7450 - INVENTORY PROCEDURE

Mason Consolidated Schools

Administrative Guidelines

7450 - INVENTORY PROCEDURE

	A.	General Procedure for Consumable Inventory
		In order for the District to meet requirements for preparing GAAP (Generally Accepted Accounting Procedures) basic financial statements, it is necessary to conduct an annual inventory of consumable supplies and materials on hand at fiscal year end, June 30th.
		The Physical Inventory Area Supervisor for each building/department will be the principal.
		Inventory sheets will be provided by the Business Manager's office and will include:
		Date
		Building/Department
		Item Description
		Part #/Catalog #
		Quantity
		Unit Cost
		Extended Cost
		Grand Total Cost
	B.	Responsibilities of Physical Inventory Area Supervisor

		1.	To supervise the inventory for a specific location.
		2.	To ensure that qualified stock counters and sheet writers are available for the inventory period.
		3.	To serve as the contact with the Business Manager's office during the inventory.

Action to be Taken (Pre-Inventory Planning)

		1.	Select a sufficient number of inventory stock counters, sheet writers, and if necessary, material handlers to complete the inventory within the allotted time period. Provide the inventory crew with instructions on completing the inventory sheets.
		2.	Determine that people involved with inventory are qualified.

			a.	Counters: Employees should be familiar with the stock and with the part/supply numbering system. If possible, they should have prior inventory experience.
			b.	Writers: Employees should have legible handwriting.

		3.	Arrange so that areas subject to inventory are clean and that stock is arranged in an orderly and accessible manner. All scrap should be removed to a separate section and clearly identified.
		4.	Issue instructions that operations, when possible, will cease and no stock will be moved during the inventory recording period. In areas where movement of inventory is anticipated, schedule counting of items to be as least disruptive as possible. Consequently, count high moving items last and slow moving items first. Areas where work must be continuous should be noted to the inventory controller, and records kept of counted inventory used until verified and released.
		5.	Advise all inventory participants that their work may be subject to verification by State Auditors.
		6.	If perpetual records are used, make sure that all postings are current. Auditors may wish to test the accuracy of perpetual records prior to the actual inventory.
		7.	Meet with inventory crews to do the following:

			a.	Give specific area assignments to the inventory crews so that physical boundaries are clearly identified. This will avoid overlapping or failure to cover an area.
			b.	Remind inventory crews not to destroy sheets but rather to void them in case of error.
			c.	Remind inventory crews not to borrow inventory sheets from each other.
			d.	Advise inventory crews their count is being audited, so accuracy is important.
			e.	Review with the inventory crew the procedure for preparing inventory sheets. Stress accuracy of the counts.
			f.	Remind writers to repeat all information back to the counters to get an immediate double check that the information is correct.

Actions to be Taken (During Inventory)

		1.	Issue inventory sheets and record to whom issued. REMEMBER - ALL SHEETS MUST BE ACCOUNTED FOR!
		2.	Analyze each area with the inventory crew and determine the best course to follow.
		3.	If necessary, request office personnel to provide aid in getting adequate descriptions, units of measure, and pricing information.
		4.	Check to see that all completed inventory sheets are accounted for.
		5.	Assign personnel to cost each item, extend cost, sub-total each page, and grand total on final page. This procedure should be spot checked and verified by Inventory Supervisor.
		6.	Return all (used and unused) inventory sheets in numerical sequence to the Business Manager's office no later than the scheduled completion date.

Exceptions to above procedures

Buildings and Grounds Department

			a.	Inventory conducted by building location.
			b.	A threshold of $500.00 may be lowered at the Board's discretion to include certain items determined to be necessary to include in inventory.

		2.	Food Service
			Donated commodities should be recorded and costed separately from balance of supply inventory.
		3.	Transportation

			a.	The Director of Transportation is to provide a list of specific supply and repair items to be inventoried due to accumulated value of parts on hand necessitated by summer repair schedules.
			b.	All fuels (gas and diesel), oil, etc. are to be reported.

	F.	Follow-through procedure
		Upon completion of the inventory process at the Building/Department level, return all consumable inventory sheets to the Business Manager's office. After verification by the Business Manager's office, the District Consumable Inventory Fiscal Year End Report will be compiled and a request sent to the State Auditors for observation and verification of the inventory. Each building/department will be apprised of this schedule and upon verification by the auditors, the inventory process will be complete for that fiscal year.
	G.	New Equipment Inventory Control Procedures
		All equipment with a value of $500.00 or more is to be given an inventory number and recorded on the New Equipment Inventory listing located in the Business Manager's office.

		1.	Remove equipment from the shipping container. Inspect it to be sure all parts have been received and are in good condition.
		2.	After inspection, an inventory ID Number should be attached. These numbers are to be issued in sequence, by the Business Manager. The sticker should be attached as close as possible to the serial number, without covering any information pertinent to the repair or replacement of the equipment.
		3.	All information pertaining to the equipment, i.e., item, serial number, vendor, date of purchase, cost, building located in, room located in, maintenance agreement, etc. should be recorded on the new inventory listing.
		4.	The listing is presently recorded on a bar code sticker. It is located on a floppy disk and backup in the storage box in file folder "Equipment Inventory," with a file name of "New Equipment."
		5.	All information should be submitted to the Business Manager for placement in the "New Equipment" file.

Textbook Inventory Procedures

		1.	All nonconsumable textbooks, teachers editions of textbooks, and reference books that are not controlled by the library, are to be stamped and numbered.
		2.	Hardback Textbooks and Teacher's Editions

			a.	Each book is stamped with the school or District name on the inside front cover and on any page in the middle of the book.
			b.	Numbering is done on the inside front cover and contains the year purchased and the book number. (Example: 96-0, 96-2, 96-3) Each book title will receive its own set of sequenced numbers.

Paperback Books

			a.	Because of the small print, paperback books are stamped and numbered on the inside front cover only.
			b.	Once the books are received, all pertinent information concerning the purchase is recorded in the "Textbook Inventory" file located in the principal's office. Information such as title, publisher, cost, building and teacher, and copyright are recorded.

At the end of each school year, a new inventory report is sorted by school and teacher and sent to the respective school. Each teacher updates and returns his/her report to the principal to update the records. Reasons for most changes are replacement of texts with a new edition or a destroyed or lost book. Each teacher is also to submit Form 5513 F1 - Textbook Condition, indicating the condition of each textbook issued to students.

	I.	Workbook Inventory Procedures
		As workbooks are received, they are entered in the "Workbook Inventory" file located in the principal's office. Information such as supplier, cost plus shipping, building, etc. is to be recorded.
		Workbooks are to be stamped or marked in any way with District identification.