Introduction to Inventory

1
Introduction to Inventory

• DE-437 (Required)

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Class Objectives

• Establish an understanding of Inventory and
  Inventorys role.
• Understand why a physical inventory is conducted.
• Recognize the importance of updating inventory
  statuses and locations.
• Understand the basic steps of performing physical
  inventory.

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Why is inventory management so important?

• Because The University of Texas at Austin has
  over 1 billion worth of assets in which to
  maintain and report to the State of Texas.

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Lets keep UT out of the headlines!
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Whose stuff is it anyway?
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Inventory Contact
Inventory Services
Property Manager
President of the University
Board of Regents
Federal Agency
Federal Government
The State of Texas
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Inventory Services Role

• Maintains equipment inventory records on shared
  mainframe database.
• Locates and tags university equipment as it is
  purchased and received by departments. For
  departments that self-tag, we use their details
  to add assets to DEFINE.
• Conducts and monitors the annual physical
  inventory cycle. Audit those reports submitted by
  the university departments.

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Inventory Services Role

• Provides inventory information and reference
  resources to department personnel.
• Reports and reconciles inventory records and
  values to
• annual financial report schedules
• state property accounting record reports
• federal agencies

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The Department Inventory Contacts Challenge

• Tracking (tagging inventory)
• Reporting (physical inventory certification)
• Relinquishing (inventory removal)

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Tracking Inventory

• What gets tagged?
• Capitalized Assetsassets whose purchased value
  is equal to or greater than 5,000
• Controlled Assetsassets whose cost is between
  500 and 4,999.99 and fall under the special
  category designated by the state

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Examples of Controlled Equipment(500 to
4999.99)

• cameras camcorders
• projectors
• stereo systems
• televisions VCRs
• computers desktop CPUs or portable laptops
• nonportable printers
• hand guns rifles, regardless of cost

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What is not controlled?

• computer-related equipment
• scientific equipment
• monitors
• servers
• hard drives
• cards
• furniture
• software
• In order to be tagged and included on your
  inventory, this equipment must be 5,000 or more
  in value (it becomes capitalized).

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Tracking Inventory

• Tagging the Equipment
• Inventory field representatives
• They are deployed automatically based on
  purchasing data.
• To request tagging, e-mail oa.inventory_at_austin.ute
  xas.edu.
• Departments that participate in self-tagging
• After tagging assets, these departments send the
  tagging detail to Inventory Services for
  processing.
• This information should be sent monthly.

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Tracking Inventory

• All capitalized or designated controlled
  assets must be tagged within 30 days of receipt.
• Any asset not meeting the controlled or
  capitalized thresholds should have a
  noninventory object code and will not be tagged
  or added to DEFINE.

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Attention Please

• Not everything is tagged however, everything is
  an asset, even if it is not in DEFINE or if it
  has depreciated to a zero dollar value.

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Reporting (Physical Inventory Certification)

• Why do we conduct a physical inventory?
• When do we perform inventory?
• How is physical inventory performed?

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Why We Conduct a Physical Inventory

• The provisions of the 52nd Legislature
• Regular Session 1951
• House Bill Number 753, Section 5 (3)
• Requires state organizations to take a complete
  physical inventory of all equipment in their
  possessions once each year
• Results reported to
• State Comptroller
• TEX.GOVT CODE ANN.sec. 403.271 (b)

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When We Perform Inventory

• Inventory Services establishes eight inventory
  cycles. Cycle deadlines are based on the number
  of items assigned to the departments.
• The FY 08-09 deadline for departments with fewer
  than 100 items is Jan. 23, 2009. All other
  deadlines will occur between February and June.
• You may begin your cycle at any time (unless you
  need to schedule a scanner), the earlier the
  better.
• Turn in your inventory by the designated due
  date.

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Before You Begin

• Update the DEFINE GG5 screen.
• Work with your supervisor and team members to
  determine which unit codes you are responsible
  for.
• Be sure that the correct inventory contact is
  listed in GG5 for all units and subunits in your
  department . If your name is listed, you are
  responsible.

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Before You Begin

• Gather materials
• current NVP report of departmental assets
• building/room list for your area
• scanner for those departments with greater than
  100 items (this has to be scheduled)
• If you have trouble obtaining an NVP report or a
  list of buildings/rooms, please contact
  oa.inventory_at_austin.utexas.edu.

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Updating GG5
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Updating GG5
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Printing an NVP report Step 1
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Printing an NVP report Step 2
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Printing an NVP report Step 3
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Printing an NVP report Step 4
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Printing an NVP report Step 5
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Printing an NVP report Step 6
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Printing NVP report Step 7

• Pick up the NVP print out at the UT Copy Center
  located at the Social Work Building Room G14.
• It is usually ready in about an hour.

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Understanding the NVP Report

• Found
• New fiscal year acquisitions are typically
  indicated as found when they are added to your
  inventory.
• Not Found (need to locate)
• Items transferred in
• Any prior-year asset acquisitions
• Items previously indicated as missing

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Institutional Research Bldg/Room List

• Go to the NMM menu in DEFINE.
• Press the SHIFT and F3 keys simultaneously.
• Select
• _ INJGBLD2 BUILDING CONVERSION REPORT -
  OLD BUILDING CODE ORDER
• or
• _ INJGBLD3 BUILDING CONVERSION REPORT -
  BUILDING NUMBER ORDER
• Pick up at the Copy Center. The same place that
  you pick up the NVP report.

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Annual Physical Inventory Process
The annual physical inventory process is a
procedure performed annually to account for
assets and equipment belonging to the university.
4. Report

• Four-Step Process

3. Reconcile
2. Scan
1. Locate
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Step 1 Locate

• Use the NVP report to locate assets.
• If you cant find an asset, look everywhere
• offices/classrooms
• labs
• closets/storage areas
• previous documentation/files
• check Request for Removal of Equipment forms
• ask coworkers or other departments

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Step 2 Scan

• When scanning barcodes during the inventory
  process, all equipment within any one room should
  be scanned. This will provide an update of the
  location to the actual equipment owners if
  another department owns it.
• Scanning an item will not change ownership.
• It will simply create a transaction line on NV1
  Screen 3 for the inventory item showing the date
  and logon ID of the person who scanned the item.

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Step 2 Scan

• While scanning, if an item is
• Found
• Continue scanning until you finish or have
  reached approximately 200 items.
• Arrange to bring the scanner in to upload data.
• Repeat this process until all scanning is done.
• Not foundNotate this on the NVP report to
  further investigate or run a new NVP after
  downloading to see what still needs to be found.

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Manual Step 2

• Departments with less than 100 items will
  complete the inventory manually.
• While searching, if the item is
• FoundMark it on the NVP report for manual
  updating in DEFINE later.
• Not foundNotate on the NVP report to further
  investigate or run a new NVP after downloading to
  see what still needs to be found.

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Additional Information 900000 Numbers

• Why are there inventory numbers on my NVP report
  beginning with 9 that are not on my equipment?
• Because of system limitations, Inventory Services
  must clear out the DEFINE NU1 screen at the end
  of the fiscal year and assign temporary numbers.

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Additional Information 900000 Numbers

• Notify Inventory Services
• If you have temporary numbers for equipment other
  than software and artwork.
• Example 988889-Dell G4 computer was tagged
  778904
• Provide Inventory Services with the serial
  number.
• Self-tagging
• Tag equipment.
• Send spreadsheet to Inventory.

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Off-Campus Equipment

• Checkout logs are required to be kept for all
  equipment located off campus. A copy of this form
  or equivalent must be kept in the department and
  with the equipment at all times.
• Note Departments are responsible for all their
  equipment, whether located on campus or off.

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Off-Campus Equipment

• Schedule a day for all off-campus equipment to be
  returned for scanning.
• Notify all staff who have equipment removed from
  campus to return those specific items on the
  scheduled date for inventory scanning.
• For a sample form, go to
• http//www.utexas.edu/business/accounting/hbp/form
  s/inv-offcampus.pdf.

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Step 3 Reconcile

• Scanning takes care of most updates. Make notes
  on the NVP report printout of updates you need to
  make in DEFINE.
• Use either NVP or NV1 to make updates.
• NVP sorts by unit code
• NV1 sorts by inventory number (more options)
• No items status should be left blank.
• Certifications will not be complete until all
  blanks are finalized with either Found or
  Missing.

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Updating in NV1

• On the NV1 detail screens,
  following fields may be updated by the
  department
• item description
• serial number model number
  (screen 2)
• building locations
• room numbers
• equipment statusfound or missing
• screen 6comments

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Updating in NV1

• Use Screen 6 to retain comments. Location updates
  for inactive equipment due to threshold
  write-offs can also be made on this screen.
• These fields should be updated if the current
  fields are not accurate.
• If you do not have update access in DEFINE, your
  electronic office manager can assist you.

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Are You Really Missing an Item?

• Before you mark that item as missing in DEFINE
  NV1
• Make sure it is not being kept off campus, being
  repaired, or overlooked in the initial scan.
• Check your department records and databases for
  possible transfers, cannibalizations, disposals,
  etc.

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Are You Really Missing an Item?

• Before you mark that item as missing in DEFINE
  NV1
• If the item you cannot find is a vehicle, please
  file a police report with UTPD. They have been
  successful in locating missing vehicles that have
  been abandoned or were impounded. Fleet
  Management requires that the police be notified
  when a vehicle cannot be located.
• If you cant locate the item, mark it as
  missing, but look for it the next time you
  perform your physical inventory.
• Remember, every item counts.

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Where on NV1 Would I Show This Item as Missing?
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Looking up a Login ID

• DPUSER
• http//www.utexas.edu/business/accounting/pubs/txm
  ail.pdf
• Example
• Screen 3 shows that a printer was last scanned by
  INCPJ in September 2003.
• You cannot find this printer, so you want to know
  who INCPJ is to follow up with him/her regarding
  this piece of equipment.
• If you follow the DPUSER instructions, you
  should be able to get the following information
• _ JACOBSON,CECILIA INCPJ INVENTORY 232-7560

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Looking up a Login ID

• What choices do I have?
• If you want the equipment back, you can retrieve
  the item.
• Transfer ownership by doing an NT1 transfer.

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View Percentage of Unfound Items

• Unfound percentage includes items indicated as
  missing or left blank. Your NVP report has a
  percentage figure at the end of the listing.
• To view your units unfound percentages without
  running a report, go to INPERC from the COMPASS
  screen.
• Press ENTER and another screen will appear.
• Type the first four digits of your unit code, and
  press ENTER.

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View Percentage of Unfound Items

• Comp Unit Unfound Unfound Depr Amt
  Total Depr Amt As of Date/Time
• ---- ------- ----------- ----------------
  -------------- ---------------
• 0 5100 99.49 150,147.27
  150,906.50 12/08/03 0048
• 0 5100000 99.49 150,147.27
  150,906.50 12/08/03 0048
• You should not have at or above two percent
  unfound. If you do, there could be a penalty
  assessed. The penalty would be assessed on the
  depreciated amount of any missing or stolen items
  with a disposal of 17, 18, 20 or 21.

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Step 4 Report

• Download Certification form.
• The Certification Form must be complete and
  signed by
• The department chair
• department inventory contact (you)
• A current and complete NVP report must be
  included with the certification form

Do you know about the Physical Inventory Kit,
FAQs, and other helpful tools on the
Web? http//www.utexas.edu/business/accounting/in

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Certification of DepartmentalAnnual Physical
Inventory

• Completed at the end of scanning your inventory.
• Must be signed by your department head.
• This process and documentation certifies that
• all items have been inventoried.
• all items are accounted for within your
  department.

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Tips, Tidbits, and Hints

• Start early.
• Keep a trail of paperwork.
• Make copies.
• Use correct inventory forms.
• Notify Inventory Services of untagged or tagged
  equipment not on DEFINE that meets the
  threshold.
• Request a new barcode when
• damaged
• worn
• missing
• will not scan
• Self-tagging, communicate New Tag info.

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Safeguarding Assets

• Be organized.
• Keep a record of off-campus
  equipment.
• Be observant.
• Frequently monitor all current assets.
• Be perceptive.
• Keep an eye on equipment awaiting Surplus
  pickup.
• Be efficient.
• Keep track of assets out for repair.

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Relinquishing Inventory(Inventory Removal)

• Transfer or Removal
• Three-Step Process
• Types of Removals

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Transfer or Removal?

• Will ownership of the property remain with the
  university?

• Yes
• Use a CCART.
• This includes donations to other departments,
  and
• Transfers to Surplus.

• No
• Submit an inventory removal request to Inventory
  Services.
• Do this before the item leaves the university.

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Surplus Property - Unit (4500-999)

• When property exceeds its life expectancy and/or
  is no longer needed, send to Surplus.
• CCART creates an NT1 Electronic Transfer doc.
• Be sure to remove insurance. For questions,
  please contact Risk Management at 471-3723 or
  e-mail oa.riskmgt_at_austin.utexas.edu.
• Erase all sensitive data from hard drives.
• Keep a list of outstanding NT1 document IDs until
  the transfer has been processed.

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What is a Removal?

• Removals do not include
• transfers to surplus.
• transfers to other departments.
• missing items.

• Removals do include
• cannibalization
• PI transfer
• stolen
• donations
• trade-in
• sale
• other

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Cannibalization

• Prior approval
• Is not required if the property value is
  depreciated to 0 and if the property is not
  federally owned.
• Is required if the property still has value.
• Is required if the property is Federally owned.
• Must be depreciated to 0 value.
• The only exception to the approval rule.
• Do not trash any spare parts.

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Cannibalization
Are parts left over?

• YES
• Remove the parts needed
• Send the excess to Surplus

• NO
• Dismantle the equipment
• Submit barcode tag with the IRR form

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PI Transfer

• Definition Principle Investigator (PI) leaves
  the university and takes research equipment with
  him/her.
• Usually involves 26-accounts.
• Transfers to other Texas state agencies require
  transfer through the State Property Accounting
  (SPA) system and may take more time and
  additional steps.
• 60 Days before the PI leaves, submit the IRR and
  letter of justification.
• A PI is never allowed to take equipment without
  prior approval from the property manager.

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Stolen

• File police report immediately.
• Complete an IRR form with the authorized
  signature of department.
• Prepare letter of justification.
• Submit all of the above to the Inventory Services
  mail code K5306.

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Donations

• Donations to other Texas state agencies
• Processed through the State Property Accounting
  (SPA) system.
• May require more processing time.
• Donations to non-state agencies
• In-state require certificate of eligibility from
  the Texas Facilities Commission.
• Out-of-state
• Similar documentation must be provided.
• Only nontechnology items are allowed.

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Donations

• Technology Equipment
• State law mandates priority.
• school districts
• Texas correctional institutions
• Hard drives must be cleaned.
• Verification must accompany the IRR form.

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Traded-in

• Notate on the P.O. of the new item
• inventory number
• serial number
• trade-in value
• type of trade-in
• even trade
• discount
• upgrade
• Note
• Proper processing should not require a removal.
• If trade-in is not recorded properly, complete an
  IRR form and submit to Inventory Services.

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Sale

• Should go through Surplus
• Unless there are extenuating circumstances.
• Departments can request that proceeds from sale
  be deposited into their account.
• Sales outside of Surplus
• Submit an IRR and letter of justification.
• Approvals must be granted before the sale is
  conducted.
• A copy of the check used for payment must be
  submitted to Inventory Services.

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Other

• Returned to vendor
• Damaged items or items returned to vendor for
  some other reason.
• After returning it, submit an inventory tag.
• Returned to the agency sponsoring a project
• grants
• military
• contracts
• Anything that doesnt fit previously covered
• Submit as much documentation as possible

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Step One Approval

• Before disposing of university property, approval
  must be granted by the property manager.
• Submit the inventory removal form and all
  necessary documentation to Inventory Services.
  The form is available at http//www.utexas.edu/bus
  iness/accounting/forms/inv-remove.pdf

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Inventory Removal Request Form

• 1. Department name and unit code
• 2. Equipment to be removed
• Inventory Description Purch.
  Date Cost Depr. Value
• 3. Reason why removal is requested
• (see instructions on page 2 for further details)
• Stolen
• Cannibalization
• Donation
• Sale/Sealed Bid/Auction
• P.I. Transfer
• Other Please explain
• 4. Department Signatures Approval Signatures
• ______________________________ ___________________
  ____
• department chair inventory supervisor
• ______________________________ ___________________
  ____
• department inventory contact property manager

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Step Two Removal of Property

• After receiving approval from the property
  manager, you may remove the property.
• Be sure to document the removal. Get Receipts.

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Step Three Removal from DEFINE

• Inventory will remove items from DEFINE after
• documentation has been submitted.
• sales receipts have been received.
• the property manager has approved.
• Note Submit receipts to have the item removed
  from your inventory list within 30 days.

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Inventory Services

• University of Texas at Austin
• Main 132
• Phone [phone]
• Fax [phone]
• Assistance hours 10 a.m.-noon 2-4 p.m.
• oa.inventory_at_austin.utexas.edu
• http//www.utexas.edu/business/accounting/in/