INVENTORY PROCEDURE

Roles and Responsibilities

The effective maintenance and reporting of Department fixed assets requires teamwork between offices and divisions. Roles and responsibilities are assigned as follows:

Office of Budget and Finance

Maintenance of the Inventory System computer system including; installation, security, training, and troubleshooting.

• Responsible for the accuracy and timeliness of department inventory. Will monitor entry of assets into system.
• Department policies and procedures regarding tangible personal property (equipment) and buildings.
• Department compliance with Internal Accounting Control Program (IACP).
• Annual reporting of assets to DAS.
• Bar code readers and reconciliation software.

Division and Offices

• Daily entry and maintenance of inventory in the Inventory System computer system.
• Responsible for accuracy and timeliness of division/office inventory.
• Adoption of Department policies and development of internal procedures for compliance.
• Compliance with Internal Accounting Control Program (IACP) in regards to internal processes.
• Complete physical inventory annually, may take perpetual inventory throughout the year to fulfill this requirement.

Internal Audits

• Performs random inventory audits.
• Reports inventory conditions and findings to management for review.
• Reviews fixed assets IACP for compliance.

Criteria for Inventory

The Department of Administrative Services (DAS) has established minimum reporting criteria for tangible personal property. It is the responsibility of each agency to maintain current and accurate records of all inventories regardless of the minimum reporting thresholds.

The Department has purchased a fixed asset system from Oracle Corporation. All fixed assets, with the exception of licensed vehicles, will be entered into and maintained in the Inventory System.

The Department has established the "Policy for Department Inventory" to address inventory criteria. Below is a summary of the policy as it deals with tangible personal property and buildings.

Inventory labels are self-adhesive tags or comparable electronic device used to safeguard and identify assets. Inventory labels must identify the agency and have a serialized asset ID number. The asset ID number must be in both human readable and bar code format by the close of fiscal year 1999.

All property that meets or exceeds the thresholds (cost or value) outlined above must be tagged with an inventory label, except the following:

• licensed vehicles,
• internal components of an original asset,
• items not having an appropriate outside surface area or other physical configuration to allow placement of an inventory label,
• assets subject to environmental conditions not allowing the label to remain affixed,
• modular furniture that requires attachment to other modular furniture in order to perform its intended function,
• antiques and/or museum items.

An alternative method of etching or stenciling the asset number onto the asset can be used instead of an inventory label when one of the above conditions applies.

An asset that has internal parts that are necessary to the functioning of the asset are not required to be separately inventoried, and can be considered to be all one asset (inventory record) providing the following applies:

• The internal parts are acquired to place the asset into service and function as required,
• The life and utility of the internal part are mainly dependent on that of the asset, even if the acquired dates and vendors are different for each item.
• The cost of each part is included in the aggregate total of the inventory record,
• The internal parts are included in the description of the inventory record.

Division and offices have the option of tagging items below the thresholds with a security tag. These items do not have to be entered into Inventory System. Division and offices may use Inventory System to track items under the threshold. If this is the case, an inventory label must be used in place of the security label.

Placement of inventory labels and security tags should be consistent and follow these guidelines:

• should be inconspicuous yet easily visible without moving the asset,
• should not impede regular use of the asset,
• placed on a permanent part of the asset,
• not placed on the work surface of an asset,
• Whenever possible, do not place labels on the bottom, back, or inside drawer of an asset,
• In executive areas, do not deface decor.

Asset Information

The following information is required when entering asset into Inventory System:

• Asset Number = Inventory Label Number
• Category = Auditor Codes
• Equipment Description
• Acquisition Date = Date Received
• Acquisition Code
• Condition of Asset
• Asset Cost
• Manufacture Number = Serial Number
• Voucher Number
• Accounting Information - Division, Fund and SAC
• Assignment Information - Division, Location, County

The following information is optional when entering asset into Inventory System:

• Federal ID#
• Vendors Name
• Manufacture Name and Model
• Vendor Invoice Number
• Purchase Order Number
• Accounting Information - Grant, Program, Activity, Project, Subproject, and Accounting Location.
• Assignment Information - Employee Name and Number (Contact Oracle Asset Administrator - this information requires a table for validation).

Divisions and offices are free to design and use their own forms to collect and enter fixed asset data.

Addition of New Assets

The following procedures should be used when a new asset has been acquired from purchase, leases, donation, confiscation, or transfer from another state agency.

1. Receive new fixed asset.
2. Tag fixed asset with inventory label as-soon-as possible not to exceed 3 working days of receipt.
3. Record necessary information about asset. Divisions may use department's form or develop their own form.
4. Forward packing slip and information:

1. to payment section, payment forward to inventory section, or
2. forward copy of voucher and inventory information to inventory section

1. Enter fixed asset information into Inventory System as-soon-as possible not to exceed 5 working days of receipt of information.

Transferring Assets

The following procedures should be used when transferring assets from one division to another.

1. Complete hand receipt. Divisions may combine the addition form and the hand receipt into one form.
2. Both transferring and receiving division's representatives sign receipt.
3. Transferring division enters transfer information into Inventory System as-soon-as possible not to exceed 5 working days of transfer.
4. Receiving division checks Inventory System for transfer.
5. Both divisions must maintain written copies of hand receipts.

Retirements

An asset is retired or disposed of when it no longer serves its intended purpose. This can result from technological advances, wear and tear, and destruction through natural causes and theft. In some cases, fixed assets no longer used by an agency may be transferred to another agency. A fixed asset should be reported as "retired" if it is:

• salvaged, sold or auctioned,
• donated, traded or transferred to another state agency,
• lost, stolen or destroyed,
• scrapped, junked or cannibalized.

Retirements to State Salvage

The following procedure should be followed when sending assets to state salvage:

1. Let other divisions know items available for transfer.
2. Tag asset with Surplus Property Tag ADM 3615 .
3. Complete Surplus Property Turn-In Document ADM 1420.
4. Schedule drop off of assets with the surplus warehouse, phone number 466-7636.
5. Take assets to the surplus warehouse at 4200 Surface Rd, surplus will sign Surplus Property Turn-in Document, save pink copy for your records.
6. Send a copy of the Surplus Property Turn-In Document to the department's Fixed Assets Administrator.
7. Retire asset in Inventory System.

Cannibalized or Junked (thrown away) Assets

The following procedure should be followed when cannibalizing assets:

1. Let other divisions know items available for transfer.
2. Complete Surplus Property Turn-In Document ADM 1420 and send form to state surplus for approval.
3. Once approved, discard asset.
4. Retire asset in Inventory System.

Stolen Assets

The following procedure should be followed when assets have been stolen:

1. Contact the State Highway Patrol.
2. Complete Theft Report of State Owned Property DNR O413 and send a copy of the form to Internal Audits.
3. Retire asset in Inventory System.