the municipal secretary desktop reference manual - Southwestern ...

NOTES
MUNICIPAL INVENTORY SYSTEM *
apply:
An inventory control system is viewed as necessary when any of the following conditions
! Materials are purchased in large quantities to secure better prices
! Materials are used in more than one department
! Materials are used for both maintenance and construction activities
! Materials are vital to maintain service and care must be exercised to avoid an
oversupply or out-of-stock condition
Although there are these benefits to be gained from an inventory control system, it must
be recognized that the system's establishment and maintenance is a cost to the administration. It
is a cost which should be avoided, but without sacrificing any benefits. This is possible when:
- materials and supplies are to be used in one program and are chargeable to a single
departmental account;
- vendors who were successful bidders can supply materials as needed and within
required time frames;
- contracts are written on Aan as needed@ basis, with vendors being required to maintain
and store the necessary supplies and materials; and
- the value of supplies or materials is small.
Even though there may be no need to have an inventory control system, a municipality
must still take appropriate steps to protect and safeguard municipal assets from the weather,
thievery and misuse.
An inventory control system generally involves the following procedures:
Step One
Step Two
Maintaining perpetual inventory records
Controlling and reordering supplies and materials
Step Three Receiving materials and supplies
Step Four
Step Five
Step Six
Issuing materials and supplies
Inventorying of materials and supplies
Accounting for materials and supplies
* Adapted from An Accounting Handbook, Municipal Finance Officers Association
(now the Governmental Finance Offices Association).
XII-24