SUBSECTION 3.1.2.2
ACCOUNTING PROCEDURES

3.1.2.2.1

Perpetual Inventories

Effective Date:

July 1, 1998

A perpetual inventory system is one in which the inventory quantities and values for all purchases and issues are recorded directly in the inventory accounts as they occur. Perpetual inventory system balances are verified by means of periodic physical counts. A revolving physical count, where segments of inventories are counted at a time, may be used provided all inventories are counted at least biennially.

The inventory officer is responsible for developing and implementing procedures for recording inventory additions as received and reductions as used.

3.1.2.2.2

Periodic Inventories

Effective Date:

July 1, 1998

In lieu of a perpetual system for inventories, an agency may at least annually at fiscal year end perform a physical count of its inventory, cost the inventory according to generally accepted accounting procedures, and adjust the accounting records to reflect this cost. This simplified method avoids the necessity of accounting for each addition to and deletion from inventory. When this method is used, the agency is to maintain a system for documenting the inventory unit costs used in determining the cost.

3.1.2.2.3

Lost or Stolen Property

Effective Date:

July 1, 1998

The following procedures are applicable regarding suspected or known losses of inventories.

3.1.2.2.3.a

A search of the agency for the missing inventory should be undertaken; if not found, then the following procedures are to be performed.

3.1.2.2.3.b

The loss procedures identified in Part 6 are to be followed when an agency determines inventory is missing.

3.1.2.2.3.c

The agency is to remove the lost or stolen items from its inventory and accounting records.