Capital Assets & Inventory Control

1600.107 CAPITAL ASSETS AND INVENTORY CONTROL

A. PURPOSE

This procedure establishes practices for the control and accountability of capital assets within Wenatchee Valley College (WVC).

B. LIMITATIONS AND REQUIREMENTS

To safeguard assets, promote operational efficiency, and ensure the accuracy and reliability of financial data, WVC will maintain a system of perpetual inventory records to track inventoriable capital assets under the direction of the fiscal services director and the vice president of administrative services. For purposes of this procedure, inventoriable capital assets include:

1. Fixed assets with a unit cost (including shipping charges, sales tax and ancillary costs) of $5,000 or greater and useful life of greater than one year.
2. Fixed assets with a unit cost (including shipping charges and sales tax) of $300 to $4,999.99, and meeting the criteria for “small and attractive” commodities, defined in the State Administrative and Accounting Manual (SAAM).
3. Other items may be included in the inventory for tracking purposes.
   The vice president of administrative services will assign the responsibilities of an internal inventory specialist, including maintaining a master record of tagged equipment records, documentation of all inventory transactions, and providing direction and assistance regarding all inventory matters.

C. ACQUISITION OF CAPITAL ASSETS

Upon purchasing assets meeting the criteria for inventoriable, the purchasing manager will provide to the shipping and receiving clerk all known information for the inventory. Upon receipt of the item, the shipping and receiving clerk will assign and affix a state inventory tag and complete the inventory record. The inventory record will include at a minimum the state tag number, serial numbers, description, fund source, department making the purchase, and physical location (required by Washington State Policy, SAAM 30.40.30). Other relevant or required information may be included.

Donated assets will be inventoried using the same procedures as purchased assets. All donated assets will be received by the WVC Foundation or WVC Foundation at Omak, recorded, and gifted to the college. It is the responsibility of the appropriate dean or director to properly report donated assets.

All capital assets and inventoriable items will be received by the shipping and receiving department of the college. Exceptions may be made for specialized purchases with prior approval.

Monthly, the shipping and receiving clerk will reconcile inventory records with fiscal service records of capital asset purchases.

Area administrators are responsible for the safekeeping of assets in their departments. When leaving a position, administrators will leave a complete record of the inventoried assets under their control or responsibility.

D. TRANSFER OF INVENTORIABLE CAPITAL ASSETS

Once assigned to a department or location, inventoriable capital assets transferred from one department to another, or from one location to another, will be recorded in the asset inventory. The area administrator responsible for the asset will notify the college employee responsible for internal inventory control to update the records.

A record of any equipment temporarily removed from its assigned physical location will be kept by the department responsible for the equipment. The record will include the state tag number, the date moved and the purpose or reason for the temporary relocation. The record may be a check out log or other record and will be updated upon return of the equipment.

E. DISPOSITION OF SURPLUS CAPITAL ASSETS

Disposition of all surplus equipment, supplies and materials is delegated to the director of facilities and operations, who may assign it to a department employee. No other employee may sell, donate or dispose of state property, except as provided in state policy for real property (land and buildings).

Property disposal practices will comply with state policy (SAAM Chapter 30).

Capital assets with an acquisition cost of at least $5,000 and purchased with federal grant funds will be reviewed by the district fiscal services office to determine the appropriate distribution of proceeds, if any, from the disposition.

Proceeds from the sale of all assets not fully depreciated will be returned to the fund that purchased the asset less any disposal costs. Proceeds from fully depreciated assets may be returned to the original fund for replacement or reinvestment, or may be recorded in an auxiliary fund to support surplus property processing or other district needs.

Disposal of inventoried assets not considered capital assets will follow the same procedures as for capital assets, except as allowed in SAAM Chapter 30.

All surplus property is to be recorded on an equipment disposal form (https://commons.wvc.edu/SitePages/Forms.aspx) by the appropriate administrator or designee. A form is required for each tagged asset. Arrangements will be made with the director of facilities and operations or designee to schedule asset disposition.

The appropriate administrator or their designee is responsible for keeping items secure until collected by facilities and operations staff. The director of facilities and operations or designee is responsible for items upon collection until disposed.

F. PHYSICAL INVENTORY

A complete physical inventory of capital assets is to be conducted during each biennium or as required by source of funds used to purchase the assets.

Area administrators will be notified prior to a scheduled physical inventory and will designate a staff member to assist with the verification of equipment in its proper place.

When the physical inventory takes place, any equipment found outside of its assigned location will either be returned to its proper location or be reassigned to its current location in the asset inventory database. Any equipment not found will be reported and proper action taken to find it or remove it from the inventory database.

A summary report will be issued to the appropriate administrator within 30 days of completing the physical inventory listing missing items, discrepancies and the adjustments made to correct inventory errors.

1. The appropriate administrator will have 30 days to locate the missing equipment, issue the appropriate disposal documentation, or take additional corrective action as appropriate.
2. The disposal documentation will include a description of events surrounding the disappearance of the asset, who was notified of the loss, and steps taken to locate the asset.

In the event that a reconciliation following a physical inventory is not completed within the allotted 30-day period, notice will be issued to the director of fiscal services and appropriate administrators, including the president. Upon determination that a state owned capital asset has been lost or stolen, the vice president of administrative services will report the loss to the state auditor’s office in a timely manner.

G. INVENTORY OF ART COLLECTIONS

1. Art collections are not required to be capitalized for accounting purposes or depreciated if all of the following conditions are met (SAAM 30.20.22):
   
   1. The collection is held for public exhibition, education or research in furtherance of public service, rather than financial gain; and
   2. The collection is protected, kept unencumbered, cared for, and preserved; and
   3. The collection is subject to an agency policy that requires the proceeds from sales of collection items be used to acquire other items for the collection.
2. 2.   WVC will develop and maintain a record of the art items owned with a description, acquisition cost and reason items are not capitalized, as required by state policy (SAAM 30.40.10).

Approved by the president’s cabinet: 5/17/16
Presented to the board of trustees: 11/30/16
Last Reviewed: __/__/__
Procedure contact: Administrative Services

Related policies, procedures and other
600.107 Capital Assets and Inventory Control Policy
RCW 43.88.160, Fiscal management – powers and duties of officers and agencies
RCW 43.19.1917, Records of equipment owned by state – “state equipment” defined
OFM SAAM, Chapter 30 – Capital Asset Policies
OFM SAAM, Chapter 35 – Inventories
OFM SAAM Chapter 30.40.20 - Small and Attractive Definition