Provide a brief description of the transaction cycle. The key internal control and/or operational risks, are summarized below: | Existing Control Processes | Control Risk Value | Operational Risk |
|---|---|---|---|
| Resale Inventory valuation could be misstated due to errors. Selling price could be under/overstated if the inventory costing is incorrect. Sales misstated on the financial statement could result in variance in financial statement results. | Use consistent methods to value inventory in each unit (Store, Dining, Cornell Health, Athletics), periodic physical inventories, off cycle counts. Secondary random audit of physical inventory by staff not responsible for inventory control (BSC). Segregation of duties, perpetual inventory (Store and Dining) - have automated updates of pricing for inventory items. Obsolete inventory is written off and/or used as recognition (Cornell Store.) Athletics manual process (except for Golf pro shop), pricing errors could happen, cycle count errors possible. | Moderate | Moderate |
| Resale Inventory security: If inventory is not secured properly, theft could occur resulting in inventory write-offs and lost sales opportunities for Student & Campus Life. | PO approvals, monthly reconciliation of GL inventory balances to subsidiary tracking system, physical counts, and segregation of duties in recording, counting, and releasing inventory. Access to inventory limited to appropriate staff only (note, Dining has the broadest access to food, inventory disbursed to 30+ units). Inventory Control Specialist at the Cornell Retail main store who monitors shoppers for theft. Pharmacy limited to Pharmacist, narcotics tracked, logged, and locked up. Vendor for inventory counts; run by Nursing and oversite/monitoring by Finance and monitored by | Moderate | Low |