Topic 6 Topic 6 PDC 264, Revise DS 867I and MILSTRAP Issue Transactions to Support Navy Requirements for Reason for Reversal Code SDR Committee Meeting, July 25, 2997

2Background DLMS Change Approval pending SDR Committee input – DoD MILSTRAP Administrator requests SDR Committee position on whether Navy's unique process of reversing the D7_ issue is an acceptable approach for processing discrepant materiel Navy receives from the depot. – If not, the process will be identified as temporary for U2 until such time as U2 goes away, at which time the reversal code R will no longer be valid. This would accommodate the existing U2 process, but flag that its not intended for modernized systems. Requires justification for not authorizing for modernized systems. Review procedures Determine consensus

3 As is Process "... when a customer receives a discrepant item from the distribution depot, the customer would not process a receipt to their [customer] records for the discrepant item they received; instead they submit an SDR and request credit for item “A”. Item “A” being the item that Navy actually ordered. The depot will follow established procedure and practices to determine the validity and cause of valid SDR. If the SDR is valid, credit is recommended. The Navy will ship the item back to the depot using the document number used for the original issue. When the discrepant item is received at the depot, the depot will post a D7 reversal if it is a Navy SDR. The credit occurs when the item is received at the distribution center. Reversing the erroneous TIR for item "A" feeds into the financial system in Navy, and corrects their financial records. No impact to the Navy inventory records. If under $100 - No SDR is submitted, no action required. Navy keeps the erroneous item and reorders. DoD policy requires the SDR prior to processing the D7 reversal to conform to Chief Financial Officer (CFO) compliancy and to maintain audit ability support where the SDR supports the D7. When the material is Navy managed, the "credit authorized" response by DLA to an SDR does not do ANYTHING financially. Instead it takes a D7 reversal TIR feeding into the Navy system to cause the credit to be done in Navy's financial system.

4 Navy issues with current process Navy does not consistently follow this policy. Sometime, they actually post a receipt into inventory for the wrong item received. Then Navy does an informational SDR indicating that they received the wrong item. Instead of following the current, or the above policy, Navy reports the receipt to the ICP, then issue it on a stock off load document. A completely different document number is used from the original document that the item was ordered. Consumable sale may need to be treated differently from depot level repairable (DLR). Navy wants decision on when to receive a credit, and use the SDR process to determine that. Concerned that serially tracked items are not allowed to be reversed in DSS. This requires research. DDC will be consulted. Per Navy representative, the preferred option is one that allows Navy to specify on the MSDR when credit is required (e.g., issue reversal TIR) and when Navy will retain the materiel. A future meeting is required to document a preferred solution. That solution will require a separate DLMS change than the one discussed in today’s meeting. The “As Is” process matches the Navy published policy, and does not take into account deviations from the policy, even if deviations are known. It also documents DDC current policy.

5 REASON FOR REVERSAL CODE NUMBER OF CHARACTERS One TYPE OF CODEAlphanumeric EXPLANTIONUsed in transaction reversals to indicate why the transaction is being reversed. CODEDEFINITION R Navy uses to indicate that the customer has returned the material.

6 DLMSO Concerns Navy U2 had received material for which they have not processed a D6_, Receipt, although the SDR is submitted for discrepant material received – is this a procedural and physical disconnect? If material is not receipted properly, might it become lost during the interim period while the SDR is being processed? Is the true practice for co-located sites to physically return the discrepant material, DD reverses the issue, and customer does not file an SDR? DSS awaiting ADC for deployment of DLMS 867I -- replacement for MILSTRAP D7_ Issue