A term used to identify property that is recorded in the Accountable Property System of Record and is controlled by an identification system and supporting records from its acquisition through final disposition.
Accountable Property Officer (APO)
The Accountable Property Officer (APO) is appointed by proper authority to establish and maintain an organization’s accountable property records, systems, and/or financial records, in connection with Government property, irrespective of whether the property is in the individual’s possession. Actual titles for the Accountable Property Officer (APO) vary by Component:
Accountable Property Record
The record contained within the Accountable Property System of Record. An Accountable Property Record must be established and maintained in an Accountable Property System of Record for all items with an acquisition cost of $5,000 or greater. Accountable Property System of Records may also be established for management purposes, or when otherwise required by law, policy, regulation, or Agency direction, such as:
Accountable Property System of Record
The system used to control and manage accountable property records, or a subset of existing organizational processes related to the lifecycle management of property, or the system that is integrated with the core financial system. The Accountable Property Officer (APO) has the overall responsibility to ensure that an Accountable Property System of Record system is in place and contains the data elements required in DoDI 5000.64 for DoD equipment (see Accountable Property System of Record Data Elements).
Accountability systems are primarily used by the logisticians to track military equipment and products by UID. These systems will also track the condition and location of each item.
Equal to the sum of the development cost for prime mission equipment and support items; the procurement cost for prime mission equipment, support items and initial spares; and the system specific facilities cost. (DAU Glossary of Defense Acquisition Acronyms and Terms, 12th Edition)
The assessment of the full cost of an item include the cost of any components that are separately obtained but embedded in an item of equipment, or developed specifically for that item.
Examples would be a jet engine for an airplane, manuals, and new equipment training.
An adverse opinion states that the financial statements do not present the subject matter fairly in conformity with the established criteria (e.g., Generally Accepted Accounting Principles (GAAP)).
The auditor adds an explanatory paragraph that includes all of the substantive reasons for the adverse opinion and, if practicable, the principal effects on the subject matter of the issue causing the adverse opinion. If the effects are not reasonably determinable, the auditor states this in the report.
See Automated Military Equipment Valuation.
For example, budget and expenditure data are inputs that figure into the average cost calculation, which leads to one value listed on financial statements. Therefore, Program Management Offices will attest to the accuracy of the data provided for the program valuations.
Glossary: Defense Acquisition Acronyms and Terms (12th edition, Defense Acquisition University (DAU))
Automated Military Equipment Valuation
Automated Military Equipment Valuation (aMEV) is an initiative to automate that process for determining the full cost of military equipment, including the cost of Government Furnished Property (GFP) and modifications, for reporting on the Department’s financial statements.
Business Enterprise Architecture (BEA)
Business Enterprise Architecture (BEA) 3.0 provides the architectural framework for an information infrastructure for the Department of Defense (DoD), including business rules, requirements, data standards, system interface requirements, and the depiction of policies and procedures. This framework is provided through a set of DoD Architecture Framework (DoDAF) products, including Operational, Technical, System, and All View products.
An expenditure having the effect of extending the useful life of an existing asset, increasing its normal rate of output, lowering its operating cost, increasing rather than merely maintaining its efficiency or otherwise adding to the worth of benefits it can yield. A betterment is distinguished from repair or maintenance in that the latter have the effect of merely keeping the asset in its customary state of operating efficiency without the expectation of added future benefits. (FASAB Appendix E)
Ability to produce during a given time period, with an upper limit imposed by the availability of space, machinery, labor, materials, or capital. Capacity may be expressed in units, weights, size, dollars, man-hours, labor cost, etc. Typically, there are five different concepts of capacity.
“capacity.” Dictionary of Accounting Terms. Barron’s Educational Series, Inc, 2005. Answers.com, 18 June 2007. http://www.answers.com/topic/capacity
(Barrons) Betterment to a building or equipment, which extends its life or increases its usefulness or productivity. The cost of a capital improvement is added to the basis of the asset improved and then depreciated, in contrast to Repairs and Maintenance, which are expensed currently. (see Betterment definition.)
The current DoD capitalization threshold is $100,000 and is applicable to assets (including military equipment) procured by both General and Working Capital Funds.
Verifies that all equipment meeting the definition of military equipment is included in the valuation. The Acquisition community asserts for the Property, Plant & Equipment (PP&E) line item on the balance sheet that all programs that should be reported, have been recorded and reported.
Non-repairable items or repair parts that can be discarded more economically than they can be repaired or that are consumed in use. Examples of consumables include munitions, hydraulic fuel, nuts and bolts, and filters.
Demilitarization is the act of destroying the military offensive or defensive advantages inherent in certain types of equipment or material. Disposal is the end of life tasks and/or actions for residual materials resulting from the demilitarization and disposition processes. In the Defense Acquisition Guidebook (DAG) link to definitions at https://acc.dau.mil/CommunityBrowser.aspx?id=30277&lang=en-US and discussions at https://acc.dau.mil/CommunityBrowser.aspx?id=30276&lang=en-US.
Disclaimer of Opinion
In a disclaimer of opinion, the auditor does not express an opinion on the subject matter. A disclaimer of opinion is appropriate when the auditor has not performed an audit sufficient in scope to enable them to express an opinion. This usually occurs when the auditor is not provided with sufficient information to enable them to express an opinion.
Disposition of Property
The method by which the Department of Defense (DoD) or Component is formally relieved of accountability by authorized means, including, but not limited to, consumption, transfer, donation, sale, abandonment, or destruction, or through a completed evaluation and investigation for lost, damaged, or destroyed property.
At the DoD-wide or Department-wide level. The Enterprise-level encompasses the full range of objectives, policies, programs, and initiatives associated with leveraging the power of information and enabling Net-centric operations.
An environmental liability is a probable and measurable future outflow or expenditure of resources that exist as of the financial reporting date for environmental cleanup costs resulting from past transactions or events. Definition from Department of Defense (DoD) Financial Management Regulation (FMR) Volume 4, Chapter 13 http://www.defenselink.mil/comptroller/fmr/04/04_13.pdf.
Any costs that are associated with environmental cleanup and restoration that can be attributed to specific items of military equipment should be included in the determination of full cost. An example would be environmental costs associated with refueling a nuclear powered naval ship.
Verifies that documentation is available at the enterprise-level to demonstrate that an item exists. The Acquisition and/or Logistics communities assert that the military equipment reported by DoD does exist and has proof to support that assertion.
Federal Accounting Standards Advisory Board (FASAB)
The Secretary of the Treasury, the Director of the Office of Management and Budget (OMB), and the Comptroller General, established the Federal Accounting Standards Advisory Board (FASAB or “the Board”) in October 1990. It is responsible for promulgating accounting standards for the United States Government.
Examples of general equipment include fork lifts, servers, copying machines, trucks, and video conferencing equipment.
General Ledger (G/L)
The General Ledger is the master record of all the balance sheet and income statement account balances used by each Component. Simply put, it is the collection of all Asset, Liability, Equity, Revenue, and expense accounts.
Government Furnished Equipment (GFE)
Government Furnished Equipment (GFE) in the possession of or acquired directly by the Government, and subsequently delivered to or otherwise made available to the contractor. GFE is part of Government Furnished Property (GFP).
Government Furnished Material (GFM)
Government Furnished Material (GFM) is government property that may be incorporated into, or attached to, an end item to be delivered under a contract or that may be consumed in the performance of a contract. It includes, but is not limited to, raw and processed material, parts, components, assemblies, and small tools and supplies. GFM is part of Government Furnished Property (GFP).
Government Furnished Property (GFP)
Government-Furnished Property (GFP) in the possession of or acquired directly by the Government, and subsequently delivered to or otherwise made available to the contractor. GFE and GFM together are known as Government-Furnished Property (GFP).
(DAU Glossary of Defense Acquisition Acronyms and Terms, 12th Edition)
Hazardous materials include materials that are toxic, corrosive, and reactive. In addition, some materials are unacceptable from an Environmental, Safety, and Occupational Health (ESOH) standpoint and have been banned (i.e., Halon 1301, chlordane). Definition from DAG: https://acc.dau.mil/CommunityBrowser.aspx?id=21733&lang=en-US. Discussion at same link into DAG.
Not material. Materiality depends on the degree to which an omission or misstatement would change or influence the judgment of a reasonable person relying on the information, and requires the application of professional judgment. Both quantitative and qualitative considerations can determine materiality. Each DoD Component is responsible for defending any immateriality determinations including documentation. From DoD FMR Volume 4, Chapter 13 http://www.defenselink.mil/comptroller/fmr/04/04_13.pdf.
See Betterment definition.
Relates to an assessment of an organization’s system of internal control that is designed to provide reasonable assurance of achieving effective and efficient operations, reliable financial and performance reporting, or compliance with applicable laws and regulations. Internal control objectives also may be relevant when determining the cause of unsatisfactory program performance. Internal controls comprise the plans, policies, methods, and procedures used to meet the organization’s mission, goals, and objectives. Internal controls include the processes and procedures for planning, organizing, directing, and controlling program operations, and management’s system for measuring, reporting, and monitoring program performance.
The Office of Management and Budget (OMB) Circular No. A-123 defines management’s responsibility for internal control in Federal agencies. This Circular provides guidance to improve the accountability and effectiveness of Federal programs and operations by establishing, assessing, correcting, and reporting on internal control.
The application of protective materials with significantly enhanced corrosion and erosion resistance, combined with improved flow dynamics that have potential to create substantial value through the reduction of costs related to the replacement of failed and worn parts.
Internal Use Software (IUS)
Software that is purchased from commercial vendors “off-the-shelf,” internally developed, or contractor-developed solely to meet the entity’s internal or operational needs. Software includes the application and operating system programs, procedures, rules, and any associated documentation pertaining to the operation of a computer system or program. Normally, software is an integral part of an overall system or systems having interrelationships between software, hardware, personnel, procedures, controls, and data.
This definition of IUS encompasses the following:
Examples of IUS include commercial off-the-shelf software like Microsoft Office, SAP, Oracle; and contractor-developed and internally developed software, like the targeting software that is included in radar systems.
(SFFAS 6) For purposes of this standard, maintenance is described as the act of keeping fixed assets in acceptable condition. It includes preventive maintenance, normal repairs, replacement of parts and structural components, and other activities needed to preserve the asset so that it continues to provide acceptable services and achieves its expected life. Maintenance excludes activities aimed at expanding the capacity of an asset or otherwise upgrading it to serve needs different from, or significantly greater than, those originally intended.
For acquisition and financial reporting purposes, Military Equipment assets are defined as weapon systems that can be used directly by the Armed Forces to carry out battlefield missions. Military equipment:
Examples include combat aircraft, pods, combat ships, support ships, satellites, and combat vehicles. Examples exclude training aircraft and simulators.
An alteration to a configuration item (CI) applicable to aircraft, missiles, support equipment, ground stations software (imbedded), trainers, etc. At a minimum, the alteration changes the form, fit, function, or interface of the item. If the cost of the modification meets the Capitalization Threshold, then it is added to the full cost.
National Archives and Records Administration (NARA)
The National Archives and Records Administration (NARA) is the Federal Government agency that stores all important Government documentation. NARA regulations affecting Federal Agency records management programs are found in 36 Code of Federal Regulations (CFR), Chapter XII, Subchapter B.
Repairables and consumables that are not for sale are considered OM&S.
OPTEMPO is short for operational tempo. It is the pace at which an item of equipment is used for the purpose intended and is usually measured in miles/hours for ground equipment and flying hours for aircraft. Fluctuations in OPTEMPO, together with environmental factors and fatigue, may impact the life expectancy of equipment.
For a definition, link to Environmental Protection Agency (EPA) Ozone Depletion Glossary http://www.epa.gov/Ozone/defns.html. For discussion, link to Army Environmental Command (AEC) “Guide to Environmental, Safety, and Occupational Health Compliance for Army Weapon System Acquisition” http://aec.army.mil/usaec/acquisition/esoh2004.pdf.
Presentation and Disclosure
Verifies that all numbers on the financial statement are accurately presented and properly footnoted or referenced. The Financial Management community asserts that information is presented accurately on financial statements.
That which can reasonably be expected to occur or is believed to be more likely than not on the basis of available evidence or logic. Definition from Statement of Federal Financial Accounting Standards (SFFAS) 5, par. 33: http://www.fasab.gov/pdffiles/codification_report2007.pdf.
Equal to the sum of the procurement cost for prime mission equipment, the procurement cost for support items, and the procurement cost for initial spares.
(DAU Glossary of Defense Acquisition Acronyms and Terms, 12th Edition)
The responsibility to ensure security and conscientious inventory management of actual property. This obligation, imposed by public law, requires the maintenance of accurate records of personal property assets; conducting physical inventories to reconcile property records. It also includes maintaining an audit trail for applicable physical property and financial transactions.
An individual appointed by the Accountable Property Officer (APO), who accepts custodial responsibility for property, typically by signing a hand receipt. The property custodian is directly responsible for the physical custody of accountable property under their control.
In essence, a qualified opinion states that the subject matter is presented fairly with the established criteria in all material respects except for a certain matter. A qualified opinion states that “except for” the effects of the matter to which the qualification relates, the subject matter of the assertion complies with the established criteria.
Land and improvements to land (i.e., facilities). It includes equipment affixed and built into the facility as an integral part of the facility (such as heating systems), but not movable equipment (e.g., plant equipment, industrial equipment, buoys). In many instances, this term is synonymous with real estate. Examples include ground stations, test facilities, and air craft hangars.
The ability to reliably quantify, in monetary terms, the outflow of resources that will be required. Definition from the Federal Financial Accounting and Auditing Technical Release 3 (Rescinded): Preparing and Auditing Direct Loan and Loan Guarantee Subsidies under the Federal Credit Reform Act http://www.fasab.gov/pdffiles/codification_report2007.pdf.
The restoration or replacement of parts or components of real property or equipment as necessitated by wear and tear, damage, failure of parts or the like, in order to maintain it in efficient operating condition. (DAU Glossary of Defense Acquisition Acronyms and Terms, 12th Edition (plus updates since publication))
An item that is expected to be repaired when it is broken or worn out. This definition does not include equipment, but it does include component repair parts for equipment. Examples include engines, aircraft radios, and avionics.
Rights and Obligations
Verifies that the Department owns and has documentation to support the rights to all items represented on the financial statement. The Acquisition community asserts that the Component or Agency reporting an item has the rights to and “owns” the equipment, and has documentation to support that assertion.
The possibility an event will adversely effect the achievement of internal control objectives and result in the loss of Government resources or cause an agency to fail to accomplish significant mission objectives through fraud, error, or mismanagement.
The engagement of time and effort for which the primary purpose is to perform an identifiable task or tasks, rather than to furnish an end item or supply. Examples include systems engineering, program management, training, and aviation operations.
Unique Identification or Identifier (UID)
A Department of Defense (DoD) program that enables improved access to information about DoD possessions to make acquisition, repair, and deployment of items faster and more efficient.
The UID identifies each item or piece of equipment. For additional information see: http://www.acq.osd.mil/dpap/pdi/uid/index.html
Unqualified Audit Opinion
The auditor concludes that the subject matter of the audit (as of the specified date) is in conformity with established criteria (e.g., GAAP) and that no deficiencies exist. An unqualified opinion is sometimes referred to as a “clean opinion.”
To improve, usually applied to technology, generally by complete replacement of one or more components; to replace an existing object with something better (computing) to replace a program with a later version of itself, a version having a higher version number or marketed under a more recent product name.
Volatile Organic Compounds (VOC)
Compounds that have a high vapor pressure and low water solubility. Many VOCs are human-made chemicals that are used and produced in the manufacture of paints, pharmaceuticals, and refrigerants.
Definition and discussion from the U.S. Geological Survey (USGS) website: http://toxics.usgs.gov/definitions/vocs.html.
Work in Process or Work in Progress. The WIP system collects and holds all costs associated with projects. WIP also refers to inventory that has value added from labor or additional processing. When considered for inventory value, the value of the raw material plus the value added components are accounted for in determining the value of that inventory at that point in time.