Fixed Assets Regulation 304
|Regulation 304||Approved: October 2, 2013|
|UNIVERSITY OF NORTH CAROLINA SCHOOL OF THE ARTS
Fixed Assets Regulation
|Source of Authority:||State Property Office, Department of Administration;
N.C.G.S. § 116-34(a);
UNC Code § 502(A)
|History:||First Issued: February 17, 2011
Revised: September 19, 2013
|Related Policies and Regulations:|
|Responsible Offices:||Purchasing Department|
|Effective Date:||October 2, 2013|
This regulation is designed to comply with state regulations and guidelines and to assist management in carrying out their responsibilities regarding the accountability for school equipment, including: reporting of changes in equipment status, temporary relocation of equipment, and tracking of fixed assets.
This regulation applies to all school departments and activities utilizing equipment purchased with state/grant funds, equipment furnished by sponsoring agencies through external contracts or grants with the school, or equipment donated to the school.
A. “ Capitalized Fixed Assets” means property, items such as land, buildings, and equipment that are tangible in nature with a useful life of greater than one (1) year and an acquisition value equal or greater than $5,000.
1. For donated equipment, the fair market value at the time of donation determines whether the item meets this definition.
2. For other equipment, the initial acquisition cost determines whether the item meets this definition. The initial acquisition cost includes the total of the following, if all these costs are on the same initial order:
a. Purchase price of the equipment, and
b. Reasonable and necessary expenses (such as shipping charges, tax, start-up or installation if applicable) to prepare the equipment for its intended use.
3. Items with an initial acquisition cost of less than $5,000 are not defined as capitalized fixed assets, even when a subsequent addition or improvement to the equipment causes the cost to exceed $5,000.
B. “School Equipment” means non-consumable, movable items used in normal operations with a useful life of one year or more. Equipment items are generally complete in themselves (i.e., do not become a component item and do not lose their identity).
C. Consistent with Option 4 of the State Controller’s Fixed Asset Overview: http://osc.nc.gov/sigdocs/sig_docs/documentation/policies_procedures/step_by_steps/sigFixed_Asset_Overview.html, “Noncapitalized Inventorial Fixed Assets” refers to equipment assigned to employees off campus and/or mobile devises whose acquisition value is less than the UNCSA capitalized threshold of $5,000. For the purposes of this regulation, noncapitalized inventorial fixed assets are defined as off campus equipment assigned to an employee (i.e. printers, wireless routers, etc.) or mobile devices such as laptops, cell phones, iPads, tablets and mobile hot spots. Only capitalized fixed assets are recorded in the school’s fixed asset system. The schools financial statements will only reflect the value of capitalized fixed assets.
A. Personal Use
Items purchased with school funds are the property of the State and are not intended for personal use.
B. Departmental Accountability
1. Department employees are responsible for all state owned property assigned to them. These responsibilities include safeguarding equipment from loss, damage, theft or misuse; and arranging for maintenance as needed to keep equipment in good condition.
2. Department heads are responsible for developing an internal tracking process for noncapitalized inventorial fixed assets (see definition above). These assets should be inventoried annually by the department and the results reported to the Fixed Asset Officer.
3. Each department is also susceptible to internal and external audit verifications of its fixed assets.
C. Fixed Asset Officer’s Responsibilities
The Fixed Asset Officer enters capitalized fixed assets in the fixed asset system, assigns each fixed asset a unique number, attaches a UNCSA fixed asset tracking tag to each recorded fixed asset, and oversees the annual physical inventory of the fixed assets.
D. Equipment Monitoring
1. Fixed Asset Tags
All capitalized fixed assets should be tagged with a fixed asset tag. Tags should not be removed, relocated, or damaged. If a fixed asset is not tagged within a reasonable time after receipt, or if the equipment needs a new tag, the owning department is responsible for notifying the Fixed Asset Officer
2. Equipment not Qualifying as a Capitalized Fixed Asset
Equipment not meeting the definition of a capitalized fixed asset is not tracked in UNCSA’s computerized fixed asset system and a fixed asset tag number is not attached or assigned to the equipment, even when a subsequent addition or improvement to the item causes the cost to exceed $5,000.
E. Record Keeping
1. All purchases of school equipment require the use of the appropriate object code.
2. The listing provided by the Fixed Asset Office is the official record of capitalized fixed assets for which each dean or department head is responsible.
3. When any fixed asset is permanently transferred to another department or relocated, or when any equipment items are lost, stolen, traded in, or sent to Surplus Property, the dean or department head must prepare an Inventory Action Form and notify the Fixed Asset Officer so that the appropriate records may be adjusted.
4. Departments are required to maintain an equipment check-out list whenever equipment items are temporarily removed from the custody of the campus department or employee(s) normally assigned the equipment. This record may be reviewed during an audit.
F. Receipt of Equipment as a Gift
All non-cash gifts to the school should be coordinated with the Chief Advancement Officer and the Controller, in cooperation with the department receiving the gift, in order to establish the fair market value of the gift.
G. Annual Physical Inventory
1. A physical inventory requires a hands-on inspection of each fixed asset, verifying UNCSA tag, location and if applicable the serial number. Annual physical inventories shall be completed prior to the financial reporting due date.
2. The Fixed Asset Officer is responsible for overseeing the physical inventory process.
3. Equipment Missing During Physical Inventory
a. Fixed assets are considered missing when an inventory is taken and assets on the physical inventory worksheet are not found. This can occur because an asset is moved to another location but the new location is not recorded in the system before the Physical Inventory Worksheets are printed, or the asset could be lost or stolen.
b. In the event of equipment missing during a physical inventory, the Fixed Asset Officer and the department representative have various responsibilities in the attempt to locate the missing property pursuant to this regulation’s procedures.
c. Equipment that is not located at the end of one year and is still on the missing status report will be removed from the Fixed Asset System at the end of the next fiscal year.
H. Lost or Stolen Equipment
1. Pursuant to N.C.G.S. § 114-15.1, if any state property has been stolen, the employee discovering the theft must report it to his/her supervisor no later than three days from the date of discovery.
2. The supervisor is to notify Campus Police.
3. In addition an Inventory Action Form must be prepared and forwarded to the Fixed Asset Officer with a copy of the police report attached.
I. Disposal of School Equipment
1. All State-owned property must either be transferred directly to another UNCSA department or disposed of pursuant to the Surplus Property Regulation, regardless of price.
2. State-owned property cannot be donated, traded-in, or given to another entity without approval of the state surplus property office.
J. Temporary Relocation of Equipment
1. Departments are required to maintain a current record of any temporary relocation (using the Equipment Temporary Check Out List), whenever equipment is removed from the custody of the department, or the employees to which the equipment is normally assigned, regardless of whether or not the equipment is a fixed asset.
2. Equipment may be temporarily relocated with prior department head approval.
3. Except for repairs, the temporary removal of equipment is authorized only for school departments.
4. Off-Campus Use
a. Off-campus use should be for work on a school assignment or school related business.
b. Removal of school equipment for off-campus use without department head approval may result in the individual being prosecuted for misappropriation of State property and/or larceny.
c. School equipment used off campus or loaned to another campus department or activity is subject to immediate return if requested by school officials, state auditors, or other state agencies.
K. Requests for Additional Capitalized Fixed Asset Listings
In addition to the annual capitalized fixed asset listing, deans or department heads may submit a request to the Fixed Asset Officer to generate additional fixed asset printouts at any time if there is a need to review or verify the capitalized fixed assets for which he/she is accountable.
L. Misuse of School Equipment
Misuse or abuse of school property could result in disciplinary action leading up to and including termination. Depending upon the nature and severity of the violation, criminal penalties could apply, as well.
V. Revision History
A. February 17, 2011 – Adopted by Board of Trustees as part of UNCSA Policy Manual
B. September 19, 2013 – Revised to include new internal control standards.
UNIVERSITY OF NORTH CAROLINA SCHOOL OF THE ARTS
Fixed Asset Procedures
I. Annual Capitalized Fixed Asset Physical Inventory Procedures
A. By March 31st of each year, the Fixed Asset Officer will send inventory worksheets listing all tagged fixed assets to each department head, along with instructions on how to properly conduct the physical inventory.
B. The department head or his/her designee shall locate all inventory items listed, update the inventory worksheet data, and return the information to the Fixed Asset Officer within 10 business days of receiving the inventory worksheets. If listings are not returned within two weeks, the Fixed Asset Officer will send a second request to the department, with a copy forwarded to the Vice Chancellor for Finance and Administration. Delinquent listings after the second request are referred to the Vice Chancellor for Finance and Administration. Signed and completed fixed asset listings must be returned to the Fixed Asset Officer no later than April 30th of each year.
C. The dean or department head or his/her designee conducts the physical inventory and records any changes on the listing as follows:
1. Additions (Attach Inventory Adjustment Form)
2. Location changes within the responsible department
3. Equipment transferred to the responsibility of another dean or department head (attach Inventory Disposition Form and a copy of the signed Inventory Action Form.)
4. Equipment placed in surplus (attach Inventory Disposition Form and a copy of the Inventory Action Form.)
5. Lost or stolen equipment (attach a police report and an Inventory Disposition Form.)
D. Upon completion of the physical inventory, the Fixed Asset Officer will update the Fixed Asset System as needed and send a missing items schedule and a final inventory printout to each department.
E. On a timely basis, the Fixed Asset Officer will prepare and send missing asset reports to the Purchasing Director and the Internal Auditor.
II. Equipment Missing during Annual Capitalized Fixed Asset Physical Inventory Procedures
A. During the annual physical inventory, missing assets are noted on the Physical Inventory Worksheets.
B. After the worksheets are completed, they are forwarded to the Fixed Asset Officer for reconciliation to the Fixed Asset System. The Fixed Asset Officer compares assets listed as missing on the Physical Inventory Worksheets at one location with assets found at other locations that were not listed on the Physical Inventory Worksheets. If there are any matches, location changes are made to the Fixed Asset System to list the asset properly.
C. Equipment missing after the above process is then flagged in the Fixed Asset System as “suspended.”
D. The department having items of equipment missing during the annual inventory will be given a period of 90 days to locate the items in question.
1. If the items in question are still missing after the 90-day period, the Fixed Asset Officer will submit a report to the appropriate dean or department head and copy the Purchasing Director. The dean or department head will be requested to respond within 30 days.
2. After 180 days, if the items are still considered missing, a second report will be submitted to the dean or department head, with a copy to the Purchasing Director. The dean or department head will be requested to respond within 30 days.
3. If items are still missing after 210 days, the Fixed Asset Officer will consult with the Purchasing Director to determine appropriate steps to be taken based on the individual circumstances, including, filing a misuse report, conducting an on-site audit, or awarding additional time to locate items. University disciplinary action will be taken when appropriate, up to and including termination.
E. Equipment that is not located at the end of one year and is still on the missing status report will be removed from the Fixed Asset System at the end of the next fiscal year.
F. The following actions will occur simultaneously with the steps described above
1. The designated departmental representative will submit to the Fixed Assets Officer a quarterly status report of efforts to locate the missing equipment.
2. The Fixed Asset Officer will monitor the progress of the department’s investigation by comparing the quarterly status reports.
3. The Fixed Asset Officer will update the inventory database when missing equipment is located.
III. Change in Location within the School
A. Prior to changing the assigned location of any capitalized fixed asset within the university, the Equipment Action Form must be completed.
B. The form must be signed by the giving and receiving department heads and submitted to the Fixed Asset Officer.
C. The Fixed Asset Officer approves all location changes.
D. Upon approval, the Fixed Asset Officer will enter the location changes into the Fixed Asset System.
E. A copy of this form will be signed and returned indicating inventory records have been adjusted.
IV. Trade-in of Equipment
A. When equipment is used for trade-in, the responsible department should get prior written approval from the Fixed Asset Officer, who must get approval from the State Surplus Agency.
B. Once approval is received from the State Surplus Agency, the Fixed Asset Officer will forward an approved copy of the Inventory Action Form back to the requesting department.
C. An Inventory Action Form should be completed and sent to the Fixed Asset Officer before the Purchase Requisition is completed.
D. A notation should be made on the Purchase Requisition detailing the equipment to be traded-in.
V. Adjustments to Fixed Assets Records after Physical Inventory
A. The Fixed Asset Officer will adjust the school records to reflect the results of the inventory and will make on-site verifications as necessary.
B. A corrected listing will be returned to each department by September 30. This listing is for departmental information only and does not need to be returned to the Fixed Asset Officer unless corrections need to be made.
VI. Noncapitalized Inventorial Off-Campus or Mobile Fixed Assets
A. When a department head determines that it is necessary for a University employee to use or have access to University equipment off campus, the department must complete the Off Campus Equipment Form. This form must include the description, serial number, manufacturer, the name and title of the employee who has custody of the equipment, telephone number for the department head, and the off-campus location (address). The employee must sign the agreement which includes this note: “As a University employee user of the equipment listed on this form, I agree, I agree to return the equipment when requested and to complete a new form if I still have the equipment in my possession at the annual inventory date. While assigned to me, if the equipment is not returned when requested by the Department, I agree to repay the equipment’s fair market value.” The department sends the completed form to the Fixed Assets Officer. Under no circumstances should anyone remove an asset from campus prior to approval from department head/supervisor. Removal of university equipment for off-campus use without department head approval could result in the individual being prosecuted for misappropriation of state property and/or larceny.
B. The employee and the department head/supervisor must renew the form during the physical inventory process each year (no later than January 31st).
C. Any missing items should be reported in accordance with the same procedures as capitalized fixed assets outlined above in Section II.