Date Created: April 15, 2024  

Last Updated: June 13, 2024


Overview: 

Bowling at Helen Newman offers items for resale such as bar beverages, t-shirts, bags, towels, cleaner, etc. In addition, they will special order bowling shoes and bowling balls.  Segregation of duties exists between ordering and receiving processes.  Excess inventory is stored at the Golf Pro Shop warehouse until needed.


Criticality:  High

Frequency:  Other

Turnaround:  Other


Key Parties / Contacts: 

Manager:  Responsible for monitoring inventory and placing orders.  Reviews any pricing or delivery discrepancies and addresses with vendors. Requests credits as necessary. Completes physical inventory counts in Jan and June and values using last price paid. Performs recounts as requested by the SSC for large discrepancies.

Helen Newman/Bowling Staff:  Receives product and verifies shipment matches order. Notifies manager if there are missing items or count variances.  Assists with placing inventory items in dedicated storage locations (locked area and cooler for bar beverages and back of counter for other resale items).

Shared Services Center (SSC):  Responsible for processing vendor invoices and credits timely and recording inventory adjustment entries to the general ledger.  Calculates inventory adjustment needed from physical count and reaches out to Bowling Manager if variance is inconsistent with prior inventories. 


Key Documents / Sources of Information:

  • Excel Inventory Sheet
  • Kuali Financial System
  • Invoices, credits, returns and packing slips from vendors


System Access Needed:

  • Excel
  • Kuali Financial System (KFS)
  • OAS Reporting Dashboard (KDW)

 

Common Problems or Issues Encountered: 

  1. Credits and returns can make tracking and reconciliation challenging.
  2. Physical inventory counts could contain errors.
  3. Credits are inadvertently processed if staff presses “the red button”.

 

Step by Step Procedures:

Ordering Product:

  1. Manager orders items from vendors. All special-order items (bowling balls or shoes) are ordered as needed.
  2. If orders exceed establish buying limit of $10K, orders are directed to a secondary approver (Jen Gudaz ; jag245@cornell.edu [Primary Approver] Sr. Assoc. Director).
  3. When orders are delivered, the Helen Newman staff count the items received to ensure accuracy of pricing, and counts.
  4. Manager enters quantities received in the Inventory tracking sheet to update inventory on hand.
  5. If PO does not match order as received, Manager contacts vendor directly to request an adjustment or credit memo. If a credit is expected and it is not reflected on the next invoice, the Manager contacts the vendor for a corrected invoice.
  6. Vendor bills Bowling and submits invoice to the SSC for payment.
  7. SSC team verifies 3-way match of vendor invoices to the receiving documents and PO in KFS and processes invoices for payment.

 

Semi-Annual Physical Inventory Count:

  1. Manager prints the Excel Inventory Sheet to be used to conduct the physical inventory counts.
  2. Manager? counts the physical inventory in bar, front desk and the storage location and updates the count on the Excel sheets.
  3. Variances are reported to Sr. Assoc. Director and recounts are done to verify differences and confirm an error was not made on the physical count.
  4. Once final, the Manager sends the final Excel Inventory Sheet to the SSC for recording any adjustments in the GL.

 

Shared Services Center (SSC):

  1. The SSC compares the manual count inventory sheets by supplier to the Inventory on Hand reports to check for discrepancies.
  2. If variances are identified, the SSC contacts the Manager for resolution or re-count.
  3. The SSC records the inventory adjustment to COS in the KFS general ledger.


Key Risks

Key Controls

Risk of the same individual ordering and receiving product, allowing opportunity for fraud

1.      Ordering and receiving processes are segregated to two different individuals at Helen Newman.

Risk of individuals having too much control in the inventory process.

1.      There is a two-way verification of inventory counts.

Risk of inventory misappropriation

1.      Due to the size of the location, physical counts are only done twice annually.

2.      Access to bar beverages is limited.

3.      There are 3 security cameras that manager monitors in office.

Value of inventory could be incorrect due to costing entry errors

1.      Inventory is double counted.

2.      Pricing is confirmed.

Returns may not be credited by the vendor

1.      Manager tracks credits that are due.  Receipts have credits written on them.  Deliveries are counted and verified before sales person leaves.


Metrics:

Cornell Finance Staff

  • Monitor inventory values, adjustments and fluctuations to identify possible fraud
  • Monitor inventory value on hand to ensure inventory is being managed appropriately (is value on-hand consistent with best practices).
  • Monitor inventory turns to identify slow moving merchandise that may need to be eliminated from the inventory portfolio.
  • Monitor Helen Newman profits/losses to identify any changes.


Glossary of Key Terms/Acronyms:

  • KFS – Kuali Financial System
  • OAS – Oracle Analytics Server, financial reporting tool (formerly known as OBIEE)
  • GL – General Ledger

SSC – Shared Services Center that processes financial transactions for Athletics.









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