BOP Program Statement 8561.05 § 7

Each July, the FFA provides a workbook using the June dead stock balances for the Operations

Manager to conduct a thorough review of all raw materials, work in process, subassemblies, and

finished goods inventories to determine which items are excess and/or obsolete. This review, at a

minimum, is conducted using the following reports in the FPI financial information system:

 MC50 - Dead Stock Report.

 MB24 - Material Reservations Report.

 MCBZ - Current Requirements/Stock Report.

 MB51 - Material Document List.

a. Identifying EXOB. Annual review reports used to determine EXOB as a result of the annual

review must be compiled using a June 30 report date. Unused and slow-moving items identified

on the reports are considered excess or obsolete.

b. Reporting Requirements. The Operations Manager reviews the Dead Stock and Slow-Moving reports and recommends disposition of each item by annotating the report with one of

the following codes:

 Code 1 - Retain for future use. This recommendation must include a written

justification if there has been no production or sales usage within the last six months. If an

item that hasn’t moved in over two years is marked as Code 1, the Operations Manager

must approve via a memorandum justifying the inventory being retained for future use.

 Code 2 - Transfer to another FPI location. This recommendation must include the

location to which the items are to be transferred and that location’s current requirements.

The transferring location must contact the receiving location to obtain the information

8561.05 6/22/2026 PROPERTY OF US GOVERNMENT 5

and provide documentation of the approved transfer request (e.g., email approval and

stock transfer order number).

 Code 3 - Trade-in, re-stock, sell to another government agency, or sell to the public.

 Code 4 - Sell for scrap. This recommendation must include a written justification, e.g.,

shelf life of item expired, certificate of conformance no longer available, etc.

 Code 5 - Intentionally left blank and reserved for future use.

 Code 6 - Write off and dispose.

c. Submission Procedures. The Controller issues an annual memorandum outlining these

requirements and providing deadlines for field submissions, including negative reports, to the

FFA, as well as FFA requirements and deadlines for reporting to the General Manager. The

memorandum also outlines requirements for the General Manager to return approved inventory

dispositions back to FMB through the FFA.

d. FMB Review. Upon receiving the approved inventory reports from the General Manager, the

Controller provides final approval. After receipt from the Controller, the FFA advises each field

location concerning dollar amounts and procedures for setting up allowances and writing off

EXOB. Any allowances authorized by FMB as a result of the annual review are in addition to the

monthly allowances previously established.