FIACCT 08-07_00 Inventory – Inventory Control – Physical Inventory Reconciliation Process

Responsibility

Action

Support Services
Managers/
Physical Inventory
Supervisors

1. Coordinate count schedule with the State Auditor’s office.
2. Organize and verify that all costs/data have been received, entered and processed into the Inventory Control System.
3. Ensure that all warehouse locations are orderly and clean.
4. Make adjusting entries to correct all inventory exception reports.
5. Acquire items required to measure, calibrate and record during the physical inventory process.
6. Ensure Warehouse Supervisors/Warehouse Managers are not be involved in the physical inventory process of counting and recording at the warehouses they manage.
7. Segregate and clearly mark all non-inventory items.

Inventory Control

1. Schedule or produce inventory system exception/edit reports for
   warehouse personnel.
   
2. Edit Inventory Control System file maintenance reports.
   
3. Schedule and coordinate data entry requirements and time schedule with warehouses and other system interfaces.
   
4. Coordinate with FINET the schedule for closing the inventory control system security, running the INF2 batch program and the Inventory Freeze Report.

Inventory Control

1. Run the batch program that produces the corresponding control number stickers SR75B.
   
2. Sort/distribute the physical inventory count material. Document the range of control numbers issued to each warehouse.

Support Services
Managers/
Physical Inventory
Supervisor

1. Close all locations to normal operation until after physical inventory is completed. Emergency issues are to be kept to a minimum and deliveries will be set aside until after physical inventory is completed.
   
2. Organize inventory count teams and control desk operations. Each count team shall consist of a counter and a recorder.
   
3. Verify, sort and distribute the Inventory Freeze Report (count sheets), IN70 Report(book), and corresponding control number stickers. Document the range of control numbers issued, so that they can be verified later. The sort sequence on the physical inventory material is: warehouse, primary bin number, stock item number.
   
4. All motor fuels are to be dipped at the beginning of physical inventory.

Control Desk

1. Collect any data entry transactions reflecting issues that have occurred since the physical inventory process began or that missed the schedule for input before the inventory system closed.
   
2. Using a red pen, make adjusting entries to the Physical Inventory Freeze Report INF2.
   a. To assist the control desk in determining whether an adjustment is added or subtracted from a count, all outstanding transactions should be labeled Before the Count or After the Count.
   b. Any quantities listed on the Batch Audit Control Report coming from the Maintenance T-91 process should be added to the physical count.
   
3. Prepare a log sheet. Issue to each count team a packet consisting of the following:
   a. Physical Inventory Freeze report with control numbers.
   b. Corresponding control number stickers.
   c. A blank form to record items on the shelf that are not represented on the reports.
   d. Some blank control number stickers, pencils, and a clip board. Log the range of control numbers, the date and time issued, and the names of the count team for each packet issued.

Count Team

1. Print in pencil the date, and the name of the counter and recorder on all sheets within the count team packet.
   
2. Locate and begin counting the first item on the Inventory Freeze Report.

Team Counter

Perform a physical count of the stock items. Verify the stock item being counted; compare with the description represented on the Inventory Freeze Report and ensure that the stock item is counted in the proper unit of measure.

Š Stockpiles:
When measuring stockpiles, the Inventory Freeze Report, control number stickers and IN70 (book quantities) are used. Compare the physical count with the IN70. If there is a 15% variance or less, the quantity on the IN70 report is recorded on the Inventory Freeze Report as the Actual Quantity.

Š Bulk Motor Fuels and Oils:
Motor fuel and oils should be measured at the beginning the physical inventory. If the measured quantity is within + or – 5% of the quantity represented on the IN70 report then record the IN70 quantity on the Inventory Freeze Report as the Actual Quantity.

Team Recorder

1. Verify that the description and unit of measure of the stock item counted is accurately represented on the Inventory Freeze Report. With pencil, record the quantity counted as the Actual Quantity.
Inventory Stickers – The corresponding control stickers will be placed on the stock item in an easy to see place after the stock item has been counted and recorded. The stickers will help identify during the “walk through” any stock items which have been overlooked and still need to be connected.

2. A form with blank lines except for control numbers and blank control stickers are available to be used to list any items physically on the shelf, but not represented on the count material. For items not represented on the count material, record on the form any information available, such as: Stock Item number, description, unit of measure, and primary bin. Log the physically counted quantity. Write the corresponding control number on a blank sticker and place on the stock item.

Count Team

Once all items have been counted, return the packet to the Control Desk.

Control Desk

1. Log the date and time returned. Issue a new first count packet or issue a recount packet. Before a recount packet is issued, verify that it is being issued to a different count team than the first count. Log range of control numbers, date, time issued and names of count team.
   
2. Compare Inventory Freeze Report against the corresponding IN70 (book quantities). If there are quantity differences, highlight the space to the right of the Actual Quantity field.
   
3. Send the count packet back out for a recount with a different count team. Using the same procedure as above, a set of count sheets may or may not, at the discretion of the control desk, be sent out for a third count.

Support Services
Managers/Physical
Inventory Supervisors

Verify that all Inventory Freeze Reports have been completed and returned. Verify that the range of control numbers issued to your warehouses are intact and sorted in numerical order. Submit to Inventory Control on or before the Inventory Control established due dates.

Inventory Control

1. Log returning count material. Verify, using control numbers, that all count material produced and issued have been returned. Using the Physical Inventory Freeze Report, add together physical quantities per warehouse to arrive at a data entry control count.
   
2. Log and data enter to the Inventory Freeze (INVF) Table the physical counts per stock item per warehouse. Verify control count. If there are discrepancies, a mainframe batch report of what was data entered can be produced for comparison. Make adjusting entries where needed.
   
3. Schedule and coordinate with FINET operations to produce the Inventory Discrepancy Report (IN70). Distribute for review.

Support Services
Managers/Physical
Inventory Supervisors

Review Inventory Discrepancy Report (IN70). Notify Inventory Control if there are or are not adjustments to be made.

Inventory Control

1. Enter any changes or adjustments to the IN70 report in the Inventory Freeze Table (INVF).
   
2. Schedule/coordinate with Finance to produce the Inventory
   Reconciliation Posting (INRP). Adjustments to the FINET system are automatically performed during this step.