The furniture and equipment inventory system of the Montgomery County Public Schools is examined in this report. Following a summary, comments provided by the Office of the Associate Superintendent for Supportive Services relating to recommendations made in the report are presented. The first chapter provides an introduction, background, program and inventory information, and objectives of review. Chapter 2 focuses on the capitalization policy and policy application. Chapter 3 examines records of new purchases and notes various accounts used. Chapter 4 looks at the physical inventories and verification of records and assets. Chapter 5 examines the management and control of the inventory system, stating the need for further improvements. Chapter 6 highlights efforts made to improve the inventory system, stressing the need for change in various areas. Five appendices include information on (1) scope and methodology of the report; (2) a list of schools included in the report; (3) comparisons of quantity and value of furniture and equipment; (4) selected items of furniture under $75; and (5) excerpts from the Maryland Financial Reporting Manual. Included in the report are 16 tables and 1 exhibit. (WTH)