2.1 Authority to issue goods

Goods must never leave a store simply because someone asks for them. Authority to issue goods is the formal permission, given in writing by a person entitled to give it, that allows the storekeeper to release stated items in stated quantities to a stated person or department. It protects the organisation's stock from loss, theft, waste and fraud, and it gives the storekeeper a document to account for every item that leaves. Example: at a county referral hospital, a ward nurse cannot collect a box of surgical gloves from the main store on request. She must present a requisition signed by the nurse in charge before the storekeeper may release anything.

Meaning and purpose of authority to issue goods

Authority to issue is both a document and a decision. The decision is made by a person with the right to commit the organisation's stock, and the document is the evidence that the decision was made. Without both, the storekeeper has no protection if stock goes missing.

The main purposes of authority to issue goods are:

• Control of stock: Only approved quantities leave the store, so the stock records agree with the physical stock.
• Accountability: Every item issued can be traced to the person who approved it and the person who received it.
• Prevention of theft and fraud: Requiring a signature from someone other than the storekeeper makes it harder to remove goods secretly.
• Budget control: Approving issues allows managers to check that usage stays within the department's budget.
• Support for accounting: The signed document is the basis for stock ledger entries, cost allocation and later audit.
• Protection of the storekeeper: A valid authority proves that the storekeeper acted on instructions and not on personal choice.

Documents that give authority to issue goods

The form of the authority depends on the type of organisation and the destination of the goods. Internal issues normally use a requisition, while issues to customers use a sales or release document. Each must show enough detail to identify exactly what is to be issued.

A valid authority document should contain the following information:

• Serial number: A pre-printed or system-generated number so that no document can be inserted or removed unnoticed.
• Date and department: These show when the request was made and which cost centre will carry the charge.
• Item description and code: Clear descriptions and stock codes prevent the wrong item being released.
• Quantity requested and quantity approved: The approver may reduce the quantity, so both figures are recorded.
• Purpose or job reference: This links the issue to a job, project or activity.
• Signature of the approver: This is the core of the authority and must match the specimen signature held by the store.
• Name and signature of the receiver: This is completed on collection and proves delivery.

Persons with authority to approve issues

Not everyone in an organisation may approve an issue. The right to authorise is given by management according to rank, role and the value or sensitivity of the goods. The storekeeper is normally the person who carries out the issue, not the person who approves it.

Typical levels of authority include:

• Head of department or section supervisor: Approves routine issues of consumables for the department's own use. Example: the housekeeping manager of a coastal hotel approves requisitions for cleaning chemicals and linen.
• Finance or accounts officer: Approves issues of high-value or attractive items, or issues charged to a restricted budget.
• Stores manager or procurement officer: Approves transfers between stores and the release of goods to external parties.
• Sales manager or authorised sales officer: Approves the release of goods to customers once an order is confirmed and payment terms are met.
• Project manager or site engineer: Approves issue of materials to a construction site. Example: a building contractor's site engineer signs for cement and steel bars drawn from the central yard.
• Chief executive or accounting officer: Approves exceptional issues, such as disposal, donation or write-off of stock.

Authorised signatory lists and delegation limits

To make checking easy, the organisation keeps a list of authorised signatories. The list names each person, their position, the type of issue they may approve and the maximum value they may approve. The storekeeper holds a copy with specimen signatures and compares every incoming document against it.

Delegation limits may be set in this way:

• Storekeeper: No power to approve any issue, only to carry out issues approved by those named below.
• Supervisor level: Up to Ksh 10,000 per requisition.
• Head of department: Above Ksh 10,000 and up to Ksh 50,000.
• Finance manager: Above Ksh 50,000 and up to Ksh 200,000.
• Chief executive: Any amount above Ksh 200,000.

These figures are only an illustration, since each organisation sets its own limits. Example: a SACCO may allow its administration officer to approve stationery issues up to a fixed amount, but require the manager's signature for the issue of new cheque books or passbooks because they are sensitive items.

When an approver is absent, delegation must be written, dated and limited in time. A verbal message that "the manager said it is fine" is never sufficient authority. The list must be updated when staff leave, are transferred or are promoted, and the storekeeper must withdraw old copies so that outdated signatures are not accepted.

Checks made before accepting the authority

Before any goods are touched, the storekeeper must be satisfied that the authority is genuine and complete. These checks take only a few minutes and prevent most unauthorised issues.

1. Check the document is original and serial numbered. Photocopies, altered forms and documents with a missing or duplicated number are rejected until clarified.
2. Compare the signature with the specimen list. The signature must belong to a person on the current authorised signatory list.
3. Confirm the approver's limit. The value of the issue must not exceed the approver's delegated limit, otherwise a higher signature is needed.
4. Check the details are complete. Item descriptions, codes, quantities, date and purpose must all be filled in, and blank lines must be crossed out.
5. Look for alterations. Any change to a quantity or item must be countersigned by the approver.
6. Confirm the document is still valid. Some authorities lapse after a set number of days, and a stale requisition must be re-approved.
7. Confirm the identity of the person collecting. The collector shows a staff or national identity card, or is named on the document, before goods are released.
8. Confirm stock is available. If stock is lower than the approved quantity, the issue is limited to available stock and the shortfall is noted on the document.

Where any check fails, the storekeeper withholds the goods and reports the matter to the stores manager instead of releasing them informally.

Separation of duties and control of records

Authority works only if the duties around it are separated. The person who requests goods, the person who approves, the person who issues and the person who records the transaction should be different people wherever the size of the organisation allows. This means that one person cannot request, approve and remove goods alone.

Records that support control of authority include:

• Signed requisition file: All approved documents are filed in serial number order, including cancelled or spoiled ones.
• Stock card or system entry: Each issue is posted against the document number so that the balance is updated.
• Register of authorised signatories: This is kept current and signed off by management at least once a year.
• Issue register or log: This lists each issue by date, document number, receiver and value.
• Periodic reconciliation: Issues recorded in the store are compared with the department's consumption and with accounts records.

In computerised systems, authority is controlled by user rights and approval workflows. Example: in a school's inventory system, a requisition from the laboratory is routed to the head of science for electronic approval, and the storekeeper can print the issue only after approval is shown on the system.

Urgent and exceptional issues

Some situations cannot wait for the usual approval, such as a machine breakdown on a farm or an emergency in a clinic. The organisation should have a written rule for such cases so that the storekeeper is not forced to choose between stopping work and breaking control.

A sound emergency arrangement has these features:

• Limited items and values: Only listed critical items, within a set value, may be issued on an emergency basis.
• Verbal approval confirmed quickly: The approver gives approval by telephone, and the storekeeper records the name, time and details.
• Written authority within a fixed time: The proper requisition is submitted and signed, usually within 24 hours.
• Entry in an emergency log: The issue is recorded separately so that management can review how often it happens.
• Review by management: Frequent emergency issues point to poor planning and should be investigated.

Example: a dairy farm's milk cooling unit fails at night and the farm manager telephones the storekeeper to approve the release of a spare compressor part. The storekeeper records the call, issues the part, and the signed requisition is delivered the next morning.

Consequences of issuing without proper authority

Issuing goods without valid authority exposes the organisation and the storekeeper to serious risk. The effects are felt in stock records, finances and discipline.

The main consequences are:

• Stock losses: Goods leave without being traced, so physical counts fall short of the records.
• Fraud and theft: Dishonest staff or outsiders can take goods knowing nobody will check.
• Wrong or excess issues: Departments may take more than they need, causing shortages elsewhere.
• Inaccurate costing: Costs are not charged to the right job or department, so profits and budgets are misstated.
• Audit queries: Auditors raise findings where issues cannot be supported by documents, which may damage the organisation's reputation.
• Disciplinary action: The storekeeper may be required to pay for the loss or may face dismissal, and in serious cases the matter may be reported to the police.

Chapter Summary

This chapter covers the essential aspects of preparing to issue requested goods, beginning with the importance of establishing clear authority to issue goods to ensure accountability and proper control. It outlines the standard issuing procedure that guides the systematic release of goods from inventory to authorized personnel or departments. Various methods for issuing goods are explored, emphasizing the need to select appropriate approaches based on organizational requirements. The chapter also delves into order picking methods, detailing techniques to efficiently locate and retrieve items for dispatch. It highlights the necessary resources, equipment, and facilities that support effective goods issuing operations. The role of goods issuing schedules is examined to facilitate timely and organized distribution. Further, the process of preparing an issuing schedule is explained, focusing on planning and coordination to meet demand. Lastly, the chapter discusses how to identify and utilize suitable resources and facilities to optimize the issuing process while revisiting order picking methods to reinforce best practices.