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Warehouse Operation (Internal Audit Issues)
Transcript of Warehouse Operation (Internal Audit Issues)
Segregation of duties
Revolving fund for projects are with the custody of the Purchasing Manager.
Internal Audit Issues
Travels to Clients
How do we fix this?
Receiving of inventory from the suppliers, recording in the APPS System, and releasing of inventories are done by the Warehouse In charged Lonie Pacnis.
Lack of systematic procedure in custody, monitoring and authorization for inventory items.
The material request form is without the Team Leaders signature. And the material/ items needed for fabrication is picked up in the releasing area by the worker.
Material Request Form
SPACE AND SAFETY
Currently the space in the warehouse are not yet occupied for maximization, since the place is just new and needs a better plan for proper movement of goods.
Presence of third party personnel in the area adds risk to inventory losses
Management must create a systematic inventory management system taking into account:
1. Physical asset custody
2. Monitoring of the in and out of the inventories
3. Authorization procedure
Physical custody should have specific identification for each item with that matches with the record.
Departmentalization of the inventories will be helpful in monitoring inventory for valuation and identification
Material request form should be duly signed by the team leader. Team leader should attach the copy of the material request marked as 'issued' in the copy of the cost estimate.
Effective warehouse layout will increase efficiency in inventory movements and personnel movement.
CCTV cameras may mitigate the risk posed by the existence of increasing 3rd party personnel in the area.
SPACE AND SAFETY
Inventory Control Responsibility
Purchasing naturally has vest interest in inventories.
In effect the responsibility cannot be kept in one head since inventory management is an integrated effort.
Inventories are economic importance to finance department.
The fact that materials must be moved from one place to another is of importance to warehouse department.
INVENTORY OF SCRAPPED ITEMS
Inventory Count Observation
Pre-count of inventories in the warehouse has not been done.
Proper assignment of persons to do the count.
Month end of July 2013
PYR's are reviewed and approved by the Vice President Miss Thessa Paulino.
Persons in charge in the custody of inventories (WIC) do the inventory count.