How often should physical inventories be conducted and reconciled with property records?

• A. Monthly, regardless of agency requirements.
• B. Only when a theft is suspected.
• C. Once every two years.
• D. At least annually, or as required by the funding agency, with discrepancies investigated and corrected.

Answer: (D)

Regular physical inventories paired with reconciliation to property records ensure what’s on the books matches what’s actually in the facility. The standard requirement is at least annually, or as dictated by the funding agency, with any discrepancies investigated and corrected. This cadence supports accountability for grant-funded property, helps catch loss or theft early, and keeps financial records accurate for reporting and audits. Relying on inventories only when a theft is suspected leaves gaps in control, while waiting years between counts increases the risk of unrecorded losses and material misstatements. If variances are found, they must be investigated to determine the cause and the records must be corrected with proper documentation and approvals.