COM 0109.001 2016-2018 - Laserfiche WebLink

Home

Audit Results Internal controls over the inventory management system are inadequate causing inaccurate inventory and inventory records. The purpose of the County's inventory management system is to maintain continuous inventory records, track County -owned or controlled equipment, materials, tools and supplies, and dispose of property not needed by any department. County policies and other documents define the inventory management system and establish the rules and guidelines employees must follow to maintain a continuous inventory system. Internal controls are broadly defined as a process to minimize risk that is implemented by management. They are designed to provide reasonable assurance on the effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations. Internal controls can help achieve performance measures and prevent loss of resources. An organization's internal control structure over inventory management should include the following elements: • Segregation of Duties. Duties should be segregated among employees so that errors and irregularities made by one employee are difficult to conceal. Duties that include record keeping and accounting reports should be separated from those with operations or asset custody. • Independent Review and Monitoring. Management should document their review and approval of critical tasks performed by employees. They should not review and approve their own work. Management should take prompt corrective measures when deficiencies or errors are discovered. • Evaluate Count Results. Management should assess the results of the physical count using performance measures in determining the accuracy and completeness of the physical inventory and inventory records. • Physical Safeguarding of Assets. Assets should be physically protected from loss, unauthorized use, or disposition. • Written Policies and Procedures. Policies and procedures should be approved by management, cover all aspects of operations, be sufficiently detailed, and be distributed to staff. In addition, ongoing monitoring is necessary to ensure policies, procedures, and internal controls remain effective and efficient as operations change. The Department of Finance's Accounting Manual requires each County department to establish and maintain adequate internal controls to ensure inventory is properly recorded, accounted for, DPW Highway Maintenance Division Inventory Management: Audit Results 19