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Standard Operating Procedures Manual SOPs

Assets Management

“Supplies Delivery, Receipt, Storage and Distribution”

Presented to:

Independent Elections Commission (IEC)

Funded and Supported By

United Nations Development Programme (UNDP)

Kabul- Afghanistan

Date: March 2016/ Hoot 1394

Prepared by: BDO- Jordan & SH

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Issue date Hoot–1394/ March 2016 Department Assets Management

SOP No. Assets Management-01 Revision No. and date NEW

Implemented By Asset Management Manager and Store Keeper

Review authority

No. of pages 29 Signature/ stamp

Terms and Definitions:

Warehouse: The place where the goods, equipment and inventories are stored and protected.

Material: All consumable and non-consumable materials that are stored and recorded as

inventory.

Consumable Material: The goods were it has less value and it’s not required to be recorded

against the transfer request, like (paper, stationery, IP material and etc.).

Non-consumable Supplies: The goods which have to be recorded and stored, the value is

important to reach in a depreciation period of time.

Equipment’s: The non-consumable goods that are used in government and non-government

organizations, which will be depreciated over period of time, such as (furniture, carpet,

machinery, computer equipment, electrical equipment, medical equipment, etc.)

Depreciation: The loss of the nature of the goods caused by normal use in period of time.

Inventory Records: Consists of all transactions related to the purchase and procurement,

storage and distribution of goods and assets within an organization.

Inventory: Is the verification of all the relevant goods and items as per the records of

warehouse or store department.

Store: The goods and assets which will be available in the warehouse.

Secondary Store: The goods and assets are placed in addition to the general warehouse for

the related departments of the organization in order to easily facilitate the needs and speed

up the work process.

Surplus assets: The goods that are available and it will be necessary for the next two months

Outmoded goods: The goods, which are all functional, but in terms of time period and

technical improvements on technology it is not applicable.

Wear out goods: The goods and assets that are lost by more usability.

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Defective goods: The goods and equipment that their period of durability is lost within a

minor damage.

Lost goods: The goods and assets that disappeared in the specified location but the

possibility of theft and robbery do not exist.

Stolen goods: The goods that has been stolen and it will be available in the context theft

o Source: Afghanistan Warehousing Manual Published on 1967

Abbreviations

NCB: National Competitive Bidding

DG: Director General

CEO: Chief Executive Officer

IEC: Independent Election Commission of Afghanistan

SOPs: Standard Operating Procedures

GoIRA: Government of Islamic Republic of Afghanistan

PFEML: Public Finance and Expenditure Management Law

RFQ: Request for Quotation

NCB: National Competitive Bidding

ICB: International Competitive Bidding

BOQ: Bill of Quantity

GPM: General Procurement Manager

GSM: General Stock Manager

SK: Stock Keeper

IC: Inspection Committee

SFP: Supplier Focal Point “Authorized”

GS: Gate Security

WF: Workers (Workforce/ Labors)

ID: Individual Departments

In. Co: Inventory Committee

P. Co: Procurement Committee

PP: Procurement Plan

PO: Purchase Order

SL: Supply list

PI: Purchase Invoice

I.Ch: Inspection Checklist for receiving of supplies

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1. Introduction:

When new goods are delivered to the location where the stock is kept (i.e. a warehouse mostly),

several checks take place. Firstly, the price and quantity are compared to the purchase-order to

see whether the delivered quantity and price match. In most of the organizations there is a link

to information from the purchase department at this point. For some materials, the quality is also

checked before adding the goods to stock. In some special cases the delivered goods even have

to stay in quarantine for a while (e.g. to stabilize after transport or to adjust) before the quality is

being checked. Because the quarantine process is optional, this block is dotted in the picture.

Additionally the completeness of the order is often checked and the delivery date is registered.

This information is used to keep track of the reliability of suppliers. Additionally, partial

deliveries can be monitored using this information.

2. Problem statement:

Stock management is a storage facility that receives assets and products for the eventual

distribution to the end consumers or to the businesses. Stock management is concerned with

ensuring that all the activities involved in store are carried out efficiently and effectively by

those employed in the store. In other words, it is the process of coordinating the incoming

assets, the subsequent storage and tracking of the assets, and finally, the distribution of the

assets to their proper destinations.

The evaluation found that, every year Millions of budgets are spent at Independent Election

Commission for the procuring of equipment and assets required for public services which are

then stored in many stores of related departments of IEC and later distributed to other sub-

departments at different zoon’s according to their requirements and needs.

Assets Management Department of Independent Election Commission does not have a reliable

management process for its fixed and disposable assets or supplies; In addition, IEC does not have

a system that can provide accurate, fast and updated information about these assets.

3. Purpose statement:

The purpose of this topic is to design a new management system (SOPs) standard operating

procedures for managing of IEC fixed assets to provide accurate information on the status of the

organization’s warehousing, more specifically, it will help: (a) Determine what are IEC fixed

assets, (b) Determine their condition or status, (c) Identify where these assets are located, (d)

Ensure that the inspection of specification of assets take place , (e) Assure that assets are

adequately insured, (f) Ensure that all fixed assets are registered, tagged and categorized (g) Assure

that proper depreciation procedures are in place.

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4. Scope:

The scope of this SOP will be limited to fixed assets that are movable in nature and the assets that

are considered to be highly vulnerable to theft or misuse or known is capital assets and how to

improve delivery, storage, distribution and record keeping of assets.

5. Objectives:

To modify how fixed assets forecasting and planning being accomplished.

To describe the procedures for receiving of assets from the IEC suppliers and to how to

increase and achieve the satisfaction level of end user.

Guarantee the continuous and transparent control of assets stored and distributed according

to Afghanistan Assets Manual.

To ensure availability of supply and proper stock management without delay to various

departments of the organization.

To prevent overstocking (Stock In) and under stocking (Stock Out) of IEC Assets.

To Standardize procedures for assets quality control and inspection

To minimize the storage costs and to increase high quality of stock management.

To ensure most effective utilization of available storage space and workers engaged in the

process of storekeeping.

6. Functions of Stock Management:

In the light of above objectives, the functions performed by the stock department are

outlined below:

• Issuing purchase requisitions to Purchase Department as and when necessity for materials in

stores arises.

• Receiving purchased materials from the purchase department and to confirm their quality

and quantity with the purchase order.

• Storing and preserving materials at proper and convenient places so that items could be

easily located.

• Storing the materials in such a manner so as to minimize the occurrence of risks and to

prevent losses due to defective storage handling.

• Issuing materials to various departments against material requisition slips duly authorized by

the respective departmental heads.

• Undertaking a proper system of inventory control, taking up physical inventory of all stores

at periodical intervals and also to maintain proper records of inventory.

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• Providing full information about the availability of materials and goods etc., whenever so

necessary by maintaining proper stores records with the help of bin cards and stores ledger

etc.

7. Tasks, Responsibilities and Procedures in the Stock Management Process

Task Authorized In charge Procedural Indicator

Forecast and Planning CEO Individuals/ Departments Store Request Form

(Form F.S.9)

Purchasing of Assets CEO Procurement/ Purchasing

Committee

Solicitation Doc

(NCBs, RFQs)

Receipt of Assets CEO Stock General Manger Delivery Receipt Form

(Form M.7)

Quality Check &

Inspection of

Specification

CEO Inspection Committee Inspection Committee

Objection/ Approval

Storage

Stock

General

Manager

Stock Management Team

Stock Record Card

(Form F.S.7) Inventory Records

Distribution Store Distribution

Form (Form F.S.5)

Inventory Surplus

Management CEO Stock General Manger

Stock Return Form

(Form F.S.8)

Stock Inventory Form

(Form F.S.4)

Delivery Receipt Form

(Form M.7)

8. Stack Management Department TOR and Hierarchy:

The main purpose of a stock management is to guarantee the availability of essential

supplies for accomplishment of the service activities, permanently, in a proper quantity, into

a proper place and with the best ratio cost and quality for proper final utilization.

a) Issuing purchase requisitions to Purchase Department as and when necessity for materials in

stores arises.

b) Receiving purchased materials from the purchase department and to confirm their quality

and quantity with the purchase order.

c) Storing and preserving materials at proper and convenient places so that items could be

easily located.

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d) Storing the materials in such a manner so as to minimize the occurrence of risks and to

prevent losses due to defective storage handling.

e) Issuing materials to various departments against material requisition slips duly authorized by

the respective departmental heads.

f) Undertaking a proper system of inventory control, taking up physical inventory of all stores

at periodical intervals and also to maintain proper records of inventory.

g) Providing full information about the availability of materials and goods etc., whenever so

necessary by maintaining proper stores records with the help of bin cards and stores ledger

etc.

Figure # 6.1: Assets Management Department Hierarchy

9. Stock Management Cycle:

9.1. Forecasting and planning:

The organization administration department (procurement committee) prepares the annual

procurement plan on the basis of organization needs and requirements which includes a

detailed plan schedule about how many list of items should be procured which areas will be

included, duration/length of the project, estimated cost of the project, procurement methods,

financial code of conduct, donor, purchasing reference number and purchasing/procurement

management duration.

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9.2. Purchasing of assets:

After approval of purchase documents from concerned authority, procurement department

prepares the bid document incorporating special guidelines of Afghanistan procurement law.

It initiates invitation of tender by advertising in the national/ international newspapers.

9.3. Receiving section:

While the agreement made in between Organization as a purchaser and the Vendor as

retailer, the list of required assets will be delivered to the organization address.

9.4. Quality check/ inspection:

It is a Committee of officials appointed by the entity for the purpose of assuring qualitative

and quantitative procurement performance as provided for by this Law.

Following procedure is followed in receiving of supplies:

- Receiving these incoming materials in stores.

- Checking and inspection of these incoming materials in stores etc.

- Recording the incoming materials in goods received book.

- Informing the purchase department about damaged and defective goods and surplus or deficit

supplies etc.

- Returning damaged or defective goods to the suppliers in accordance with the instructions of

the purchase department.

- Forwarding the materials to respective stores and locations where these are to be stored or

preserved.

9.5. Storage section:

After the completion of purchase procedure, the next important aspect of assets management

is storekeeping. This section is concerned with keeping proper records with regard to receipt

and issue of materials into stock card. The primary task of this section is to undertake the

process of inventory control.

9.6. Issue/Distribution section:

In this section the distribution department distributing assets to respective departments on

receiving duly authorized requisition slips or distributing on quarterly or monthly bases. An

entry is made immediately on the stock book which is the record of assets from where the

material has been issued and it shows the store balance.

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Figure # 9.1: Stock Management Cycle:

10. Supplies Delivery, Receipt, Storage and Distribution Work Flow:

10.1. Tasks:

1. Receiving purchased materials from the purchase department and to confirm their quality

and quantity with the purchase order.

2. Storing and preserving materials at proper and convenient places so that items could be

easily located.

3. Storing the materials in such a manner so as to minimize the occurrence of risks and to

prevent losses due to defective storage handling.

Inventory

Surplus

Mgt

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10.2. Key Personnel involved in the supply delivery and distribution process

1. CEO (Chief Executive Officer/ DG)

2. General Procurement Manager (GPM)

3. General Stock Manager (GSM)

4. Stock Keeper (SK)

5. Inspection Committee (I. Co)

6. Supplier Focal Point “Authorized” (S. F.P)

7. Gate Security (GS)

8. Individual Departments

9. Inventory Committee (In. Co)

10. Procurement Committee (P. Co)

10.3. Records and Appendices:

1. Procurement Plan (P.P)

2. Stock Request Form (F.S.9) Annex #: 1

3. Purchase Order (P.O)

4. Purchase Invoice (PI)

5. Standard Bidding Document (SBD copy of Solicitation Doc)

6. Inspection Checklist (I.Ch) Annex #: 4

7. Delivery Receipt Form (Form M.7) Annex #: 3

8. Government Property Record Form Annex #: 5

9. Stock Record Cards (Form F.S.7) Annex #: 6

10. Distribution Record Form (F.S.5) Annex #: 2

11. Staff property stock card (F.S.16) Annex #: 8

12. Return of Surplus Supplies (F.S.8) Annex #: 9

13. Stock Inventory Form (F.S.4) = Stock Physical Check Form Annex #: 10

14. Bin Card Annex #: Annex #: 7

15. Expenditure Chart Form “filling for Consumable Supplies” (F.S.10) Annex #: 11

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Table: 10.1 Supplies Reciept and Distribution Flow Chart Principles

STEP ACTIONS / OUTCOMES NOTES / EXCEPTIONS

Step One: Processing Purchase Order

1. The purchase order for both first time deliveries should be

made by the procurement/purchasing department to the

supplier at least 14 working days in advance.

2. General Procurement Manager then takes discussion with the

General Stock Manager to design the delivery schedule,

taking in consideration the resources available in the

Organization such as personnel (Labor), Space for stoking

and other special constraints.

3. At least 1 working day (24 hours) before the delivery, the

supplier will notify the GPM by phone.

4. The delivery booking or appointment should be notice.

5. The purchase order cover up the whole details of SBD/RFQs

and it’s a common reference for or between all the parties

(suppler name- address, and the supplies descriptions or

specification, bill of quantity “items name, Specifications,

units, quantities, unit price, total price and etc)

6. A delivery schedule is officially shared with the supplier by the

Procurement Unit.

7. A copy of the delivery schedule also shared with the

Inspection Committee of the organization who is already

assigned for three months (one quarter).

1.1. Late deliveries may

be chased with the

GPM by an official

source.

1.2. Liquidated

damages will be

applied, if the

supplier fails to

deliver any or all of

the supplies by the

date(s) of delivery

within the period

specified in the

contract, purchase

agreement.

1.3. The purchaser

(procuring entity

may without

prejudice to all its

other remedies

under the contract,

deduct from the

contract price as

liquidate damages,

a sum equivalent to

the percentage

specified in the

Procurement Law

of Afghanistan

Step Two: Receipt of Supplies (Arrival of Deliveries or Supplies)

1. On arrival of supplies at the organization, the delivery vehicle

(which may be sourced through a third party), the driver, any

of the supplier’s workers involved and the supplier’s focal

point (s) present themselves and their delivery paperwork to

the guard/ gate security.

2. The security guard calls the Procurement Department and

secures verbal approval that the delivery is planned and might

proceed (otherwise, the vehicle is refused access) and that

the relevant personnel should be admitted.

3. The Procurement Officer (or a representative) then proceeds

to the security gate and directs the vehicle and personnel,

once inside the compound, as where to park.

4. Review of receipt documentation

5. The delivery will be offloaded from the delivery vehicle to the

designated inspection / checking area by the driver, supplier’s

focal point and/or the supplier’s workers.

6. At the designated offloading point, where the delivery may be

checked, the Inspection Committee, plus the General Stock

Manager and Stock In-Charge, the panel will meet up and be

5.1. The procuring entity staff (Stock Labors) are not involved at this point.

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appraised of the following documentation relating to the

delivery by the supplier’s representative :

7. Purchase Order

8. Standard Bidding Document (SBD)

9. Purchase Invoice

10. Certification (if applicable)

Step Three:

Supplies

Quality Check/

Inspection

Process

1. The Inspection Committee in coordination with GPM is joining

the panel.

2. The supplier submits the purchase invoice at the time of the

delivery to the General Director. The GD refers the invoice to

the General Admin Manager and he/she refers it to the

Inspection Committee.

3. Inspection of any physical damage and Visual inspection are

administrated to the delivery by the Inspection Committee plus

the Supplier Focal Point and GSM using the Descriptive Form

to ensure that the Goods supplied are as per technical

specification.

4. On offloading/ delivery of supplies the availability of Inspection

Committee is mandatory, otherwise the supplies will be

offloaded but will be placed in the Quarantine aria and the

procuring entity will not have the responsibility of securing of

supplies theft, damage etc.

5. Items against the terms of the purchase order or agreement

it’s in inadequate quality, may be rejected and immediately

returned to the supplier’s focal point.

6. Items with incomplete Quality Assurance documentation may

be accepted but it will be in the pending delivery, until the

documentation submitted. but will be placed in quarantine,

meantime and cannot be distributed

7. Based on Afghan Procurement law, the QA documents should

be provided to the organization within 40 working days

(otherwise, reminders will be issued to the suppliers by the

Procurement Unit and supplies will be returned to the

suppliers address).

8. Items having quality assurance documents are stored in

specific place and sample of items like (Fuel, Mineral Water

etc will be sent to ANSA (Afghanistan National Standard

Agency) and sample of items like (Dry food, Vegetable Oil,

Medicine, Consumable Medical Item and etc) will send to

Quality Assurance Department of the MOPH for testing

(Quality Analysis Check).

9. The Supplies Description Form will be filled by the Supplies

Description Panel, while the supplies delivery finalized by

Inspection Committee and the Supplies Descriptive Form will

be considered and filled based upon the specification of the

SBD/PO and supplier invoice and comparison with actual

1.1. The inspection

Committee shall be

assigned by the

CEO, consisting of

three persons

including

(representative

Administration

Department, Store

Keeper or a member

of Stock

Management and

third one from the

representative of

end user).

4.1. Quarantine Aria; a- Is the place where

supplies are offloaded within the organization in absence of Inspection committee.

b- Is the place where supplies are against the terms and conditions of the procurement agreement and it’s kept in this place until to be replaced/ returned.

6.1. Exceptions will be those supplies that there are quarantined because of incomplete QA documentation.

8.1. Quality check fee

will be at the

supplier’s expense.

12.1. The deadline of

supplies return is

officially shared with

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receipts.

10. The original signed copy of the Supplies Descriptive Form is

then filed and signed by the Supplies Description Panel and

one copy will be signed by the Administration Panel who is

(CEO, General Admin Manager and General Stock Manager.

11. Two original supplier’s purchase invoice should be prepared

to show the actual delivery quantities and then it will be signed

and initialed by the Inspection Committee and the supplier’s

focal point, as proof of delivery. One original PI will be kept

with be GSM and the other will be given to SFP. Each

member of the committees can have a copy of the PI.

12. The supplier’s representative is then free to depart the

organization and should return any rejected items.

the supplier

“liquidate damaged

procedures should

be declared”.

Step Four:

Storage and

Records of

Supplies

1. While the supplies physically counted and inspected the

Inspection Committee completes signs and files the supplies

document and submit the documents to GSM.

2. The supplies are moved from the inspection/checking area by

the Stock and located on the appropriate storage locations

3. The Form M.7 (Delivery Report Form) will be prepared by

General Stock Manager with the whole supplies details

(specification of “items name, items description, quantity, Unit,

Unit price, Total price and the Total amount of supplies

delivered to stock of the organization, plus the Date of supplies

receipt, Purchase order number, Place of supplies offloaded,

the Name of Supplier and a Short statement of the supplies

receipt will be noticed and signed (approved) by both Store

Keeper, General Stock Manager and CEO.

4. The Form M.7 while prepared by GSM the Inspection

Committee will review and sign the form.

5. The GSM then attached the M-7 form and Purchase Invoice

with an official letter all in original form sending to control

manager of MOF (he/she is the MOF representative for

controlling financial affairs of organizations.

6. The GSM refers Form M-7 along with purchase invoice the

original to the Finance Department for invoice (payment)

proceeding and the copy the procurement/purchase

Department of contracts/purchase installments records and

one another copy in Stock Management Department for

contract/purchase balancing and reconciliations.

7. The stock management team will record the receipt of the

delivered items based on signed and approved documents into

a Stock Record Card (FS7) and one other copy in Bin Card.

3.1- before preparing the

Form M.7 the availability of supplies in the organization stock is mandatory, otherwise any other practices if be taken is against the store management manual.

4.1- MOF controller is to technically observing the prices and analysis and comparing the Purchase Invoice with the Form M-7 in order to find the financially mislaid.

Step Five:

Supply Request

(Individual

Requests)

1. The supplies then become available for distribution (assuming

the M.7 Form has already been filed).

2. Whiting the organization all related departments will request for

supply from Stock Management Department through Stock

Request Form (FS-9). And it’s completed by the individual

department head and submitted first to CEO for signatory

approval then forwarded to Stock Management Department for

distribution.

2.1. Applying Stock

Request Form (FS.9)

is mandatory and

there will be no

exception missing

(FS.9 Form)

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Step Six: Stock

Database

Record

1. Applying the Form F.S 16 for fixed assets (non-

consumable/non- disposable items) will be applied while the

supplies (Fixed Assets) issued to the individuals and

departments.

2. Each employee of the organization will have an assets record

or registry for the property they hold and use on their desk and

this record form is known as Staff Property Stock Card (F.S.16).

This form will be applied and filled while the assets (supplies)

issued the end user/ beneficiary.

3. There are two methods of stock record keeping; double entry

utilizing Stock Book (Stock Registry Book) method and the

second one is the Card Technique method, the purpose and

aim of both methods are same, but in this SOPs we prefer

utilizing or using Card Technique “Stock Record Card” (F.S.7)

method.

4. The SK and GSM both will update the stock record cards

(F.S.7) based on the received supplies recorded on M.7 From.

5. The disposable items or supplies which known as consumable

items will be recorded on Supplies Expenditure Chart (Form

F.S.10 )

1.1. For database

record hear it

means that the

Stock Management

Team will have

record of whole

employees of the

organization in

order to easily

apply or run

inventory physical

check within the

specific period of

time. This database

might be differs

from organizations

to organizations

(MS Excel, MS,

Access any other

software’s)

Step Seven:

Distribution of

Supplies

(Issuing of

Supplies to the

end user)

1. The distribution will be take place as per the department’s

forecasts or need (Request Form) that has been made on the

planning or forecasting stage. The formal distribution process is

applying the distribution of supplies by filling the goods/supplies

distribution form (From F.S.5) and the use of this form is

mandatory for any types of assets.

2. Each department will place its own orders independently and

there is no expectation that these orders will be coordinated.

3. On approval of the Request Form (FS-9) by all the required

signatories, GSM will prepare three copies of the Distribution

Form (FS-5) which must be formally approved within the CEO

and then communicated back to the requested departments.

4. While distribution of supplies takes place by the Store Keeper

or General Stock Manager, the stock out of any quantity of

supplies which is distributed should be re-adjusted in the Stock

Report Cards (F.S.7) which is used as a Stock Book and the

Bin Card which is made for each item and hanged on the items’

shelf. These two forms show the balances of stock-in and

stock-out and these forms filling on the delivery of supplies

(stock-in) and the distribution of supplies (stock-out).

5. The relevant stock cards and reporting database are updating

on daily biases by the Stock Keeper or General Stock Manager.

6. The disposable items or supplies which known as consumable

items will be recorded on F.S.10, F.S.5 forms and other related

specific forms.

7. For all Stationary distributions the (Form FS.10) will be applied.

This form filled for the individual departments as per their

forecasting request and in the light of this form the distribution

will take place.

8. The Organization Stock or Warehouse or Stores will be the only

source of supply for each type of assets/goods. There will be no

6.1. Short-shelf-life

items already should

be distributed to

departments, in

order to avoid expiry

of assets and its

applicable for

consumable

assets/goods like

(Medicine, Medical

Consumable items,

Vegetable Oil and

etc).

12.1. The Organization

stock should be

designed with two

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direct deliveries to the other departments through external

sources.

9. Ordering from each department should be limited on quarterly

biases, except urgent requests or immediate purchases.

10. The Distribution Forms (F.S 5) then send to the Control

Department for their approval.

11. The GSM should provide a suitable area at Stock for

inspections and administration, through which the team could

check the contents of the order while they are distributing

supplies.

mean categories

(Fixed Assets Store)

and (Non-Fixed

Assets Store) in

order to easily run

the stock

management

operations on daily

biases.

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11. Annexes: Stock Management Official Standard Forms

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19

20

21

22

23

24

25

26

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9. References:

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- Afghanistan Assets Management Guidelines 1967 - Procurement Law of Afghanistan 2009 - Introducing SOPs for Fixed Assets for Afghan Public Sector KARDAN University Kabul

2015. - Afghanistan Accounting Manual 2011