Financial Procedures
5 Assets (continued)
5.6.4 Stock Levels
Stock shall not be held in excess of reasonable requirements as any excess represents capital tied up which could be more profitably employed elsewhere.
5.6.5 Stock Checks
The Director of Finance shall be entitled to check all stock and be supplied with such information relating thereto as may be required for accounting, costing and other financial purposes. A representative of the Director of Finance and the External Auditors may be present at any stocktaking.
5.6.6 Surplus Stock and Stock Deficiencies
Any surplus or deficiencies revealed in items of stock shall be reported to the Director of Finance. Adjustments to write off deficiencies shall be subject to the approval of the Director of Finance.
5.6.7 Disposal of Surplus Stock
The Head of Department concerned should approve the disposal of any batch of stock deemed to be surplus to requirements or obsolete. Where the total amount involved exceeds £1,000 the approval of the Director of Finance should be obtained.
5.6.8 Stocktaking
Departments holding stock must carry out a stock count on the last working day of the financial year. Blank stock sheets accompanied by the following notes of guidance are sent to the relevant departmental heads during July of each year.
Procedure
1. At least two reliable members of staff who are familiar with the stock at the location should be selected to carry out the count - one to identify and call out the stock quantities while the other makes a written record of the information on stock sheets.
2. Stock sheets should be properly headed showing the department/hall of residence holding stock to be counted.
3. Stock sheets should be appropriately ruled with columns for units, i.e. quantities or amounts, description, cost per unit (inclusive of VAT), value, location, i.e. bin number or shelf, and remarks.
4. Before the count begins, stock should be grouped in batches of the same kind and neatly arranged for easy counting and identification.
5. By way of advance preparation, it is advisable to check that bin cards correctly describe the stock in the respective bins and other receptacles and that correct unit costs are displayed. Such preliminary work will greatly speed up the completion of the count on the stocktaking day.
6. Stocks which are slow-moving or obsolete should be isolated and entered on separate stock sheets suitably headed. Comments regarding disposal of such stock - SALE or SCRAPPED as of no value - should be ‘remarked’ upon. Where disposal would be by SALE, the likely proceeds of sale, if less than the original purchase price, should be entered.
7. Stocks must be taken on 31 July of each year which is the last day of the College’s financial year. If, because of some uncontrollable reason, the count cannot be made on that day, then it must be done on the nearest possible date. Naturally, adjustments will have to be made of stock received or issued between the date of the count and 31 July (to arrive at the year-end stock figure), so it is most important that a careful record is kept of stocks moving in and out during that short period.
8. During the count no stock should be received or issued as this will confuse matters. It is, therefore, best to ensure that all issues or receipts are made before the count begins as there must be no interruption during the stock-take for those purposes.
9. Progress should be methodical, the count beginning at one end or corner and taking in a manageable swath of receptacles. It is a good idea, circumstances permitting, to mark out such breadths with lines on the floor and to ensure that all stock within a marked out area is counted before proceeding to the next. Thus the entire stock can be taken in an organised manner.
10. Where Stock is held in large bulks which do not permit easy measure, some equitable method of assessment should be used. This may be by weight, gauge or, at times, an educated guess. The method used must be reasonable and consistently applied from year to year.
11. Stock must be valued at its VAT inclusive price. (See 3 above).
12. Stock held for resale must be valued at the lower of cost and net realisable value. (See 6 above).
13. At the end of the count, stock sheets must be completed by calculating the value of each line of stock, totaling each sheet and summarising the value of all the sheets on a final page. These should then be sent to the Finance Department to arrive there by the date advised.