SOP Library

SOP NO: GS-PD26    (List of Exhibits/Attachments)


Mission: Finance and Administration

Area: General Services (GS)

Activity: Purchasing/Inspection and Fixed Asset Disposition (GS-PD)

Title: Revised SOP on Property Inspection

Date Approved/Issued: 05/06/2019

Date Effective: 05/06/2019

Digest:

Hide details for I. TERMS OF REFERENCEI. TERMS OF REFERENCE

Show details for A. RationaleA. Rationale

Show details for C. ScopeC. Scope

Show details for D. BasisD. Basis
Hide details for II. IMPLEMENTING GUIDELINESII. IMPLEMENTING GUIDELINES
Hide details for III. RESPONSIBILITIESIII. RESPONSIBILITIES

E. Acronyms

1. GSD-PSMD – General Services Department – Property and Supply Management Division
2. AGS – Administrative and General Services
3. ASD-COAD – Accounting Services Department - Central Office Accounting Division
4. BTFMD – Budget, Treasury and Fund Management Department
5. CPMSD – Corporate Planning and Management Services Department 2

6. HRMD-HSU – Human Resource and Management Department – Health Services Unit
7. SSID-SSD – Security Services and Investigation Department – Security Services Division
8. COA - Commission on Audit
9. TRSD – Technical Research and Services Department
10. PO – Purchase Order
11. JO - Job order
12. APR – Agency Purchase Request
13. IAR – Inspection and Acceptance Report
14. PAR - Property Acknowledgment Receipt
15. RRP – Receipt of Returned Property
16. PPE - Property, Plant and Equipment
17. STI – Small Tangible Items

A. Definition of Terms

The following shall be taken and understood in the same sense indicated in this SOP unless the context otherwise requires:

1. Inspection - shall refer to the process of measuring or checking supplies, materials as well as acquired / repaired PPE, workmanship or methods in conformity with ocular quality / condition, quantity and specifications.

2. Property Inspector - the authorized representative designated by the management charged with the responsibility of conducting the required inspection of all deliveries including repairs and disposition of PPE in the Central Office and Field Offices.

3. Specification - shall refer to the detailed description of the parts of a whole stating or enumerating the particulars as to size, quality, performance, terms, etc. It is a clear and accurate technical description of a material, a product or service, including the procedures or methods for testing, inspecting, packing and / or packaging of the items purchased and by which requirements are met.

4. Technical Item - shall refer to an item, the inspection of which requires special knowledge, training and education in the pertinent / related arts and sciences in order to determine the quantity, quality, substance and composition.

5. Non-Technical Item - shall refer to day-to-day-use supplies, the inspection of which generally involves physical count only and does not require high-level expertise.

6. Head of Offices – shall refer to Department Managers for Central office, Head of Offices for Executive Offices, Regional managers (RM) for Regional Offices (RO) and Provincial Managers (PM) for Provincial Offices (PO), unless otherwise noted.

7. Supply Officer – shall refer to Supply Officers of GSD-PSMD of Central Office, Field Office and designated Supply Officers of Lead Departments, unless otherwise noted. 3

8. Serviceable but outmoded PPEs – no longer economical to maintain or no longer needed for NFA operations. Properties whose maintenance cost / repair cost is more than or outweighs the benefits and services that will be derived from its continued use.

9. Unserviceable PPEs – considered junk or beyond economical repair. Beyond economical repair shall mean that the cost of repair is more than 60% of the acquisition cost at current prices.

10. Inventory Held for Consumption (IHC) - shall refer to consumable commodities that are normally consumed within two (2) months in connection with government operations. It shall include small and tangible items that are acquired to replace spare parts of a property and equipment.

11. Properties, Plant and Equipment (PPE) - are tangible assets that are:

a. purchased, constructed, developed or otherwise acquired;

b. held for use in the production or supply of goods or services or to produce program outputs;

c. for rental to others;

d. for administrative purposes;

e. expected to be used during more than one reporting period;

f. not intended for resale in the ordinary course of operations; and

meets the capitalization threshold of P15,000.00

12. Inspection and Acceptance Report (IAR) – a report submitted by the Property Inspector on the inspection and acceptance of the purchased and delivered property, supplies and materials. This form shall be used to report the result of the inspection made by the Property Inspector on the deliveries and the status of the accepted items by the Supply Officer.

II. IMPLEMENTING GUIDELINES

A. General Policies

1. Inspection of newly purchased IHC and semi-expendable properties shall be conducted by the Property Inspectors immediately upon receipt of the delivered items with complete supporting documents subject for inspection. The Property Inspectors shall determine and ensure the supplier’s compliance to the item of specification as indicated in the PO / JO / Contract / APR. Unless specifically waived due to unforeseen emergency, all deliveries are subject to inspection.

Notwithstanding inspection conducted by NFA Property Inspectors, COA inspection for infrastructures shall be mandatory for first and final payment of 4

projects amounting to more than P25 million for Central Office and P10 million for Field Offices.

2. A pre and post repair inspection shall be undertaken for all repairs and maintenance contracted for all PPE owned by the agency.

3. An inspection shall be undertaken of all PPE for disposition whether unserviceable or serviceable but outmoded.

4. Property Inspectors who shall be tasked with the conduct of inspection, shall be designated by NFA management.

B. SPECIFIC POLICIES

1. Property Inspector

a. Designation / Assignment

a.1. Property Inspectors shall be designated by the Head of Office of concerned office in accordance with the following:

For Central Office:


For Field Offices:

Separate Property Inspectors shall be designated by the Head of Office in accordance with the following:

Alternate Property Inspectors shall also be assigned by the Head of Office in addition to the designated Property Inspectors of the concerned office.

a.2. The designation of Property Inspectors as provided in paragraph II.B.1.a shall be covered by a Special Order issued by the NFA Administrator upon recommendation from the respective Heads of Office of responsible offices.

a.3. Designated Property Inspectors for technical items must have the relevant knowledge, training or education and expertise required in the circumstance (e.g. licensed engineer for infrastructures, information technology experts for computer hardware, etc.). On the other hand, Property Inspectors for non-technical items may be designated based on the merit of their function or working experience.

a.4. The designated Property Inspectors shall in no case be involved in any purchasing activities. As a consequence, they shall not be allowed to act as a member of any committee or group / team relative to the purchases / acquisitions and repairs of supplies, materials and PPE whether being undertaken by the office of his / her assignment or otherwise, such as but not limited to membership in the Public Bidding Committee, Technical Working Group and disposition activities.

b. Duties and Responsibilities

The Property Inspectors shall have the following duties and responsibilities:

b.1. The Property Inspectors shall be responsible for the conduct of inspection immediately by accomplishing the Request for Inspection Form (Exhibit 1) from concerned office / section on:

b.2. The Property Inspectors shall strictly follow policies and procedures as to the manner of inspection to be conducted provided herein to ensure a reliable result.

b.3. The Property Inspectors shall prepare and submit the required report and inspection documentations called for in the circumstance as provided herein.

C. Manner of Inspection

The following policies and procedures shall be observed by the Property Inspectors. However, these shall not preclude the Property Inspector to apply other systematic procedures in order to come out with a more comprehensive conduct of inspection.

1. Inspection of Newly Purchased PPE

1.1 Inspection shall be conducted only on deliveries that are properly invoiced for and accepted and upon accomplishing the Request for Inspection Form (Exhibit 1) by Supply Officer of the Lead Office.

1.2. Inspection shall be made at the delivery site specified in the PO / JO / Contract / APR or their equivalent. In no case shall inspection be undertaken in the premises of the supplier or contractor.

1.3. Inspection shall be conducted based on a duly approved PO / JO / Contract / APR or their equivalent. The supplier’s or contractor’s invoice shall not, in any circumstance, be made the basis for inspection. Any alterations, erasures, or modifications on the aforementioned basis documents must be verified and duly authenticated by the authorized approving official
.
1.4 In cases where the item specifications indicated in the PO / JO / Contract / APR calls for “As per government standard specification” or “As per Department of Science and Technology (DOST) test”, the Property Inspectors must secure a copy of the required specifications from the concerned authorized government agency.

1.5 In cases where the item specifications indicated in the PO / JO / Contract / APR calls for precise measurements, the Property Inspectors must use the required measuring devices to determine the same.

1.6. Where the delivery is subject to test / analysis, and sample is to be taken, the Property Inspector shall accomplish the Certificate of Sampling form (Exhibit 2) and request the presence of the supplier or contractor or their authorized representative during the sampling. The Certificate of Sampling must be duly signed by the Property Inspector and the supplier or contractor or their authorized representative.

Where the supplier or contractor waives the right to be present in the sampling of a particular delivery subject to test / analysis, a written statement shall be provided by the supplier or contractor to that effect. The same shall be attached to the Inspection and Acceptance Report (Exhibit 3).

1.7. For deliveries that are subject to test / analysis, the Property Inspectors shall submit a Request for Analysis (Exhibit 4) to the designated authorized testing center/s together with samples of the items being inspected. The required fee for said test / analysis shall be charged to the supplier or contractor.

1.8. In submitting items for testing / analysis, the “lot number”, in all cases, shall be indicated in the Request for Analysis. Results of analysis without duly signed approval of the recognized testing centers or that of his/her authorized representative shall not be honored.



1.9. Where it is not practical to get samples for testing from a container without affecting its composition, an indication that the unused portion of the items to be tested shall be returned to the Purchasing Officer / Property Custodian, must be indicated in the Request for Analysis.

1.10. Results of test / analysis shall exclusively be the Property Inspector’s responsibility and must never be delegated to the supplier or contractor.

1.11. Test / analysis of deliveries may be waived by the Property Inspector and a Waiver Certificate (Exhibit 5) shall be prepared and submitted after due consideration of the merits of each particular case under the following conditions:

a. When the delivery amounts to P500 or less and the specification of the order do not need actual testing because it can be determined or calculated.

b. Test of subsequent deliveries that were previously tested in designated quality - testing centers within a period of not more than six (6) months may be waived provided that the specifications of the lot or items under current order are the same as those already previously tested. The previous laboratory report shall be specified in the Waiver Certificate.

c. Products of government-owned or controlled corporations, schools and similar government institutions in their original containers, sealed and properly labeled.

2. Pre / Post-Repair Inspection

Repair of PPE, just like deliveries of new acquisitions require inspection. As such, the following guidelines are provided for inspection before and after the repair.

2.1. Pre-inspection is conducted before a PPE is repaired. It shall be done to serve as a basis in determining whether a repair is really necessary, to establish the extent of repair or scope of work to be done and to determine missing / damaged parts to be supplied / replaced. Post-inspection, on the other hand, is conducted after a PPE is repaired and shall be done to determine if the findings of the Property Inspector during pre-inspection have been strictly complied with.

2.2. Pre / Post-inspection shall be conducted on PPE repairs upon receipt of the Request for Pre / Post-Repair Inspection (Exhibit 6) by the Supply Officer.

2.3 Cost of repair amounting to more than sixty (60%) percent of the acquisition and/or replacement cost whichever is higher of the PPE shall be considered uneconomical and deemed to be junk. However, for motor 8

vehicles, National Budget Circular No. 446 (series of 1995) shall be implemented.

2.4. Post-inspection shall include not only verification of the compliance in the required scope of repair works and replacement parts specifications by the contractor but also verification of the existence of waste materials as well. The Waste Materials Report (RWM) (Exhibit 7) shall serve as evidence of surrendered worn-out or defective parts of the repaired equipment for replacement / disposal based on the inspection report of the Property Inspector. Waste Materials with resale value shall be stored temporarily and later offered for bid and those without value shall be destroyed immediately.

3. Inspection of Returned Properties

Equipment returned by NFA employees to the Supply Officers shall require inspection to evaluate its true condition. As such, these guidelines shall be followed:

a. Property accountabilities due for return shall be inspected by a Property Inspector to determine its true condition and to establish that it is the same property accountability previously issued.

b. Inspection of returned property accountabilities shall be undertaken upon written request from the Supply Officers.

c. When evaluating and determining unserviceable or serviceable but outmoded PPEs, Property Inspectors shall make sure that any of the following conditions are present:

c.1. The item is beyond economical repair because the cost of repair is more than 60% of the acquisition cost at current prices.

c.2. The item is obsolete due to change of technology and is no longer needed for NFA operations.

c.3. The item is no longer economical to use or maintain. The property whose maintenance cost / cost of repair is more than or outweighs the benefits and services that will be derived from its continued use.

d. The inspection of returned properties shall be conducted based on the Receipt for Returned Property (RRP) (Exhibit 8) for PPEs and a Waste Materials Report (WMR) for STIs. This shall be prepared by the Property Inspector after surrendering the property accountability previously covered by PAR by the concerned NFA employee.

e. The Property Inspector shall accomplish and certify the portion of the Inventory and Inspection Report of Unserviceable Properties (IIRUP) (Exhibit 9) pertaining to inspection prior to disposal of unserviceable or serviceable but outmoded PPEs. Any alterations, erasures, or 9

modifications on the aforementioned basis documents must be verified and duly authenticated by the authorized approving official.

D. Acceptance of Inspected Deliveries

1. Acceptance of inspected deliveries as to quality / condition, quantity and specifications shall be the responsibility of the Supply Officer of the concerned requisitioning office.

2. For technical items, in addition to the inspection conducted by the assigned Property Inspector, the requisitioning end-user shall check conformance of delivered items to technical specifications as indicated in the PO / JO / Contract / APR prior to acceptance by the Supply Officer.

3. Final acceptance of all deliveries shall be dependent on the result of inspection conducted by the Property Inspector and the requisitioning end-user (for technical items). Deliveries which conform to the specifications in the PO / JO / Contract / APR or their equivalent are accepted and recommended for payment and those found not in accordance to the specifications are rejected.

4. Where the delivery is subject to test / analysis or performance testing / commissioning, a Letter of Final Acceptance shall be prepared by the requisitioning end-user as supporting document for acceptance and recommendation for payment.

All rulings and/ or issuances inconsistent herewith are hereby superseded.

This SOP shall take effect effectively upon approval.



TOMAS R. ESCAREZ
OIC - Administrator



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