Inventory Management

Topics: Inventory, Inventory control system, Cycle count Pages: 11 (2925 words) Published: March 8, 2013
| | |Internal Controls For Inventory | |Jan 27,2012 at 12:42:PM | | | | |MAJOR EQUIPMENT INVENTORY | |Basic Principle: Individual departments are ultimately responsible for the safekeeing of inventory they purchase on their own. Equipment purchased is considerd "major"| |if the value is over $5,000 and has a useful life of more than 2 years. This equipment should be capitalized. Accuracy of the inventory records should be periodically | |verified. | |Keep assets physically secure. | |Capitalized equipment must be tagged by Property Management. | |Employees should fill out appropriate forms that acknowledge receipt and responsibility for equipment removed from SU premises. | |Using the inventory reports sent to departments, an annual inventory of capitalized equipment is required to be taken to compare and validate system records. Any | |differences should be investigated, documented and reconciled. The inventory should be conducted by someone other than the person responsible for purchasing assets. | |Property Management should be notified of any updates that need to be made to the inventory system by returning the inventory report, signed by the Dean, Director or | |Department Head. | |Whenever capitalized equipment is moved, notify Property Management. Provide the tag number, previous location and the current location so the inventory records can be| |undated accordingly. | |Departmental records should be maintained of easily misappropriated equipment that is not capitalized. (i.e. laptops, cameras, video cameras, computers). Inventory | |should be taken periodically and any differences documented and reconciled. | |Excess Property should be contacted to determine the appropriate method for surplus equipment. |

Basic Principle: Perpetual inventory records should be maintained and periodically verified. • Inventory receipts should be handled and verified by 2 people. One to input the receipt into the system and another to secure the goods. The person responsible for ordering inventory should not be the same person to receive it. • Inspect receipts to ensure they are accurate and not damaged. • Store inventory in secure areas. Access to these areas should be restricted also. • Physical inventory counts should be taken periodically by someone independent of...
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