asset model and associate the picture with asset profile.  Use Barcode Readers  Use RFID Scanners  Use Global Positioning Devices  Use Smart Cards  Use Mobile Apps – Push and Pull Inventory Reports  Use E-Mail  Use Vendors  Use a Data Dictionary 12

13. 2014 NPMA Spring Seminar Value Through Professional Asset Management Concepts to Reduce Inventories 13 Prime Vendor Delivers inventory items to the customer within hours of reviewing the order. Integrated Supplier One or more suppliers locate distribution center close proximity to their customers. Local Distribution Centers/Supplier Parks An integrated supplier assumes total inventory management responsibilities for a customer. Electronic Ordering System – Supplied by Vendors Type of SavingsEstimat ed Amount s Inventory Reductions??? Holding Cost Reductions??? Product Cost Reductions??? Distribution Cost Reductions??? This table illustrates realized savings from reduced inventory levels and the associated holding and distribution costs and realized reduce product costs. Source: Slide 17 – 3 rd Bullet

14. 2014 NPMA Spring Seminar Value Through Professional Asset Management Develop Efficiencies  Develop inventory accurate rates based on commodities.  Develop inventory reconciliation policy and procedures.  Develop fast moving items in warehouse to a in-reach concept.  Develop just-in-time deliveries to avoid maintenance delays.  Develop bench stocks for fast moving consumables.  Develop locations to improved the availability of inventory.  Use ASTM standards to benefit your inventory processes.  Outsourcing ‘certain’ inventory activity to external vendors.  Smoke out inefficiencies in your inventory management processes. 14

15. 2014 NPMA Spring Seminar Value Through Professional Asset Management Old Property Inventory Methods  Wall-to-Wall – Closed and Open  Cycle Counts - Partial Counts 15 Cycle Counting – A cycle count is a partial count of selected items within specific areas. The count “cycled” through various items and various areas over time. The results are used as a “barometer” measurement of the whole, without having to verify the entire asset base. Wall-to-Wall - Full Count – Closed and open inventories are essentially full blown physical counts. Closed inventory nothing moves or changes until the count is completed. During an open inventory, the asset base can change allowing for greater possibility of error. Business operational requirements often dictate the viability of an open vs. closed inventory.

16. 2014 NPMA Spring Seminar Value Through Professional Asset Management New Property Inventory Methods  Inventory by Exception  Transaction based Inventory  Statistical Random Sample 16

17. 2014 NPMA Spring Seminar Value Through Professional Asset Management Ways to Count Property  Physical Count  Barcodes  Radio Frequency Identification Data (RFID) Based Solution  APPs – Mobile  Transaction  Movement – (e.g., Refueling) 17 Date of Last Inventory - Inventory Note

18. 2014 NPMA Spring Seminar Value Through Professional Asset Management GAO Best Practices  GAO, Best Practices in Achieving Consistent, Accurate Physical Counts of Inventory Counts of Inventory and Related Property, Appendix I: Implementation Checklist, March 2002  GAO, Best Practices: GAO Best Practices: http://www.gao.gov/docsearch/featured/bp_reviews.html  GAO, Inventory Management, Greater Use of Best Practices Could Reduce DOD Logistics Costs, GAO/T- NSIAD-97-214, July 24, 1997 18

19. 2014 NPMA Spring Seminar Value Through Professional Asset Management OIG Best Practices  Issue self-audit guides to business units – makes employees aware of internal controls.  Train new business unit staff and managers in control issues.  Set-up an on-line internal control library that contains records from previous audits.  Focus on improving systems and procedures, changing the attitudes of staff and improving the overall integrity and performance of the business unit.  Manage the risks involved in business units to maximize opportunities and minimize adversity. Source: www.fau/fiscal/best-practices/OIG.pdfwww.fau/fiscal/best-practices/OIG.pdf 19

20. 2014 NPMA Spring Seminar Value Through Professional Asset Management Primary Objectives of Internal Control  Reliability and integrity of information.  Compliance with policies, laws and regulations.  Safeguarding of asset.  Effective and efficient use of resources.  Achievement of strategic goals. 20

21. 2014 NPMA Spring Seminar Value Through Professional Asset Management Questions 21 Al Green, CFPPM CF Senior Personal Property Manager Department of the Interior Office of Acquisition and Property Management 1849 C Street N.W. Mail STOP - 4262 Washington DC 20240 Albert_Green@ios.doi.gov