Fixed Asset Policy and Procedures

Fixed Asset Policy and

Procedures

Adopted: xxx, 2014

Resolution: 2014-x

F

IXED

A

SSET

P

OLICY AND

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ROCEDURES

P

URPOSE

The following policy and procedures document a fixed asset system designed to comply with all statutory requirements. The intent of this policy is to obtain accountability over assets, provide documentation for insurance purposes, meet financial reporting needs, and generate asset management information.

P

OLICY

It is SCOG’s policy to maintain accountability over all tangible fixed assets which cost $5,000 or more and have a useful life exceeding one year. This policy applies to all land improvements, all buildings and building renovations, equipment purchased, and additions to existing equipment that extends its useful life/value.

G

Fixed assets include all land, buildings, machinery, and equipment with an original cost of $5,000 or more. The original cost shall include the cost, sales tax, transportation expenses and the cost of installation. SCOG’s capitalization threshold is $5,000 for assets with a useful life of more than one year.

Donated fixed assets are recorded at their estimated fair market value on the date donated.

SCOG uses single entry, cash basis accounting and as such is not required to account for depreciation. Small and attractive items which cost under $5,000 are governed by the Small and Attractive Items Policy and Procedures.

R

The Executive Director or his/her designee shall maintain the fixed asset records. The fixed asset records shall be verified by a physical inventory at least once every two years. If an asset is deleted, the reason will be noted along with the means of disposal.

The Executive Director is responsible for ensuring that adequate safeguards are in place to prevent loss, damage, or theft of the property, for procuring adequate insurance coverage, and for implementing maintenance procedures to keep the property in good condition.

A

I

All fixed assets will be assigned a unique asset identification number. The Finance Manager will assign this number. The assigned number will follow the asset throughout its life in the SCOG’s fixed asset system.

Whenever feasible, each fixed asset will be tagged or marked with SCOG’s name and identification number. Such markings will be removed or obliterated only when the asset is sold, scrapped, cannibalized, or otherwise disposed of.

P

ROCEDURES

R

P

SCOG does not own any real property. In the event SCOG acquires real property in the future, SCOG will amend the Fixed Asset Policy and Procedures.

E

TITLE

Subject to the obligations and conditions set forth in this section, title to equipment acquired under a federal or state, grant or sub-grant will vest upon acquisition in SCOG.

USE

Equipment may be used by SCOG in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by federal funds. When no longer needed for the original program or project, the equipment may be used in other activities currently or previously supported by a federal agency.

SCOG must not use equipment acquired with grant funds to provide services for a fee, or to compete unfairly with private companies that provide equivalent services, unless specifically permitted by federal statute.

SCOG shall also make equipment available for use on other projects or programs currently or previously supported by the federal government, providing such use will not interfere with the work on the projects or program for which it was originally acquired. First preference for other use shall be given to other programs or projects supported by the awarding agency. User fees should be considered if appropriate.

When acquiring replacement equipment, SCOG may use the equipment to be replaced as a trade-in or sell the property and use the proceeds to offset the cost of the replacement property, subject to approval of the awarding agency.

ADDITIONS

SCOG may acquire fixed assets via purchase, construction, donation, or lease. Regardless of how it is acquired, and regardless of whether acquired with local funds or under a grant or sub-grant, a fixed asset record shall be created and the asset shall be tagged with SCOG’s name and an ID number.

FIXED ASSET RECORDS

The fixed asset records will include:  A description of the asset.

 A serial number, model number or other identification number, if available.  The source (purchased from, constructed by, donated by etc.) of the asset.  Name of title holder.

 The acquisition date and original cost of the asset.

 Percentage of Federal participation in the cost of the property.  The location, use and condition of the asset.

 Ultimate disposition data including the type and date of disposal, value of asset at disposition, and the selling price if the asset was sold.

PHYSICAL INVENTORY

Per OMB Circular A-102, a physical inventory of fixed assets must be taken and the results reconciled with the fixed asset records at least once every two years.

The Executive Director will determine who will be responsible for taking the physical inventory; determine how to deal with inconsistencies (items on list but not located or items located but not on list), and establish framework for observing, evaluating and recording the physical condition of assets.

DISPOSITIONS:

When original or replacement equipment acquired under a grant or sub-grant is no longer needed for the original project, program or for other activities currently or previously supported by a federal agency, disposition of the equipment will be made as follows:

 Items of equipment with a current per-unit fair market value of less than $5,000 may be retained, sold or otherwise disposed of with no further obligation to the awarding agency.

 Items of equipment with a current per-unit fair market value in excess of $5,000 may be retained or sold and the awarding agency shall have a right to an amount calculated by multiplying the current market value or proceeds from sale by the awarding agency’s share of the equipment. Assets previously acquired with local funds or under a grant or sub-grant will eventually be disposed of and will need to be deleted from the fixed asset inventory. Disposals must be approved by the Executive Director prior to disposing of the asset. Deletion may be required due to sale, disposal/scrapping, damage, cannibalization, theft, or damage beyond repair. When an item is deleted, the reason and/or means of disposal will be noted.

Revenues generated from disposal of equipment will be used to support on-going SCOG programs. Removal from the fixed asset inventory must be approved by the Executive Director.

Items that have disappeared due to apparent theft may need to be reported to law enforcement, the Board of Directors and/or Insurance Company. Deletions brought about as a result of damage or destruction should be reported to the insurance company for possible reimbursement.

FEDERAL EQUIPMENT

In the event SCOG is provided federally owned equipment:  Title will remain vested in the federal government.

 SCOG will manage the equipment in accordance with federal agency rules and procedures, and submit an annual inventory listing.

 When the equipment is no longer needed, SCOG will request disposition instructions from the federal agency.

LOST OR STOLEN ASSETS:

Lost or stolen equipment must be reported to the Executive Director and the Board Chair as soon as the loss is discovered. The Executive Director shall report the loss or theft to law enforcement and the insurance company as appropriate.

S

DISPOSITION

If there is a residual inventory of unused supplies exceeding $5,000 in total aggregate fair market value upon termination or completion of the award, and if the supplies are not needed for any other federally sponsored programs or projects, SCOG shall compensate the awarding agency for its share.

C

The federal awarding agency reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish or otherwise use, and to authorize others to use, for federal government purposes:

 The copyright in any work developed under a grant, or sub-grant; and

 Any rights of copyright to which SCOG purchases ownership with grant support.

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UESTIONS