Inventory & Supply Management
For most schools, inventory is often an afterthought until audit time arrives. However, maintaining a structured inventory system is essential for compliance and financial accountability. Per the Texas Education Agency (TEA) Financial Accountability System Resource Guide (FASRG), every charter school in Texas is required to maintain an Inventory & Supply Management system using an acceptable tracking method. Auditors review a school’s inventory policy annually to ensure compliance with both state and federal regulations. Property purchased or leased with funds received by a charter holder is public property under state law. It is property of Texas, held in trust by the charter holder for the benefit of students and may only be used for purposes permitted by a school district.
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Managing inventory effectively ensures schools maintain accurate property records, track all assets, and meet federal and state program requirements. This process also supports financial accountability by properly recording high-value items as part of capital assets. Implementing safeguards such as tagging, restricted access, and routine audits can help prevent theft and loss. Schools should establish clear policies and procedures outlining how assets are tracked, maintained, and disposed of while ensuring that all purchases align with budget approvals. Conducting regular physical inventories allows verification of asset conditions and ensures that outdated items are removed promptly. Routine maintenance extends the lifespan of equipment and ensures functionality, while proper disposal tracking guarantees compliance with TEA guidelines, especially for federally funded assets, which require approval before removal and must be documented for five years.
Schools must differentiate between capital assets and non-capital assets. Capital assets are tangible, long-lived items with a lifespan exceeding one year and a value of $5,000 or more (or a lower threshold based on charter policy). These may include land, buildings, machinery, and equipment. Non-capital assets are items below the capital threshold but require tracking due to their marketability and portability, such as laptops, tablets, and specialized equipment.
To maintain an effective inventory system, schools should design a structured process for tagging, transferring, and disposing of assets. Conducting annual audits and reconciling inventory records ensures accuracy. A well-defined system includes clear location identifiers (e.g., office, cafeteria, classroom) and consistent naming and numbering conventions to improve asset tracking. It is essential to avoid starting numbers with ‘0’ or using manufacturer codes, as these can cause confusion. Ongoing maintenance of the system involves training staff on proper input, transfer, and disposal procedures, keeping inventory well-organized, and utilizing software solutions to track and report data efficiently.
Inventory data is used by multiple stakeholders within the school, including charter administrators, IT and planning teams, textbook and budget coordinators, department heads, auditors, grant administrators, lenders, and insurance claims processors. Conducting onsite inventory verification at least every two years, though annual audits are recommended, helps maintain compliance. Schools should also maintain a transfer log to track asset movement and regularly update their inventory policies to align with state and federal guidelines.
Checklist for Inventory Control:
- Assigned Inventory Roles & Responsibilities
- Written Policy outlining inventory management procedures
- Trained Staff on input, transfer, and disposal processes
- Consistent Naming & Numbering System for easy identification
- Properly Labeled Locations for efficient tracking
- Software to Monitor Inventory Activity
- Annual Reviews & Audits to ensure compliance and accuracy
By implementing these best practices, charter schools can improve accountability, financial compliance, and operational efficiency while reducing the risks associated with mismanaged assets.
Questions?
Email Finance Director, Norma Garcia – ngarcia@charterschoolsuccess.com
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