Fixed Assets Inventory General Information

Transcription

1 Fixed Assets Inventory General Information Fixed assets accounting is an important part of the stewardship responsibility of school officials, both appointed and elected. Care of school property is a legal responsibility of school officials pursuant to N.C.G.S. 115C-523. In addition, an inventory control system for all tangible fixed assets owned or possessed by the Burke County School System is mandated by Board Policy # Purposes: The purposes generally are: -to safeguard the sizeable investment in fixed assets, -to provide physical and accounting controls for the investment in fixed assets, -to assist administration in the formulation of policies dealing with acquisition, maintenance, retirement, and replacement of fixed assets, -to improve the insurance coverage of the fixed assets and increase the chances of recovering lost or stolen fixed assets. Definitions: Adequate records of all assets of the school system must be maintained by each school/department. For accounting purposes, fixed assets are defined as items of tangible property, both real and personal, having a value of $ or more and an estimated useful life of two years or more as distinguished from intangible property such as money or securities, and consumable property such as school and office supplies. Land-A fixed assets account which reflects the value of land and the rights to land owned or possessed by the Board of Education. It includes all real property including, but not limited to, land owned in fee simple, easements, right-of-ways, leases, and/or other interests in land. Land Improvements A fixed assets account which reflects the value of permanent improvements (excluding buildings as defined below) which add value to the land or improve the use of land such as sidewalks, parking lots, fences, drainage systems, driveways, etc. Buildings A fixed assets account which reflects the value of any permanent or portable manmade structure owned by the Board of Education and used to house or shelter persons or property, including schools, offices, warehouses, garages, sheds, etc. Equipment A fixed assets account which reflects the value of portable tangible personal property, not permanently affixed to real property that is owned, leased or used by the Board of Education. Examples of equipment are machinery, furniture and furnishings, motor vehicles, etc. Page 1

2 Fixed Assets Inventory General Information Basis of Valuation: The basis of valuation of all fixed assets is historical cost at the time of acquisition. Land The basis of valuation includes the purchase price and closing cost (e.g. legal fees) and costs such as filling, excavating and the like which are incurred to put the land in the condition required for its intended use. Rights-of-way and easements are recorded at purchase price plus legal costs. Land Improvements Same as for buildings. Buildings The basis of valuation includes the purchase price and closing costs of buildings purchased, the contract price, architect and legal fees of buildings built or the appraised value at date of acquisition of buildings donated to the Board of Education. The total value of the following items are included in the value of a building, but should be listed separately whenever the data are available: (1) Heating and cooling systems (2) Electrical systems (3) Plumbing systems (4) Elevators and Escalators (5) Water connections to Main (6) Sewer connections to Main Equipment The basis of valuation of purchased equipment is the net contract price plus transportation and other charges plus cost of installation or other preparation required to place the asset in its intended use. The basis of valuation of an asset acquired in and exchange transaction is the additional purchase price and costs plus the trade-in allowance on the old asset. A trade-in or exchange is considered a disposition of the asset exchanged. Purchasing of assets subject to a lien: Agreements that grant the school system definite equity rights in a fixed asset without giving it legal title at the date of the contract should normally be recorded as purchases of fixed assets. This is particularly true where the real intention of the parties is the permanent acquisition of the use of the asset by the administrative unit. Lease: Lease agreements are frequently used as a means of purchasing assets over and extended time period. This is the case with the so-called finance lease, in which the lease payments are calculated to pay off the cost of the fixed asset plus a predetermined interest rate over a period of time less that the useful life of the fixed asset. The basis of valuation of a fixed asset acquired through a form of lease agreement is the discounted net present value of the fixed asset at the time the lease is signed. Page 2

3 Fixed Assets Inventory General Information Lease, con t.: The basis of valuation of a leased asset and its amortization rate will be determined by someone in the Finance Department. Leasing is only allowed for technology needs and school facilities. Donation of fixed assets items: Charitable contributions of fixed assets items are permitted. Report all donated items to the Fixed Assets Controller immediately upon receipt. Place the necessary data on the file maintenance form. Surplus Items: Due to staff reduction, operational changes or other applicable situations, an item listed on the Fixed Assets Inventory may no longer be needed by a school or department. This item becomes surplus and can either be transferred to another school, etc., that needs the item or temporarily stored until such time as needed. An asset transfer form should be completed and affixed to the item until it reaches its new home. Sale Items: Surplus or obsolete Fixed Assets Inventory items may be sold by the Board of Education through GovDeals or the state surplus office. A copy of the surplus items is to be forwarded to the Fixed Assets Controller. Please complete and sign all fields on the disposition form. When the item is sold, the item will be removed from the Fixed Assets Inventory. If the item is not sold, it will be transferred to its proper place on the inventory file. Broken or irreparable items: Broken or irreparable Fixed Assets Inventory items are not to be discarded or destroyed without prior approval from the Fixed Assets Controller. In many instances, some items can be destroyed after telephone authorization. Stolen Fixed Assets Items: Notify the Finance Office. Provide the inventory number, description of the item and the serial number (if known). The item will be dropped from the Fixed Assets Inventory file when the loss is reported. If the item is recovered, it will be reinstated on the inventory file. Page 3

4 Fixed Assets Inventory General Information Control of Fixed Assets: Fixed Assets require both physical and accounting controls. Physically, it is necessary that all assets be identified, clearly marked and their custody assigned. Physical controls must provide for protection from theft, insurance for risk of loss due to fire, theft or other natural catastrophes, and for maintenance of the asset to achieve maximum operation efficiency and life. The fiscal controls are intended primarily to supplement the physical controls, not take their place. Responsibility: The physical control of the Fixed Assets of the Burke County Schools will be the responsibility of: The Superintendent The Finance Officer The School Principals The location Directors Fixed Assets Contact Person: The name of the individual designated by one of the above as Fixed Assets Contact must be provided and updated as necessary to assure prompt delivery of reports, notification of procedural changes and to prevent unauthorized changes, transfers or deletions to the Fixed Assets Inventory File. All input to the Fixed Assets Inventory system will be coordinated through the Finance Officer. Tagging and Identification of fixed assets: Identification of fixed assets includes the listing of all recordable fixed assets, the marking of the asset as the property of the school administrative unit, adequate descriptions of each asset (including model, serial number, date of acquisition and cost) and a means of correlating assets and asset records through the use of asset numbers. Fixed Asset inventories are necessary at the time of the initial recording of fixed assets and annually hereafter. Fixed assets are marked to identify the owner at the time that asset numbers are affixed. Responsibility: The inventory of Fixed Assets and the placement of tags shall be the responsibility of the Fixed Assets Contact Person. Periodic checks on a random selection of items will be made to verify that tags have been affixed properly. Page 4

5 Fixed Assets Inventory General Information General: As a general rule, inventory tags should be affixed in a place easily located. When left or right is designated, this applies to the item as the individual faces it. Desk and file drawers are interchangeable and are not a good location for affixing inventory numbers (modular units are an exception). Keep in mind the wear factor. Will the affixed inventory number be damaged or easily removed? Placement of Tags Type of Equipment Office/Instructional equipment Heavy equipment Maintenance equipment Portable Power Tools Electronic equipment Furniture Chairs Files, safes, storage Miscellaneous equipment Motor vehicles Modular Panel Modular-Work surface Modular-Shelving Modular-Drawers Modular-Files Modular-Desk Cabinet-Wardrobe Location of Tag Near Manufacturer s tag (or back near lower left) Near Manufacturer s tag Near Manufacturer s tag Near Manufacturer s tag Near Manufacturer s tag Top of left front leg Rear underside of seat Top left front corner Use applicable above On steering column inside Top left-hand corner or where it will be sighted Left chair side vertical edge of work surface Left-hand corner of horizontal shelf surface edge Exposed left front corner of drawer unit Exposed left front corner of file unit Top left side of knee well opening Top left side Tagging Procedures: (1) Choose the smoothest surface available meeting most other requirements (2) Make sure receiving surface is clean and dry. (3) Do not apply tags if temperature is below 60 Fahrenheit. (4) Do not touch the adhesive. (5) Be careful not to bend or crease the tag. (6) Place the tag on firmly. Pressure is essential. Maximum bond strength can only be realized if the surfaces are brought into intimate contact. Page 5

6 (7) Never attempt to reapply a tag after removal. (8) If a preprinted asset tag is damaged or unusable request a new preprinted tag from the Fixed Assets Controller. Fixed Assets Inventory General Information Inventory Tagging of Fixed Assets Purchases: Purchases: When a fixed asset is approved for purchase, a P.O. will be generated. A copy of the P.O., an inventory number tag, and asset form will be sent to the Fixed Assets Contact Person. It will be the responsibility of this person to insure that the inventory number tag is properly affixed to the asset when it is received (see preceding tagging procedures instructions). This form will originate from the Fixed Assets Controller with appropriate fields completed. The Fixed Assets Contact Person will hold this form and tag until receiving the item. Upon receiving the asset the tag should be affixed, appropriate areas of the form completed and signed and immediately returned to the Fixed Assets Controller. In the event 5 (five) or more assets from the same vendor, and of the same model are purchased a summary asset form will accompany the PO and asset tags. School Funds Purchases: The procedure for tagging a fixed asset purchased by an individual school is essentially the same as that described above. However, in this instance, the individual school must notify the Fixed Assets Controller an asset has been purchased. From this point on, the procedure is the same as described above. Central Office Procedures: The Fixed Assets Controller upon receiving the asset form back will record in the asset tag log file and forward the form to the Finance Department. The Finance Department will match the asset form with the invoice and return to the Fixed Assets Controller. The Fixed Assets Controller upon receiving appropriate documents back from the Finance Department will record the assets in the Fixed Assets Accounting System and file paper documents. Recording Thresholds Individual items purchased that range from $500 to $4,999 will be recorded in the Fixed Assets Accounting System but not capitalized. Items costing in excess of $4,999 will be capitalized. Page 6

7 Useful Lives Buildings 50 years Improvements 10 Mobile Units 10 Vehicles & Motorized Equipment 6 Furniture & Equipment 5 Computer Equipment 3 Page 7

8 Fixed Assets Inventory Form To: From: Fixed Assets Controller Date: RE: Purchase of fixed assets in the amount of $500 or more When a new asset is approved for purchase, the inventory number tag will be sent to the Fixed Assets Contact Person. It will be the responsibility of this person to insure that the inventory number tag is properly affixed to the asset when it is received. After the Fixed Assets Contact Person has affixed the inventory tag to the asset, he/she should fill in the appropriate area, sign and date this form and return to the Fixed Assets Controller. Fixed Assets Controller Use Only: PO Account(s) Tag Number(s) Fixed Assets Contact Person use only: Model Serial Number Description Location Room Person assigned to I certify that the attached inventory number tag has been properly affixed to the indicated asset. Fixed Assets Contact Person Date Finance use only: C-attached invoice Page 8

9 Fixed Assets Initial Inventory of Furniture and Equipment Purpose: To provide a procedure for the initial identification of fixed assets of a school administrative unit and to physically mark the fixed assets with property tags. Materials: The inventory takers should have each of the following: a. Definitions of fixed assets and fixed asset categories b. Instructions on where to place property tags c. Definitions of codes to be used d. Supply of numbered property tags e. Supply of unnumbered property tags f. Supply of file maintenance inventory sheets g. A clipboard to write on (legal size) Procedures: The areas to be inventoried should be assigned to a team consisting of two (2) people, one to identify and count and one to observe and record the required information to the extent that it is available. It will be necessary to exercise strict control in order that uninventoried assets are not moved to areas previously inventoried. Inventory: 1. Instruct the inventory takers in the proper procedures to be employed while taking and recording inventory. 2. Check that each pair of inventory takers has the needed inventory materials and understands the procedures. 3. Lay out each building or land area in a pattern on a map or sketch so that items within each grid are inventoried in sequence and no areas omitted. 4. Starting in the first area: a. Identify each fixed asset. b. Determine whether it is to be given an inventory number tag. c. If it gets a number, enter the proper number on the inventory sheet d. Affix inventory number tag e. Complete description by including on inventory sheet the following data: 1. Fund source code (if known) 2. Asset group code 3. Location code 4. Property category code 5. Manufacturer and model number 6. Serial number (if any) 7. Cost (purchase price, if known) 8. Acquisition date (date purchased) Page 9

10 Fixed Assets Initial Inventory of Furniture and Equipment Inventory, con t.: 5. Continue with each fixed asset to be recorded until inventory is complete 6. Before leaving each area, check that all assets in the area have been identified and inventoried as necessary. 7. Check that all areas in the building or site have actually been inventoried. 8. Double check each area to determine that no unidentified assets have been moved into the area during the inventory process 9. Return completed form to the designated supervisory personnel. How to complete file maintenance inventory sheet Equipment -Return this form on all new purchases of fixed assets -Always use the correct codes from the code sheets -Fill in numerical fields (except Serial Number) right justified -Print with fine point ball point pen only. Do not use pencils or flair type pens. -Send the white and canary copies to the Office of Business Affairs, Fixed Assets Inventory. Keep the pink copy for your files 1. SCHOOL/DEPARTMENT Fill in the name of the school or location where the inventory is being taken. 2. DATE PREPARED Date of Inventory PREPARED BY Name of person taking inventory REVIEWED BY Reserved for inventory officer 3. DESCRIPTION: Page 10