processing material transfer only if record balances are suspect or the item is classified or sensitive. SCHEDULED INVENTORY.— This inventory is accomplished at a given time for a specific material category. The inventory frequency for each type of material is discussed in the following paragraphs. General Supplies.— A random statistical sample inventory of the total population of items in storage is conducted quarterly to determine the overall inventory accuracy rate. Activities under the Uniform Automated Data Processing System-Stock Points (UADPS-SP) use the Statistical Accuracy Techniques and Measurements Analysis (STATMAN) system to perform the sample inventory. The non-UADPS-SP activities have the ‘option to perform an annual wall-to-wall inventory instead of a quarterly sample inventory. For arms, ammunition, and controlled inventory items, use the procedures described in OPNAVINST 5530.13. Sonobuoys must be inventoried annually. Narcotics, drug abuse items and alcohol, and precious metals (Security codes Q and R) are inventoried quarterly. Refer to NAVSUPINST 4440.146 for additional information. Classified (Security codes A through H, K, L, O, S, and T) items are inventoried annually as required by DODINST4140.35, In addition to the annual inventory requirement, NAVSUP Publication 1, Volume II, Supply Ashore, requires the maintenance and reconciliation of dual stock records. This is performed by matching the manual stock records and the master stock item record (MSIR). The manual stock record is to be maintained on NAVSUP Form 766, Stuck Record Card, by the storage branch/division. To ensure inventory accuracy, the annual classified inventory and the reconciliation of the manual stock record must be scheduled alternately at six-month intervals. Pilferable items (Security codes I, J, M, V, W, X, Y, Z) must be inventoried annually as required by DODINST4140.35. Consumer Level Stock.— These are items carried in service marts (SERVMARTS), shop stores, ready supply stores, and W purpose repairables that are part of the fixed allowance assets. Items in SERVMART must be inventoried once each fiscal year according to NAVSUPINST 4400.59. The inventory adjustments (based on dollar value of gains or losses) must not exceed one percent of the total sales since the last scheduled inventory. If the inventory adjustment is over one percent, an inventory must be taken quarterly until the financial adjustments are within limits as prescribed by NAVSUPINST 4400.59. The shop stores and ready supply stores are inventoried once each fiscal year according to NAVSUP Publication 1, Volume 2, Supply Ashore. Inventory the fixed allowance assets in W purpose (SHORCAL) annually according to NAVSUPINST 4440.160. Scheduled Inventory Requirements During the fourth quarter of each fiscal year, stock points prepare a physical inventory schedule for the following fiscal year. The stock points should consider the following factors when preparing the schedule: 1. The estimated number of scheduled and unscheduled inventories to be conducted for the fiscal year. 2. Results of the recent statistical random sample inventories and location surveys. If the results dictate the need for a wall-to-wall inventory, the annual schedule must be updated with the scheduled inventory requirement. 3. Requests for inventory from the NAVICP/DSC. 4. Mandatory inventory requirements described in previous paragraphs. Format for Annual Physical Inventory Schedule The annual schedule indicates the inventories projected for execution during each quarter of the fiscal year. The schedule should be in the following format: 1. Inventory Segment. This column identifies the type of material to be inventoried. Some examples of the different types of material are classified, specific supply group or class, and so forth. 2. Scheduled Inventory Line Items. This contains the number of line items included in the segment of inventory. 3. Warehouse/Warehouse Areas. This identifies the warehouse or warehouse areas in which the inventory is conducted. 4. Preliminary Cutoff Date. At start of business on this date (7 to 15 days before the actual cutoff date), inventory controls are established and tracking of in-process transactions begin. 5-8