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(Definitions)
(Policy and Procedure Statements)
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== Policy and Procedure Statements  ==
 
== Policy and Procedure Statements  ==
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=== New Equipment ===
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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,
 +
*Aid in the taking of physical inventory,
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*Control the location of all physical assets,
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*Aid in maintenance of fixed assets, and
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*Provide a common ground of communication for both the accounting department and the assets' users.
 +
 +
Generally, all capital assets (capitalized and inventory) are tagged. The tag number is kept in the asset record in the Capital Asset Management System.
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 +
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:
 +
 +
*Buildings (record legal description in asset record),
 +
*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.
 +
 +
=== Use of Assets ===
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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
 +
*Relocation purpose is for the conduct of University business by a University employee
 +
*Property, while relocated, will be adequately protected from loss and damage
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*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.
 +
 +
=== Safeguarding Assets ===
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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 ===
 +
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.)
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 +
=== Department Head Changes ===
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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 ===
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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 ).
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 +
=== Depreciation ===
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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 ==

Revision as of 17:28, 1 August 2011

Policy 501.22

1 Introduction

1.1 Responsibility

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.

1.2 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

2 Scope

3 Definitions

3.1 Fixed or Capital Assets

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.

4 Policy and Procedure Statements

4.1 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,
  • Aid in the taking of physical inventory,
  • Control the location of all physical assets,
  • Aid in maintenance of fixed assets, and
  • Provide a common ground of communication for both the accounting department and the assets' users.

Generally, all capital assets (capitalized and inventory) are tagged. The tag number is kept in the asset record in the Capital Asset Management System.

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:

  • Buildings (record legal description in asset record),
  • 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.

4.2 Use of Assets

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
  • 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.

4.3 Safeguarding Assets

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.

4.4 Yearly Inventory

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.)

4.5 Department Head Changes

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.

4.6 Separation of Duties

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 ).

4.7 Depreciation

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.

5 Additional References

6 Authority

7 Contact Information

8 Effective Date

9 Revision Dates