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Table of Contents
To establish uniform procedures to support University of Arkansas at Little Rock (UA Little Rock) policy and enable UA Little Rock to maintain a perpetual capital equipment inventory system. This procedure manual describes the method used to acquire equipment, the accumulation of the additional information, the physical tagging of each asset, the input and approvals required, property forms, and the annual inventory process.
This policy provides guidance for the ownership, control, and disposition of equipment. The policy applies to equipment for which UA Little Rock has ownership or custody, including equipment purchased with funds from grants or contracts (unless the grant agreement or contract specifies otherwise).
The vice chancellor for finance and administration (VCFA) is the authority for the physical and reporting control of the university’s capital assets. Significant legal and insurance exposure exists if the university’s capital assets are misused and/or misappropriated. Federal regulations require we maintain a functioning financial system in order to protect the university’s assets from misuse and/or misappropriation. Accordingly, an annual physical inventory of all university capital assets is required. The violation of these federal regulations could result in a loss of federal awards.
Banner. Software that we use to maintain fixed assets.
Capital Equipment. Any item of furniture or equipment or any tangible property with a useful life of at least two years which has a unit cost or donated value of $2,500 or more, including taxes, freight, and installation charges. This definition includes vehicles and equipment procured on a capital lease.
Capitalization. A means of recording an asset in the accounting records.
DF&A. The State of Arkansas Department of Finance and Administration.
Equipment. An item of a movable nature, which has an expected useful life of two years or more, is non-expendable and maintains its identity when it is incorporated into a larger or more complex unit.
Hard Drive. A very large disk that holds huge amounts of information usually inside the computer’s structure. Sometimes data is still retrievable even after it has been erased. For that reason, DF&A has specified that it must be totally destroyed before it can be disposed.
Low Value Assets. Equipment with a cost or donated value less than the capitalization threshold but greater than $500.
Marketing and Redistribution. A section of the Office of State Procurement of the Department of Finance and Administration hereinafter referred to as M&R. This is the state agency responsible for accumulating and selling all items disposed by a state agency.
Net Book Value. The current book value of an asset; i.e., its original book value net of any accounting adjustments such as depreciation.
Organization Head. The individual with authority and responsibility for the budgetary organization (department) to which the equipment is assigned. Also known as the financial manager.
Origination Tag/O-tag. The unique identification number that Banner automatically generates for a fixed asset that is updated with a permanent tag number when tagged.
Packing Slip. A statement of the contents of a package, usually put into the package so that the quantity of merchandise may be counted by the person who opens it.
Physical Inventory. A verification that recorded assets are physically located at an agency.
Procurement. The process of purchasing of services or materials.
Permanent Tag/P-tag. The UA Little Rock property tag assigned to a fixed asset when tagged and updated in the system.
Purchase Order. A written authorization for a vendor to supply goods or services at a specified price over a specified time period. Acceptance of the purchase order constitutes a purchase contract and is legally binding on all parties.
Tagging. The placing of a numbered identifier (property tag) on a fixed asset.
Useful Life. The number of years an asset is expected to be operational.
- Complying with state and university procedures regarding the acquisition of assets.
- Identifying equipment purchases that meet the definition of capital equipment. Also identifying purchases over $500 that meet the definition of low-value assets that may need to be added to the campus inventory.
- Assigning the appropriate account code to each purchase that will trigger the fixed assets system.
Campus organizations are responsible for:
- Complying with state and university procedures regarding the acquisition of assets.
- Completing a Purchase Requisition form and forwarding it to Procurement Services for approval.
- Completing a Receiving Report within one business day of receipt of the item and submitting it to Financial Services.
- Assisting Financial Services by making staff available to ensure that all items are tagged within 30 days of receipt. This includes gathering the required information and locating the equipment to be tagged.
- Notifying Financial Services when an item purchased will be taken off-campus BEFORE the item is taken off-campus, so it can be tagged.
- Maintaining physical control and upkeep over all items on their equipment inventory.
- Preparing appropriate forms to notify Financial Services of changes in inventory items. Organizations should maintain copies of all inventory forms submitted.
- Notifying the Development Office and Financial Services of all equipment or furnishings donated. This includes when equipment is acquired without university expense, such as equipment purchased with Foundation funds.
- Following approved procedures and notifying Financial Services when:
- transferring equipment to a new location or to another department;
- equipment has been lost or stolen; or
- equipment exists that needs to be disposed.
- Conducting an annual inventory by scanning items on the annual inventory report provided by Financial Services.
Property Accounting is responsible for:
- Complying with equipment procedures and regulations issued by DF&A.
- Physically tagging all equipment items with a UA Little Rock property tag within 30 days of receipt. This is to be coordinated with each organization.
- Maintaining the fixed assets system, including collecting and inputting the required information to update the asset.
- Maintaining and controlling detailed inventory records on items such as furniture and equipment as well as vehicles and machinery for each department.
- Updating the inventory records as changes occur.
- Reconciling between the fixed assets module and Banner Finance.
- Providing UA Little Rock organizations with their equipment listing and assisting them with the annual inventory scanning process.
- Participating in audits conducted by internal and external auditors.
- Informing the campus community of any policy/procedural changes relating to fixed assets.
The Development Office is responsible for:
- Acknowledging each gift of donated property, including any required IRS reporting.
- Informing Property Accounting of any donated property.
Acquisitions (Receiving and Tagging Equipment)
Organizations should use specific account codes when purchasing furniture and equipment. This is so that the accounting system will record the information about these purchases. There are three account codes set up in the accounting system to record fixed asset purchases:
Account code 721700 Items with cost between $500 and $2,499.99
Account code 750300 Items $2,500 and over
Account code 759999 Non-pool grants for furniture and equipment BOTH under and over $2,500
Within one business day of the receipt of equipment, the receiving organization should send a receiving report to Financial Services, attention Accounts Payable. For inventory purposes, the receiving report must state the following: “RECEIVED,” date of receipt, and the full name of the person receiving the equipment.
If more than one item is ordered on the purchase order, a copy of the receiving report should be made and forwarded with the item number and the quantity received given so that payment can be made for those items received.
If your organization has Banner security to enter receivers, skip the step above. If your organization needs security to enter receivers, contact Accounts Payable.
Locations outside of the Little Rock area will be responsible for applying their own property tags. The receiving unit will receive a memo along with the actual property tag for application to equipment. The receiving unit should:
- Attach the property tag to the equipment.
- Confirm the description, serial number, custodian, and location code.
Financial Services is notified by the Development Office of organizations receiving Donations/Gifts-In-Kind with a value of more than $500. Items purchased with UA Little Rock Foundation funds also fall into this category. Once Property Accounting is notified, the organization will be contacted to tag the equipment and record the following information:
- Asset Description
- Location Code
- Serial Number
- Estimated Fair Market Value/Appraisal
- Professional appraisal if over $5,000 (IRS Form 8283)
- Custodian Name
- Date of Gift
- Tag Number
Departments requesting the return of tagged property to the vendor for credit, exchange, or repair must complete an Outgoing Shipment Form.
Upon receipt of the signed and dated form, Property Accounting will contact the organization to determine what the status is on the item to be returned and what actions to take. Whether the vendor exchanges, repairs, or issues a credit will determine how the item will be updated.
Prior approval from DF&A is required before trading in any UA Little Rock equipment (including capital lease agreements). The campus organization should write a memo to Property Accounting requesting approval to trade-in equipment and should attach an invoice from the vendor that shows credit for the trade-in. The memo should also include the UA Little Rock tag number, description of property, serial number, and any other information associated with the asset. Once the trade-in is approved by the associate vice chancellor for finance, the request will be submitted to DF&A. Property Accounting will notify the organization when DF&A has made a decision.
Upgrade of Equipment
When an item is purchased that costs $500 or more and will be added as an integral part of an existing piece of equipment, the value of the purchased item must be added to the value of the original equipment. Property Accounting will increase the value of the original equipment by the cost of the upgrade.
Lost or Stolen Property
When property cannot be located, the organization head or equipment manager should immediately conduct a search of transferred property. It must also be verified that the property has not been turned into Marketing and Redistribution (M&R).
The last recorded location should be checked. If the property was lost, the organization head or equipment manager should complete the Lost or Stolen Property Form and send to Property Accounting. This is required by Act 876 of 1973 (Ark. Code Ann. 19-4-1501). It is necessary to take these steps before deleting the missing property from the inventory records. These reports become a part of the agency’s property records used for a Legislative Audit.
Damaged Property or Property Removal
To remove equipment that is damaged beyond repair or deemed no longer useful, the Marketing and Redistribution Form should be submitted to Property Accounting.
Once Property Accounting approves the form, it is sent to Facilities Management. Facilities Management is responsible for the physical removal of property and determining its status before sending it to DF&A-M&R.
When equipment is no longer used or needed by an organization, it may be transferred out. The terms of its purchase, such as with restricted funding, may constraint its use and transfer. All equipment transfers must be coordinated through Financial Services.
Transfers between UA Little Rock Organizations
When capital equipment is to be physically moved to another location an On-Campus Property Reassignment Form must be completed. The form must be sent with the items being moved. The transferring organization should maintain a photocopy of the form in their files.
The receiving organization should verify the move by adding its organization code to the form. The receiving unit should also:
- Examine the equipment and the form to verify that the property numbers match.
- Make the needed corrections to the form before accepting the equipment.
- Sign, date, and send the original to Financial Services. The receiving organization should keep a photocopy in their files.
The receiving organization should not sign the form for equipment that is not delivered. Undelivered items should be crossed off the form and initialed. If other items are to be delivered at a later time, another form should be completed at that time.
Upon receipt of the signed and dated form from the receiving organization, Financial Services will update the inventory records. Incomplete or inaccurate forms will be returned to the appropriate organization for correction before changes are made. No equipment will be transferred into an organization without the signature of the head or designee.
Transfers between State Agencies
Requests to transfer UA Little Rock capital equipment to another state agency are to be sent to Financial Services. The written request must state the property number, description of the equipment, the reason for the transfer, and the name of the receiving state agency and person responsible. The request will be sent to DF&A for review and approval. No UA Little Rock equipment should be removed from UA Little Rock custody until DF&A’s approval is received. Upon receipt of the approved form from DF&A, Financial Services will notify the requesting organization and will remove the equipment from inventory records. The requesting organization should then remove the UA Little Rock property tag and any other decals from the equipment before transfer.
Transfers to Non-State Agencies
Capital equipment may be donated or given to non-profit organizations with the prior approval of DF&A. The UA Little Rock organization wishing to make such a donation should submit a written request to Financial Services stating the property number, description of the equipment, reason for the donation, and the name of the organization/person responsible to which the equipment will be given.
Financial Services will prepare a cover letter for the signature of the vice chancellor for finance and administration or their designee and forward the request to DF&A. No UA Little Rock equipment should be removed from UA Little Rock until DF&A’s approval is received. Upon receipt of this approval, Financial Services will notify the requesting organization and will remove the item from the equipment records. The requesting organization should then remove the item from the equipment records. The requesting organization should then remove the UA Little Rock property tag and any other decals from the equipment before transfer.
The physical location of equipment will be identified in terms of the organization’s operational space. The location codes are by building and room number. Location of each asset must be verified at least annually and updated to reflect the correct location.
Any transfer to another organization, building, facility, or another agency must be coordinated with Financial Services. An On-Campus Property Reassignment Form will be utilized for reassignments between UA Little Rock organizations and buildings. Contact Financial Services for procedures for all other transfers/reassignments.
All UA Little Rock property located off-campus must be recorded on an Off-Campus Property Reassignment Form. Property located at sites other than UA Little Rock owned and leased land and facilities shall be considered off-campus for the purpose of this policy.
Approval for use of UA Little Rock property off-campus must be obtained in writing from the organization head. Responsibility for all assigned property rests with the organization head regardless of the location of the property. All UA Little Rock property regardless of location may be used only to complete regular UA Little Rock business and not for personal use.
When an employee leaves UA Little Rock and has off-campus property, they are required to return the property. It is up to the organization head to make sure the property is returned before signing the terminating Personnel Action Form.
Annual Inventory Process
Inventory scanning is scheduled from September through March each fiscal year. Each department will be allotted a certain period of time to conduct a physical inventory based on size and complexity of their inventory. An annual Inventory Scanning Schedule will be posted on the website and sent to the inventory listserv before September. Monthly memos and weekly email reminders are also sent out to each organization.
In order to print your organization’s property report, the FWRPROP-Fixed Assets Property Report, you will need to follow these steps: Go to http://monthly.eprint.ualr.edu. At the login box, type in your Banner User ID and password, just make sure the drop down box is “Finance Monthly.” Click on the PDF button and look for the FWRPROP report with the description of “Fixed Assets Property Report” to bring up your property report. The list of organizations to which you have security will be listed on the left under the bookmark tab. Click on an organization code to view the organization’s property report. To print your monthly report, click on the File menu, then click Print. In the print dialog box, specify the pages you want to print by entering the first and last page numbers you want, then print.
On the day of an organizations’ scheduled pickup, the person in charge of conducting inventory will receive the scanner and instruction packet from Property Accounting. At that time, the department will be provided with detailed instructions and training for individuals performing the scanning. To conduct the physical inventory you should scan each item on your inventory report and verify the information provided, including description, location, serial number, and custodian. When scanning for your department is complete, please return the scanner and required documents to Property Accounting. You will be responsible for the scanner assigned to your department until the scanner is checked back into Financial Services.
Shortly after the return of the scanner, we will send your department up to four exception reports. Each department has two weeks to complete and return the exception reports to Property Accounting. Once returned, we will request that you assist us in resolving these problems in a timely manner. The reports an organization may receive include:
Inventory items not scanned, but on inventory. This report lists any items that were assigned to your department but were not scanned in the physical inventory.
Inventory items scanned, but not on inventory. This report lists items that were scanned but do not belong to your organization.
Hand-entered tags. This report lists any items that were hand-entered in the scanner.
Assets with no custodian name. This report lists any items without a custodian assigned.
All property forms and instruction can be found at the following link: http://ualr.edu/vcfa/home/resources/forms/generalaccountingforms/
Marketing and Redistribution. Used to document obsolete property that is to be disposed and subsequently written off of the organization’s inventory. A Certificate of Destruction must be attached if the property has a hard drive to be destroyed.
On-Campus Property Reassignment Form. Used to document property that has been transferred from one organization to another.
Off-Campus Property Reassignment Form. Used to document property located off-campus.
Lost or Stolen Property Form. Used to document property that has been lost or stolen. A police report must be attached if the property has been stolen.
Outgoing Shipment Form. Used when shipping property off-campus for repair or returns.
Unlisted Property Form. Used to document property not listed on inventory or if missing a tag.
Location Barcode Request Form. A form used to request a missing location barcode.
Certificate of Destruction. Used to certify hard drive removal for M&R process.