Finding Text
Food Distribution Cluster ? ALN 10.565, 10.569 2020-01: Inventory Reconciliation Process: Condition and Criteria: During the year, the Organization transitioned to a new inventory management system. As the Organization adjusted to the new system?s reporting capabilities, this transition led to delays in posting inventory-related journal entries and reconciling inventory to the general ledger. In addition, there was an increase in the amount of time between when inventory receipts and distributions were posted to the Organization?s inventory management system and when they were posted to the Organization?s general ledger. Cause: The Organization?s inventory adjustments were not posted timely and monthly reconciliations of inventory to the general ledger were not performed. Effect: There is a risk that governmental food commodities may not be timely reported to the Food Nutrition service and restitution may not be made for losses. Recommendation: We recommend that the Organization perform a monthly reconciliation of its book inventory to the distributions report, receipt report, and inventory on-hand report from the inventory management system. We recommend that all inventory counts be reconciled to the book inventory and all inventory reconciliations be signed off by the VP of Finance and CEO. In addition, we recommend that inventory be tracked by federal program in order for management to accurately reconcile federal expenditures by program and that management continue to improve inventory related policies and procedures. Management?s Response: As inventory receipts and distributions revert to similar levels as those prior to the pandemic, the Organization has tightened controls over warehouse inventory counts including continued quarterly inventory, weekly cycle counts, and implementation of a new warehouse management system specifically tailored towards food banks. These improvements have been designed to prevent anomalies before they occur. Management is confident that inventory counts will continue to become more accurate throughout the current fiscal year and beyond.