Questions regarding this chapter should be directed to the following: | ||
---|---|---|
Asset and Inventory Mailbox | osc.assets@ct.gov | |
Elizabeth Daly, CPPA | 860-702-3436 | elizabeth.l.daly@ct.gov |
Fiscal Policy Statewide Services | 860-702-3440 |
Inventory Management System
Items stored must meet the capital threshold collectively. The storage area must
be secured. An agency must perform a cost evaluation to determine if it is
beneficial to retain inventory and determine if the benefit of storing the
inventory is worth the cost. Staff time involved, personnel costs, overhead
costs of the storage area, are among the costs that should be considered before
establishing an inventory.
An effective inventory management system requires:
Managing Inventory Levels
Inventory is an asset that must be more closely guarded because inventory, if
not managed properly, can lead to excessive spending. The best way to view
inventory is to think of it as cash, an asset of the State. The State manages
cash by ensuring it is adequately safeguarded and maintained in accounts that
maximize earning power. Cash is not maintained as dormant so inventory should
not be considered dormant either. Keep in mind, excess inventory levels should
be avoided. Inventory items not being used during a reasonable period of time
wastes State funds that could be used elsewhere.
Safeguarding Inventory
Safeguarding the inventory items is important to prevent theft and loss of State
property that must be replaced by expending additional State funds. Review the
adequacy of existing physical safeguards designed to protect State property that
is under your responsibility. Appropriate safeguards should be implemented to
prevent potential losses.
Inventory Property Control Records
Includes Materials and Goods in Process and Stores and Supplies Inventory
Records. This information is also contained in Chapter 5, Maintaining the
Property Control System.
1. | Item Description |
---|---|
2. | Storage location |
3. | Unit of measure |
4. | Unit Cost |
5. | Minimum and maximum levels the number of items that should be on hand before ordering and the greatest number of items on hand that can be effectively maintained in inventory without incurring unnecessary storage or handling charges and with a minimal risk of the inventory becoming obsolete. |
6. | Reorder quantity |
7. | Balance available to fill an order |
8. | Date, quantity, and dollar value of items received into inventory |
9. | Date and number of inventory requisition |
10. | Quantity deleted from inventory |
11. | Inventory balance on hand both quantity and dollar value |
Physical Inventory
A complete physical inventory of all property must be taken by the end of the
fiscal year (June) to insure that property control records accurately reflect
the actual inventory on hand within the current fiscal year. The key to ensuring
an accurate physical inventory is the quality of the planning effort prior to
conducting the physical counts. Agencies using the Core-CT Inventory Module must
use the Inventory Module for physical inventory. Agencies with Inventory that do
not participate in the Core-CT Inventory Module must also conduct an annual
physical inventory.
Each storage area, warehouse or facility must have a physical inventory completed by June 30th of each fiscal year. Agencies may choose one of two methods for their physical inventory, wall to wall or cycle counts.
Wall to wall inventories are inventories that count all items within a given storage area, warehouse or facility at the same time and are conducted once per year.
Cycle counts are inventories of a small subset of items, in a specific location, counted on a specified day, and conducted on a continuous basis throughout the fiscal year. If an agency chooses the cyclical inventory method, the physical inventory must be completed by the end of each fiscal year.
The inventory must be reconciled to the inventory system. If items are found to be stolen, vandalized, obsolete, expired or spoiled, damaged by criminal or malicious activities, lost or misplaced, missing (cause unknown) or damaged caused by wind, fire or lightning, impaired, the Report of Adjustment to State Owned Real and Personal Property (CO-853) must be completed to document the removal of the inventory item. The item must be removed from the inventory system. If an agency finds that items are obsolete, the item must be surplused and removed from the inventory record. Follow the instructions in Chapter 9 of this Manual, Disposition of Surplus Property to dispose the items.
See Chapter 5 for the policy on conducting a physical inventory.
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