IB 505.01 Inventories - Warehousing
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Effective Date: April 1, 2016
Applicable FAM Policies: 505 - Inventory Management
Applicability: GNWT Departments
INTERPRETATION
The Department of Infrastructure is responsible to warehouse common use inventory and surplus goods for the Government. It warehouses commonly used commodities in a revolving fund inventory, from which departments purchase in bulk quantities. Departments may independently warehouse goods that are unique to their own programs.
Infrastructure is responsible to:
- review inventory regularly and maintain stocks at acceptable service levels;
- maintain the revolving fund inventory control in accordance with standard and proper warehousing practices;
- reconcile the revolving fund inventory control system with the General Ledger of the Government on a monthly basis;
- conduct an annual stock taking (to be observed by an independent observer appointed by the Comptroller Genera or delegate), reconcile inventory to the General Ledger of the Government, and adjust perpetual inventory records; and
- manage the disposal and write-off of surplus stock.
Recording Inventories of Materials
The Government shall operate a perpetual inventory system for all common usage warehousing operations. All entries in the perpetual inventory system are recorded in a control account in the General Ledger. These entries include the costs of all goods receipted and issued, the quantity shortages or overages identified through physical stock counts, and the deletions of obsolete, damaged or excess stocks.
Valuation of Inventories of Materials
The cost of purchases (excluding freight) will be charged against the appropriate account.
Stock issues must be:
- priced by the moving average method;
- charged back to user departments; and
- credited to the appropriate account.
Inventory Shortage and Overage
Adjustments to inventory for shortages or overages must identify the type of discrepancy as:
- physical count differences; and/or
- pricing and extension differences.
- shortages shall be charged to an appropriation and overages credited to a revenue account.
Inventory adjustment transactions must have the following approvals:
- up to $50,000 approved by the Department Head; and
- $50,000 or more approved by the Financial Management Board.