Warehouse Operations, Audit No. 2010

 

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The audit of Warehouse Operations was conducted to evaluate the management controls over and cost-effectiveness of the City’s warehouse operations.

The Purchasing Department operates a warehouse function that receives, delivers, and stores items for City departments. It operates a supply store to provide commonly used maintenance and repair supplies to departments. And, it manages surplus City property by selling it through public auction online or disposing of items that cannot be sold.

The audit found that management has not established appropriate controls to manage its Stores operation. Supplies issuances are not entered as they occur, receipts are not provided, and refunds are not adequately documented. Additionally, inventory counts are not properly conducted and documented. Annual inventory counts are not conducted blind, periodic cycle counts are not documented and related adjustments are not correctly recorded.

Surplus property policies and procedures are not consistently followed, and practices could be improved. For example, items reviewed for appraisal are not documented, disposition of some items could not be verified, tax exemption certificates were not documented, and the existing refund policy was not followed. Additionally, disposition of some surplus items has been delegated to other departments though City code currently does not provide for this.

The Warehouse could also more efficiently promote internal surplus property transfers as prioritized in City Code. Available surplus property has not been communicated to City departments for their potential use.

Record-keeping and accountability for departmental property being stored at the warehouse needs to be clarified, and shipping responsibilities may be more effectively managed by departmental staff. 


 

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