Financial Management Policy 30940
Note: This policy is inclusive of and supersedes the following policies:
30940: Inventory of Equipment
30941: Receiving of Equipment
30945: Surplus Property
The purpose of this policy is to describe the general guidelines for receiving, recording, and maintaining the equipment inventory of Germanna Community College.
The Business Office of Germanna Community College is responsible for maintaining an accurate record of all equipment that is considered a Fixed Asset which is in the possession of the College. Fixed Assets are defined as any individual asset with a cost greater than or equal to $2,000. Exceptions to the $2,000 recording requirement are assets procured with Equipment Trust Funds (ETF) having a value of $500 or more. The Higher Education Equipment Trust Fund (ETF) was established to provide new or updated instruction and research equipment in the academic areas of State institutions of higher education.
The Business Office is responsible for identifying asset purchases, and for designating a representative to act as the Fixed Asset Coordinator and a representative to act as the Surplus Coordinator. The Fixed Asset Coordinator performs the following with respect to asset purchases:
- Assigns a tag number
- Logs the purchase on the Master Asset Inventory List for the year
- Upon receipt, identifies model and serial number identification as well as physical location and updates the Master Inventory List spreadsheet as outlined in the VCCS AIS Asset Management manual
- Distributes tag(s) to department of purchase for affixing to asset
The Business Office is responsible for recording assets in the Asset Information System (AIS) Asset Management (AM) module within 60 days of receipt. AIS is the system of record for Fixed Assets. The Business Office is also responsible for reconciling the Master Inventory list and ETF list to AIS to insure that all assets have been entered into AIS.
Departmental and office personnel are responsible for ensuring that equipment is safeguarded and controlled, and that all changes and discrepancies are promptly reported to the Fixed Asset Coordinator. In the event of any stolen or missing items, departments must report the stolen or missing items to the Security Office and the Business Manager.
4.1 Identifying fixed assets
In the event that a controllable asset is not identified, potential controllable equipment is identified through review of the Cardinal Query of Potential Fixed Assets (V_GL_POTENTIAL_FIXED_ASSETS). This query will be reviewed by the business office on a regular basis. Vouchers listed on the report are reviewed to insure that all capital equipment has been identified.
When a fixed asset is received, the Fixed Asset Coordinator will maintain copies of the purchase order and/or packing slip and the invoice in an asset file for the fiscal year of receipt. Pertinent information required to record the asset is logged on the Master Asset Inventory List.
4.2 Renovations and repairs
Renovations and repairs to capital assets that increase the economic benefits of the asset should be capitalized. Expenditures that materially extend the useful life, increase the capacity, or improve the efficiency of an asset should be capitalized.
Routine costs incurred to maintain the asset in its operating condition are expensed and are not recorded in the asset management system. A repair that simply serves to maintain the asset in its operating condition, even if over the $2,000 limit, is not a capital item and should be expensed.
The Fixed Assets Manager at the VCCS System Office is available to review and recommend appropriate treatment for renovations and repairs.
4.3 Receiving equipment
Departments are responsible for:
- Promptly checking received goods to make sure the right items were delivered in the agreed upon quantity and that they are not damaged or defective.
- Following tagging procedures as outlined in the “tagging equipment” section.
- Entering receipt information on eVA.
- Signing and recording the date of receipt on the receiving document and forwarding to the Fixed Asset Coordinator.
4.4 Tagging equipment
Once a Fixed Asset is received, it must be tagged for tracking purposes by designated department staff. Tags will be supplied by the Fixed Assets Coordinator at the time the purchase is approved and should be retained in a pending order file until time of receipt. Equipment that is above $2,000 and ETF purchases will be assigned a burgundy tag. All IT equipment is also maintained in an internal IT database (GSAM). IT equipment that is less than $2,000 and not ETF (not tagged with a burgundy tag) will be tagged with blue tags for tracking in GSAM but are not recorded in the Asset Management system (AIS).
Upon receipt, department personnel should pull the PO copy and asset tags supplied by the Fixed Asset Coordinator. The tag will be affixed to the asset where it can easily be located and scanned with a bar-code scanner for purposes of physical inventory. The tag number is to be noted on the purchase order next to the item being ordered, along with the receipt date, serial number, and location of the asset. If there are multiple assets on one purchase order, there must be a clear delineation of the line item on the purchase order to the serial number and location and the tag number that has been affixed to the asset.
Equipment that has been identified as a fixed asset must be recorded in the Accounting Information System Asset Management module (AIS AM). The Business Office enters the asset into AIS once the required information has been recorded on the Asset Master Inventory spreadsheet, but no later than 60 days from the day the College takes possession of the asset. Information to be recorded into AIS-AM for each inventoried item:
- Tag number
- Date of acquisition
- Capitalization number (ETF only)
- Item description
- Profile ID (nomenclature code to track useful life)
- Accounting chart of account coding (department and fund)
- Dollar value
- Manufacturer, serial number, and model number
- PO number (custom attribute)
- Location code
4.6 Movement and relocation
IT assets are moved by entry of the move into GSAM. This produces a move form to be used to update the location on AIS Asset Management.
For non-IT assets, fixed asset Move forms must be completed any time the equipment is being moved from one location to another or from one responsible area to another. The form must be signed by the person performing the move. Once the move is has been completed, the form is sent to the Fixed Asset Coordinator to enter into AIS Asset Management.
4.7 Temporary removal from campus
The only equipment that may be removed from college premises equipment is IT-related for remote computing needs, equipment used for mobile learning, and equipment used for offsite instruction or demonstration. IT has the authority and responsibility to approve and control the use of IT-related equipment for remote access. Department Heads are responsible for maintaining a record of equipment taken offsite for mobile learning or offsite instruction or demonstration. This record shall be available to the fixed asset coordinator at any time for assistance in performing a complete physical inventory.
4.8 Physical inventory of fixed assets
The objectives of a physical inventory are to ensure that
- The equipment recorded in AIS AM physically exists,
- To determine if unrecorded or improperly recorded transactions have occurred,
- To identify any excess, defective or obsolete assets on hand.
A physical inventory of fixed assets is required at least once every 2 years in order to properly safeguard assets and maintain appropriate fiscal accountability.
The Fixed Asset Coordinator runs a report from AIS Asset Management listing equipment by responsible area and room number.
The Fixed Asset Coordinator will be permitted access to each room/department controlled by the college.
Individuals designated to perform the physical inventory will scan the tags of equipment found in each location.
Any discrepancies between the physical inventory and the AIS Asset Management printout will be researched and resolved in a timely manner. There are several discrepancies that may occur:
- Item is not in the location assigned on the Asset Management system. The reconciliation process will produce a fixed asset move form for these items. See procedure under the section 4.6 “movement and relocation”.
- Item cannot be found. An extensive and thorough search will be conducted to locate the item in question. If necessary, other departments such as IT or Security may be brought in to assist in the investigation. If the item is found, then it should be returned to the location specified in AIS Asset Management or a fixed asset move form should be filled out. See procedure under the “movement and relocation” section. If the item is not found, refer to procedure 4.9 “equipment that cannot be located after thorough search” section.
Upon completion of the inventory, all forms and other documentation shall be retained as backup for the audit file. A brief summary of the outcome of the physical inventory and any additional procedures that had to be followed will be retained with the documentation. This summary shall be signed by the Fixed Asset Coordinator and the Business Manager or the Vice President of Administrative Services.
4.9 Equipment that cannot be located after thorough search
If, after a thorough search, the asset cannot be located, a fixed asset disposal form shall be completed and forwarded to the Business Manager. The form shall identify the item, model, serial number, property description and the steps that have been taken to locate the item. The Business Manager will review and either authorize the disposal or request additional investigation. Authorized disposals will be updated on AIS AM within 60 days.
4.10 Stolen items
If items are stolen, contact security to file a police report as soon as the item is noted as missing. A copy of this report should be forwarded to the Fixed Asset Coordinator.
4.11 Surplus property
When an asset no longer meets the need of the College it shall be classified as surplus. Surplus property will be handled according to the rules and regulations promulgated in the Agency Procurement and Surplus Property manual, Chapter 12, of the Division of Goods and Services (DGS). Surplus property may be sold by on-line auction or disposed of if authorized by disposal letter from DGS.
4.11.1 Equipment Trust Fund
Care must be taken that any equipment purchased from the Equipment Trust Fund (ETF) follows the procedures established by the State Council of Higher Education. Equipment purchased from the Equipment Trust Fund may not be auctioned as surplus before the end of the three year period associated with the revenue bond financing the ETF.
4.11.2 Computer equipment and software
Computer software cannot be designated as surplus. It must be discarded according to the licensing agreement under which it was acquired. All computer hard drives and other electronic equipment must be erased according to the standards set by Virginia Information Technologies Agency (VITA).
4.11.3 On-line auction (Gov deals):
The Surplus Coordinator will work with the DGS to list asset(s) for sale. The Surplus Coordinator will submit a surplus property report (DGS-44-001). Included with the form should be clear digital photographs of the item(s). Each form is considered one (1) lot. The Surplus Coordinator will update the surplus lot on the surplus inventory spreadsheet. Once a lot has been sold, DGS will send a Bill of Sale. If the buyer is sending another person to pick up the item, DGS will also send a release authorization form. The department will arrange a time for pickup with the buyer. Once the item(s) have been picked up by the buyer, the signed Bill of Sale will be returned to the Surplus Coordinator who will update the Surplus Inventory spreadsheet.
4.11.4 Disposal of surplus property
If a lot does not sell, the Surplus Coordinator will request correspondence authorizing disposal of the asset(s) for that particular lot. Once this is available, the Surplus Coordinator will coordinate the disposal with Facilities and notify the Fixed Asset Coordinator to update the Asset Management system.
CAPP Manual Section 30000, Fixed Asset and Lease Accounting
Agency Procurement and Surplus Property manual (APSPM), Chapter 12.
6.0 Point of contact
Director of Finance
7.0 Approval and revision dates
7.1 Joyce Warnacut: Oct. 20, 2016
7.2 College Council: Nov. 18, 2016