Scribd
Upload
2K views

Sample Memorandum Invtry

This document provides guidelines for conducting an annual physical inventory of property, plant, and equipment (PPE) for a government agency. It outlines the objectives to validate existence, check records, determine condition, and update PPE records. An inventory committee will be formed including members from accounting and property divisions. The committee is responsible for verifying existence, reconciling records, and submitting a final report. The procedures describe identifying equipment, conducting the physical count, and reconciling results to accounting records. The committee must prepare and submit inventory reports to the agency head and auditor by the specified deadline.

Uploaded by

Arlea Asenci
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
2K views

Sample Memorandum Invtry

This document provides guidelines for conducting an annual physical inventory of property, plant, and equipment (PPE) for a government agency. It outlines the objectives to validate existence, check records, determine condition, and update PPE records. An inventory committee will be formed including members from accounting and property divisions. The committee is responsible for verifying existence, reconciling records, and submitting a final report. The procedures describe identifying equipment, conducting the physical count, and reconciling results to accounting records. The committee must prepare and submit inventory reports to the agency head and auditor by the specified deadline.

Uploaded by

Arlea Asenci
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

(SAMPLE MEMORANDUM)

NAME OF THE AGENCY

I.Rationale:

Property, Plant and Equipment (PPE) generally constitute a significant portion of the total assets of
the government, usually comprising more than fifty percent thereof. The existence of enormous
amounts of discrepancies in PPE account balances of government agencies has become a perennial
issue and caused the non-establishment of the accuracy of the PPE balances presented in the financial
statements. Such condition, if not properly addressed would always cause an exception in the fairness
of presentation of the financial position of government agencies and will deprive the government of
reliable and useful information in decision-making and accountability for these assets

In all cases, Chief of agencies are required to take physical inventory of all the equipment and
supplies belonging to their respective offices at least once a year. The conduct of physical inventory of
properties and equipment is one way of attesting the physical existence of properties and serve as a
basis for preparing accounting reports, and is vital in the planning of additional acquisitions. Thus,
Commission on Audit Circular 2020-006 provide guidelines and procedures to assist government
agencies in coming up with reliable PPE balances that are verifiable as to existence, condition and
accountability.

II.Objectives:

1. To validate the existence of properties and equipment;


2. To check the integrity of records of stockpiled items;
3. To determine the conditions and functionality of properties and. equipment; and
4. To update records on properties, and equipment

III. Composition of the Inventory Committee

1.
2.
3.

Section 5.2 states that the Head of the Agency shall create an Inventory Committee composed of
adequate number of members to be able to complete the physical inventory in three months or less.
The Inventory Committee shall have at least one member each from the Accounting and Property
Divisions/Units of the agency.

The Field Office Director may appoint additional members if necessary. The inventory taking activities
shall be also witnessed by representative/ from the Regional Commission on Audit/Field Office
Resident Auditor.

The Property and Supply Unit in the Field offices shall serve as the Secretariat to the Committee. All
the records and other pertinent documents relative to the inventory of properties shall be kept in
their custody.

IV. Functions

Once the inventory taking has started, the Committee shall perform the following functions on a "Jury
Duty" to avoid interruption of the activity:
1. Verify existence of properties and equipment;
2. Validate stock level/count of all stockpiled items;
3. Reconcile and prepare reports of discrepancies between physical count and
property records;
4. Establish accountability and responsibility over the properties and equipment;
5. Establish conditions and functionality of properties and equipment;
6. Prepare and submit the final Inventory Reports together with the recommendation
and findings to the Secretary or his/her representative in C.O. or to the Director in
FOs for approval.

V. Inventory Procedures
Prior to the conduct of the actual inventory by the Committee, a standard form on the list of existing
properties/equipment shall be filled up by each office for submission to the property office/unit for
initial assessment and study not later than June 30, 2021.

1. Conduct of Physical Inventory


The Committee is responsible for the actual count and in ascertaining the existence of all
properties/equipment on stock. The valuation and/or costing for unvalued properties shall
be the responsibility of Accounting Division/Unit.

Any adjustment of records of properties shall be done immediately by the Committee with
the knowledge and consent of the head of the office concerned

2. Date of Inventory Taking Activity

Cut off date Start of Inventory Submission of Report : June 30


Actual Inventory Date/s: _______________
Estimate submission of Revised Report: ____________

3. Documents Required as Basis of Inventory Taking Activities


a. Prior Year's Inventory Reports
b. Property Ledger Cards (PLC)
c. List of Newly Acquired Equipment/Properties
d. Property Acknowledgement Receipt (PAR)
e. Deed of donation and acceptance of donated properties
f. Other documents relevant to the inventory

4. Property Identification
The Department shall adopt a uniform identification system for easy recognition of
equipment/property/ies. The property officer shall assign a property sticker for each and
every property/equipment according to the system. The property sticker shall contain all
vital
information of each equipment/property for easy identification, as
follows:
a. Year Purchased
b. PPE sub-major account group
c. General Ledger account
d. Serial Number
e. To Whom Assigned/Location/Office
f. Space for Validation/Signature of the Inventory Committee
The codes for the PPE sub-major account group and General Ledger account correspond to
those provided in the Revised Chart of Accounts prescribed under the Accounting Manuals of
the respective Sectors (National, Local and Corporate).

5. Validation/Inventory Taking
In order to facilitate the smooth conduct of inventory, the Chairperson of the Committee
shall give specific assignment to his/her members as follows:

a. Check the property description as listed in the reference documents and state its
present condition. b. Replace the property sticker/tag.
b. List all equipment/properties that are found at the station but not listed in the
reference documents and indicate the condition of the equipment/property in the
remarks portion of the inventory sheet.
c. Sign the space provided on the sticker/tag indicating therein the date of inventory.

After the physical inventory, the inventory committee shall reconcile the results of the
activity with the property and accounting records. All discrepancies between the physical
count and records shall be reported to concerned staff/official and reconciled immediately.

VII. Preparation and Submission of Reports

Upon completion of the physical count, the Committee shall prepare the required annual or semi-
annual inventory reports. The inventory reports shall be certified correct by the Committee, attested
by witnesses from COA and/or IAS subject to the approval of the Director in FOs.

Such inventory reports shall be made in official form (GF 41(A)) and reproduced in three (3) copies.
Upon approval by the Secretary or his/her representative in C.O. and the Director in FOs, a copy of
the reports shall be submitted to the auditor concerned not later than the deadline ____________.

__________________
HEAD OF THE AGENCY

You might also like