COMLANTFLT

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COMLANTFLT
MILSTRIP Accounts Payable Process
Earl Strickland LANTFLT FI 757-836-6922 2
February 2005
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Overview

• Requirement
• Definitions
• Accounts Payable criteria
• Current Barriers
• SCR Description
• Future Challenges
• Summary

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Requirement

• Objective Record timely Accounts Payables for
  Navy issued MILSTRIP requisitions.

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MILSTRIP Requisitioning Definitions

• Ordering - MILSTRIP - Military Standard
  Requisitioning And Issue Procedure A uniform
  procedure established by the Department of
  Defense (DoD) for use within the DoD to govern
  requisition and issue of material within
  standardized priorities.
• Billing - MILSBILLS - Military Standard Billing
  System (MILSBILLS) Prescribes data elements and
  codes, standard procedures and formats to be
  followed for billing and related adjustments,
  collections, and accounting for sales of material
  and in using the Interfund Billing System.
  Applies to all DoD activities and, by agreement,
  to the General Services Administration, the
  Federal Aviation Administration, the National
  Oceanic and Atmospheric Administration, and the
  U.S. Coast Guard Agencies. It is mandatory for
  use by all the DoD Components.

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Accounts Payable Definitions

• Formal Definition
• Exchange transactions which result in the
  receipt of goods and/or services in exchange for
  a promise to pay in the future.
• Bottom-line
• Goods and/or services have been received and an
  amount is owed.
• Definition leads to a two questions
• Have goods and/or services been received?
• Is there an amount owed?

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Question

• Do MILSTRIP requisitions fit the requirements
  for posting a timely Accounts Payable?

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Criteria 1Have goods and/or services been
received?

• Yes, on a constructive basis.
• Detail
• Receipt is usually determined by physical
  receipt of goods or consuming services such as
  plumbing repairs.
• However, receipt can also occur on a
  constructive basis. constructive receipt
  occurs upon title transfers and does not depend
  upon physical receipt.
• In the case of MILSTRIP orders to Navy
  stockpoints, title transfer and thus
  constructive receipt is considered to occur when
  the item is dropped from inventory.

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Criteria 2Is there an amount owed?

• Yes, at the end of the month, there may be
  MILSTRIP Issues that have not been paid however,
  issues average less than 1 of annual
  requisitions.
• Detail
• Navy Inventory Control Point processes MILSBILLS
  on a weekly basis.
• Maximum potential unbilled amount is seven days.

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Barriers to Recording Timely Accounts Payable

• No interface between the logistics receipt
  processing systems and the financial systems.
• MILSBILLS payment occurs prior to physical
  receipt of material.
• Manual effort impractical due to volume of
  MILSTRIP transactions being processed.

• MILSTRIP SCR addresses these barriers.

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MILSTRIP SCR

• DONs logistics system Transaction Item Report
  (TIR), generates a D7A (Issue to Own
  Service/Agency) which is a financial transaction
  that credits an accounts payable amount.
• Title transfer occurs at this point, thus
  receipt criteria for A/P is met.
• Billing has not occurred, thus owed criteria
  is met.
• Upon receipt of MILSBILLS payment, the A/P
  account is debited, thus clearing the previous
  A/P amount.
• Phase 1 testing in progress..

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Challenges

• Addresses only Issue to Own Service/Agency
  transactions which are approximately 50 of
  MILSTRIP transactions and 60 of annual dollar
  amount.
• Currently addresses only afloat units.
• Inclusion of missing 50 of supply points other
  than DON (i.e., Air Force, Army, Coast Guard,
  GSA, etc.) will require incorporation of AS_
  Shipment Status. Requires additional resources.
• Phase III (MILSTRIP Ashore) funding is in place.
  Additional requirements meetings will be
  necessary prior to starting programming.
• Potential for unmatched accounts payable
  transactions.
• Need GAO to review logic used for constructive
  receipt.

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Summary

• When fully implemented the MILSTRIP SCR
  provides an automated process to record
  Accounts Payable amounts for DON issued
  material.
• Supports DONs FY07 unqualified opinion goal.