Fixed Asset System and Small Purchases: Difference between pages

From Appalachian State University Policy Manual
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Policy 501.22
Policy 509.22
 
== Introduction ==
== Introduction ==
=== Responsibility ===
You may copy this page's source to start a new policy page. Be sure to remove or overwrite the examples. Second level headings should NOT be altered.
The responsibility for equipment control, or the Capital Assets System, has been assigned to the Fixed Assets Office, a Division of the Controller's Office. The telephone numbers for assistance and information are 262-2636 or 262-2500.
 
=== Function ===
The Fixed Asset System (FAS) was implemented at Appalachian State University July 1, 1979, in order to more effectively control those assets owned by the University. The function of this system is to:
 
*Account for lost or damaged property due to fire, flood or other disaster. This kind of information may be essential in obtaining replacement funds or collecting insurance coverage.
*Comply with requirements of the State of North Carolina that tangible, long lived assets be accounted for through an inventory control system.
*Deter theft and aid in tracking property which has disappeared.
*Facilitate transfer of equipment to fill a requirement on campus in lieu of procuring new equipment.
*Provide data to departments which will aid in better utilization of equipment.
*Determine the rate of depreciation on equipment for the purpose of calculating the University's overhead rate to Federal Agenc


== Scope ==
== Scope ==
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== Definitions  ==
== Definitions  ==


=== Fixed or Capital Assets ===
=== Definition phrase or word ===
are defined as those tangible items generally costing $5,000 or more including taxes, shipping, and other costs to make the equipment operative and having an estimated useful life of more than one year. Additionally, purchased intangible assets such as computer software, patents, trademarks, copyrights, web sites, easements, and other intangibles costing more than $100,000 are also capitalized as assets according to policy set forth by the Governmental Accounting Standards Board (GASB) Statement 51 and Office of the State Controller (OSC) guidelines if the assets have a useful life of more than one year. Internally developed software is also considered a capital asset if applicable costs exceed the materiality threshold set by OSC.
: Definition summary
 


== Policy and Procedure Statements  ==
== Policy and Procedure Statements  ==
=== New Equipment ===
The Purchasing Office routes all purchase orders of applicable assets to the FAS Office, where an equipment control record is prepared and sent along with a numbered decal to the Central Warehouse. Warehouse personnel apply the decal before forwarding the equipment to the department which placed the order, or in some cases will tag the items after they are assembled by departmental personnel. Maintaining a positive identification of assets is the primary purpose of tagging. Tagging is important to:


*Provide an accurate method of identifying individual assets,  
'''Definition'''
*Aid in the taking of physical inventory,  
 
*Control the location of all physical assets,  
The North Carolina Agency Purchasing Manual, Section V-2, effective November 15, 1998, defines small purchases as those purchases of commodities, services or printing, not covered by a term contract, involving an expenditure of public funds of five thousand dollars ($5,000) or less.
*Aid in maintenance of fixed assets, and  
 
*Provide a common ground of communication for both the accounting department and the assets' users.
COMPETITION
 
Competition is not required by statute for those purchases of equipment, supplies, materials, and services which meet the definition of small purchases. However, it is the responsibility and obligation of all University employees to seek the best possible value when making purchases with University funds. Accordingly, where appreciable value can be gained without undue sacrifice of convenience and/or necessity, the Purchasing Department may seek competition for certain purchases under $5000.
 
DOCUMENTATION
 
This small purchase policy in no way changes the requirement to obtain proper authorization documentation through the Purchasing Department or the Controller's Office prior to committing any University funds for the procurement of commodities or services. Normal purchases processed through the Purchasing Department require a purchase order. Certain small purchases as indicated below may be accomplished without a purchase order and documented as specified in the [Accounting Accounting] Section of this manual.
 
PETTY CASH PURCHASES
 
As a result of the increasing costs of issuing procurement requests, purchase orders, and checks, petty disbursing funds have been established for small purchases and emergency purchases.


Generally, all capital assets (capitalized and inventory) are tagged. The tag number is kept in the asset record in the Capital Asset Management System.
Petty disbursing funds are available through the Controller's Office for use by University departments and areas under University control.


Some assets are not tagged. The asset number is still recorded in the system, but not physically attached to the asset. A description of the property is recorded, including address and plat location found in the Register of Deeds. Items not needing a tag are:
This procedure does not replace the routine purchasing procedures. However, if the purchase meets the criteria outlined below, this procedure may be used in lieu of the regular purchasing procedures.


*Buildings (record legal description in asset record),
The Central Petty Disbursing Fund may be used when:
*Land (record legal description in asset record),
*Mainframe Software (record description in asset record).


Tags are generally placed in the same location on each similar type asset. If possible, the tags should be accessible for viewing. Tags should be placed where the number can be seen easily and identified without disturbing the operation of the item. This aids in taking inventory.
*There is a need for items that can be purchased locally at an economical price.
*The University Warehouse does not have the items in stock.
*The reimbursement amount is within the limits established in Accounting, Policy 16.
*The budget account to which the purchase is being charged is maintained by the ASU Controller's Office.
*State Term Contract items must be purchased from contract vendors.
*The purchase of first aid supplies must be approved by the Safety Officer before reimbursement will be made by the Controller's Office.


=== Use of Assets ===
If there is any question about a purchase being legitimate, the Petty Disbursing Officer in the Controller's Office should be asked for clarification prior to making the purchase.
University assets are property of Appalachian State University. Custody, control, and use of this equipment must be in accordance with University policy. As a general rule, removal of University equipment, furnishings, and similar property from campus is not permitted. Specific exceptions may be made when all of the following conditions are met:


*Relocation is temporary
The University cannot be responsible for the purchase if it does not meet the established purchasing regulations and criteria listed in items 1 through 6 above.
*Relocation purpose is for the conduct of University business by a University employee
*Property, while relocated, will be adequately protected from loss and damage
*Head of the administrative unit to which the property is assigned must approve the relocation
*Absence of the property, while relocated, will not hinder normal, on-campus operations


Lending of University property for personal or organizational use by private parties is prohibited.
For details on this procedure, see Accounting, Policy #16? and Accounting, Procedure #5?.


=== Safeguarding Assets ===
CHECK REQUEST PURCHASES
Management is responsible for implementing procedures for maintaining control over and the safeguarding of assets. Physical security measures over facilities and authorized personnel must be established and documented.


=== Yearly Inventory ===
Certain small purchases totaling less than $1,500 including taxes, delivery and costs to place item into operation may be made using a Check request in lieu of following the normal purchase procedure.
Each year, the FAS Office will send to each department a listing of all assets for which that department is responsible. The department will be required to make a physical count of those assets, noting any differences. Also, in case of any disposition of assets; i.e., transferred, traded, stolen, or destroyed, the proper procedures should be followed in notifying the FAS Office. (See PURCHASING Procedure 5.)


=== Department Head Changes ===
The following restrictions must be strictly adhered to by all personnel making procurements under this procedure:
Inventory listings are available to incoming and outgoing department heads upon request so there can be a physical inventory taken and signed by both persons indicating a transfer of responsibility for State property.


=== Separation of Duties ===
*Total value of the purchase (including taxes, delivery, and costs to place item into operation) must be less than $1,500. Orders may not be split to avoid this threshold.
Fixed asset responsibilities should be distributed among several positions. This separation is necessary for adequate internal control. The Controller has the custodial and supervisory duties of the system. He/she assigns both supervisory and clerical positions to control the assets. The Fixed Asset Officer makes the entries in the system. He/she also issues tags for assets and records the assets in the system. A separate employee in the Purchasing area receives the assets and checks them in and personnel in this area also affix the fixed assets tag to the items. Departmental personnel, who are separate from the above mentioned positions perform the annual inventory. After inventory, these positions research any missing assets. The responsible departmental supervisor approves the Physical Inventory Worksheets before the Fixed Asset Officer makes any changes to the Capital Assets Management System (see Transferring Assets ).
*Contracted personal services.
*Items listed on State Term Contracts must be purchased from a State Contract Vendor.
*Items stocked in the Central Warehouse stores. These items must be purchased through the warehouse.
*Purchases from overseas vendors.
*Purchases requiring prepayment.
*Research gases.
*Radioactive materials.
*First aid supplies should be approved by the Safety Officer prior to purchase.
*Purchases unauthorized for State Fund expenditure, such as: items for personal use, alcoholic beverages, and entertainment expenses (to include food).


=== Depreciation ===
The Controller's Office has the responsibility for management and oversight of this procurement procedure. For details on this procurement method, see Accounting, Policy #15 and Accounting, Procedure #4?.
The University uses the straight-line method of depreciation using the half-year convention and an assumed salvage value of zero. Straight-line is a time-based method used when the service life of an asset is affected primarily by the passage of time. A useful life is assigned to each asset class based on historical information, industry data, and/or other factors and falls within a range set forth by the Office of the State Controller. The useful life assigned to each class is assessed annually and adjusted as needed to more accurately reflect actual useful lives of each asset class.


== Additional References ==
== Additional References ==
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== Revision Dates ==
== Revision Dates ==
Last modified 04/08/2011 08:55:49 AM by Matt McNaney

Revision as of 15:20, 13 June 2011

Policy 509.22

Introduction

You may copy this page's source to start a new policy page. Be sure to remove or overwrite the examples. Second level headings should NOT be altered.

Scope

Definitions

Definition phrase or word

Definition summary


Policy and Procedure Statements

Definition

The North Carolina Agency Purchasing Manual, Section V-2, effective November 15, 1998, defines small purchases as those purchases of commodities, services or printing, not covered by a term contract, involving an expenditure of public funds of five thousand dollars ($5,000) or less.

COMPETITION

Competition is not required by statute for those purchases of equipment, supplies, materials, and services which meet the definition of small purchases. However, it is the responsibility and obligation of all University employees to seek the best possible value when making purchases with University funds. Accordingly, where appreciable value can be gained without undue sacrifice of convenience and/or necessity, the Purchasing Department may seek competition for certain purchases under $5000.

DOCUMENTATION

This small purchase policy in no way changes the requirement to obtain proper authorization documentation through the Purchasing Department or the Controller's Office prior to committing any University funds for the procurement of commodities or services. Normal purchases processed through the Purchasing Department require a purchase order. Certain small purchases as indicated below may be accomplished without a purchase order and documented as specified in the [Accounting Accounting] Section of this manual.

PETTY CASH PURCHASES

As a result of the increasing costs of issuing procurement requests, purchase orders, and checks, petty disbursing funds have been established for small purchases and emergency purchases.

Petty disbursing funds are available through the Controller's Office for use by University departments and areas under University control.

This procedure does not replace the routine purchasing procedures. However, if the purchase meets the criteria outlined below, this procedure may be used in lieu of the regular purchasing procedures.

The Central Petty Disbursing Fund may be used when:

  • There is a need for items that can be purchased locally at an economical price.
  • The University Warehouse does not have the items in stock.
  • The reimbursement amount is within the limits established in Accounting, Policy 16.
  • The budget account to which the purchase is being charged is maintained by the ASU Controller's Office.
  • State Term Contract items must be purchased from contract vendors.
  • The purchase of first aid supplies must be approved by the Safety Officer before reimbursement will be made by the Controller's Office.

If there is any question about a purchase being legitimate, the Petty Disbursing Officer in the Controller's Office should be asked for clarification prior to making the purchase.

The University cannot be responsible for the purchase if it does not meet the established purchasing regulations and criteria listed in items 1 through 6 above.

For details on this procedure, see Accounting, Policy #16? and Accounting, Procedure #5?.

CHECK REQUEST PURCHASES

Certain small purchases totaling less than $1,500 including taxes, delivery and costs to place item into operation may be made using a Check request in lieu of following the normal purchase procedure.

The following restrictions must be strictly adhered to by all personnel making procurements under this procedure:

  • Total value of the purchase (including taxes, delivery, and costs to place item into operation) must be less than $1,500. Orders may not be split to avoid this threshold.
  • Contracted personal services.
  • Items listed on State Term Contracts must be purchased from a State Contract Vendor.
  • Items stocked in the Central Warehouse stores. These items must be purchased through the warehouse.
  • Purchases from overseas vendors.
  • Purchases requiring prepayment.
  • Research gases.
  • Radioactive materials.
  • First aid supplies should be approved by the Safety Officer prior to purchase.
  • Purchases unauthorized for State Fund expenditure, such as: items for personal use, alcoholic beverages, and entertainment expenses (to include food).

The Controller's Office has the responsibility for management and oversight of this procurement procedure. For details on this procurement method, see Accounting, Policy #15 and Accounting, Procedure #4?.

Additional References

Authority

Contact Information

Effective Date

Revision Dates

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