Army Regulation (AR) 735-5, titled Property Accountability Policies, establishes standardized procedures and responsibilities for maintaining, transferring, and investigating the accountability and responsibility of government property within the Department of the Army.
The regulation applies to Active Army, the Army National Guard/Army National Guard of the United States, and the U.S. Army Reserve.
Accountability and Responsibility
Definitions
- Accountability is the obligation imposed by law, lawful order, or regulation on an officer or other person to keep an accurate record of property, documents, or funds.
- This includes identification data, gains, losses, dues-in, dues-out, and balances on hand or in use.
- Accountability pertains to maintaining prescribed property records and is assigned officially—it cannot be delegated【37:0†source】.
- Responsibility is the obligation of an individual to ensure government property and funds entrusted to their possession, command, or supervision are properly used, cared for, and secured.
- Unlike accountability, responsibility can involve individuals regardless of their position in the property record system【37:0†source】.
Relationship Between Accountability and Responsibility
Accountability is formally assigned and involves maintaining records. Responsibility, on the other hand, involves the physical care and protection of property and can be held by anyone who uses or supervises the use of property.
Both are separate obligations and both can result in financial liability if negligence or misconduct is found【37:4†source】.
Types of Property Responsibility
1. Command Responsibility
- Inherent in command and cannot be delegated.
- Evidenced by assignment to a command position.
- Includes enforcement of security, observation of subordinates, and taking administrative or disciplinary measures【37:0†source】.
2. Supervisory Responsibility
- Obligation of a supervisor to ensure proper use, custody, and safekeeping of government property.
- Inherent in all supervisory positions and does not depend on receipts or statements【37:0†source】.
3. Direct Responsibility
- Results from receipt of property on a hand receipt or delegation by an accountable officer.
- Requires ensuring proper use, custody, and safekeeping【37:0†source】.
4. Custodial Responsibility
- Involves individuals like supply clerks or warehouse personnel.
- Ensures care of property in storage awaiting issue or turn-in【37:0†source】.
5. Personal Responsibility
- Imposed on individuals for property in their personal possession or use.
- Exists with or without a hand receipt【37:0†source】.
Temporary and Sub-hand Receipts
- “Sub-hand receipts may be used to record the issue of property from the hand receipt holder to a person under their supervision.” (Para 2-10b)
- “Temporary hand receipts will not exceed 30 days.” (Para 2-10d)
These tools help manage equipment during training events, temporary duty, or when temporarily transferring property between users.
Accountable Officers
Types and Appointment
- Appointed in writing by the appropriate authority (commander or head of activity).
- Types of Accountable Officers:
- Transportation Officer – accountable for property in transit.
- Stock Record Officer – accountable for supplies held for issue.
- Property Book Officer (PBO) – accountable for unit-level property from receipt until turn-in or consumption【37:3†source】.
Qualifications
- Must be a DoD commissioned officer, warrant officer, GS-07 or above civilian, or E-5 and above enlisted personnel (when no officer is available)【37:3†source】.
Duties
- Maintain formal property accounting records including item identification, gains/losses, balances, condition, and location.
- Maintain sales records for accounts dealing with monetary assets.
- Ensure property is accounted for until dropped from the records or transferred【37:7†source】.
Sensitive Items and Serial Number Inventories
- “All sensitive items will be inventoried quarterly.” (DA PAM 710–2–1 referenced)
- Serial number inventories are required for equipment tracked by serial number.
These items require strict control and documentation due to their high risk of theft, misuse, or security classification.
Contractor Accountability
- Contractors can be held responsible for government property under contract terms but may not be designated as accountable officers.
- Specific responsibilities are set by the contract and managed under the Federal Acquisition Regulation (FAR) and DFARS【37:1†source】.
Financial Liability Investigation of Property Loss (FLIPL)
Overview and Purpose
- Replaces the older report of survey system.
- Purpose: To document loss, damage, or destruction (LDDT) of government property and determine if financial liability should be assessed using DD Form 200【37:19†source】.
Mandatory Initiation Conditions
- Negligence or misconduct is suspected.
- The property is lost during inventory transfer.
- Value exceeds monthly pay of the responsible individual.
- Controlled items are lost.
- Bulk petroleum losses exceed authorized thresholds【37:19†source】.
Cases Where FLIPL is Not Required
- “When the value of the property is less than one month’s base pay, and there is no evidence of negligence or willful misconduct, a memorandum for record (MFR) may be used instead of initiating a DD Form 200.” (Para 13-5a(2))
Approving Authority
- Must be a GS-14 or LTC and above.
- Ensures all legal and investigative steps are followed before liability is assessed【37:16†source】.
Financial Liability Limits
- “The amount equal to one month’s basic pay or the actual loss—whichever is less—may be assessed, unless negligence or willful misconduct is found.” (Para 13-41b)
- “If negligence or willful misconduct is shown, individuals may be assessed the full amount of the Government’s loss.” (Para 13-41a)
Transfer of Accountability
- When no physical issue occurs, formal documentation is required (e.g., change in accountable officer).
- Involves written transfer statements and proper documentation per AR 710–2【37:9†source】.
Command Supply Discipline Program (CSDP)
- Reinforces command responsibility.
- Helps standardize supply discipline procedures and ensures effective property management at all levels【37:15†source】.
Conclusion
AR 735-5 plays a critical role in ensuring the integrity, accountability, and proper management of Army property. By clearly defining roles, types of responsibility, and procedures for accountability and liability, it upholds discipline, reduces losses, and enhances operational readiness across the Army.
AR 735-5 Army Regulation: Frequently Asked Questions
What is Army regulation AR 735-5?
“This regulation establishes basic policies and procedures for accounting for Army property.”
“It applies to all Department of the Army personnel and covers all property, including historical artifacts, art, flags, organizational property, and associated items acquired by the Army from any source.” (Para 2-2a)
Who is responsible for enforcing AR 735-5?
“All persons entrusted with Government property are responsible for its proper use, care, custody, safekeeping, and disposition.” (Para 2-1a)
“The commander or head of an activity will implement the provisions of this regulation within their organization.” (Para 1-4)
What does AR 735-5 cover?
“This regulation prescribes Department of the Army policies and procedures for property accounting.”
It covers:
- General accounting requirements (Chapter 2)
- Appointing and duties of accountable officers
- Inventories and property transfers
- Investigations for lost/damaged property
- Contractor-held property
- Capital equipment and disposition (Chapters 3–15)
What is the purpose of property accountability?
“All persons entrusted with Government property are responsible for its proper use, care, custody, safekeeping, and disposition.” (Para 2-1a)
“Army property will not be used for any private purpose except as authorized by Headquarters, Department of the Army (HQDA).” (Para 2-1e)
Who is responsible for maintaining accountable property records?
“Accountable officers are responsible for maintaining a formal set of accounting records showing item identification, gains, losses, dues-in, dues-out, balances on hand or in use, and other essential information.” (Para 2-12a)
How often should physical inventories be conducted?
“At the user level, all on-hand property carried on property book records and/or hand receipt records will be inventoried annually or upon change of the primary hand receipt holder, whichever comes first.” (Para 2-6c)
“Supplies and equipment in storage at SSA will be inventoried annually.” (Para 2-6b)
What is the process for reporting lost, damaged, or destroyed property?
“Loss, damage, or destruction of government property will be documented using DD Form 200.” (Para 13-3)
“Initiators and accountable officers must document all facts, conditions, and circumstances in Block 9 and actions to prevent reoccurrence in Block 10 of DD Form 200.” (Para 13-10a(5))
What are the consequences of property loss, theft, or misuse?
“When negligence or willful misconduct is shown, individuals may be assessed the full amount of the Government’s loss.” (Para 13-41a)
“In all other cases, the amount equal to one month’s basic pay at the time of the loss, or the actual amount of the loss, whichever is less, may be assessed.” (Para 13-41b)
How can property be disposed of in accordance with AR 735-5?
“No Government property will be sold, given as a gift, loaned, exchanged, or otherwise disposed of unless specifically authorized by law.” (Para 2-1f)
“All excess equipment and supplies will be turned in to the appropriate supply support activity (SSA) in accordance with AR 710–2.” (Para 2-1k)
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