Distribution parameter &1 is set to value "Local" (SCUM)

What causes this issue?

CASE &V2&
WHEN '01'
The system is a central system of the Central User Administration (CUA).
By setting the distribution parameters in transaction SCUM for &V1&, you
can assign roles to local users only. This means that a cross-system
evaluation of &V1& is irrelevant. Instead of using report
RSUSR_SYSINFO_ROLE, use report RSUSR002.
WHEN '02'
The system is a central system of the Central User Administration (CUA).
By setting the distribution parameters in transaction SCUM for &V1&, you
can assign profiles to local users only. This means that a cross-system
evaluation of &V1& is irrelevant. Instead of using report
RSUSR_SYSINFO_PROFILE , use report RSUSR002.
ENDCASE

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

System Response

How to fix this error?

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.