BOP Program Statement 8531.14 § 6

FPI is required to ensure adequate internal controls exist regarding reliability of transit times. It

is an acceptable accounting practice to estimate delivery times, if the costs of tracking actual

receipt dates outweigh the benefits.

P8531.14 03/20/2015 4

The Deputy Controller, responsible for accounts receivable, or designee, ensures that reliable

estimates of transit times can be determined for shipments of similar products to similar

destinations.

a. Reporting Requirements. The Prime Business Manager or designee of each location within

each Business Group ensures a sample of FOB Destination shipments is completed for their

plants. Actual transit times for each shipment are tracked and reported.

At the beginning of each month, random samples are generated from a population of FOB

Destination shipments for the month prior. Samples are made available by Accounts Receivable

via SharePoint to be completed by each Business Group. Samples are pulled from a population

of all FOB Destination deliveries. Multiple deliveries are removed from the population before a

sample set is pulled from each business area, to include at least one sample for every factory

listed in the population. The number of samples selected is determined from the population

based on a 95% confidence level and a 10% margin of error. All transit time averages are

rounded up to the next full value or day.

Each FFA is responsible for ensuring the samples for his/her areas are completed no later than

the 10th working day of the month following the month being reviewed. Average transit times

for each Business Group will be determined using the completed transit time sample

spreadsheets.

b. Variances. The Deputy Controller responsible for accounts receivable, reviews in-transit

times for each business group, and compares them to established times each quarter, making

adjustments as needed.