Policy
FIACCT 08-08_00 Inventory – Inventory Control – Surplus/Obsolete Stock Items Process
Effective: March 16, 1998
Revised:
Reviewed:
Purpose
This policy describes the inventory control policies and procedures for performing the Surplus/Obsolete Stock Items process, and reviews stock items periodically to ensure that the items stocked in the warehouses are those necessary to meet the consumers’ needs.
Background
A report can be generated by the Finance DataWarehouse group called the Last Activity Report. This report lists any stock items where the inventory system has not recorded an activity within a specified date parameter, e.g., 18 months. This report is sorted and distributed to the warehouses for review and input. On-going consumer input is solicited and reviewed for stock items that may meet the criteria for surplus/obsolete processing. A change in stock item specifications or a change to the way an agency does business may account for spontaneous review.
Policy
It is recommended that the Surplus/Obsolete Stock Items process be performed twice a year, with one occurrence performed just prior to physical inventory. A designated agency representative with an authorized signature will need to coordinate between state agencies and/or the vendors.
Procedures
Responsibility
Action
Inventory Control
- Identify low turnover and obsolete stock items by following the procedures below.
a. Provide each warehouse with the Last Activity report of stock items with no activity for one year or more.
b. Solicit periodic input from consumers.
c. Note information provided during normal operations. - Prepare a memo to accompany the Last Activity Report requesting that the warehouse personnel determine if the low turnover items are obsolete or if they will be used in the coming year. Instruct them how to make that determination and the processes that follow. Provide instructions on paperwork and contact personnel once the determination is made.
- Circulate a master list of obsolete stock items for review. Coordinate necessary transfers.
Warehouse Personnel
Prepare a Property Survey form that reflects what will be returned to the Central Warehouse; send to Inventory Control.
Inventory Control
- Compile a list of the stock items to be removed from inventory.
- Attempt to return stock items to the originating vendor for credit or cash.
- Attempt to locate other users of large dollar items for transfer or
purchase. - Coordinate the delivery of remaining items to State Surplus Property.
- Prepare all Inventory Adjustment (IA) forms. Prepare form SP-1 for State Surplus Property. Distribute where necessary.
- Coordinate with internal consumers the physical transfer of the stock items to the Central Warehouse. Send copies of the paperwork to accompany the stock items.
- Review/coordinate the transfer of stock items with the Central
Warehouse Manager. - Remove items from the shelf and prepare for shipping to the Central Warehouse.
Central Warehouse
- Collect the copies of the paperwork as the stock items are received into the Central Warehouse. Send to Inventory Control.
- Verify that items received are the same as the items listed on the form. Separate items that will be handled differently.
Inventory Control
Data enter original paperwork. Coordinate delivery to the vendor or outside agency.
Comptroller’s Office
Distribute credit to appropriate budgets.