Inventory & Capital Asset Management

 

  • All transactions are made and approved by authorized individuals.
  • All inventory items are subject to effective custodial accountability procedures and physical safeguards.
  • All receipts and withdrawals of inventory are properly recorded, and the records reflect actual quantities on hand and that the receipts and withdrawals are made by authorized individuals.
  • All capital asset transactions are initiated by authorized individuals in accordance with established criteria.
  • Advance approval is obtained for all significant capital asset transactions.
  • Adequate project cost records are maintained, and in-progress and completed project reports are issued.
  • All capital assets are accurately recorded in detail records, which are compared with existing assets at reasonable intervals.
  • All capital assets are adequately safeguarded.
  • All capital assets transactions are properly accumulated, classified and summarized in the general ledger accounts.

  • Equipment or other assets can be used without authorization. 
  • Fictitious purchases or payments are made to contractors or suppliers, with or without kickbacks to employees.
  • Assets are physically lost by employees or outsiders through inadequate security or insurance coverage.
  • Actual costs exceed projected amounts; overpayments are made to contractors.
  • No basis exists for comparing actual usage with expected usage, resulting in the inability to determine material reorder points.
  • Financial statements are misstated or inaccurate; losses, shortages, or material defects in reported assets are concealed.
  • Conflict of interest exists for vendor purchasing arrangements.
  • Expenditures in excess of originally approved amounts without authorized review and/or approval
  • Costs are miscalculated between capital and operating budgets.
  • Assets are disposed of without authorization, or proceeds are diverted from sales of assets.
  • Obsolete or otherwise nonproductive assets continue to be owned and insured.