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Part 4. Examining Process

Chapter 1. Planning and Special Programs

Section 2. Determining Return Need

4.1.2  Determining Return Need

4.1.2.1  (10-24-2006)
Overview

  1. This section discusses determining return needs.

  2. The PSP Territory Manager must ensure the correct types of returns are available in the quantity needed to accomplish the Examination Plan (Plan). If workload is unavailable in a needed priority, workload from the next priority that is available will be input to cover needs until the higher priority workload becomes available.

  3. The PSP Territory Manager must determine the number and class, of returns needed. To facilitate that effort, a Return Needs Analysis and a Return Starts Analysis should be completed on a monthly basis.

  4. On a quarterly basis, local PSPs should analyze priority program DESY application, priority program inventory, projected future inventory and project year-end accomplishments in relationship to the Examination Plan.

4.1.2.2  (10-24-2006)
Return Needs Analysis

  1. The current available inventory and projected return needs should be analyzed on a monthly basis. Return needs for each category, i.e., IMF and BMF, should be analyzed separately, by POD, to determine the number of returns needed. Analyzing by POD will prevent shortages in those PODs with staffing imbalances. IMF return needs for Field Examination and Office Examination should be determined separately.

  2. It generally takes 8 to 12 weeks for a DIF return order to be delivered for classification, therefore, the PSP must plan well in advance. The Needs Analysis should project future requirements for 4-6 months.

  3. Training—PSP should always be aware of training needs. Stay in close communication with the SBSE Area Training Coordinator. A separate analysis must be done for training needs early enough to ensure that returns are delivered and classified timely.

  4. A proper analysis should take the following into consideration:

    1. Current number of examiners in each POD. Sources: Area or Territory staffing charts, managers

    2. Inventory stored at the Centralized Files and Scheduling Unit at the Campus, status 08. Sources: Table 1 and Table 2

    3. Current status 10 inventory in each POD, by Activity Code. Sources: Table 36, AIMS Open Case Database, ERCS, etc.

    4. Inventory stored in PSP in statuses 06 and 08, i.e., , Compliance Initiative Project cases, Preparer Projects, Non-filers, etc.

    5. Determine if there are any return orders that have been approved/processed, but have not been classified and/or added to either the Centralized Files Database or the Area inventory. If so, these returns should be considered as available inventory, giving adequate consideration to the Area’s select rate. (Computation: Returns ordered X Delivery Percent X Select Percent)

    6. Consider the related/multi-year pickup rate, if significant. For IMF, remember to consider related pickups as a result of starting Partnership and Sub-S corporate returns.

    7. Often, group managers will survey returns without adequate notification to PSP. Other managers will hold inventory that they do not wish to examine. If this is true for the Area, then status 10 inventory should be "discounted" by a comfortable percentage. CF&S inventory should be "discounted" as you approach the time to excess survey returns.

    8. The average number of returns needed for each POD, excluding specialty groups, for the 4–6 month period of the analysis. Source: Contact managers for their input regarding the number of returns they will need for the next 4–6 months. Also, consider determining the average return starts from Table 36. (Computation for average return starts per agent using Table 36: Total number of returns started for each group in a POD for a 12 month period/Total number of agents in each POD). (Computation for average number of returns needed: Number of agents X average return starts per agent X 4 (or 6) months.)

  5. Once the number of returns needed has been determined, an analysis to identify the category or activity codes needed to meet the Plan is in order.

4.1.2.3  (10-24-2006)
Return Starts Analysis

  1. After determining the number of returns needed, the PSP Territory Manager should determine the return category, priority, and activity codes needed to deliver a balanced work plan. The number of returns started each month must be monitored to maintain the optimal base inventory level. A tool that will facilitate this effort is a Return Starts Analysis.

  2. A Return Starts Analysis analyzes the number of returns that have been started during the fiscal year, by return priority and activity code. This projects the number of returns that will need to be started for the remainder of the fiscal year.

  3. An effective Return Starts Analysis generally includes the following by priority and/or activity code:

    1. Planned returns. Calculation: (Planned DESYs X hours in a staff year) /District or National Rate). Sources: Examination Plan, Table 37

    2. The average number of returns that need to be input each month. Calculation: (Planned returns /12)

    3. The Turnover rate and Base Inventory. Calculate the number of returns required to realize the Plan DESYs for each priority or activity code. Calculation: ((Planned DESYs X hours in a staff year) /Plan rate). Sources: Examination Plan, Table 37, Table 36.

    4. Then calculate the Turnover Rate for each priority or activity code. The turnover rate is the number of times, in one year, that a return will be closed from work in process. Calculation: (Total closures from Status 12/ (Total Status 12 Ending Inventory/12)). Sources: Table 37, Table 36.

    5. Note: Turnover months is the number of months it will take for a return to be closed from work in process. Calculation: (12/ Turnover Rate).

    6. Calculate the base inventory required for each activity code. Base inventory is the optimal level of work in process necessary to accomplish the Plan. Calculation: (Plan returns/Turnover rate).

    7. Base inventory variance. The difference between base inventory returns and current work in process returns. Calculation: (Base Inventory—Current work in process Inventory). Sources: Table 37, Table 36, AIMS Open Case Database.

    8. Average return starts. Source: Table 37 or Table 36.

    9. Average starts needed. Calculation: (Planned returns/ 12).

    10. Starts needed each remaining month to balance the Plan. Calculation: ((Planned returns—Total return starts) /months remaining in the fiscal year). Sources: Plan, Table 37 or Table 36.

  4. Now that the number of returns needed each remaining month to balance the Plan have been determined, by return category and activity code, the PSP Territory Manager must determine if there is sufficient inventory on hand. If sufficient inventory is not on hand for each class/activity code, an order may be necessary.

  5. Note that the Return Starts Analysis may indicate on an Area level that returns are not needed. However, be sure to review the Return Needs Analysis to determine if a particular POD requires inventory.

4.1.2.4  (10-24-2006)
Deciding to Order

  1. The Return Needs Analysis helps to determine if there is a need for additional inventory in the various PODs, and the number needed. The Return Starts Analysis helps to determine the number of returns in each category/activity that need to be started each month to ensure accomplishment of a balanced Plan. Either one of these analyses, or both, could indicate a need to order returns. However, there are other considerations, with regard to the class or activity of the returns to be ordered:

    1. Productivity. Generally, there is sufficient flexibility built into the monitoring of Plan accomplishments to allow the PSP Territory Manager to over/under accomplish line items within the individual, corporate, and partnership categories. This flexibility is usually geared toward productivity.

    2. Grade level of the agents in the POD for which returns will be ordered.

4.1.2.5  (10-24-2006)
Monitoring Unassigned and Unstarted Inventory

  1. The PSP Territory Manager is responsible for monitoring unassigned inventories (Status 08), assigned-no time applied (Status 10), and work-in-process inventories. The monitoring responsibility should be accomplished through the use of the following reports:

    1. Table 36— Campus generated monthly report

    2. Table 37— Monthly report MCC generated

    3. AIMS Database Tables

    4. Inventory and Delivery Reports

    5. Centralized Files and Scheduling Tables

    6. Examination Returns Control System (ERCS)

    7. Statistical Sampling Inventory Validation Listing (SSIVL)

  2. Unassigned inventories (Status Code 08) should be maintained throughout the fiscal year. Generally, inventory levels should not exceed needs for 3–4 months.

  3. Unassigned inventories in Status Code 10 should be kept to a minimum to allow for a quicker change of direction to meet program needs.

  4. Non-DIF returns may be stored either in centralized files at the campus, or in the Area office.

  5. Returns are generally assigned to examination groups in a manner that will facilitate compliance with examination cycle limitations.

  6. Monitoring allows the review of group return orders in PODs and the comparison to status 10 in other groups in the POD. It also is needed to compare with group surveys to determine if groups are in need of inventory or have poor survey practices.

4.1.2.6  (10-24-2006)
Inventory Brokering

  1. If a shortage of resources exists in any major category, the affected Area Director and the PSP Territory Manager will take the appropriate actions to redirect inventory and to deliver a balanced plan.

  2. Inventory brokering within an Area and between Areas are options.

  3. Inventory brokering requests between Areas should be coordinated with the Director, Examination Planning & Delivery (EPD) before movement of inventory.


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