9 Steps towards a Fixed and Mobile Asset Inventory Audit
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- Review Contract Requirements / Regulations – such as internal contract and program requirements, federal acquisition regulations, as well as reference documents. While reference documents may not be compliant to your contract, they remain good sources of information for procedural best practices and process reviews.
- Review the Items to be Inventoried and Processed – First, determine whether you will be conducting a material or equipment audit. Next, obtain a master inventory list from the centralized database in your asset management software, and then establish a property baseline from which to compare audited assets. Next, identify warehouses or building sites and locations where the assets are currently located. Finally, establish a time frame for the inventory audit and assign a team leader to ensure the audit is successfully accomplished within those parameters.
- Select the Desired Inventory Method and Data to Review – This is key to the overall success of the audit, and there are several types of inventory methods: pre-inventory location survey (PILS), ensures storage areas and locations are identified, labeled, and numbered correctly; Wall-to-Wall (WtW) a manual audit of every single asset conducted by a team-member with a bar-code scanner (due to the risk of human error WtW inventories should be reviewed and reprocessed with second counts (two or more auditors), several times to ensure accuracy; Random Samples / Spot Inventories involve a sampling of asset pools to maintain records; Inventory by Exception utilizes current legacy data such as maintenance and custodial records to assess the condition of the asset inventory.
- Review Procedures / Training – Develop or obtain (then maintain) written physical inventory procedures with checklists that document the audit process and clearly establish audit policies and standards. This will hold employees to a higher level of accountability and help to ensure the accuracy of the inventory audit.
- Develop Schedules / Plans – Develop schedules to accurately and realistically establish time frames for the audit’s completion. Schedules should reflect first and second counts.
- Establish a Team Leader / Build an Inventory Team – Assign a point-person, one who is knowledgeable of the audit process, to lead the physical inventory team. Considering that inventory team members may require training and additional supervision during the audit process, the team leader should have excellent and should have the authority to set directives, such as the need for additional counts.
- Review Your Asset Management System to Data Consistency – The key to an effective audit is to maintain a centralized data base with accurate asset data. This will ensure that comparison made to the established baseline inventory will be reliable. Measure the results against the baseline and calculate the accuracy to produce quantifiable metrics that the decision makers can use to gain total asset visibility.
- Review with Management –Management’s support of the auditing process is critical. Maintain open lines of communication between the team leader and management to establish priorities and create total asset visibility.
- Review Reporting Discrepancies – Conduct ad-hoc reports that detail the adjustments made. These reports should detail loss of or damage to assets, identifying the assets with an explanation of the circumstances and offering corrective actions. The team leader or management team must then determine whether the loss or damage to the given asset is below company standards after which they should: develop corrective action plans to prevent reoccurrence; provide additional training to personnel; update procedures.