Internal Audit of Inventory

The TN Department of Revenue's Internal Audit and Consulting Services (IACS) section is currently conducting physical verification of license plate inventory in County Clerk Offices.The IACS office will contact each county individually regarding scheduling.  

Prior to arriving, IACS requests each office provide (from the TNclerk front end system) the “Inventory Maintenance Report” for each site. We will also need the “Used Inventory Report” on the day of the count upon arriving. Please do not run these reports until requested by IACS auditors as the timing is a central component to our auditing procedures.

In an effort to improve the inventory audit process, the following recommendations should be considered:

• Inventory Receipt Verification: If not currently being performed, we suggest taking additional measures upon receipt of shipments to ensure accuracy by having the inventory clerk immediately compare the delivery invoice with the original order and/or counting all received inventory and comparing it to the packing slip.
• Implementation of Physical or Cycle Counts: A physical count represents performing a 100% count of inventory on hand (typically annually), while a cycle count allows for a more flexible approach by targeting a count based on criteria you set. A cycle count might include selecting several plate classes to count each month and verify amounts on hand agree to inventory records. Any differences to be properly reconciled and adjusted.

Please see the 2018 Audit Inventory Commencement Memo PDF and the October 15, 2018 update attached at the bottom of this page for more details.  Should you have any questions, please contact Cynthia Vaughn – [e-mail] - [phone]; Ahmad Lewis- [e-mail] – [phone]; or Joseph Ghaly- [e-mail] – [phone].