Finding 529895 (2024-001)

Internal control related matters related to store inventory tracking. The Habitat ReStore maintains considerable amounts of purchased and donated materials and supplies for sale to the public, for which inventory is not tracked or counted. The lack of tracking of store inventory increases the possibility of theft occurring and going unnoticed. While store inventory is not recorded on the financial statements, theft could affect store revenue in amounts material to the financial statements. This is a repeat finding as management believes, given the nature of the store inventory items, costs exceed the benefits derived from implementing the recommendation. Recommendation: We recommend store inventory item counts be taken periodically. The tracking of store inventory items could provide indications of potential theft occurring. In addition, the tracking of store inventory could provide management with information on what items are sold more frequently and should be sought out for donations as well as identify slow moving or obsolete items that should be sold at deeper discounts or discarded. Management Response: Habitat for Humanity in the Roanoke Valley, Inc. concurs with this finding as stated. As in previous years, management believes given the nature of the store inventory items, costs exceed the benefits derived from implementing the recommendation. Habitat for Humanity International, Inc.’s policy is to not track and record store inventory.