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Fixed Assets, a unit within the Purchasing Department, maintains accurate and current data on movable equipment campus-wide, records and performs annual inventories, and provides the school departments with timely reports and information regarding their assets.
This policy/procedure 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.
- Tracking of fixed assets
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.
Definitions
School Equipment. For purposes of this policy, School equipment is defined as non-consumable, movable items with a useful life of one year or more. Equipment items are used in normal departmental operations and are not for resale purposes. Equipment items are generally complete in themselves (i.e., do not become a component item and do not lose their identity).
Fixed Assets. For purposes of this policy, fixed assets are defined as those non-consumable School equipment items with a useful life of one year or more and a cost of $2,500 or more.
Note: In determining whether equipment meets the fixed asset definition (i.e., cost is $2,500 or more):
- For donated equipment items, the fair market value at the time of donation determines whether the item meets the fixed asset definition.
- For other equipment items, the initial acquisition cost determines whether an item meets the fixed asset definition. The initial acquisition cost includes the total of the following, if all these costs are on the same initial order:
- Purchase price of the equipment, and
- Reasonable and necessary expenses (such as shipping charges, tax, start-up or installation if applicable) to prepare the equipment for its intended use, and
- Accessories and component parts for the equipment.
To meet the fixed asset definition, the total of these costs must equal at least $2,500.
- Items with an initial acquisition cost of less than $2,500 are not defined as fixed assets, even when a subsequent addition or improvement to the equipment item causes the cost to exceed $2,500.
Accountability for School Equipment
The individual charged with budget and expenditure authority is responsible for the appropriate use, safeguarding, and tracking of all School equipment assigned to his/her respective department, whether or not the equipment meets the fixed asset definition.
Fixed Asset Tracking and Tagging
All School equipment meeting the fixed asset definition is tracked in the School’s computerized fixed asset system. A NCSA fixed asset tag number is attached or assigned to such equipment for inventory and identification purposes. If equipment meeting the fixed assets definition is not tagged within a reasonable time after receipt, the owning department is responsible for notifying the Purchasing Department. Once items have been tagged, it is important not to remove, relocate, or damage fixed asset tags.
Equipment not meeting the fixed asset definition (i.e., cost is under $2,500) is not tracked in the School’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 $2,500. However, such equipment items are subject to random selection for audit.
Receipt of Equipment as a Gift
All non-cash gifts to the School should be coordinated with the Development Office. The Director of Financial Services, in cooperation with the department receiving the gift, is responsible for establishing the fair market value of the gift for reporting purposes.
Fixed Asset Inventory and Audit
Departments are required to perform a physical inventory of fixed assets on an annual basis. During the year, the Internal Audit Office or Purchasing may perform random audits to ensure School compliance with state regulations.
Changes in Fixed Asset Listings
The Authorized School Official is responsible for notifying Purchasing via an Inventory Disposition form whenever fixed asset items are transferred to another department or relocated so that fixed asset records may be appropriately adjusted. In addition, the Authorized School Official is responsible for notifying Fixed Assets in accordance with the guidelines listed below when any equipment items are sent to Surplus Property for disposal, lost, stolen, or traded in.
Disposal of School Equipment Through Surplus Property
School equipment (including software media) that is no longer needed by a department cannot be thrown away or discarded. If not transferred directly to another School department, all School equipment regardless of cost must be sent to Surplus Property for disposal.
Lost or Stolen Equipment
The Authorized School Official is responsible for notifying School Police immediately if equipment is lost or stolen, whether or not the equipment has a fixed asset tag. In addition, an Inventory Disposition form must be prepared and forwarded to the Fixed Assets Officer with the police report attached.
Trade-In of Equipment
Some equipment, such as office machines and other equipment, may have trade-in value on the purchase of new or similar equipment. When equipment is used for trade-in, the responsible department should get prior written approval from State Surplus (Jeff Nance or Mary Alice Sechler, 919-733-3889) regarding price and put a notation on the Purchase Requisition to that effect, giving details about the equipment to be traded in. A Transfer to Surplus Property form should be submitted and Surplus should also be sent copies of the transaction.
When an equipment item is traded in, the department must notify Fixed Assets on an Inventory Disposition form if either the cost of the old item or the cost of the new item (including the trade-in allowance) meets the fixed asset threshold of $2,500 in order that the fixed asset records may be adjusted.
Temporary Relocation of Equipment
Departments are required to maintain a current record of any temporary relocation (using the Equipment Temporary Check Our 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 meets the fixed asset definition. Equipment may be temporarily relocated with prior department head approval. Except for repairs, the temporary removal of equipment is authorized only for School departments. Off-campus use should be for work on a School assignment. 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. 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.
Personal Use
Items purchased with School funds are the property of the state and are not intended for personal use.
- Purchase of School Equipment
- To facilitate School tracking of fixed assets, use the correct object code. To obtain the correct object code, refer to the NCSA Chart of Accounts Object Codes. For additional assistance in determining the appropriate object code, contact the Accounting Department.
- When requisitioning additional component parts (not replacement parts):
- Accessories and component parts that are purchased on the same initial order, as the equipment item may be included in the original cost of the equipment and charged to a 5XXX object code.
- For component parts purchased on a subsequent order, note the original fixed asset tag number.
- Contact the Purchasing Department for any additional questions or if assistance is needed in ascertaining which component items compose the equipment to be purchased and/or tagged.
- Permanent Changes in Equipment Status
- The listing provided by Purchasing is the official record of fixed assets for which the department’s authorized School official is responsible.
- When fixed asset items are permanently transferred to another department or relocated, or when any equipment items are lost, stolen, traded in, or sent to Surplus Property, prepare a Inventory Disposition Form to notify the Purchasing Office so that appropriate records may be adjusted.
- Temporary Loans or Transfers of Equipment
Whenever equipment items are temporarily removed from the custody of the campus department or employee(s) normally assigned the equipment, maintain a record of the equipment removal and return by using the Equipment Temporary Check Out List. Obtain signatures for both checkout and return of the equipment. This record may be reviewed during an audit.
- Annual Physical Inventory of Fixed Assets
- Each year by March 31, the Fixed Assets Officer provides a fixed asset listing to each Authorized School Official, itemizing all fixed assets for which he/she is accountable.
- The Authorized School Official conducts the physical inventory and records any changes on the listing as follows:
- Additions (Attach Inventory Adjustment Form)
- Location changes within the responsible department
- Equipment transferred to the responsibility of another department and/or Authorized School Official (Attach Inventory Disposition Form.)
- Equipment placed in surplus (Attach Inventory Disposition Form.)
- Lost or stolen equipment (Attach a police report and a Inventory Disposition form.)
- By April 30 each year, the Authorized School Official will need to sign and return the completed fixed asset listings to the Fixed Assets Officer. If listings are not returned within two weeks, the Purchasing Department will send a second request to the department, with a copy forwarded to the appropriate Dean or Vice Chancellor. Delinquent listings after the second request are referred to the Office of the Vice Chancellor for Finance and Administration.
- Adjustments to Fixed Assets Records After Physical Inventory
The Fixed Assets Officer will adjust the School records to reflect the results of the inventory and will make on-site verifications as necessary. A corrected listing will be returned to the department by September 30. This listing is for departmental information only and does not need to be returned to the Fixed Assets Officer unless corrections need to be made.
- Requests for Additional Fixed Asset Listings
In addition to the annual fixed asset listing, the Authorized School Official may submit a request to the Fixed Assets Officer to generate additional fixed asset printouts at any time if there is a need to review or verify the fixed assets for which he/she is accountable.
Transfer/Surplus Property
Equipment Check Out List
Inventory Adjustment Form
Inventory Disposition Form
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