INSTITUTE OF ACCOUNTANCY ARUSHA

RESEARCH PROPOSAL THE ROLE OF INTERNAL CONTROL OVER INVENTORY IN PUBLIC ORGANISATION

CASE STUDY: TANZANIA NATIONAL PARKS PRESENTER: GERALD, GRACE ADA III 2011/2012

SUPERVISED BY: MR. R. MURO

A RESEARCH PROPOSAL SUBMITTED TO THE INSTITUTE OF ACCOUNTANCY ARUSHA FOR THE PARTIAL FULFILLMENT FOR THE AWARD OF THE ADVANCED DIPLOMA IN ACCOUNTANCY

TABLE OF CONTANTS
TABLE OF CONTANTS....................................................................................................ii ABSTRACT.......................................................................................................................iii INTRODUCTION............................................................................................................iv 1.1 BACKGROUND TO THE PROBLEM...................................................................iv 1.2 STATEMENT OF THE PROBLEM........................................................................v 1.3 RESEARCH QUESTIONS......................................................................................vi 1.4 OBJECTIVE OF THE STUDY................................................................................vi 1.5 SIGNIFICANCE OF STUDY .................................................................................vi 1.6 SCOPE OF THE STUDY........................................................................................vii 1.7 LIMITATION OF THE STUDY.............................................................................vii 2.0 LITERATURE REVIEW...........................................................................................viii 2.1.0 Theoretical literature review ...............................................................................viii 2.1.1 Meaning of inventory.............................................................................................ix 2.1.2 Inventory control terminology................................................................................x .......................................................................................................................................xi 2.1.3 Types of inventories...............................................................................................xi 2.1.4 Importance of inventory control. ........................................................................xii 2.1.5 Economic Order Quantity....................................................................................xiii 2.1.6 Function that inventory performs........................................................................xiii 2.1.7 Reasons for holding inventory.............................................................................xiv 2.1.8 Objective of inventory..........................................................................................xv 2.1.9 Inventory levels....................................................................................................xvi 2.1.10 Purchasing process.............................................................................................xvi 2.2.0 Empirical literature review..................................................................................xix 3.0 RESEARCH METHODOLOGY...............................................................................xx 3.1 RESEARCH DESIGN.............................................................................................xx 3.2 RESEARCH TECHNIQUES...................................................................................xx 3.3 POPULATION INQUIRING..................................................................................xx 3.4 SAMPLING TECHNIQUES...................................................................................xx 3.4.1 Purposive sampling method..............................................................................xx 3.4.1 Random sampling............................................................................................xxi 3.5 SAMPLE SIZE.......................................................................................................xxi 3.6 DATA COLLECTION METHODS.......................................................................xxi 3.7 TYPES OF DATA COLLECTED........................................................................xxii ii

4.0 ANNEXES I.............................................................................................................xxiii 4.1 RESEARCH BUDGET........................................................................................xxiii 4.2 BIBLIOGRAPHY..................................................................................................xxv 4.3 DEFINITION OF ITERMS.................................................................................xxvi 4.4 QUESTIONNAIRE.............................................................................................xxvii

ABSTRACT.
Most common current Assets, in the balance sheet of the companies are cash, debtors and inventories. Of the three, the inventories of the merchandise often become large, because of relatively large value of this asset. An error in the valuation may cause material misstatement of the financial position and net income of the organization. It is for these reasons, which calls great attention to this asset. The control and maintenance of inventory is the common problem to all organization in any sector of economy. The problems of inventory do not confine themselves to profit making organizations, but likewise are encountered by social and non- profit making organizations. Inventories are common to farms, manufacturers, wholesalers, retailers, hospitals, Churches, prisons and local governments. Indeed, inventories are also relevant to the family in relation to food, clothing, and medicines toiletries, and so forth. The main objective of this topic is to find out the causes of the poor central for inventories to establish the remedies of the problem to the company and other similar companies.

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The study attempts to investigate the effectiveness of inventory control. It observed that the effectiveness of inventory control has given little importance by many organizations in the country. It is further noted that the number of organizations set their goals for effectiveness of inventory control during respective financial year and thus they set measures for attaining these objectives. However it often happens that many organizations fail to attain the budgeted objectives as a result of their poor inventory control. This fact has recently led to many businesses wound up. Since many frauds involve inventories, should provide ways through which fraud may not be affected. Defensive attitude has developed on evaluating inventory control procedures and enhance adherence to the inventory control procedures by creating reducing easy convertibility of inventories and Asses improving the management efforts to solve employees problems, and instituting regular checks to inventories. The weakness if any, will be identified which may let the loopholes for lose of stock and eventually recommend necessary measures of fraud against inventory can be controlled.

CHAPTER ONE
INTRODUCTION

1.1

BACKGROUND TO THE PROBLEM. In the organizations such as manufacturing firms, wholesale enterprises and retail undertakings work with inventories, which account for overall of general assets. The value of inventory under the cost of the goods sold has a major impact on net income of the year. It has been a difficult task in determination of the quality of inventory, value and the condition. This is seen much on identification and valuation of work-in-progress items machines spares parts or finished goods during inflation period.

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The inventories in an organization are in the raw materials, of which they can be used or consumed directly or indirectly. Either inventory may be in the form of finished goods or goods in the process of production. In this case, the cost of structure plays the great role to the firms. Cost structure in the form of purchases cost, ordering cost, stock out cost vary with the amount of inventories. So management always faces the problem of trade off. This is when the firms purchase in small quantities which consequently bring about loss of discounts. Where ordering costs are increase. However purchasing in large quantities will enable the discounts and reduction of ordering costs where stock outs are minimized. Many firms or companies put emphasis on controls over cash, placing less emphasis on control over inventories. This is because management considers inventories to be composed of items, which cannot be easily subject to theft, so regarding internal control over inventory unnecessary. The fact remains that; inventories form a very important part of assets of organization through these the objective set by the management can be set. Together with the necessity of inventories, many organizations are still placing less control over them. Due to less controls, there has been misappropriation of inventories accompanied with frauds. In order for the firm to safeguard the companies inventories the clear regulations have to be established so as to hinder theft or fraud of inventories. 1.2 STATEMENT OF THE PROBLEM Due to poor management or control over inventories especially during receiving, storage transfer of materials within the organization there has been less a problem of fraud, theft and misstatement of profit. Accounting for inventories requires proper records, control and stock valuation as per accounting guideline and policies of the organization. The use of those guidelines and policies enable an accountant to arrive at inventories balances, which in turn will entails true and fair view of organization financial statement.

1.3

RESEARCH QUESTIONS The following questions will be formulated for the study. a) Are the accounts records kept to ensure prompt and accurate recording of materials receipts, issues and balance? b) How internal control over inventories can minimize losses or fraud? c) How stock checking is conducted? d) Is the departments have qualified staff in terms of their qualifications and experience? What the optimal amount of inventory to carry? e) What types of goods are mostly stored to store?

1.4

OBJECTIVE OF THE STUDY This study will be conducted with the following objectives; 1. To describe the causes of poor inventory accounting and control and suggest measures to be taken to remedy the situation. 2. To examine how financial procedures may contribute towards internal control over inventory. 3. To recommend on measures that should be taken to develop a strong system of inventory function. 4. To identify many categories of inventory. 5. To enlighten the organizations on the importance with the principles, rules and guidelines for inventory management and enhance good inventory control. 6. To come up with the research paper to be submitted to the institute of Accountancy Arusha as a partial fulfillment for the award of the Advance Diploma in Accountancy (ADA).

1.5

SIGNIFICANCE OF STUDY i) ii) Will equip the researcher with the additional knowledge of inventory control in practical approach. After this research it may reveal the new areas uncovered for further research.

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iii) iv) v)

It will suggest the reasons for attention of organizations management on the question of inventory control. It will explore the causes of poor performance and hence provide base for corrective measures to the organizations and other bodies at large. It will enhance other researchers to evaluate the findings and make further findings on the topic of inventory control and hence inviting more challenges sand contributions.

1.6

SCOPE OF THE STUDY In order to get the data, which are relevant to this study, the study will cover all areas of department concerned with the inventory where the study will be conducted. This will enable the researcher to draw up his suggestions, which can enable the organization to improve the control system over inventory.

1.7

LIMITATION OF THE STUDY During this study, there are some factors, which will hinder the research to be conducted extensively. Most of these hinderers are: a) Time factor. The time given to conduct the research is approximately short so that it will be difficult to gather relevant information enough for the study. This causes the study not to be scientific enough because the researcher will be based more in theoretical part rather than practical one. b) Inadequate financial resources

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The researcher may not be exhaustive due to financial constraints since the amount of money provided by the sponsor is not sufficient to meet all necessary cost of the study. So due to the above reasons, the study will be narrowed down. c) Problem in source of data The researcher will expect to have the problem in the collection of data because in the organizations the providers of data always are busy. Also some of them are not co-operative enough with the researcher so that will cause him to fail to obtain enough data for the purpose of this study.

CHAPTER TWO
2.0 LITERATURE REVIEW 2.1.0 Theoretical literature review In this chapter the research will show other scholars say about understudy problem. Also the research will visit all relevance materials concerning the research problem such as journals, newspaper, different reports on the problem, website and other research papers. And the research will give short notes on what has been done to problem and why has chosen to study that problem and not other one.

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Difference scholars have written a number of literatures on the role played by internal in prevention of frauds over inventories. 2.1.1 Meaning of inventory Lucey T. (1996) (NOTE 1) has defined inventory control as the system used in the firm to control the firms investment in stock. This includes; the recording and monitoring of stock levels forecasting future demands and deciding when and how many to order. According to Render Barry (2003) (2) inventory is any stored resource that is used to satisfy a current or a future need. Raw materials working in progress and finished goods are a direct function of demand. When we determine the demand for completed clothes dryers, for example, it is possible to use this information to determine how much sheet metal, paint, electronc motors, switches, and other raw materials and work in progress are needed to produce the finished product. Morrison and Jessop (1994) (3), The usual approach to the control of stock is the control of inputs to the stocks. The stock controller in most circumstances will have little, if any, jurisdiction over outputs. Kothari C.R. (1984) (4), Defined inventory as to the physical stock of goods which though remain idle in a store but essential for smooth sailing of the company and hence has economic value. According to revised, International Financial Reporting Standards (IFRSs) 2007, defined inventory as assets; a) Held for sale in the ordinary course of business. b) In the process of production for such sale; or c) In the form of materials or supplies to be consumed in the production process or in the rendering of services. Inventories encompass goods purchased and held for resale including, for example, merchandise purchased by a retailer and held for resale, or land and other property held for resale. Inventories also encompass finished goods produced, or work in progress being produced, by entity and include materials and supplies awaiting use in the production process. In case of a service provider, inventories include the costs of the

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service, as described in the paragraph 19 of IFRSs, for which an entity has not yet recognize the related revenue. 2.1.2 Inventory control terminology. According to Lucey T. (1996) (1), some common inventory control items are defined and illustrated in figure below: d) Leading or procurement time. The period of time between ordering (externally or internally) and replenishment, i.e. when the goods are available for use.

The diagram shows a simple stock position with the following assumptions and values. Regular rate of demand of 100 units per week. Fixed lead-time of 5 weeks. Reorder quantity 600units Maximum rate of demand 140 units per week. Safety stock 200 units. Recorder level 700 units.

Reorder level (700 units)

Anticipated rates of demand Slopes indicate average maximum

1000 900

Stock level

800 700 600 500 400

Reorder quantity (usually EOQ) in this case 600 units

Lead time (5 weeks) Safety Stock

10

11

12

13

14

15

Time (in days or weeks)

2.1.3 Types of inventories. Tersine Richard J (1994) (5), Inventory may consist of suppliers, raw materials, in process goods, and finished goods. 1. Supplies These are inventory items consumed in the normal functioning of an organization that are not a part of the final product. Typical supplies are the stationeries, light bulbs, and facility maintenance items. 2. Raw materials. These are the items purchased from supplies to be used as inputs into the production process. They will be modified or transformed into finished goods. Typical raw materials for furniture are lumber, stain, glue, screw, varnish, nails and paints. 3. In process goods. These are partially completed final products that still in the production process. They represent both the accumulation of partially completed work and the queue of material waiting further processing. 4. Finished goods. These are the final product, available for sale, distribution or storage. The assignment of the inventory to any of these categories is dependent on the entity under study. This is because the finished product of one entity may be the raw xi

materials of another. For example refrigerator manufacturer consider copper tubing as a raw material, but the firm that produce the tubing consider it as a finished goods. 2.1.4 Importance of inventory control. According to Render Barry (2003) (2), Inventory control serves several importance functions and adds a deal of flexibility to the operation of the firm. Consider the following five users of inventory: a) Decoupling function. One of the major functions of inventory is decouple manufacturing processes within the organization. If you did not store inventory, these could be delays and inefficiencies. For example, when one manufacturing activities has to completed before a second activity can be started, it could stop the entire process. b) Storing resources. Agricultural and seafood products often have defined seasons over which they can be harvested or caught, but the demand for these products is somewhat constant during the year. In these and similar case, inventory can be used to store these resources c) . Irregular supply and Demand. When the supply or demand for an inventory items is irregular, storing certain amounts in inventory can be important. If the greatest demand for Diet-Delight beverage is during the summer, you will have to make sure that there is enough supply to meet this irregular demand. This might require that you produce more of the soft drink in winter than is actually needed to meet the winter demand. d) Quantity discounts. Another use of inventory is to take advantage of quantities discounts. Purchasing in large quantities can substantially reduce the cost of products. These are however, some disadvantages of buying in large quantities. You will have higher storage costs due to spoilage, demand stock, theft and insurance. Furthermore by investing in more inventories you will have less cash to invest elsewhere. e) Avoiding stock outs and shortages. Another important function inventory is to avoid shortages or stock outs. If you are repeatedly out of stock customers are likely to go elsewhere to satisfy their needs. xii

Lost goodwill can be an expensive price to pay for not having the right item at the right time. 2.1.5 Economic Order Quantity. The economic order quantity is the one of the oldest and the most commonly known inventory control technique is still used by a large number of the organization today. It is relatively easy to use but it does not make a number of assumptions. Some of the more important assumptions are: i) ii) iii) iv) v) vi) Demand is known and constant. The leading time, that is the time between replacement of the order and the receipt of the order, is known and constant. The received of the inventory is instantaneous. In other words, the inventory from an order arrives as one batch at one point time. Quantity discounts are not possible. The only variables costs are the cost of placing an order, ordering cost and the cost of holding or storing inventory over time, holding / carrying cost. Orders are placed so that stock outs or shortages must be avoided completely. When these assumptions are not met, adjustment must be made to the economic ordering quantity model. 2.1.6 Function that inventory performs. Levin Richard I. (1992) (6), Suggest that The many functions that inventory performs can be summarized as follows; i) Smoothing out irregularities in supply. Sugar beets are harvested during the late summer months, but the manufacturer of products from them such as sugar and cattle feeds continue through out the entire year. In cases like these, sufficient raw material must be purchased during the beet- producing period to last the entire year; this forces the manufacturer to carry an inventory. ii) Buying or producing in lots / batches. When the demand for an item would not support its continued production throughout the entire year, it is usually produced in batches or lots on an xiii

intermittent basis. During the time when the item is not being produced, sales are made from inventory, which is accumulated while the item is being produced. iii) Allowing organizations to cope with perishable materials. The packers of frozen lobsters tails operation at peak production only a few months each year; they too must store up or inventory, a supply sufficient to last them through a years anticipated demand until the next lobsters. The entire production process which deals with freezing fresh fruits and vegetables must also give throughout the peak production and sales period each year. iv) Storing labor. Although it may be conceptually difficult to think of inventory labor it is routine practice to do just that. The peak demand of the installation of replacement heating units comes in the fall, just after the old units have been operated for the first time. Even if demand exceeds the current productive capacity, a manufacturer can supply the difference out of inventory at that time. 2.1.7 Reasons for holding inventory. Lucey T. (1988) (9), suggest the main reasons for holding stocks can be summary summarized as follows; a) To ensure that sufficient goods are available to meet anticipated demand. b) To absorb variations in the demand and production. c) To provide a buffer between production process. This is applicable to work in progress stocks, which effectively decouple operations. d) To take advantage of bulk purchasing discount. e) To meet possible shortage in the future. f) To absorb seasonal fluctuations in usage or demand. g) To enable production process to flow smoothly and efficiently. In this case because inventories account for greater percent of the firms asset, there is a need for careful accounting for, especially in the preparation of financial statement, xiv

because misstatement which is material will bring about an effect on total assets, cost of sales, gross profit and net profit, so an inventory control is of greater significance to a firm and as well as owners. 2.1.8 Objective of inventory. According to Dobbler (1996) (8), the main objective of inventory management and control is to provide services to the customer but at the same time at a very minimum cost. i) Financial objectives. The availability of fund makes the managements requirement on how much is needed for investing in inventory so that cash will not be tightened in a stock and leaves other needy areas with no working capital. ii) Property protection objectives. Inventory represent money, so this objective gives the inventory controller the obligation to ensure that inventories are safeguarded and protected against all possible hazards, that is theft, wastage, misappropriation of the inventory, thus there should be proper inventory control of stock. iii) Operating objectives. The objectives therefore is to find the point of compromise between customer service level and economy of the operation in terms of inventory level to the support of manufacturing process. To ensure that organizational objectives are achieved, policies should be established to make available materials and when required with regard to ordering cost, holding cost, and working capital by considering three questions: What to order, How to much to order, and When to order.

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2.1.9 Inventory levels. Morrison A (1991) (9) suggests that, there are four levels of inventories. That is minimum inventory level, re order level, hastening stock level and maximum stock level. 1. Minimum inventory level. This is the level of stock that is not allowed to be below re-order level to avoid any shortage in production or distribution. It provides the safety in the stock in time of shortfall. This level is sometimes called the danger level. 2. Re-order level. This is the amount expressed in units of issue at which ordering action is indicated in time for the materials to be delivered before stock falls below the minimum. The factors to be considered in re-order levels are; i) The rate of consumption and, ii) The lead-time 3. The hastening stock level. This is the amount expressed in units of issue at which it is estimated that hastening action is necessary to request suppliers to make early delivery. 4. Maximum inventory level. This is the level expressed in the units issue above, which the inventory of the given items is not allowed to raise. When fixing the maximum inventory levels, the following factors are to be taken into consideration; i) ii) iii) iv) The rate of consumption or usage, always the fast moving items should always be available when required. Necessary time of obtaining new supplies (lead time) The economic order quantity. The supply patterns- depending on which seasons are we, because if the supply is fluctuating from time to time, is when the levels will have to fluctuate, but when the supply is constant, high levels are desirable. 2.1.10 Purchasing process. According to Heinritz (1991) (10), the basic purchasing processes are: a) The purchasing cycle. xvi

A using department indicates its needs for materials on the requisition. It uses the stores requisition to obtain materials that are in regular use in plan and carried as normal stock. This requisition goes directly to the stores departments, and the requirements are supplied from there. The purchase requisition is used for materials that have to be ordered from suppliers. b) Ordering. The various processes of negotiation and decision making that take place between the time a purchase is authorized and the time the order is issued. About the only routine procedure in the process as part of a purchasing system is the invitation to suppliers to bid and the evaluation of bids received. In industry when such invitations are issued prior to ordering, the form used is generally called requires for quotation, and no obligation to buy from the supplier quoting the lowest price is applied. c) Clearing the order. In some large companies the normal of the purchasing department ends with the issuing of the purchase order. In such cases the using department or a separate expediting units follows up for delivery, the inspection department or a separate expediting units follows up for delivery, the inspection department is responsible for acceptance, the stores department takes care of receiving the materials, and the accounting department checks invoices and certifies them for payments from its own copy of the order. d) Routine follow up. Follow up is selective. A study of prevailing policy shows that less than one third of all companies follow up every order issued for delivery. An additional one third follow up orders classified as an important or production orders as distinguished from orders for stock. In the other companys follow up is restricted to those that are actually and seriously overdue and too special, rush or emergence orders. e) Field expediting. In contrast to such routine expediting is the practice of maintaining a staff of expediter in the field, who keep constant with supplier on important orders. Such xvii

expeditor are usually made responsible for all orders placed with supplier in a given territory; often times they operates from the companys branch offices in these territories, but they report direct to the general purchasing office. f) Charge orders. It sometimes becomes necessary to make change in the original order- changes in quantity, scheduling or specifications; changes authorizing some alternative product or any other of its course of possible relation that may arise with changing design and changing condition of business. Many companies accomplish changes by correspondence. g) Receiving. The receiving department is usually an adjust of the stores department, which may or may not be a part of the purchasing department. Its functions are to receive incoming foods, signing of the delivery notice presented by the carrier or the supplier in connection with the shipment; to identify and record all incoming materials to report their receipts to the purchasing department and the stores using it or inspection departments are required and top make prompt disposition of the goods to the appropriate department. Each should be in form of receipt or damage goods. h) Inspection for quality Not all materials require formal inspection for quality; in a large proportion of deliveries on a normal procurement program, sample visual inspection needs every practical need. Secondly many firms today pre- certify their suppliers quantity. Shipments of materials from suppliers who are certified by pass incoming inspection and are set directly to the store room or into production. i) Check the invoices. Meanwhile an invoice for the shipment is, or should be, received from the vendor and this too, must be reconciled both with the original order and with the records or receipts. It is important that the invoice be received and processed promptly, so that the order may be cleared and payment be made within the discounting period, or so that necessary adjustments may be initiated without delay in case there is any discrepancy. xviii

2.2.0 Empirical literature review. In this section the researcher review the works done by other researcher in one way or another related to the topic under discussion. It aims at relating the theoretical literature reviews with the findings of other researchers. The research done by Rajab Mshindo (2001) (11) Titled Effectiveness of inventory control. Buy as needed The last arrangement of alternative is to buy as needed. Materials are ordered only when requirement for them arises, of course under this arrangement the items concerned should be those with no difficulties in obtaining, rate of usage and lead time certain. The aim is actually to stock only those items which it pays to stock. Reorder Quantity. During the time of setting the reorder quantity two sections are concerned, i.e. sales section and procurement sections, and lead-time should be known. Because the organization has got the reorder level, this system enables the organization to minimize tying up of the capital and create a continuity flow of money (liquidity).

CHAPTER THREE

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3.0 RESEARCH METHODOLOGY.

3.1 RESEARCH DESIGN The research design for this study will be case study design based on TANAPA headquarters which is situated in Arusha municipality. The organization is selected because it is among the biggest organization in tourism industry. 3.2 RESEARCH TECHNIQUES. This study is going to use both qualitative and quantitative research techniques in order to increase the validity and reliability of data collected. 3.3 POPULATION INQUIRING. To achieve the overall objectives of this study the population and units of inquiry will be the staff of TANAPA headquarters. The units of inquiry will be comprised of the following: a) Management accountant. b) Purchasing and supplies manager. c) Director of finance. d) Store officers 3.4 SAMPLING TECHNIQUES. Since it is difficult for the researcher to collect data from every individual, the researcher will sample from the population to get the representatives of the entire population. In order to ensure that the chosen sample is accurate, free from duplications and biasness the study will employ two types of sampling procedures. 3.4.1 Purposive sampling method. This method will be employed in order to determine the sample to represent Management accountant, Purchasing and supplies Manager and Director of finance.

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3.4.1

Random sampling. This will be employed in order to determine the sample to represent the employees from various departments like Purchasing and supplies.

3.5

SAMPLE SIZE. The sample size will be comprised of 16 respondents. This is the found affordable and adequate for the purpose of the study.

3.6

DATA COLLECTION METHODS. The researcher will use suitable method for data collection according to the circumstances from where data are needed, from whom and the kind of data needed; the researcher will rely on the following instruments; a) Primary data. The researcher will collect primary data through interview; spot observation and unstructured interviews will be used to obtain relevant data on all components which conceptualizing the framework. i) Interviews. Personal interview will be preferred, much by the researcher since the accessibility has to the staff. Hence it will be face to face contact, with the interviewee screened the respondent to ensure that they fit with the desire population. ii) Observation. Participatory observation will be adopted to enable the researcher to know the overall movement inventories in the organization. Therefore it will facilitate the collection of several data. iii) Questionnaires. The list of short and clear questions will be designed in advance to enhance understanding and responses. Hence the questions will be distributed to the store and accounts departments, employees in order to give out their views that are beneficial to the researcher, in evaluating the effectiveness of inventory control.

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b) Secondary data. Secondary data will be gathered through documentation such as internal files, receipt vouchers, combined requisition and issue note, daily, weekly, monthly and annually reports register books (receiving and customers collection books) and purchase requisition. The researcher will be able to find out the accuracy of records in stating stock position such as stock out, overstocking, obsolescent and other data which he did not have physical access. 3.7 TYPES OF DATA COLLECTED. This study is designed to use both primary and secondary data. The methods mentioned above will be employed in order to obtain these data.

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CHAPTER FOUR 4.0 ANNEXES I

4.1 RESEARCH BUDGET The following are the cost estimate the researcher is expected to incur during the conclusion of the report; COST ESTIMATES SCHEDULE S/N PARTICULARS 1 FIELD WORK i) Meal allowance 2 ii) Local transport SECRETARIAL EXPENSES (Est.) Rims of papers Flash disk Binding expenses SUB TOTAL ADD: 15% Incidentals GRAND TOTAL 2 rims 1 flash Estimate 6000 30000 80000 12000 30000 80000 1,074,000 199,800 1,273,800 ITEMS 119days 119days EACH 6000 per day 2000 per day TOTAL 714,000 238,000

The above cost analysis is prepared and presented basing on the economic constraints of the country. They have been adjusted to conform to the economic situation.

TIME SCALE / SCHEDULE OF ACTIVITIES.

The study / research are scheduled to take 16 weeks that from October 2011 to February 2012

THE FIRST EIGHT (8) WEEKS WILL BE USED TO;

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a) Familiarization of the situation, reviewing documents. b) Formulation, designing and drafting of interviews. c) Gathering data and facts.

THE FOUR (4) WEEKS FOR;

a) Data analysis and interpretation. b) Submitting the first draft.

THE LAST FOUR (4) WEEKS FOR;

a) Documentation / Final report writing and submission.

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4.2

BIBLIOGRAPHY Dobbler W.D and Butt (1996), Purchasing and Materials Management, International, edition, Tata Mc Graw Hill, New Delhi India. Heinritz Stuart (1991), Purchasing principles and applications, A Paramount communications company Englewood cliffs, New Jersey USA. Kothari C.R (1984), Quantitative Techniques, 3rd revised edition, Ansari Road, New Delhi India. Levin Richard I. (1992), Quantitative Approaches to Management, International Edition, Mc Graw Hill Book, New York USA. Lucey T (1988), Quantitative Techniques, 3rd edition, Guernsey Pres Co. Ltd. Great Britain. Lucey T (1996), Costing, 5th Edition, Martins the Printer Ltd, Berwick upon Tweeb, London. Morrison A. (1994), Storage and Supplies of Materials, 6th edition, Bell and Bain Glasgow, Great Britain. Morrison A. (1991), Storage and Control of stocks, Pitman Book Ltd, Landon. Render Barry (2003), Quantitative analysis for management, Upper saddle River, New Jersey USA. Tersine Richard J. (1994), Principles of Inventory and Materials Management, A Simon and Schuster Company Englewood Cliffs, New Jersey USA. International Financial Reporting Standard (IFRSs) 2007.

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4.3

DEFINITION OF ITERMS As the research topic stated,`` the role of internal control over inventory in public organization the following terminology will be employed in the whole research with their meaning; 1. Inventory: The aggregate of those items of tangible personal property which are held for sale in the ordinary course of the business, or are in the process of production for such sale or are to be currently consumed in the production of goods or service to be available for sale. 2. Internal: refers as within the locus. 3. The internal control system. Include all the measure taken by an organization for the purpose of protecting its assets against waste fraud and inefficiency, ensuring accuracy and reliability in the accounting and operating of data, securing compliance with company policy and evaluating the level of performance. 4. Control: Means making guide in order to avoid deviation from the goal. Or is the monitoring and regulatory process that helps a firm achieve its objectives and fulfill its plans. Elements in the control process are a performance measure, an operating process, a sensor, a planner and a regulator. A central feature is feedback.

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4.4

QUESTIONNAIRE

Introduction: These are questions, which have been designed for the aim of collecting information or data within the organization so as to achieve the objectives of the research respondent. My name is GERALD, Grace perusing Advanced Diploma at the institute of Accountancy Arusha. Im conducting an academic research on roles of internal control over inventory in public organization. The Case study of Tanzania National Parks (TANAPA)-Arusha Please would you answer the questions listed below: The information you provide will be treated with confidential. The researcher will not disclose the identity of a respondent. Only aggregated data and summaries will be used. Please put a tick to the correct answer and fill in the blanks where necessary:-

1. Is there any segregation of duties among those who maintain accounting records and
those handling inventory in the TANAPA? Yes No Dont Know

2. Does the validity and amount to the every inventory verified before receiving and issuing?

Yes

No

Dont Know

3. Does all issues supported by documentary evidence that is requisitions on issuing process? Yes No Dont Know

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4. Does every acceptance of inventory acknowledged by means of appropriate and approved document such as GRNS?

Yes

No

Dont Know

5. Does TANAPA have purchasing and stores policy?

Yes

No

Dont Know

6. Any difference that arises between the accounting records and store records will be detected when the reconciliation is prepared? Is this applicable with TANAPA? Yes No Dont Know

7. Does the documents such as store issue vouchers and others recorded transactions are serially numbered in your record so as to facilitate the rechecking? Yes No Dont Know

8. Does record keeping made as soon as the transactions take place and by competent employees?

Yes

No

Inappropriate

9. Due to improvement in science and technology; every Goods Received Note (GRN) and Stores Issue Note should be entered in the computer? Is this applicable in the TANAPA? Yes No

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10. What do you suggest to improve controls in your department, which might reduce or eliminate the risk of errors and irregularities? ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________

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