2. Physical Inventory Why? 1 Barbara A. Finnegan, CPPM CF

3. Physical Inventory Why? Agenda Purpose of a Physical Inventory Value of a Physical Inventory Discuss Outcomes Methods Physical Inventory Plan Reconciliation Summary Questions 2 Barbara A. Finnegan, CPPM CF

4. Physical Inventory Why?  Its the method by which an organization, corporation, university etc test the accuracy of their property records (Property Business System (PBS))  Accuracy of the PBS meets the following business and legal requirements Financial Sarbanes-Oxley Government Account Standards Board (GASB) Federal Acquisition Regulations (FAR) Contract Corporate Policies and Procedures State and County Regulations (property taxes and income tax) Department of Transportation Insurance Reports 3 Barbara A. Finnegan, CPPM CF

5. Physical Inventory Why? 4  What is the value of a Physical Inventory Its the best method of determining health measures of the property management system/PBS: Significant discrepancies may indicate: Theft, Poor Security Inadequate documentation Locations errors may indicate: Movement issues Poor recording keeping Poor Training or communication Barbara A. Finnegan, CPPM CF

6. Physical Inventory Why? 5  Value of a Physical Inventory (Continued) Identifying property not posted to the management property system may indicate: Inadequate interfacing with procurement Failure to report acquiring property by the users Unlocated property at the conclusion of the inventory reconciliation may indicate: Movement Issues Disposition Issues Lack of training or communication concern the care of property Barbara A. Finnegan, CPPM CF

7. Physical Inventory Why? 6  Value of a Physical Inventory (Continued) Outcomes from performing an inventory Verification of Property Management Property Records Utilization ( is the asset being used) Maintenance ( verify calibration, proof loading stickers) Organization can more confidently do contingency or capacity planning Validation of computer system configuration Barbara A. Finnegan, CPPM CF

8. Physical Inventory Why? 7  Value of a Physical Inventory (Continued) Note that the value gained from a well-managed physical inventories conducted at the appropriate intervals will usually far out weigh their cost and the disruption caused Barbara A. Finnegan, CPPM CF

9. Physical Inventory Why?  Inventory Frequency Depends on type property Depends on regulations and contract Depends on Hazard and Security Requirements  Types of Frequencies of Inventory Periodic Continuous ( inventory by exception) Annual (calendar/or 12 Months (Fiscal)) 8 Barbara A. Finnegan, CPPM CF Customer and Capital

10. Physical Inventory Why?  Types of Frequencies of Inventory Periodic Continuous ( inventory by exception) Annual (calendar/or 12 Months (Fiscal))  Types of Inventory Methods Cyclical Inventories Contract Termination Wall-to-Wall ABC Inventories Statistical Samplings 9 Barbara A. Finnegan, CPPM CF Capital Customer Property

11. Physical Inventory Why? A detailed, specific plan is most critical to a successful inventory. Without a detailed plan with specific objectives the inventory will probably not be successful. 10 Barbara A. Finnegan, CPPM CF Customer and Capital

12. Physical Inventory Why?  Inventory Plan Specific inventory objectives Specify type of property to be inventoried Inventory time frame, start and completion date. Method of performing the inventory Identify personnel performing the inventory and provide the details of the plan. Identify the inventory strategy Identify the information to be collected during the inventory 11 Barbara A. Finnegan, CPPM CF Customer and Capital

13. Physical Inventory Why?  Inventory Plan (continued) Shall accommodate daily schedules Data load and upload strategy Controls to be put on items being inventory Shall a method to reconcile discrepancies Contingency plan to react to movement of property and personnel; change in personnel etc. Strategy for assuring record update accuracy Inventory planners should arrange to meet with coordinators and inventory takers, users in the and supervisors as necessary during the inventory plan process to get agree on the plan and schedule. 12 Barbara A. Finnegan, CPPM CF

14. Physical Inventory Why?  Inventory Plan (continued)  Conducting the inventory based on the Plan  Reconciliation Most important Phase Notification of the accountable organization and posting of items not found Second attempted to locate the missing property An inventory is used as a corrective action tool. Report results of the inventory 13 Barbara A. Finnegan, CPPM CF

15. Physical Inventory Why?  In summary Is a necessary burden on the property manager A successful inventory is an accurate and, efficient property management system. Purpose/Goal of a physical inventory is to ensure that a the assets recorded in the property system physically exist; identify unrecorded or improperly record transactions; to identify excess; defective or obsolete assets 14 Barbara A. Finnegan, CPPM CF Customer and Capital

16. Physical Inventory Why? 15 Barbara A. Finnegan, CPPM CF