SOUTH PUGET SOUND COMMUNITY COLLEGE



SOUTH PUGET SOUND COMMUNITY COLLEGE

INVENTORY OPERATIONAL GUIDELINES

PURPOSE

The purpose of this Inventory Operational Guidelines is to establish a framework for the management and control of College capital assets, including the proper recognition, measurement, safeguarding and disposal thereof. Additional regulations related to the purchasing and ordering of equipment are found in the Purchasing Handbook located on the College intranet under Administrative Services.

INVENTORY GUIDELINES

When to capitalize assets

The College’s capitalization criteria is as follow:

1. All land (including ancillary costs);

2. All other capital assets with a unit cost (including ancillary costs) of $5,000 or greater.

3. Capital leases when the net present value of the future minimum lease payments or fair value, whichever is less, is $10,000 or more.

4. Although small and attractive assets ( cost $300 - $4999 and vulnerable to theft – see Commodity Group for items considered small and attractive) do not meet the College’s capitalization criteria above, they are considered capital assets for purposes of marking and identifying capital assets, inventory records requirements, and physical inventory counts.

Recognition & Measurement

1. Capital assets are recorded at cost. As a general rule, cost includes the purchase price and other acquisition costs such as installation costs, freight charges, transportation, legal and title fees, taxes and duties. For a donated capital asset, cost is considered to be the fair value at the date of donation.

2. The cost incurred to enhance the service potential of a capital asset is considered to be an improvement and shall be capitalized. Service potential is enhanced when there is an increase in the previously assessed service capacity; associated operating costs are lowered; the useful life of the capital asset is extended or the quality of output is improved.

3. All capital assets, except land, shall be depreciated in accordance with the OFM methods and guidelines in effect.

Custody & Security

1. Capital assets costing $5,000 or greater shall be tracked by physical location through the College Fixed Assets and Equipment Inventory System (F.A.E.) maintained by the Facilities Office.

2. Small and attractive assets costing $300 - $4999 shall be tracked by physical location through the Business Office Excel spreadsheet maintained by the Inventory Control Officer.

3. A physical inventory shall be taken every two years (during summer quarter) and shall be conducted throughout the College. While overall coordination for the physical inventory shall rest with the Inventory Control Officer, each Department Head shall be responsible for conducting the inventory in his or her area.

4. It is the responsibility of the Department Head to ensure that capital assets assigned to his or her custody are maintained and safeguard in accordance with the College policies and procedures. The capital assets held under his or her responsibilities shall be reported on a yearly basis (during summer quarter) to the Inventory Control Officer.

5. After conducting the physical inventory, each Department Head shall submit a Certification of Physical Property Inventory to the Inventory Control Officer to certify the correctness of his/her inventory. A similar certificate is to be rendered on a change of Head of Department, except that on these occasions, the document is to be jointly signed by the outgoing and the incoming Head.

6. In cases where programs are shutting down, Department Heads, who are responsible for the programs, shall conduct a physical inventory and render the Certification of Physical Property Inventory to the Inventory Control Officer.

7. As a general rule, all moveable capital assets shall remain at the physical location assigned to them within the College.

8. Capital assets may only be removed from the College in the course of conducting College related business (i.e. equipment used at home or on business travel) with the approval of the Department Head. Upon completion of the project, all capital assets shall be returned to the College.

9. Should it be necessary to move a capital asset off campus to use at a location outside the College, it is the responsibility of the Department Head to follow the appropriate procedures set by the College.

10. It is the responsibility of the Department Head to report any stolen or damaged property to the Inventory Control Officer as well as to the Security Department in accordance with the procedures set by the College.

Disposal

At the end of a capital asset’s useful life, the Department Head having custodial responsibility of the capital asset shall follow the appropriate procedures for capital asset disposal as outlined in the College procedures.

INVENTORY OPERATIONAL PROCEDURES

All members of the College have a responsibility to assist in the safeguarding of College property. A great deal of valuable and attractive equipment is held in Departments, much of which is portable.

Just as the President has ultimate responsibility for all College property, the Vice-Presidents have overall responsibility for equipment in their charge. Similarly, individual members of staff and faculty who have items of College equipment under their control have a responsibility to ensure that they are safeguarded, and could be held liable in the event of negligent loss or damage.

This situation places upon individual members a great degree of involvement in this area, and such involvement should include the fostering of a responsible caring attitude towards College property, and the adoption of measures aimed at preventing loss or damage.

Members of staff and faculty who exercise supervisory authority are required to be particularly aware of what is expected of them.

Specific Responsibilities

It is the responsibility of the Business Office to specify and implement control procedures for both capitalized and small and attractive assets.

It is the responsibility of the Business Office to co-ordinate the physical inventory of both capitalized and small and attractive assets at least every other year.

It is the responsibility of the Business Office to reconcile between the physical count and the inventory record of both capitalized and small and attractive assets.

It is the responsibility of Campus Departments to follow these procedures where they are applicable to both capitalized and small and attractive assets. Departmental Heads shall be responsible and held accountable for the custody, care, and maintenance of all College equipment within their Departments.

The Senior Accountant is designated Inventory Control Officer. He/She is responsible to control the issuance of state tags, maintain the inventory list, coordinate the taking of physical inventory, reconcile the inventory report to College records, and generally carry out or oversee all the tasks enumerated for this function in State guidelines.

It is the responsibility of the Purchasing Assistant in Receiving to affix state tags. All tags are used and accounted for sequentially, including those mutilated, removed from defective equipments.

Inventory Process

1. The Purchasing Manager begins the inventory control process by assigning commodity group codes to both capitalized fixed and small and attractive assets when initiating purchase documents for those assets that meet the college’s criteria. This will alert the Purchasing Assistant to tag and inventory the asset when received.

2. When an inventoriable asset is received, the Purchasing Assistant affixes the state tag (received from the Senior Accountant), completes an equipment inventory input form (“green sheet” for capitalized and “white sheet” for S&A) before releasing it to the end user. The sheet contains all inventory information except cost. It is forwarded to the Inventory Control Officer who later completes cost data when the invoice is processed for payment.

3. The Senior Accountant reviews and approves all payment documents. This serves as a check that all purchases/payments have been properly coded and that inventoriable assets (both capitalized and S&A) are identified. The Senior Accountant takes copies of the field order or purchase request at that time and capture cost data for use in establishing the asset file and entering the asset on the S&A inventory spreadsheet. The spreadsheet will capture all the data elements required by OFM (State tag number, commodity group code, description, model number, serial number, user department, location, acquisition date, item cost, FO/PR number, vendor, manufacturer, budget/account code, and disposal information). Capitalized fixed assets data are forwarded to Facility Department to enter in the College’ inventory system (Report MM5211A – Detail Report of Equipment by Building, Room, and Tag will be used as a source document to perform inventory reconciliation).

4. All equipment transfers or disposals will be done only with an approved Equipment Transfer Form (ETF – Posted in the College share drive) signed by the Department Head. This includes those being transferred to a new user, new location, and those sent to storage for disposal (the State Office of Commodity Redistribution/State Surplus has delegated authority to the College to dispose of all surplus items except motor vehicles. The College’s Facilities department is required to submit the Property Disposal Request SF 267-A on-line to State Surplus for motor vehicles only. The State Surplus will sell the College’s surplus motor vehicles). After the transfer or disposal, a copy of the ETF or the SF 267-A (for motor vehicles) must be sent to the Business Office, where it will be permanently associated with the asset file and retained in accordance with records retention schedule (6 years). The transfer or disposal is also input to the inventory spreadsheet or the College’s inventory system.

5. If an inventoriable asset is traded in, returned as defective, or sold or otherwise disposed of outside the normal processes, these actions must be done through the Receiving Department so that tags can be removed and accounted for and supporting paperwork forwarded to the Business Office.

6. When property is temporarily removed from the campus for official use, employees must complete an Equipment Checkout Form (ECF – Posted in the College share drive) and obtain approval from their department head or division chair. The form must also be signed when the property is returned.

7. When college property is discovered to be missing, the employee responsible for the asset as well as the employee’s Department Head complete and sign a Property Disposal Request (posted in the College share drive). Include on the Request a description of events surrounding the disappearance of the property, who was notified of the loss, and steps taken to locate the property. A copy of the Request is forwarded to the Business Office so that the missing property record is removed from the S&A inventory or the college’s inventory system. Records of fixed asset losses are to be maintained in the Business Office in accordance with approved college records retention schedules.

8. The Inventory Control Officer yearly sends out the S&A lists to responsible personnel within Campus Departments. They will be asked to verify the lists, signed a Physical Property Inventory Certification (posted in the College share drive) that physical inventory of all equipment on the list is completed, then return the list and the certification to the Inventory Control Officer to update the master S&A list kept in the Business Office.

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