INVENTORY SERVICES​​ 

STATEMENT OF WORK

 

 

Client acknowledges that any delay in providing Syft with information as indicated below may result in rescheduling of the inventory count date(s) or a delay in receipt of the inventory​​ reporting. Unless otherwise indicated herein, the following descriptions apply only to the categories and options selected by Client on the Inventory Services Agreement.​​ 

 

DELIVERABLES AND CLIENT REQUIREMENTS

 

ALL INVENTORY SYSTEMS AND SUPPLY TYPES​​ 

 

  • Client shall participate in a final pre-inventory planning meeting which shall occur no later than ten (10) business days prior to the scheduled inventory count date to confirm project details such as team meet time and location, Client contact names and phone​​ numbers, verify all product excluded from inventory has been marked in advance by the Client, etc. Pre-planning is important to the success of the project outcome.​​ 

 

  • Client shall identify in writing all consumable Medical/Surgical supply, Pharmaceutical or​​ Asset Department locations and Areas to be counted no later than fifteen (15) business days prior to Syft’s start of the physical inventory. Syft will accept electronic files (MS Excel, MS Access, or CSV file format) of sterile tray contents/implants and​​ append them to the inventory valuation report without alteration or warranty provided they contain a current price, unit of measure (OUM) and conversion factor.​​ 

 

  • Client shall clearly and conspicuously identify any and all inventory Client does not want included as “DO NOT INVENTORY” or “CONSIGNMENT.”​​ Syft personnel will verify these locations during the on-site walk-thru the day of inventory count.​​ Supplies/pharmaceuticals lacking packaging identification (example: Item Number or MFG Catalog/Reference Number) along with miscellaneous supplies that reside in a common container will not be counted.

 

  • Client must supply secure and ample working space for Syft team members inclusive of working electrical outlets to charge equipment. Client will provide scrub suits or coverings for Syft staff when necessary.​​ A Client contact needs to be on-site for the duration of the inventory project. Contact must provide access to all inventory locations or provide the Syft Field Manager with security access card(s) in order to​​ access count areas.​​ Syft will require the Client designated Contact to sign off on the Syft Area Sheet for this customer location stating their agreement that all Areas to be counted have been inventoried. Syft will not be held responsible for missing Area(s) due to the inaccessibility to Area(s) or if the Syft Area Sheet is not signed off by the Client designated Contact at the completion of the inventory count.

 

  • Syft shall use its best efforts to check all counted items for expiration dates and will remove expired items from the shelves. These items will be counted, flagged as expired, and reported to the Client in a separate valuation report on the Syft Client Portal. Syft will put the expired product in the location(s) designated by the Client site contact.

 

  • Client shall periodically conduct inventory audits per Section 4 below. In the event Client identifies an inventory count variance, Client must notify Syft in writing​​ prior to Syft’s completion of the physical inventory.

 

  • Client shall provide​​ Syft electronic files (in Excel, Access, or CSV format only; scanned documents, PDF, JPEG, etc. will not be accepted) if Client desires any data to be added to the inventory that was not physically counted by Syft such as inventory contained in cabinetry (e.g. Pyxis, Omnicell, etc.), *sterile trays, etc.​​ Notwithstanding anything herein to the contrary, Client shall provide any and all such electronic files (a) prior to the start of the physical count for​​ Perpetual Inventory; and (b) no later than one​​ (1) business day​​ from the end of the physical count for​​ Periodic Inventory.

 

  • Sterile Implant Trays. If Sterile Implant Trays are to be a part of the physical inventory as a “no additional charge add-on” to the valuation report, the Client is to provide an electronic Sterile Implant Tray Inventory list, in MS Excel or delimited file format (no image files) to include item description, catalog number, manufacturer, price, unit of measure, conversion factor and quantity to Syft so as to be added to the final inventory report and avoid added costs to the Client in opening and/or valuing all Sterilized Implant Trays. *Sterile implant count files must be provided​​ five (5) business days in advance​​ of the scheduled start date of the physical inventory. Sterile implant hard copy count sheets will not be utilized by Syft for a valuation report.

 

  • Case Carts. Syft will not count case carts that are already pulled for cases on that day. If Client desires to have case carts included as part of the physical inventory as a “no additional charge add-on” to ​​ the inventory valuation, the Client must supply Syft with cart content lists in MS Excel or delimited file format (no image files) that contain all required information for all countable items on the case cart such as item description, catalog number, manufacturer, price, unit of measure, conversion factor and quantity. “Do Not Inventory” or consignment items need to be notated on the list. ​​ Client shall provide any and all such electronic files (a) prior to the start of the physical count for​​ Case Carts; and (b) no later than one​​ (1) business day​​ from the end of the physical count for​​ Periodic Inventory.

 

  • Inventory/Par Systems. If Syft is directed to include counts from inventory/par systems such as Pyxis, Omnicell, etc. which are​​ not physically counted by Syft, the contents of each unit must be provided electronically in an Access, MS Excel or character delimited text format (no image files) and must include all required information for all countable items in each unit, Manufacturer Catalog number, Manufacturer Name, Description, and quantity; or “Do Not Inventory” differentiation). The inclusion and process for counting the above must be mutually agreed upon prior to the start of the inventory. Client shall provide any and all such electronic files (a) prior to the start of the physical count for​​ Par Inventory Systems; and (b) no later than one​​ (1) business days​​ from the end of the physical count for​​ Periodic Inventory.

 

  • Post-inventory Meeting.​​ At the conclusion of the project as defined as after the inventory valuation report has been delivered and reviewed, or approximately 20 business days from the inventory count date, the Client will participate in a post-inventory meeting to discuss overall project satisfaction.

 

 

 

Syft Client Project Milestones

 

 

The following tables summarize the key milestones in a typical periodic Med/Surg inventory valuation service:

 

Task

 

Critical Date*

 

Client

 

Syft

Client to upload Item Master and P.O. History to Syft Client Portal.​​ (1.2.1.A, 1.2.2.A, 1.2.3.A, 1.3.A)

30 days

 

Client to document pricing priorities to Syft via Inventory Valuation Verification document and load to Syft’s Client Portal (1.2.4.B) as soon as possible after files are approved by Syft.

25 days

 

Syft​​ and Client to participate in final Pre-Planning meeting. (1.1.A)

10 days

Client to send Area Sheet to Syft with approval/changes. (1.1.B)​​ 

15 days

 

Syft will provide Client with names of staff to perform counts and scrub/bunny suit sizes;​​ ensuring all staff credentialed for project.

5 days

 

Syft Field Manager will conduct an opening meeting with all site contacts and walk-thru of locations. (1.1.C)

Agreed Upon Inventory Count Date

* Number of business days​​ prior​​ to​​ Inventory Count Date

 

 

 

 

 

 

Task

 

Critical Date**

 

Client

 

Syft

Client is on-site during duration of inventory to sign-off on Area Sheet at completion of the physical count. (1.1.D)

Agreed Upon Inventory Count Date

 

Client to provide Syft with any​​ inventory data from PAR systems, implants, automated drug dispensing units, etc. ​​ to be valued as part of the inventory. (1.1.G, 1.1.J)

1 day

 

Syft to deliver DRAFT Inventory Valuation Report to Client. (1.2.4.D)​​ 

3-10 days

 

Client submits any​​ changes to Syft via the Change Template. (1.2.4.E)

1-10 days following receipt of Valuation Report

 

Syft delivers Final Inventory Valuation Reports to Client. (1.2.4.F)

1-7 days following receipt of Valuation Report changes

 

Client to​​ participate in a Post Inventory Follow-Up Call with Syft to provide their feedback on the delivery of services by Syft. (1.1.K)

~20 days following Final Inventory Report Delivery

** Number of business days​​ following​​ Inventory Count Date

 

NOTE: ​​ The​​ aforementioned is the typical implementation timeline for a Periodic physical inventory valuation service to be performed by Syft but may vary dependent upon services requested, Client circumstance and or timing.

 

SYSTEM: PERIODIC ​​ 

 

TYPE:​​ MEDICAL/SURGICAL SUPPLIES​​ 

 

  • In order for the best possible inventory valuation outcome, it is critical that the Client provide a full Item Master File and 24 Month Purchase Order history file (“P.O. History file”)​​ thirty (30) calendar days​​ prior to the scheduled inventory dates via the Syft Portal with data elements as outlined in the Inventory confirmation email sent upon receipt of agreement and approval of inventory dates.

 

  • All consumable medical/surgical supplies located in​​ areas​​ to be counted​​ will be​​ identified prior to the start of the physical inventory. Physical inventory of consumable medical/surgical supplies excludes - pharmaceuticals, linen, dietary/food products, tools and hardware such as those found in an Engineering or Plant Operations department, instruments and sterile trays unless specifically contracted for in the Inventory Agreement.

 

TYPE: PHARMACEUTICALS

  • Client shall provide Syft a complete 24-month wholesaler and direct purchase history files (in Excel format) via the Syft Customer​​ Portal at least​​ thirty (30) calendar days​​ prior to the scheduled physical count.

 

  • All pharmaceuticals located in​​ areas​​ to be counted​​ will be identified prior to the start of the physical inventory. Physical inventory of pharmaceuticals excludes - consumable medical/surgical supplies, linen, dietary/food products, tools and hardware such as those found in an Engineering or Plant Operations department, instruments and sterile trays unless specifically contracted for in the Inventory Agreement.

 

  • Syft shall count all products to the “each” with the exception of bulk oral solids which will be counted to the nearest tens and liquids which will be estimated to the nearest tenth. The count team will utilize laptops and barcode scanners to capture the on-site count data on the day of the inventory by searching the database where an inventory file was created from client data files. Syft will confirm item descriptions from the package, NDC, and location as permitted. ​​ Once an item’s information is verified, Syft will enter the item as “matched.”​​ 

 

  • There is a $250.00 per cabinet fee if Client is unable to provide a download of the current counts for any automated dispensing unit (such as Pyxis) requiring Syft to hand count the automated dispensing unit.

 

TYPE: CAPITAL ASSET

 

  • Client shall provide Syft with Clients complete Asset Ledger file (and any other files that may be useful for identifying assets during the physical count) in Excel format at least​​ thirty (30) calendar days prior​​ to the scheduled start of the physical​​ count.

 

  • Syft shall only inventory medical equipment with an​​ estimated replacement cost equal to, or exceeding, the financial threshold set forth in the Inventory Services Agreement. Examples of equipment included in the scope of work are, Monitoring Systems, Surgical Tables, Surgical Lights, Video Systems, Imaging Equipment, and Intravenous Pumps. Examples of equipment excluded from the scope of work are Office Equipment, Office Furniture, IT Hardware and Software, Standard Wheelchairs, Patient Beds, Stretchers, Pumps, Boilers, Electrical, Motors.

 

  • Syft shall only tag inventoried Assets if Client selects such option in the Inventory Services Agreement and provides ​​ new tags. Client is responsible for providing a sufficient number of tags prior to start of the physical count.​​ Syft’s​​ Inventory Report will include,​​ when available: location (Facility, Department, Floor, Room), Current Asset Tag Number, New Asset Tag Number, Asset Description, Manufacturer Name, Model (if applicable), and Serial Number.​​ 

 

  • Syft will provide an Inventory Report that will include:​​ Matched/Found Items​​ (inventoried Assets that match directly to items on the Asset File Ledger),​​ Not Found Ledger Items​​ (items on the current Asset Ledger that were not located during the physical inventory),​​ Unmatched Physical Items​​ (items identified during the physical inventory that are not identified on the current Asset Ledger).

 

  • Syft will prepare an initial Inventory Report by the​​ date established and as mutually agreed to by Syft and Client (typically​​ no earlier than 20 Business Days after physical count). Syft shall deliver the preliminary Inventory Report in Excel format, via the Syft Portal.​​ 

 

  • Client has ten (10) Business Days after receipt of the initial Inventory Report to submit changes to the preliminary Inventory Report.​​ All Client changes MUST be submitted using the Change Template on the Syft Customer Portal under the Files and Uploads link. If changes are not submitted by the 10th​​ day, Client shall be deemed to have accepted the initial Inventory Report as final. If Client timely submits changes to the initial Inventory Report, Syft will deliver the final Inventory Report with revisions within 7 business days following Syft’s receipt of the change request.​​ 

 

OPTION: INVENTORY VALUATION​​ SERVICES​​ 

 

  • This option not applicable to the Inventory Type “Capital Asset”

 

  • Client shall provide Syft a signed inventory valuation verification establishing Client’s preferred pricing priority (the “Inventory Valuation Verification”) at least twenty-five​​ (25) business days​​ prior to each scheduled inventory dates via the Syft Portal. ​​ Client acknowledges and agrees that, in the event Client fails to timely return the signed Inventory Valuation Verification, Syft shall first defer to the Item Master File for​​ pricing and second (if no pricing is found in the Item Master File) to the P.O History file (the “Default Pricing Policy”). ​​ For Pharmaceuticals only: Client acknowledges and agrees that, in the event that Client fails to timely return the signed Inventory Valuation Verification, Syft shall first defer to the Wholesaler Purchase History File for pricing and second (if no pricing is found in the Wholesaler Purchase History File) to the Syft Master Dataset (the “Default Pricing Policy”).

 

  • Unmatched Pricing:​​ Syft will assign Syft Average Pricing to all unmatched items when available. Inventory priced with Syft Average Pricing will be denoted in the Inventory Valuation Change Template. Client shall have the option to provide Syft with pricing (provided that client pricing is commercially reasonable for the item in question) for those items no later than ten (10) business days following Client’s receipt of the Inventory Valuation Report using Syft’s Change Template provided.​​ Use of pricing deemed not commercially​​ reasonable (in Syft’s sole discretion) will result in Syft using the Syft Average Price for that item​​ .​​ For Pharmaceuticals only-​​ In preparing the Inventory Valuation Report (“I.V.R.”), Syft will assign​​ Average Wholesale Pricing (AWP),​​ when​​ available, to all unmatched items found during the physical inventory and label it as Syft Master Dataset in the I.V.R.

 

  • Syft shall prepare and deliver via the Syft Portal the preliminary Inventory Valuation Report (“I.V.R.”) within​​ three to ten (3-10) Business Days​​ after the end of the physical count. Notwithstanding anything herein to the contrary,​​ delivery of the I.V.R. remains subject to the payment terms set forth herein.​​ Syft reserves the right to bill Client for all inventory counted and/or included​​ even if Client subsequently determines to exclude such inventory or data from the I.V.R.

 

  • Client has ten​​ (10) Business Days​​ after receipt of the initial I.V.R. to submit changes to the preliminary I.V.R. (e.g. Client pricing to replace Syft Average Pricing).​​ All Client changes MUST be submitted using the Change Template on the Syft Customer Portal under the Files and Uploads link. Syft will deliver the final I.V.R. with revisions within seven​​ (7) business days​​ following Syft’s receipt of the change request.​​ 

 

  • If changes are not submitted by the 10th​​ day, Client shall be deemed to have accepted the initial I.V.R. as final.  ​​​​ 

 

 

SYSTEM: PERPETUAL

 

  • Not less than thirty (30) calendar days​​ prior to the start of the scheduled physical inventory, Client shall provide a “count sheet” file, via Syft’ portal, which must contain the following fields/data: Manufacturer Name, Manufacturer Catalog/Part/Re-order Number, Item Description including Size, Client Internal Item Number, Client Bin Location, “UOM” – Unit of Measure that product is to be counted which should consist of the following information: Descriptive Unit (BX, EA, CS, RL, BT, etc.); Unit Conversion (100, 5, etc.) and finally the Cost of the respective UOM represented if the inventory is to be valued.

 

  • Client​​ shall not distribute from or stock replenishment of any inventory location during the physical count. ​​ Syft shall physically count all open and partial containers and record the inventory quantities in the Syft’ proprietary software per the UOM designated​​ by Client using the Bin location, Manufacturer Catalog Number or Client Internal Item Number provided by Client.

 

  • Syft will perform a blind physical inventory count, physically count all open and partial containers and record the quantity in the Syft proprietary software which is holding the Client perpetual data set.

 

  • Syft staff will count in Row, Rack and Bin location order using a left to right, top to bottom count process.

 

  • Syft will count to the unit of measure (UOM) noted in the “electronic” data file​​ provided by the Client.

 

  • Syft will record a quantity of “0” (zero) if the count location has no countable quantity at that location.

 

  • It is the Client’s responsibility to have any and all “Overstock” locations identified for inclusion in the​​ inventory.

 

  • Syft shall deliver a count export from the Syft proprietary software system to the Client at Area count intervals or minimally at the completion of the physical count. The Client will upload or enter the count quantities into their MMIS system.​​ Any variances to the MMIS system On-hand quantities that require validation counts MUST BE BROUGHT TO THE IMMEDIATE ATTENTION OF THE SYFT ON-SITE FIELD MANAGER.

 

  • Syft will perform validation counts with a different inventory count specialist in conjunction with a Client representative as needed.

 

  • Validation counts will be recorded in the Syft software system but will not be recorded in place of the original count. Syft will perform one set of validation counts.​​ 

 

  • Verifications related to inventory variances from the Client On-hand Quantity will be conducted as mutually agreed upon Client and Syft and as set forth in the Inventory Agreement.

  • The Client must provide an export from the MMIS system with inventory Freeze Quantity/On-Hand Quantity of the Perpetual Inventory to the Syft Field Manager prior to Syft leaving the facility.

 

  • Syft will not provide an Inventory Valuation Report (I.V.R.) unless otherwise contracted.

 

  • Unless Client engages Syft to provide Valuation Services, Client shall report the valuation of the counted inventory to Syft in writing within two​​ (2) business days​​ of Syft’ completion of the physical inventory.​​ In the event this valuation is not timely provided by Client, Syft will use 110% of Syft’s estimated value for billing purposes, at Syft’s sole discretion.

 

OPTION: DATA EXPORT

 

  • Upon Syft’s completion of the Physical Inventory, a Syft Field Manager shall provide to Contact a Final electronic export of the inventory count data (the “Data Export”) which shall include the following data: Manufacturer Name, Manufacturer Catalog/Part/Re-order Number, Item Description including Size, Client Internal Item Number, Client Bin Location, UOM – Unit of Measure that product is to be counted which should consist of the following information: Descriptive Unit (BX, EA, CS, RL, BT, etc.); Unit Conversion (100, 5, etc.),​​ the Cost of the respective Unit of Measure, Count Quantity – in the above UOM, Row, Rack and Bin location (if other than what was provided), Substitute product information if applicable (Manufacturer Name, Manufacturer Catalog/Part/Re-order Number), Audit Information, Expired Flag and Item Source.​​ Note the Count Quantity will be the count of that item per location. Should a particular item be counted elsewhere, it will not be added for a cumulative or “rolled-up” count of that item for the overall inventory.

 

OPTION: COUNT SHEETS

 

  • Client shall provide Syft with hard copy Count Sheets which are sequentially numbered with page numbers prior to the day of the physical count so that all pages may be accounted for at the beginning and at the end of the physical count. Count Sheets must be in Bin location order.

 

  • Syft will perform a blind physical inventory count, physically count all open and partial containers and record the quantity on the​​ hard copy Count Sheets provided by the Client.

 

  • Syft staff will count in Row, Rack and Bin location order using a left to right, top to bottom count process.

 

  • Syft will count to the unit of measure (UOM) noted on the Count Sheet.

 

  • Syft will record a quantity of “0” (zero) if the count location has no countable quantity at that location.

 

  • It is the Client’s responsibility to have any and all “Overstock” locations identified for inclusion in the inventory.

 

  • Syft shall deliver the completed count sheets to Client at completion of the physical count. The Client will enter the count quantities into their MMIS system. Any variances to the MMIS system On-hand quantities that require validation counts MUST BE BROUGHT TO THE IMMEDIATE ATTENTION OF THE Syft ON-SITE FIELD MANAGER.

 

  • Syft will perform validation counts with a different inventory count specialist in conjunction with a Client representative as needed.

 

  • Validation counts will be recorded next to the original count, not in place of. The original count will have a single line drawn through the count which will demonstrate a validation count was executed but the original count is still legible. Syft will perform one set of validation counts.​​ 

 

  • Verifications related to inventory variances from the Client On-hand​​ Quantity will be conducted as mutually agreed upon Client and Syft and as set forth in the Inventory Agreement.

 

  • The Client must make copies of the completed count sheets to be given to the Field Manager prior to the inventory team leaving the facility.

 

  • Syft shall not provide an Inventory Valuation Report (I.V.R.). Client retains the responsibility to enter the inventory counts directly into Client’s system(s).

 

  • Client must report the valuation of the counted items to Syft in writing within forty-eight (48) hours of the completion of the physical inventory. In the event this valuation is not provided, Syft will use 110% of the estimated value for billing purposes.

 

OPTION: CLIENT EQUIPMENT

 

  • Client shall provide Syft with all necessary equipment to​​ perform the perpetual inventory. Syft and Client will mutually agree to the equipment quantity required in advance of the inventory project. ​​ All equipment must be prepared for inventory, including any segmentation required to assign the inventory count team to particular count Areas.​​ 

 

  • Syft will perform a blind physical inventory count, physically count all open and partial containers and record the quantity in the equipment provided by the Client.

 

  • Syft staff will count in Row, Rack and Bin location order​​ using a left to right, top to bottom count process.

 

  • Syft will count to the unit of measure (UOM) as outlined in the Inventory Agreement (generally as noted by the equipment or on the Client shelving).

 

  • Syft will record a quantity of “0” (zero) if the count location has no countable quantity at that location.

 

  • It is the Client’s responsibility to have any and all “Overstock” locations identified for inclusion in the inventory.

 

  • Syft shall deliver the Client provided devices/equipment back to Client at completion of the physical count (or at designated intervals for data extraction). The Client will be responsible to manage the count data extracted from the equipment. Any variances to the Client On-hand quantities that require validation counts MUST BE BROUGHT TO THE IMMEDIATE ATTENTION OF THE Syft ON-SITE FIELD MANAGER.

 

  • Syft will perform validation counts with a different inventory count specialist in conjunction with a Client representative as needed.

 

  • Validation counts will be recorded by a mutually agreed upon methodology as documented in the Inventory Agreement that will not replace the original count. Syft will perform one set of validation counts.​​ 

 

  • Verifications related to inventory variances from the Client On-hand Quantity will be conducted as mutually agreed upon by Client and Syft and as set forth in the Inventory Agreement.

 

  • Syft shall not be held responsible for an incomplete inventory result due to the failure of equipment provided by the Client.

 

  • Syft shall not provide an Inventory Valuation Report (I.V.R.). Client retains the responsibility to enter the inventory counts directly into Client’s system(s).

 

SCHEDULING ​​​​ 

 

For each year during the Term, Client and Syft will mutually agree upon the scheduled dates and hours for the physical inventory​​ services. Dates will not be confirmed for the initial physical inventory until this Agreement is executed by both parties. For any inventory to be conducted in years subsequent to the date of this Agreement, Client shall notify Syft in writing at least 90​​ days in advance of Client’s Preferred Month. Syft shall use commercially reasonable efforts to accommodate Client’s Preferred Month. The physical inventory shall incorporate Client’s reasonable patient care requirements of each department to minimize interruptions. Due to the nature of Client’s business, Client acknowledges the physical inventory could extend beyond normal hours of operations.​​ Mobilization of the Syft Count Team for scheduled inventory date(s) are subject to and contingent on Client satisfying any and all outstanding financial obligations in accordance with this Agreement. Syft reserves the right to (a) postpone, reschedule or cancel a scheduled inventory, for which any invoice remains unpaid thirty (30) days prior to ​​ any scheduled inventory date and (b) postpone a scheduled inventory due to weather conditions, transportation problems, or other causes beyond the control of Syft.

 

 

PAYMENT TERMS

 

Prior to the start of Client’s Preferred Month for each inventory under this​​ Agreement, Syft will issue Client an initial invoice for ​​ seventy-five percent (75%) of the estimated fee calculated by applying the Rate to Client’s Estimated Inventory Value (the “Estimated Fee”). For multi-year agreements, the initial invoice will equal​​ 75% of the Estimated Fee calculated based on the prior year’s inventory value. Upon issuance of the final inventory valuation report, Syft shall issue an invoice for the remaining Fee for such inventory, plus any and all processing and report fees incurred. Client shall pay all undisputed amounts in full within thirty (30) days of the date of each invoice. If Client fails to pay any invoice at least 30 days prior to the scheduled inventory date(s) Syft reserves the right to reschedule any future inventory​​ date(s) or withhold the delivery of any valuation reports until such time as all payment obligations have been satisfied. If an invoice, or portion thereof, is disputed, Client will notify Syft of such dispute in writing within 5 days of Client’s receipt of the invoice. Client will pay, in addition to all other amounts owed to Syft, interest calculated at 1.5% percent per month or, if lower, the maximum rate permitted by applicable law on all overdue amounts. Client shall pay any and all costs of collection​​ incurred by Syft, including but not limited to, reasonable attorney’s fees.

 

THIRD-PARTY AUDITS (SOP)

 

These standard operating procedures have been developed as a best practice, drawing from published auditing standards and the experience of over 700 Syft annual physical inventory events. The clinical environment is very dynamic, and inventory is in constant motion. As a result, Syft does not guarantee the validity of counts if the test counts are not performed while the Syft team is still in the “Area” being audited. The SOP is designed to mitigate the issues this dynamic environment presents. In the event these guidelines are not followed, Syft will not be responsible for the investigation or reconciliation of any variance nor will Syft provide any recount services without additional fees.

 

Definitions.

 

  • Area​​ - A physical inventory storage location within a department that is mutually agreed to with the client and defined on the “Area Sheet”. (e.g. 0108 OR ROOM 08, or 0184 CAST CARTS (02), or 0221 DIFFICULT INTUBATION CART)

 

  • Area Sheet​​ - A document agreed to with the Client during the pre-inventory process which lists all of the defined Departments and Areas for each given physical inventory location.

 

  • Third-Party Auditor​​ - Any auditor other than the Syft​​ Field Manager/Team Lead. This could either be the Client auditor or an external auditor.

 

Third-Party Audit On-Site Requirements and Procedure

 

  • The Third-Party Auditor(s) must be available for a pre-inventory conference call and/or meeting to discuss the Syft methodology.​​ 

 

  • The Third-Party Auditor(s) must be present during the Syft count, prior to the Syft Team departure from an Area, to perform their audit and interface with Syft personnel in real-time to assure accuracy of counts.

 

  • No more than two (2) Third Party Auditor(s) may be in any Area at the same time.

 

  • If Third Party Auditor(s) are not present at the time of the inventory count of an Area, the Syft Team will not return to this Area for an audit to be performed.​​ 

 

  • Any Area to be audited will​​ employ an inventory movement log which Client staff must use to maintain a record of all product movement for the period during which the Syft Team is counting an Area. This log will be used to help reconcile any audit discrepancies. It is however, strongly desired for the Client to “lock-down” the inventory in that Area until the inventory and corresponding audits are completed to mitigate any reconciliation issues.​​ 

 

  • Audited Areas must have a minimum audit sample size of 25 or at least 15% of the total records in the Area if the total records are less than 100. Areas with less than 25 audits will not be subject to a recount.

 

  • To perform the audit of an item count, the​​ Third-Party Auditor​​ will approach the Syft team member performing the physical inventory​​ and identify which product they intend to audit. Then, the​​ Third-Party Auditor​​ will count the item in question and compare their count to the Syft team member’s count.

 

  • If there is a count discrepancy, both parties count the item a second time to reach consensus on the agreed upon count quantity to be recorded as the audit record count. This value is recorded in the Syft Audit Screen as the audited count.​​ 

 

  • The Syft Inventory Count “Audit Report”, an export from the Syft Field Manager server, will serve as​​ the official Audit document of record for the inventory.

 

  • At the completion of the audits, the Third-Party Auditor must reconcile all documentation of the Audited records with the Syft Field Manager and mutually “sign-off” on the Syft Inventory Count “Audit Report”, or mutually execute the Syft Inventory Count “Audit Report” Proxy document.​​ 

 

  • If the Third-Party Auditor(s) is not present with the Syft Team during the inventory count and any recount is requested, a change order will be generated, and additional fees will apply.

 

Area Recount Trigger

 

  • Upon the completion of the count of an area, if more than 10% of the audits performed had a variance from the original count recorded, then the audit sample size will be doubled, and additional audits​​ performed.​​ 

 

  • If the count variance including the expanded sample size remains above 10%, those records demonstrating a count variance then must show a valuation of greater than 2% of the total financial valuation of the counted area to be considered for a​​ recount. If that occurs, Syft will collaborate with the Third-Party Auditor on next steps up to and including a recount of the Area as soon as practical that day with different Syft personnel at no additional cost.​​ 

 

  • Any other request by the client for a recount other than expressly provided herein will require a change order and additional fees will apply.

 

​​ 

This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof. Any amendment or modification of this Agreement will be effective only if it is in writing and signed by both parties.