1. COUNCIL FOR SCIENTIFIC
AND INDUSTRIAL
RESEARCH
STORES/INVENTORY MANAGEMENT
26TH JULY, 2016
PAUL FABALONA, CA, MBA
HEAD OF CORPORATE FINANCE
2. INTRODUCTION
Accounting for Government Stores
CSIR/Government stores are made up of supplies of
consumable and non consumables which are received,
stored and available for issue.
Features of CSIR/Government store are
They are physically visible
They are movable
They are available for use
Exclude scraps, obsolete and unserviceable item.
3. INTRODUCTION
CSIR as a public organisation must
maintain a system of control over
the ACQUISITION, RECEIPT,
CUSTODY, CONTROL, ISSUE and
DISPOSAL of Government stores.
4. DUTIES/RESPONSIBILITIES OF PUBLIC
OFFICER IN CHARGE OF STORES
Public officer in charge of stores has the following responsibilities:
To exercise general control over all activities in Stores Section
To ensure safe keeping both as to quality and quantity of materials.
To maintain proper store records such store ledgers, bin cards etc
To initiate purchase requisitions for the replacement of stock of all
regular stores items whenever the stock level of any item of store
approaches the minimum limit fixed in respect thereof.
To initiate action for stoppage of further purchasing when the stock
level approaches the maximum limit.
5. DUTIES/RESPONSIBILITIES OF PUBLIC
OFFICER IN CHARGE OF STORES
To check and receive purchased materials forwarded by the receiving
department and to arrange for the storage in appropriate places.
To reserve a particular material for a specific job when so required.
To issue materials only in required quantities against authorized
requisition notes/material lists.
To check the book balances, with the actual physical stock at frequent
intervals by way of internal control over wrong issues, pilferage, etc.
To restrict access by an unauthorized persons.
Report all losses, damages and shortages to the Director.
6. RESPONSIBILITIES OF HEADS OF
DEPARTMENT FOR STORES
•HODs/Directors are responsible for the general
management and accountability for government
stores.
•HOD may delegate store functions to an officer, called
“store keeper”
•However, HODs remain accountable for stores in his
department from the time of purchase to the time they
are no further in use or value to government.
7. POLICIES AND STANDARDS
The IPSAS 12 shall be used in accounting for
inventories. The CSIR shall use IPSAS as guidance on
the determination of costs and its subsequent
recognition as an expense, including any write-down
to net realizable value
8. LEGAL FRAMEWORK
The management of stores in CSIR
shall be carried out in compliance
with Part IV (i.e. Sections 30-37) of
the FAA 2003, Act 654 and PART VI
(I.e. Sections 181-183) of the FAR
2004.
9. PROCESSES AND PROCEDURES
DOCUMENTATION
The following documents shall be used to effectively and
efficiently manage the inventory processes and procedures.
Inventory Master Items Listing
Stores Receipt Advice/GRN
Inspection Report
Stores Issue Voucher
Purchase Requisition
Purchase Order
Tally (Bin) Card
Stores Ledger
10. Stores Accounting
There shall be proper control of stock issues and the
supervision of stock accounts, approval of maximum,
re-order, and minimum stock levels, record of
requisitions on stock unfulfilled or outstanding at any
time and record of all orders placed for re-stocking.
These are very necessary to ensure that scarce
resources are not tied up in excessive stocks over and
above departmental requirements while also ensuring
that stock-outs do not occur to disrupt the smooth
discharge of the business.
11. Establishment of Minimum Stock
Level
The minimum (safety) stock level shall be determined
for every store as the level below which purchase
requisitions must be initiated to replenish the stock of
consumable items, to ensure that Institute’s business
is not disrupted.
calculate the minimum (safety) stock level for their
respective stores as a percentage of estimated demand
for the inventory item or as a mean deviation of
demand for the inventory item.
12. ESTABLISHMENT OF LEAD TIME
The lead time is the average time (in number of days)
it takes to replenish stocks from the moment the need
for an order is established to the moment the
inventory item is purchased, received and inspected,
and conveyed to stores as available for use.
13. RECEIPT TO STORES
Only authorised stock purchases covered by
POs, waybills, VAT invoices should be
received into store.
Stock deliveries shall be inspected and
checked for quantity and quality before
accepting into store.
14. RECEIPT TO STORES
The Head of the inspection team shall issue an
inspection report, which would detail whether the goods
supplied are satisfactory, unsatisfactory, or short
delivered.
The inspection report shall be distributed to the
following:
Head of Stores, & Procurement;
Head of Finance;
Storekeeper; and the
User Division/Unit
15. STORES RECEIPT ADVICE
The Head of Stores shall then issue a stores receipt
advice (SRA)/GRN signed by him and countersigned
by the Head of the inspection team in triplicate for
distribution as below:
First copy to Procurement Unit;
Second copy to Accounts/Finance Division; and
Third copy to be retained at Stores.
The Storekeeper shall update store records (i.e. store
ledger and tally cards) with all additions of stock to
give the true stock position of each consumable item
held in store.
16. ISSUE OF STORES
The following procedures should be followed by the Institute
for issues of stores:
An Internal Requisition Form (IRF) shall be filled and
signed by a responsible Head of Division or Unit
authorised to do so.
The IRF shall require the approval of the Head of Finance
before issues can be made out of stores.
The Head of Stores shall advise on quantities to be issued,
which shall also be in line with approved procurement plan
for the CSIR.
The quantities of consumable items issued out of stock by
the storekeeper must be covered by a Stores Issue Voucher
(SIV), which must be signed by the storekeeper and
COUNTERSIGNED BY THE REQUESTING USER.
17. ISSUE OF STORES
The signed SIV shall be distributed as follows:
First copy to User Unit;
Second copy to Accounts/Finance Division;
Third copy to the Head of Stores;
Fourth copy retained by the storekeeper
The Storekeeper shall update store records (store ledger and
bin/tally cards) to reflect the issue of the consumable items
to the requesting user/unit.
The Head of Accounts/Finance shall make the relevant
accounting entries in the requesting unit’s accounts in
accordance with CSIR journal entries.
18. Stock Transfers
Stock transfers could occurred under the following:
Intra-Unit/Centre/Section Transfers
Intra-Division Transfers
Inter-Institute Transfers
Inter-Departmental Transfers
19. Stock Taking
A half-yearly stock taking shall be conducted by the Stores
Inspectorate Unit or Internal Audit for the Institute to verify
the physical existence of stocks under the following
information:
Actual stock quantities held;
Unit prices;
Value of stocks held;
Description of stocks; and
Condition of stocks.
A report on the stock taking shall be prepared and
submitted to the Director of the Institute and the Head of
Stores and Accounts.
20. UNSATISFACTORY AND DEFECTIVE
GOODS
Where goods are found unsatisfactory in
terms of being defective, improperly
specified, or with different prices other than
the price quoted on the PO, the Inspection
Team shall reject the order immediately
without accepting them into stock.
21. VALUATION OF STOCK
Some of the methods of valuing stock are as follows:
FIFO
LIFO
Average Valuation
22. SHORT DELIVERY
Where goods are short delivered compared to the
quantities as specified on the PO, the Inspection Team
may accept partial deliveries subject to supplier’s
commitment of fulfilling the remaining order based
on the same terms specified in the PO.
The Head of Stores shall prepare claims in respect of
any shortages from a supplier before payment is made.
23. DISPOSAL OF STORES
Procedures for disposal of stores:
Head of entity (DG) shall convenes a board of survey made
of representative of affected Institute including experts
outside CSIR .
BOS conducts an assessment of the store and makes a
technical report recommending the appropriate method
for disposal
HOD/Director receives the BOS report and gives approval
Stores are disposed of accordingly.
(PPA 2003, Act 663. s83)
24. DISPOSAL OF STORES
Methods of disposal of store include:
Transfer to other CSIR Institutes, with or without
financial adjustment;
Sale by public tender to the highest tenderer, subject
to reserve price;
Sale by public auction, subject to a reserve price;
Sale to public at an authorised valuation; or
Destruction, dumping, or burying where appropriate
(PPA 2003, Act 663. s84)
