Lesson 6: Physical Inventory

Transcription

1 Lesson 6: Physical Inventory Lesson Overview At the completion of this lesson, students will be able to: Define the purpose of a location survey. Identify the types of physical inventories. Identify the events that require an inventory be performed. Physical Inventory Defined Physical inventory is a periodic inspection and count of personal property for the purpose of verifying that the condition and quantities actually on hand are in agreement with the condition and quantities shown in the official system of record. There are several different types of physical inventories, including: Wall-to-wall Cyclic Special Sample Continuous or inventory by exception Location Surveys Location surveys are conducted prior to an inventory to verify that property is located where specified in the system. It is also used to verify that the identifying data is correct. The main advantage to performing a location survey in preparation for a full inventory is that the inventory can be performed more quickly. A location survey also allows you to identify any excess property that can be transferred out of the site and any unserviceable property that can be sent for repair, as well as make note of any expiration dates. Purpose of a Physical Inventory The purpose of a physical inventory is to: Satisfy regulatory or contractual requirements. Determine effectiveness of property management system. Validate financial worth. Confirm property status. Ensure property on hand for mission requirements. Satisfy Regulatory or Contractual Requirements Congress established the requirement that the Government Accountability Office (GAO) set up principles and standards for all Federal accounting systems. The Inventory System of

2 Record has to meet the GAO standards before it can be approved for use for tracking inventory financially and physically. The Federal Property & Administrative Services Act requires scheduled physical inventories to determine accuracy of property and financial records. In the Personal Property Manual there is a chapter that covers the FEMA guidelines for Evaluations, Pre-inventory Inspection, and Physical Inventories. In this lesson we will refer to this chapter periodically. Determine Effectiveness of Property Management System Accuracy of inventory and the financial records of the inventory can be a good barometer of how effective the property management system is at a site. If problems arise with the completeness and accuracy of the records, it could be due to one of the conditions listed below: Poor security practices. Failure to report acquiring of assets by equipment holders. Problems in disposition or movement practices. Poor record keeping. Inadequate training of property custodians. Technical Reviews are designed to help identify possible inefficiencies or ineffectiveness in one or more of the procedures and practices for: Requests Requisitions Receipts Hand receipts Storage Disposal The Review team can suggest changes/improvements that would correct any of the previously discussed problems that surface during an inventory. Validate Financial Worth Validating financial worth is more critical in the private sector than in the public because of mergers and takeovers. For FEMA, the inventories validate not only the total value of assets, but also the physical inventory of capital assets which Finance needs for the Agency Financial Statements. In general, financial worth needs validating: To determine total value of company or agency. For purposes of taxation and depreciation. To identify completeness and accuracy of property records and financial accounts. Remember, the Department of Homeland Security (DHS) Financial Management Policy 019 (FMP019) sets the current capitalization threshold.

3 Confirm Property Status When confirming property status, you are identifying: Idle property Repairable property Shortage and overages in property If you were able to conduct a Survey before the actual inventory, the status of the items in the site would have already been identified and addressed appropriately. Ensure Property on Hand for Mission Requirements During an inventory is a good time to ensure that there are sufficient quantities of serviceable property to accomplish the mission in the foreseeable future. Types of Inventories There are several different types of physical inventories. These include: Wall-to-wall A wall-to-wall inventory is a complete counting of all items within a site/facility as of a scheduled date. Cyclic A cyclic inventory is the scheduled counting of a specific portion of a facility s property during a given period of time (e.g., quarterly, monthly) to cover the entire account within a one-year period. Spot A spot inventory is a scheduled physical inventory of selected items for a specific purpose. Sample A sample inventory is an unscheduled physical inventory conducted to determine the accuracy of agency records. Continuous or inventory by exception A continuous inventory, or inventory by exception, is conducted within a specified period of time, where all movement of property (transfers, custody receipt changes, etc.) constitutes verification that the item has been touched and is accounted for. At the end of that period, only those items that have not already been touched in that period will have to be physically inventoried.

4 As previously described, the lists specific types of inventory only for the annual inventory. Usually the wall-to-wall method is used because our property moves quite often, but a cyclic inventory might be used if the facility is a fixed site and there is not a lot of movement of the property. Events That Require an Inventory be Performed Events that require an inventory be performed may include the following: Initial receipt of property. Change of custodian receipt holders. Change of PMO/APO or change in CO. Periodic inventory of pilferable items. Annually/Closeout. Inventory frequency is usually set by the agency, the government contractor, or a company that has a fixed policy on the conduct of inventories. When frequency is not mandated, the property manager must decide. For FEMA, the requires inventories be performed at specific times, beginning with when property is initially received from a Supply Source. Remember that the Receiving Officer will perform this inventory as he or she checks in the shipment and then forwards all the paperwork to the APO for entry into the Inventory System of Record. That procedure was covered in the Receiving Unit of this course. It is also advisable that the APO conduct an informal inventory as soon as possible after the field office opens ( when the dust settles ) to verify the property records. The change of Custody Receipt holders occurs when the Custodial Officer (CO) receives property from the Property Official and then when the CO sub-hand receipts it to the custodians. The next event requiring an inventory is when there is a change in Property Official at a particular site. It is conducted jointly by the outgoing and the incoming Property Officials. This should be a wall-to-wall inventory. Once completed, the Property Official will fill out the Accountability Statement for Transfer of Personal Property ( ). The incoming Property Official will need to check the appropriate box on the and then attest that he or she has reviewed and understands the If any discrepancies occur, attach a copy of the discrepancies as an addendum to the form. Periodic inventory of pilferable items is the next event requiring that an inventory be performed. Examples of pilferable items include cell phones and laptops. This can also be considered a Spot inventory (referring back to the previous discussion of inventory types). Finally, a full inventory, wall-to-wall, must be conducted at least as often as once a year. It can be conducted at any point during the year, but the results must be reported to the SSFMD Management Division no later than June 30. Elements of a Successful Inventory

5 Elements of a successful inventory should include the following: Detailed, specific plan Quality assurance plan Reconciliation The inventory plan should include specific objectives for the inventory, the dates it will be conducted, the method for conducting the inventory, how the personnel conducting the inventory will be identified and notified, the strategy (building location assignments or specific types of property per team, etc.), and how to mark items as inventoried. Developing the inventory plan requires the cooperation of all employees and the cooperation of all property officials. If you need assistance, contact the appropriate property official. Inventory Responsibilities PMO: Approves inventory procedures. Establishes the type of inventory to be conducted. Designates individuals to participate and supervise. APO: Recommends inventory date. Announces dates supply actions will be suspended. Trains team(s). Ensures inventory is properly performed. Works with team to reconcile discrepancies. Custodians: Have all Government-owned hand-receipted property available (We rely on you to bring in your equipment when inventory needs to be conducted). Inventory Team: "Touches" each item counted. Tags counted items. Clearly marks discrepancies on inventory sheet. Keep in mind, the APO recommends the date, but the PMO must approve it. Also, team members should "touch" each item counted, which means taking them out of boxes if necessary to make sure that what's in the box is what's listed on the inventory sheet. Further information regarding the roles and responsibilities during the inventory process can be found in the , Evaluations, Pre-inventory Inspection, and Physical Inventory. Lesson Summary Now that you have completed this lesson, you should be able to:

6 Define the purpose of a location survey. Identify the types of physical inventories. Identify the events that require an inventory be performed.