Provided by Financial Services – Capital Equipment Inventory, Procurement Services – Surplus Property, and Management Advisory Services November

 Importance of Equipment Inventory Management  Definitions  Policies and Forms  Procedures ◦ Capital Equipment ◦ Non-Capital/Sensitive Equipment  Surplus Property ◦ Policies and Procedures  Where to Get Help 2

 It is part of your job.  Lack of control over it negatively impacts our F&A rate.  OMB A-110 requires us to maintain accurate equipment records, safeguard assets, and conduct physical inventories.  Auditors test it and we have been written up for not doing it properly. 3

 Listings of non-capital/sensitive equipment were not always maintained or did not contain complete information.  Timely physical inventories were not always conducted and discrepancies investigated.  Equipment additions, disposals, and movements were not always documented.  Proper separation of duties were not established. 4

 Equipment inventory management duties must be adequately separated so no one employee has control over the entire process. 5

 The following duties should be separated: Initiate a requisition to purchase equipment Approve invoice for payment Maintain equipment records Perform physical inventory Dispose of equipment Reconcile purchases to eUMB  Use Control Self Assessment and Separation of Duties Forms (attachment 7 & 8).  Contact MAS if you need help figuring this out. 6

 Real Property  Personal Property  Capital Equipment  Non-Capital Equipment  Sensitive Equipment  Physical Inventory 7

 UMB will maintain a perpetual capital asset inventory.  UMB will perform a biennial capital equipment physical inventory. Capital Equipment Policy 8

 UMB will maintain a perpetual inventory of all non- capital and sensitive equipment. This responsibility is delegated to each School, Department or Division.  Each School, Department or Division must maintain physical control of all non-capital and sensitive equipment assigned to that unit and must complete a physical inventory once every two years.  All non-capital and sensitive equipment must be tagged. Non-Capital/Sensitive Equipment Policy 9

 Copies of these forms are in your handout: ◦ Excess Property Declaration/Capital Asset Deletion Form (attachment 2) ◦ Tag Certification Form (attachment 3) (Note: This is a system generated form and is not available on the Financial Services forms website) ◦ Capital Equipment Transfer Form (attachment 4) ◦ Non-Capital and Sensitive Equipment Inventory Sheet (attachment 5) ◦ Non-Capital and Sensitive Equipment Certification Letter (attachment 6)  Financial Services Forms 10

Capital Equipment 11

 Additions to Inventory - On Campus Dept purchases equipment >/=$5,000 coded to Capital Equip account Financial Services – Capital Equipment Inventory (FSCEI) runs query after month end to capture all purchases coded to Cap Equip account FSCEI contacts dept to set up time to tag item. FSCEI will be tagging items Note: FSCEI will now be tagging items on campus Capital Equip accounts = 42xx & 43xx 12 Donations, revolving loan and bond fund purchases – FSCEI adds to dept records

 Additions to Inventory – On Campus (cont’d) Dept personnel will sign and keep a copy of Tag Certification Form once FSCEI affixes tag New asset will be on next inventory listing for the dept (sent every 6 months) 13

 Additions to Inventory – Off Campus Dept purchases equipment >/=$5,000 coded to Capital Equip account FSCEI runs query after month end to capture all purchases coded to Cap Equip account FSCEI contacts dept to notify that item needs to be tagged. Tag is sent with Tag Certification form to Dept inventory contact Off campus depts will continue to tag items Capital equip accounts = 42xx & 43xx 14 Donations, revolving loan and bond fund purchases – FSCEI adds to dept records

 Additions to Inventory – Off Campus (cont’d) Dept personnel will tag item, sign the Tag Certification Form, fax or a copy to FSCEI, and keep a copy for dept records New asset will be on next inventory listing for the dept (sent every 6 months) 15 Fax # or to

 Changes to Inventory – includes: ◦ Transfers between departments  Requires signatures of both sending and receiving administrators ◦ Movement within a department  Building, floor or room changes ◦ Form – Capital Equipment Transfer Form (attachment 4) 16

 Why Is a Location Change for a piece of Equipment Important? 1.Each room is assigned a function (research, teaching, etc). 2.The equipment that is in a room with a research function increases the total expenses for the base used to calculate the F&A rate. 3.If an auditor finds a piece of equipment in a hallway, for instance, that is supposed to be in a “research” room, our base will be lowered, thus lowering our F&A rate. 17

 Deletions from Inventory ◦ Each School, Department or Division must provide FSCEI with notification of all deletions. ◦ Form – Excess Property Declaration/Capital Asset Deletion Form (attachment 2)  Describes the acceptable reasons for deletions and supporting documentation required for each. 18

 Physical Inventory ◦ Each School, Department or Division must complete a physical count of all their capital equipment once every 2 years. FSCEI will coordinate the schedule. ◦ FSCEI will provide packet of information to assist in completing the physical count. Packet includes:  Inventory Receipt Form  Inventory Certification of Completion  Inventory Report in Room Sequence Order  Inventory Report in Tag Sequence Order  Excess Property Declaration/Capital Asset Deletion Form  Capital Equipment Transfer Form 19

 Physical Inventory (continued) ◦ Upon receipt of the packet, Departments must sign the Inventory Receipt Form and return to FSCEI. ◦ Departments can utilize either Inventory Report to perform the physical count. This will involve:  Checking off items that are on the report and are found during the count  Noting items that are found during the count but are not on the report. They will need to be added.  Noting items that are on the report but are not found during the count. Departments must further investigate and resolve. 20

 Physical Inventory (continued) ◦ Departments must provide updated inventory report to FSCEI within 60 days. The Inventory Certification of Completion Form signed by Department Head/Administrator must accompany the updated inventory report. ◦ FSCEI will review information provided and will update the Capital Asset Management System. ◦ FSCEI will independently verify the existence of select items within 45 days after receiving updated inventory report.  FSCEI will notify departments of location selected, look for items, provide results and determine if further investigation is necessary. 21

 Physical Inventory - Delinquencies ◦ When an inventory report is not returned within 60 days, a notice of delinquency will be sent to the Department Administrator. ◦ When the inventory report is not received 2 weeks after the initial notice, a follow-up notice will be sent to the Administrator with a copy to the Department Chair and Associate Director of Financial Services. ◦ When the inventory report is not received 2 weeks after the second notice, a follow-up notice will be sent to the applicable Dean with a copy to the Dept Chair. 22

Non-Capital/Sensitive Equipment 23

 Additions to Inventory ◦ Each School, Department and Division must maintain a listing of all non-capital and sensitive equipment. ◦ Listing must at least include:  Description of asset  Original cost  Date acquired  Physical location  Asset tag number ◦ Standard form under Forms on Financial Services website

U niversity of M aryland, B altimore NON-CAPITAL AND SENSITIVE EQUIPMENT INVENTORY DEPARTMENT QUANTITYDESCRIPTIONDATE ACQUIREDREFERENCE NO.COSTLOCATIONASSET TAG NO. Attachment 5 25

 Additions to Inventory (continued) ◦ Custodial departments must affix an asset tag to the equipment upon receipt. Asset tags are issued to departments in blocks by FSCEI. ◦ Ensure that all methods of equipment purchases are accounted for:  PUR01  PUR02  Pcard  Academic Revenue Bonds  General Obligations Bonds  Revolving Loans  Donations 26

 Changes to Inventory ◦ Includes movement within a department or transfers between departments. ◦ Schools, departments and divisions must update their listing of non-capital and sensitive equipment as changes occur. 27

 Deletions from Inventory ◦ Disposal of non-capital and sensitive equipment must be done in accordance with UMB Policy on Disposal of Surplus Property. UMB Policy VIII-1.20(A) UMB Policy on Disposal of Surplus Personal Property 28

 Physical Inventory ◦ Must be completed once every two years. ◦ Start with your list of Non-Capital and Sensitive Equipment Inventory and follow same inventorying process as for Capital Equipment:  Check off items on the list and found during the count.  Note items found during the count but not on the list. Add them to your list.  Note items on the list but not found during the count. Investigate and resolve. 29

 Physical Inventory (continued) o Must notify FSCEI of completion by sending: o Non-Capital and Sensitive Equipment Certification Letter (attachment 6), and o Copy of up-to-date Non-Capital and Sensitive Equipment Inventory List (attachment 5) ◦ Delinquencies – same procedure as Capital Equipment Inventory. (see slide # 21) 30

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 Procurement Services Surplus Property Office Proc/mail/surplusprop/index.cfm Proc/mail/surplusprop/index.cfm  Surplus Property = UMB owned property that is no longer needed or utilized.  Dept must complete Excess Property Declaration/Capital Asset Deletion Form (attachment 2), attach appropriate documentation, and forward to FSCEI. 32

 FSCEI reviews and determines if item should be removed from Capital Asset records or referred to Procurement Services - Surplus Property Office to schedule removal of equipment from dept.  If item needs to be removed from dept FSCEI will refer to Surplus Property Office (e.g., Discard as Unserviceable, Sell, Donate)  Item will be removed in 3 – 5 business days.  After removal, FSCEI will remove from records. 33

 Departments should first consider if they can take advantage of a trade-in when purchasing new equipment. Contact the buyer in Procurement Services responsible for that commodity. Buyers and commodities purchased are listed at  The Surplus Property Office will offer property for sale or trade to other UMB departments via the UMB Surplus Property Trade List at mail/surplusprop/index.cfm mail/surplusprop/index.cfm 34

 When possible, surplus property may be: ◦ Offered for sale or trade within USM or to another State agency. ◦ Offered for sale to the public via public auction ( ◦ Donated to qualified non-profit charitable org (Non- Profit Certification Statement required)  If equipment was grant funded – contact ORD SPA first. Donation may not be allowed. ◦ Dismantled for recovery of useable parts. ◦ Disposed of as scrap and recycled. (UMB recycles hundreds of tons of PC and related equipment annually) 35

 Financial Services – Capital Equipment Inventory Sheri Myers Vicki Dodson-Lake Avis Suber  Procurement Services – Surplus Property Larry Butler  Management Advisory Services Marc Wasserman x Michele Evans Ola Lawal 36