SUBSECTION 3.2.2.3
PHYSICAL INVENTORY PROCEDURES

3.2.2.3.1

Frequency

Effective Date:

July 1, 1998

Physical inventories are to be conducted no less than once every two years for inventoriable fixed assets (refer to Subsection 3.2.1.2.11.b for artifacts and library resources).

3.2.2.3.2

Responsibility

Effective Date:

July 1, 1998

In order to ensure objective reporting of inventory items, physical inventories are to be performed by personnel having no direct responsibility (custody and receipt/issue authority) for assets subject to the inventory count. If the use of such personnel is not feasible for any part of an inventory, then those portions are, at least, to be tested and verified by a person with no direct responsibility for that portion of the inventory. (Refer to Subsection 3.2.1.2.11 for additional information.)

3.2.2.3.3

Instructions

Effective Date:

July 1, 1998

3.2.2.3.3.a

Written physical inventory instructions are to be developed, distributed, and explained to each person participating in the inventory process. They are to include directions as to how and where each item counted is to be recorded, what information is to be recorded, what to do when they have a question, what procedures are to be followed when they finish their assignments, and what procedures are to be followed when equipment is located but is not listed. The person counting the assets is to attest to the accuracy of the count by signing his or her name at the bottom of each inventory page.

3.2.2.3.3.b

Provision is to be included in instructions for the conduct of an inventory of fixed assets to record assets not being used or in an obviously unserviceable condition. Such information is to be used to schedule repair or disposition of such assets. (Also refer to Subsection 3.2.1.3.2.)

3.2.2.3.4

Reconciliations

Effective Date:

July 1, 1998

3.2.2.3.4.a

After the physical count is completed, the reconciliation process is to be performed by the inventory officer. Reconciliation is defined as the process of identifying, explaining, and correcting the differences occurring between the physical count and the inventory records. When all differences have been identified, and explained, the inventory is considered reconciled.

3.2.2.3.4.b

During the reconciliation process, the inventory lists are to be searched to determine whether inventory noted during the count as unrecorded is, in fact, listed on another portion of the inventory. Unrecorded assets are to be entered into the inventory system as soon as possible after discovery. If a significant number of unrecorded assets are located, indicating a major problem with the asset recording procedures, the inventory officer is to determine why the problem is occurring and correct it. Also, during the reconciliation process, a search is to be made in an effort to locate missing assets. For those assets not located, inventory officers are to follow procedures outlined in Subsection 3.2.2.2.3.

3.2.2.3.4.c

After the inventory is reconciled, the inventory officer is to certify the reconciliation with a statement and signature that it is correct and report this to the supervisor. If the certification cannot be made, the inventory officer is to disclose that fact and the supervisor is to determine the appropriate course of action.

3.2.2.3.5

Filing

Effective Date:

July 1, 1998

The certification, together with the reconciliation and the inventory listing, serves as the basis for accounting adjustments and is to be retained by the agency as documentary support for, and part of, its inventory. This documentation is to be retained in accordance with the approved agency records retention schedules.