Systems and Procedures
A Division of The Corporate Controller's Office
IN

Procedure CR2068 - Property Inventory Recording, Tracking, and Depreciation

Office of the Corporate Controller

Policy Steward facilitating procedure: Associate Vice President for Finance and Corporate Controller

Table of Contents:


GENERAL:

Property Inventory (PI), a division under the Corporate Controller reporting to the Director of Financial Reporting, Cost Analysis and Property Inventory, has the responsibility of recording, tracking and reporting University buildings and improvements, and capitalized equipment. They have a computerized system to assist in these tasks which is accessible by the University Community via the Integrated Business Information System (IBIS) and Microsoft software applications. Property Inventory has detailed procedures to cover daily and cyclical activities. This guideline outlines the steps taken to comply with policies of the University and Federal granting agencies (specifically Uniform Guidance 2CFR 200 Sub Part D Property Standards 200.436 and 200.439).

PROCEDURE:

EQUIPMENT (TANGIBLE ASSETS)

Equipment acquired by the University is processed via one of the following documents:

These documents result in an entry to the Property Inventory data base to record the addition of tangible assets to University records. Capital equipment acquired is grouped under one of the following University Object Codes:

Property Inventory reviews the following object codes to determine if any purchases should be reclassified as capital equipment:

Those items valued at $5,000 or more and have a useful life of one or more years are recorded into the Property Inventory (PI) data base.

Transfer and/or disposition of tangible assets are communicated to Property Inventory via one of these forms for PI to adjust their records appropriately:

These documents are used to adjust the PI data base as appropriate during the year as activity takes place. Disposition through Lion Surplus requires that a "DISP" be prepared before the equipment can be handled by Lion Surplus staff.

For items being permanently transferred, the location and custodian responsible for item are adjusted on the data base. For items disposed by the department, a disposition code, date and disposition number are added to the record as a Type 1 Disposition.

Physical Inventory

At least once every two years (Uniform Guidance 2 CFR 200.313 (d) (2) specifies appropriate times), Property Inventory prepares a tab listing by administrative area of all tangible assets currently on the data base. PI staff search the respective areas to locate each tangible asset listed. The inventory procedures are normally conducted by building, however: the College of Agriculture and others may conduct by administrative area only. Other department resources will be utilized to confirm assets are still being utilized, for example; OPP/Business Services vehicle registration and maintenance database.

During the inventory procedures if an outdated inventory tag is present, PI staff will apply a new tag and record the new number appropriately. All financial information is copied to the newly assigned tag.

During the inventory procedure, a pre-inventory reference list is marked - either an item is found and marked appropriately, or is not seen/located and marked as "unlocated." An inventory bar code scanner is used to record the assets current location. The information stored in the scanner is then uploaded to IBIS and the asset record is given an updated inventory date. At the conclusion of this phase of the inventory, the "unlocated" tangible assets are noted in the PI record, and a new list is made showing the missing equipment by administrative area. This list is forwarded to the appropriate Facilities/Equipment Coordinator with a cover letter explaining the process, and requesting to have the administrative area search their respective locations to find any of the "missing" items. After the department verifies that item(s) were located, PI staff will attempt to validate their findings.

Items not found will not have their inventory date updated and if the item is not found during the next physical inventory, the department will receive a final notice that the item(s) will be written off. PI will then update records to identify the equipment as being a Type 2 Disposal.

Physical Inventory Process Summary

During the inventory procedures, the Property Inventory Assistant Supervisor along with department staff prepares equipment listings for each building that is scheduled to be inventoried. After the lists have been reviewed for accuracy regarding custodian spelling and other typographical errors, a pre-inventory meeting is held with appropriate staff from each building being inventoried. Normal attendees are Financial Officers, Facility Coordinators, Safety Officers and other key department personnel. Equipment listings are handed out, Inventory process presented, and an open discussion with attendees is conducted.

Property Inventory staff conducts the equipment inventory at University Park, excluding the Applied Research Laboratory (ARL) and Electro Optics Center (EOC). Electronic bar code scanners are used to validate the location of each item. After retrieval of information via scanner, the data is uploaded to the IBIS Property Inventory database and given an updated inventory date. An unlocated listing is generated and forwarded to the appropriate Facilities/Equipment Coordinator with a cover letter explaining the process, and requesting that the administrative area search their respective locations to find any of the unlocated items. The departments have 30 days to locate the unlocated items, if after 30 days the item(s) are not located the asset record will be marked with a “U” for unlocated.

Physical Inventories at Commonwealth Campuses and other off campus locations are conducted by designees of each location. Property Inventory supplies each campus with a listing of their active assets. The campus then returns the listing with updated information and Property Inventory staff updates the database. Campuses are inventoried every two years by dividing the Commonwealth in half, East/West. One half is inventoried each year.

Physical Inventories at the Applied Research Laboratory (ARL) and the Electro Optics Center (EOC) are completed by accounting or property control employees within the mentioned departments. Consistent with other areas, the Property Inventory department provides a complete listing of active assets. ARL may utilize the University’s bar code scanners to record the inventory results and EOC conducts the inventory by using the provided hard-copy listings and Property Inventory then updates the official property records.

Depreciation

Federal or Sponsored funded equipment purchases are reviewed for ownership. If the University has full or conditional title to the asset(s), an appropriate fund source is assigned to each asset record so depreciation expense is removed from the Financial and Administrative (F&A) calculations.

Depreciation charges are made against the value of equipment for financial statement purposes, and for inclusion in the facility and administration rate for application in the conduct of governmental and industrial grants and contracts using University tangible assets. Tangible Assets classifications and their respective useful lives are as follows:

Buildings and Improvements Other than Building (IOB)

Buildings are capitalized at accumulated cost of construction (or transfer cost if purchased, or fair market value if donated).

All Federal monies that are used to pay for any new building, IOB, or renovation project are excluded from F&A calculations. Federal monies are recorded in IBIS separately and reflected on final Cost Analysis reports.

BUILDING DEPRECIATION RULES

Beginning in 2011, HCA Asset Management, LLC (formerly Hirons and Associates) was engaged on a yearly basis to review and categorize building, building additions, and building renovations into the appropriate components. Other unique roles are noted below:

Improvements Other than Buildings (IOB)

AUDIT COORDINATION - FINANCIAL AND PROCEDURAL

The Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for working with Internal Audit when audits are being performed in the administrative area, as well as performing an annual audit that is submitted to the Assistant Controller.

RECORD RETENTION, DISPOSITION AND DESTRUCTION:

Record retention must be managed in accordance with Policy AD35 - University Archives and Records Management, and records schedules approved by the Records Management Advisory Committee, Office of General Counsel, and Office of the President. These retention requirements are the University's retention criteria, either derived or based upon federal, state, and local statute or regulations, industry standards, and business needs. Retention beyond recommended time periods require justifiable reasons and warrant review by the Records Management Officer or designee. All documents must be maintained in such a manner so as to provide ease of access for review, and to provide a suitable audit trail for all transactions.

Upon expiration of a stated period of time, documents must be discarded and/or destroyed, unless permission granted by Records Management Officer or designee to retain the records. Archival records created more than 20 years prior to the current date must be reviewed before destruction. Units should also contact the University Archivist before discarding any document which may be of permanent or historical value to the University. To safeguard the privacy of individuals, documents that contain salary information, personally identifiable information (PII), or student records must also be shredded. See Policy AD53 - Privacy Policy and AD22 - Health Insurance Portability and Accountability Act for additional information regarding privacy and the protection of an individual's personal information. For documents that must be shredded, departments may arrange for Blue Bag service by contacting the Blue/White Shredding Program of the Office of Physical Plant. Exceptions to the practice are as follows:

Additional questions may be directed to the University Archivist or the Records Management Officer.

EXHIBITS:

None

CONTACT INFORMATION:

For questions, additional detail, or to request changes to this procedure, please contact the Associate Controller.

CROSS REFERENCES:


Procedure Status:

Date Approved: 2/2/16

Most recent changes:

Revision History: