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Office of Internal Audit
PO Box 1510
Pembroke, NC 28372

Phone: 910.775.4403
Fax: 910.521.6176
Email: larry.jacobs@uncp.edu

Location: Lumbee Hall, Room 324
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inventory cycle

Name:
Title:
Phone Number:
Department:
Date Submitted:
Form:  Inventory Cycle           Fiscal Year-End: 2005

A. Control Activities / Information and Communication
Yes N/A No
1. Is there a formal organizational chart defining the responsibilities of ordering, accepting, approving, processing and recording of the inventory?
2. Are policies established to ensure that inventories are not stockpiled or to prevent over-ordering?
3. Are policies established to ensure that adequate provision for surplusing or disposal of obsolete and inactive items in inventory?
4. Are steps documented to ensure that goods received are accurately counted and examined to see that they meet quality standards?
5. Does the agency maintain perpetual inventory records and are all inventory items put on the perpetual inventory system?
6. Are written instructions given and explained to all personnel involved in the physical count of the inventory?
7. Is there a proper cut-off of receipts and issues from inventory at year end?
8. Is the accounting department notified (by issuing a receiving report) immediately upon the receipt of goods?
9. Are entries to perpetual inventory records made timely upon the receipt of goods?
10. Are receiving reports or vendor invoices used to record purchases to the perpetual inventory records?
11. When issuing inventory, is the proper fund, purpose, and object charged in the general ledger?
12. Are the following duties generally performed by different people:
a. Receiving and issuing inventory and the operational duties?
b. Receiving and issuing of inventory and taking the physical inventory?
c. Receiving and issuing of inventory and the approving of expenditures, recording transactions in the general ledger, and reconciliation of subsidiary records to control accounts?
13. Is a definite responsibility designated for each inventory type?
14. Are work orders or requisitions required to be approved by appropriately designated officials as a basis of issuing inventories?
15. Are adjustments to inventory records approved by a properly designated official?
16. Is there adequate physical security surrounding inventories?
17. Is access to inventory locations limited?
18. Is there enough insurance for significant inventories?
19. Are all employees responsible for inventories adequately bonded?
20. Does the person receiving the goods sign the requisition as evidence of receipt?
21. Are the approved and completed requisitions kept on file?
22. Are physical Inventories:
a. supervised by someone independent of the custodial or record keeping functions?
b. made by or tested by employees independent of the department being inventoried?
c. recorded on permanent inventory count sheets?
d. re-recorded on count sheets signed and dated by the person supervising the count?
e. planned to provide provisions for cut-off of receipts and issues?
f. reflected in the perpetual records based on the actual inventory quantities?
23. Are prenumbered tags used during the physical inventories count?
24. Is access to the perpetual inventory records limited to authorized individuals?
Comments for section A. (please specify question number)
B. Monitoring
Yes N/A No
25. Is a physical inventory taken at least annually?
26. Are perpetual inventory balances reconciled against the general ledger control accounts at least annually?
27. Does management periodically check inventory reports/records?
28. Are deviations of reports followed up by management in a timely manner
29. Does management assess inventory policies and procedures periodically?
Comments for section B. (please specify question number)

By clicking the Submit button, I do hereby certify, to the best of my knowledge, that the answers provided in this self-assessment of internal control is a true representation of the operations of this department.

Updated: Friday, July 22, 2005

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PO Box 1510 Pembroke, NC 28372-1510 • 800.949.UNCP (8627) • 910.521.6000