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510 ESP Inventory System (University Stores)

1. Inventory System, Outline

Inventory should only be held where it is impracticable to purchase goods on an 'as needed' or 'just in time' basis due to availability and/or specific nature of those goods. Stock levels are actively managed to minimise stock holdings.

Its operation is subject to the financial and administrative policies of the University, in particular the formal policy and procedures relating to purchasing and the University Delegations

The ESP Inventory System and provides data for the charging-out of issues and the payment of accounts and commitments management. It communicates directly with the ledger, within the ESP Financials System to record and maintain stores stock values.  The System updates encumbrance balances when orders are produced for goods, services, equipment and stores stock.

Comprehensive information and full operational details can be found in the Inventory section of the ESP Online Library.

To operate any part of the ESP System, an Operator Class must be assigned to a new user.  The Operator Access Form can be found at http://esp.anu.edu.au/financials/security/security.asp Please read the description of each of the Operator Classes to determine which class you need to apply for and submit the form through your Business Office.

The System undertakes the following tasks associated with the management and control of stores:

• automatic stock replenishment reports;
• stocktaking reports;
• printing on-line stock requisitions;
• recording all stock movements;
• stock review reports; and
• suspend back-order requisitions.

2. Stores Stock, Definition

Stores stock is a current asset of the University.  Materials in store are valued at average cost.
 

3. Stores Stock, Acquisition Issues

The ESP Inventory System allows users to raise requisitions on-line for items obtainable from the imprest stores on campus.  The purchasing function of the System enables the raising of purchase orders for the replenishment of stores stock.  The progress of purchase orders can be monitored prior to the delivery of goods.  Delivery processing is undertaken on the System to record the receipt of goods so that payment can be made.  If the quantity delivered is equal to or less than the quantity ordered, the System automatically accepts the quantity delivered.  

4. University Stores and Internal Transfers

Occasionally one University store will source an inventory item from another University store rather than an external supplier. This involves the ordering store raising a material stock request (MSR, online requisition) on the supplying store. The MSR is processed like any other MSR in the supplying store. The ordering store collects the goods from the supplying store. The ordering store must then perform an Express Putaway to increment the item stock-on-hand levels.

5. University Inventory Policy

Inventory should only be held where it is impracticable to purchase goods on an 'as needed' or 'just in time' basis due to availability and / or specific nature of those goods.  Stock levels are actively managed to minimise stock holdings.

The purchasing requirements of Inventory should be consistent with, and not in addition to, the general purchasing requirements, as described below.

Preferred Supplier Arrangements
The system should support, where applicable, purchasing via the preferred supplier arrangements contracted by the University.

Electronic methods
The system should enable electronic requisition and electronic communication of purchase orders to suppliers.

One system for ordering and delivery
The Purchasing module allows for ordering and delivery of goods / services irrespective of the method of payment. This facilitates a wider use of the Purchase Card as a preferred method of payment.

Technology
Use of emerging technology, such as on-line web based catalogues, bulk invoicing and data transfer of order information should be investigated wherever possible. Adoption of relevant technologies will support processes and accessibility to end users and enable the responsibility for purchasing to be devolved to end users and consumers of goods.

Efficient payment processing
The generation of payments should not duplicate processes already performed during requisitioning and purchasing, and should utilise electronic means for payment and payment notification.

Funds Management
The system should facilitate improved management of expenditure and availability of funds.

6. Stocktaking Policy - Stores

6.1 Overview

Materials in store are valued at average cost. Average unit cost is used by the University to charge out issues of stores stock and to value stores stock holdings. The new average unit cost of a given line of stock is computed when purchases are paid for, taking into account quantities delivered and on hand, and cost of items received to cost of those on hand.  The effect of average cost is to spread total costs and cost fluctuations evenly over all items comprising a given stock line.

Stocktaking of store items is carried out on an annual basis, with test checks being carried out on a continuous cycle throughout the year. Stocktaking involves the physical sighting and recording of stock by location, quantity, description and catalogue number.  These details are reconciled with the details including stock balances reported by the ESP Inventory System.  Any stock variations are forwarded to the appropriate Business Officer or Manager responsible, for appropriate follow-up action and approval to adjust balances when required. 

 Proper records are kept by responsible officers of all items checked as support for the certification of reports and reconciliations.  Records are to be retained for audit inspection in accordance with the records retention policy.  Officers responsible for the management and conduct of checking and stocktaking shall advise the Senior Accountant at the conclusion of each calendar year, reporting on progress and results of their programs as a necessary part of Final Accounts procedures.

6.2 Missing Items - Stores

7. Stores Stock, Disposals, Write-off, Write-down

The adjustment of inventory levels is restricted to Store and Business Managers, and is subject to delegation and agency arrangements.