multiple locations, record the total quantities in alllocations on the count document. Personnel who do thecounting must ensure that the quantity and unit of issueof each item inventoried are compatible. For example,if the total count of an item is 100 and the unit of issueis pair (PR), the inventory count should be 50 PR.Inventory personnel should record or check the actuallocation(s) of material in the count documents. If theprerecorded location does not contain the item, enter a0 (zero) for quantity inventoried. In some cases,inventory personnel may find the item in anotherlocation. If it is impractical to put the item in theprerecorded location, delete the prerecorded locationand add the new location. Enter the new location and thequantity in the inventory documents. Inventorypersonnel are also responsible for keeping themselvesapprised of all pending transactions in the inventorysegment. These are the receipts, issues, or othertransaction documents of items included in theinventory. Inventory personnel should stamp or markthese transaction documents with “BEFOREINVENTORY” or “AFTER INVENTORY,” asappropriate.REVIEWING THE COUNT DOCUMENTSInventory personnel must review the countdocuments to ensure that all items scheduled forinventory are counted. During the review, they shouldensure that quantities are legible and have a correct unitof issue, and that all added items are identified andlegibly recorded. Enter any remarks legibly and statethem explicitly. When using manual inventoryprocedures, document each item in NIIN sequence.Inventory personnel should ensure that countdocuments have the date and initial of the person whocounted the items.RECONCILING COUNT DOCUMENTSAND STOCK RECORDSPhysical inventory procedures include comparingthe inventoried quantities with the quantities in stockrecords to check if there are differences. If the inventoryand stock record quantities match, post the inventoryand date of inventory in the stock records. Also, enterthe inventoried quantity in the stock record to reflect theon-hand balance.If differences exist, stock control personnel shouldreconcile the records. Reconciliation is the process ofresolving inventory discrepancies. Reconciliationprocess consists of several steps. It is dependent uponthe type of material, cost, and the circumstances that ledto a discrepancy. The reconciliation process may includeconducting a preliminary or a causative research. It alsoincludes processing inventory adjustments oradjustment reversals and maintaining supportingdocumentations.A major difference exists when the physical countof a stock item differs from the confirmed stock recordbalance by 10 percent or more. A minor difference existsif the count differs less than 10 percent. All ships treatinventory differences for SPECIAL MATERIAL, listedin the previous paragraphs, as major differences.Preliminary ResearchThe preliminary research consists of checkingrecent transactions, unposted or rejected docu-mentation, and temporary locations. It also includesverifying catalog data, such as unit of issue, quantity perunit pack or other data.Causative ResearchThis is an in-depth investigation of specificinventory discrepancies. Causative research is con-ducted to determine the cause of the inventorydiscrepancy so corrective action can be taken. Thisconsists of a complete review of all transactions, withinthe allowable look-back period, in the history files. Thetransactions that need review are the receipts, changenotices, expenditures, location updates, and unposted orerrored documents. Normally, causative research isconducted after posting the inventory adjustment to thestock record. The research should be completed within30 days from the date the adjustment was posted to thestock record. The supply officer reviews the results ofcausative research periodically. Also, the supply officerinitiates actions to prevent recurrence of such inventorydiscrepancies.Posting Inventory ResultsThe procedures for posting the result of physicalinventories may vary from each activity. Postingdepends upon the method or equipment used by theactivity. Activities using the manual procedures use theStock Record Card Afloat, NAVSUP Form 1114.Activities using automated procedures may process theresults by using the inventory function in the computerprogram. After posting, file the inventory countdocuments in the stock control history file in NIINsequence. Keep the completed count documents in file10-12
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