State of Connecticut
Office of the State Comptroller |
PROPERTY CONTROL MANUAL
This page last updated on September 9, 2021.
Questions regarding this chapter should be directed to the following: | ||
---|---|---|
Asset and Inventory Mailbox | osc.assets@ct.gov | |
Elizabeth Daly, CPPA | 860-702-3436 | elizabeth.l.daly@ct.gov |
The property record is the crucial element of the property control system. Each agency is vested with the responsibility for the control, care, and security of all property within the agency regardless of the dollar value. It is essential that agencies utilize the property to the fullest extent and have complete and accurate property records.
Equipment Utilization
All agencies contain equipment, including personal computers, desks,
chairs, tables, bookcases, cabinets, etc. Excess items may
accumulate for various reasons, including State reorganizations and
restructuring of employee responsibilities. It is important to
ensure that these assets are effectively utilized.
A screening process is necessary to avoid unneeded or duplicative purchases through systematic reviews of underutilized fixed assets already controlled by the agency.
A custodian should be assigned responsibility for each asset. This assignment facilitates physical inventory procedures and is useful in making inquiries regarding the asset's condition, status and location.
Adequate maintenance procedures are necessary for controlling fixed assets. These procedures should be sufficient to keep assets in good working condition, without being overly costly or otherwise uncontrolled.
Property Record
The property record contains all documents for the property. The
property records for each asset classification must contain the
following:
A. Land
Land is non-expendable, real property whose title is held by a state agency. The recorded asset cost should include, in addition to the acquisition price, such ancillary costs as legal and title fees, unpaid taxes assumed, surveying and recording fees, appraisal and negotiation fees, damage payments, site preparation costs (clearing, filling, and leveling), and demolition of unwanted structures.
Note:
The cost of land does not include expenditures in connection with
land improvements such as paving, fencing, and lighting.
When land is being acquired, an initial report at the time of acquisition, in memorandum form, must be made to the Office of the State Comptroller. The memorandum should contain the following information:
a. Agency Number | e. Owned or Leased | i. Plot Number |
b. Town Name | f. Usable-Unusable | j. Number of Buildings on Plot |
c. Date Acquired | g. Purchased-Gift-Transferred | |
d. Cost (Dollars Only) | h. Number of Acres (Do Not Carry Beyond two decimal points) |
Land acquired by the State by gift, requires the approval of the Governor and the Attorney General, as prescribed by Section 4b-22 Connecticut General Statutes.
The property control record for LAND owned by the State must contain the following minimum data:
a. Amount
b. Description
c. Purchase order reference
a. Kind
b. Date
c. Where recorded
d. Where filed
B. Site Improvements
Site improvements include all improvements
not specifically identifiable to an individual building except
non-depreciable improvements to land parcels such as grading or
filling expenditures. Included within this category are
agency-maintained surface gutters, parking lots, light and similar
assets which, while not identifiable to any particular structure,
nevertheless have a quantifiable value to the agency.
Site improvements that increase the value of the original property require a separate property control record. Site improvements include:
Fences Walls Shrubbery /Other Landscaping Parking Lots
C. Buildings
Buildings include all real estate, excluding land,
which are used for shelter, dwelling, and other similar agency
purposes. The statewide definition is "a relatively permanent
structure to house persons or property". The recorded asset cost
should include the purchase or construction cost, professional fees
for architects, attorneys, appraisers, or financial advisors, and
any other expenditure necessary to put a building or structure into
its intended state of operation.
The asset classification "Buildings" includes improvements to buildings as well as the original building cost. The main criteria for capitalization of building improvements are that the expenditures significantly extend the useful life or enhance the value of the individual building.
Expenditures not meeting these criteria should be expensed.
Building Fixed Equipment-Includes fixtures which are permanently attached to and made part of a building and which cannot be removed without damaging walls, ceiling or floors or without impairing the building in some manner. Examples are:
Built-in benches | Built-in Shelving and Autoclaves | Cabinets |
Conveying Systems | Counters | Fume Hoods |
Lockers | Refrigeration Machinery and Piping | Sterilizers |
Washers | Tables |
A property record similar to that used for capitalized equipment should be maintained as part of the building inventory record for all fixed equipment for that particular building. The recorded asset cost should include the purchase or construction cost, professional fees for architects, attorneys, appraisers, or financial advisors, and any other expenditure necessary to put a building or structure into its intended state of operation.
State Building Inventory System
The State of Connecticut has a
centralized building inventory system containing information that is
used by the Office of the State Comptroller, the Office of Policy
and Management and the Department of Administrative Services.
Information reported under the system is used to support the State's
real property leasing, acquisition and disposition processes as well
as assisting in the development of statewide real property policy
initiatives. The data is collected annually.
Each agency with custody and control over state owned structures must utilize the system, to track and report their building inventory information. Agencies are required to enter all owned buildings in the system. For additional information regarding the system please contact:
State of Connecticut - Office of Policy and Management
450
Capital Avenue - MS#54FIN, Hartford, CT 06106-1379
Attn: Paul
Hinsch, Phone: 860-418-6429 e-mail:
paul.hinsch@ct.gov
Enter the total number of buildings owned by the agency on the CO-59. This number is the summary total from the Building Inventory System Report. The CO-59 and State Building Inventory System must contain the same totals.
D. Improvements on Leased Property
Improvements to leased
buildings and other structures, walkways, and permanently installed
equipment items located on property leased to the State must be
capitalized. Improvements on leased property require a separate
property control record. The dollar value and a brief description of
the improvements made should be recorded. Permanent improvements to
leased assets are those items that cannot be removed without
substantially damaging or necessitating substantial repair to the
leased asset from which the improvement is removed. Other assets
owned by the agency that are merely located on leased property,
rather than permanently installed thereon, should be recorded as
capitalized assets.
E. Construction Total cost of all construction in progress.
F. Equipment
1. Equipment (Capitalized)
All personal property that meets the
capitalization threshold and has a useful life beyond a single
reporting period must be capitalized. Each item must be recorded
separately.
Note:
Insurance Insurance coverage will be provided under the
"All Risk" insurance policy if insurance coverage is requested. If the
equipment has been purchased with funds other than the general fund,
a premium reimbursement may be required to be paid to the State
Insurance and Risk Management Board. Mobile equipment, such as
motorized lawn mowers, tractors, shovels, cranes, or other such
equipment not for use on highways, should be recorded as Equipment
of the building in which, or on the premises of which, this
equipment is normally located. Mobile equipment that has a license
plate and is registered with the Department of Motor Vehicles is to
be recorded as equipment.
Donated Equipment
If equipment (capitalized) is donated, record
the fair value of the donated equipment. A donated asset is
capitalized if it meets the established criteria at its estimated
fair value at time of acquisition. If additional costs are incurred,
these costs should be considered as part of the total cost of the
asset. That is, the value should incorporate the fair value plus any
cost required placing the asset in service, (e.g., freighting).
The property control record for Equipment owned by the state must contain the following minimum data:
1. Name of Item or Brief Description
2. Specific Location -
(Building Number or Name and Floor)
3. Department or unit
responsible for custody
4. Name of Manufacturer or Vendor and
address
5. Identification Number - (Tag number assigned by the
agency at the time of acquisition. May be the same as the serial
number)
6. Manufacturer's serial number (If applicable).
7. Date
Acquired
8. Method of Acquisition
9. Complete Expenditure Coding
(Fund, Department, Sid, Program, Account and Budget Reference)
10.
Source of Funds (Restricted or federal funds)
11. Catalogue of
Federal Domestic Assistance (CFDA) number (If applicable)
12. Cost -
Actual Cost and Ancillary Charges (installation, freight,
transportation charges, site preparation expenditures, professional
fees, and legal claims directly attributable to asset acquisition).
All charges necessary to place the asset in its intended location
and condition for use
13. Estimated Cost - if there is lack of
original documentation or because establishing the original cost is
not practicable or if the cost must be established after many years
of operating without these records.
14. Purchase Order Number
15.
Maintenance Costs
16. Fair value or appraised cash value at time of
receipt of items either donated, received as surplus U.S. Government
property or surplus state property with cost
17. Condition
18.
Useful Life (in months)
19. Date of Disposition
20. Method of
Disposition
2.Books,Maps,Records
Institutions of higher education and any
other agencies that maintain a library with a librarian assigned to
it are required to maintain a separate inventory for library
materials. Library materials include but are not limited to: books,
maps, records, videos, electronic media, CD disks, other reference
materials, etc. Because institutional libraries normally contain
large volumes of individually categorized materials, and maintain
sufficient records to support the total value, it is not appropriate
to enter duplicate detailed information. Instead, acquisitions and
deletions of materials for a library should be recorded directly
into the separate control account and will be summarized on the
CO-59 form. The summary total from the library inventory should be
entered.
All additions should be valued at cost. If the cost is not ascertainable, estimate cost by using "The Annual Library and Book Trade Almanac". This classification includes a regular book collection that is not included in the Fine Arts category and should be valued at cost.
3.Livestock
Includes but is not limited to animals, fish, or
birds owned by an agency.
4. Motor Vehicles (Cars, Trucks, Buses, Motorcycles, etc.)
Each
vehicle must be recorded separately. Motor vehicles being purchased
under a lease should be recorded in this category at the beginning
of the lease term. Refer to leases within the Policy chapter of the
manual.
The property control record for MOTOR VEHICLES must contain the following minimum data for each vehicle:
1. Year, make and model
2. Vehicle identification number (VIN)
3.
Serial number
4. Type of body
5. Type of engine
6. License plate
number
7. Purchased from (date, name and address)
8. Additional
equipment - permanently affixed to the vehicle or an item that would
customarily be a part of the vehicle.
9. Gross cost (do not deduct
trade-in amounts)
10. Date and contract award number
11. Assigned
driver (if permanently assigned)
12. Permanently garaged at
13. Date
of disposition
14. Method of disposition
15. Amount received or
trade-in value
5. Boats and Aircrafts
Any boat, aircraft or aircraft equipment
owned by an agency. Each boat, aircraft and aircraft equipment must
be recorded separately. All larger inboard vessels are subject to a
survey value periodically. The survey value must be established
every three years and be carried with moderate annual depreciation
in the interim time period. The survey value must be kept at the
agency level but not entered on the CO-59, where only the initial
cost is entered. Rowboats, outboards, and the motors thereon, are
included in the regular inventory for the agency or commission
having jurisdiction and should not be included in this record. To
obtain assistance in determining a survey value, notify the State
Insurance and Risk Management Board who will advise the agent of
record.
The property control record for BOATS, AIRCRAFTS AND AIRCRAFT EQUIPMENT must contain the following minimum data for each:
1. Identification number 2. Type of body 3. Type of engine 4. Registration number 5. Purchased from (date, name and address) 6. Additional equipment - permanently affixed to the boat or aircraft or an item that would customarily be a part of the boat or aircraft. 7. Gross cost - do not deduct trade-in amounts 8. Date and contract award number 9. Inventory value 10. Assigned driver - if permanently assigned 11. Permanently garaged at 12. Date of disposition 13. Method of disposition 14. Amount received at disposition or trade-in value
6. Railroad Car Free Rolling/Self-Propelled, owned by an agency.
The property control record for RAILROAD CAR FREE ROLLING/SELF PROPELLED must contain the following minimum data for each car:
1. Full Description (make and model)
2. Identification Number -
tag number assigned by the agency at the time of acquisition
3.
Engine Number
4. Original Cost - actual cost and ancillary charges.
5. Building Number, where garaged
6. Name of Manufacturer or Vendor
and address
7. Manufacturer's serial number (if applicable).
8. Date
Acquired 9. Method of Acquisition
10. Complete Chartfield Coding -
Fund, Department, Sid, Program, Account and Budget Reference
11.
Source of Funds - restricted or federal funds
12. Present Value
13.
Purchase Order Number
14. Condition
15. Useful Life
16. Date of
Disposition
17. Method of Disposition
G. Leases
Leases should be recorded in this category at the
beginning of the lease term. Record the capital asset as the
payments expected to be made during the lease term, plus payments
made to the lessor before the beginning of the lease, add any
ancillary costs to place the leased asset into service.
Remember to reduce the cost by any discounts or other incentives
offered by the lessor.
The property control record LEASES each item must contain the following minimum data:
1. Name of Item or Brief Description
2. Specific Location -
(Building Number or Name and Floor).
3. Department or unit
responsible for custody
4. Name of Manufacturer or Vendor and
address
5. Copy of the Lease
6. Identification Number - (Tag number assigned by the agency at the time of acquisition. May be the same as the serial number).
7.
Manufacturer's serial number (If applicable).
8. Date Acquired
9.
Method of Acquisition
10. Complete Expenditure Coding (Fund,
Department, Sid, Program,
Account and Budget Reference)
11. Source of Funds (Restricted or
federal funds)
12. Catalogue of Federal Domestic Assistance (CFDA)
number (If applicable)
13. Cost - Actual Cost and Ancillary Charges (installation, freight,transportation charges, site preparation expenditures,
professional fees, and legal claims directly attributable to asset
acquisition). All charges necessary to place the asset in its
intended location and condition for use
14. Estimated Cost - if
there is lack of original documentation or because establishing the
original cost is not practicable or if the cost must be established
after many years of operating without these records
15. Purchase
Order Number
16. Maintenance Costs
17. Fair market value or
appraised cash value at time of receipt of items either donated,
received as surplus U.S. Government property or surplus state
property with cost
18. Condition
19. Useful Life (in months)
20.
Date of Disposition
21. Method of Disposition
H. Software
Software owned by the State of Connecticut and
internally generated software which the State owns, is capitalized
if it meets the capitalization threshold.
The SOFTWARE property control record must contain the following minimum data and agencies may choose to expand upon the property control record:
1. Assigned Identification Number
2. Title of Software
3.
Description - software name or functional application
4. Version
5.
Manufacturer
6. Software Serial/Registration Number (if available)
7. Acquisition Type - purchased, leased, or donated (gift)
8.
Acquisition Detail - purchase order number, donation source or gift
source
9. Initial Installation Date
10. Location and ID of CPU
device
11. Cost - the cost of the purchased software
12. Disposal -
upgraded (list new serial number), transferred, sold or destroyed
I. Licensed Software
The software must meet the capitalization
threshold. Supporting documentation should be available for audit
review purposes. The annual renewal of the licensed software should
not be included, it should be expensed. Any maintenance costs or
minor unspecified upgrades associated with the software are to be
expensed and are not to be included as part of the cost. Any
upgrades to existing software should be capitalized and reported on
the CO-59 as additions and the old version costs should be retired
and reported as deletions on the CO-59.
The LICENSED SOFTWARE property control record must contain the following minimum data and agencies may choose to expand upon the property control record:
1. Assigned Identification Number
2. Title of Software
3.
Description - software name or functional application
4. Version
5.
Manufacturer
6. Software Serial/Registration Number (if available)
7. Acquisition Type - purchased, leased, or donated (gift)
8.
Acquisition Detail - purchase order number, donation source or gift
source
9. Initial Installation Date
10. Location and ID of CPU
device
11. Cost - the cost of the purchased software
12. Disposal -
upgraded (list new serial number), transferred, sold or destroyed
J. Other Intangible Assets
Intangible assets are capitalized and
are recorded in the same manner as tangible assets. Intangible
assets are subject to depreciation.
K.Infrastructure
Infrastructure assets are long-lived capital
assets that normally are stationary in nature and normally can be
preserved for a significantly greater number of years than most
capital assets. Infrastructure includes roads, bridges, railways and
airport landing areas.
L. Art
Collections of art and historical treasures.
Works of Art
Statues, paintings, sculptures
Historical Treasures
Antiquated military and other equipment,
historical documents and artifacts, buildings considered part of a
display, and museum collections, including books. Agencies that have
these items in their custody must maintain a separate inventory
account for each item regardless of cost or value. An additional
enhancement would be a photograph of each item in case of a loss.
Each item must be listed separately.
Note:
The arts inventory, which has a $10,000 deductible, is
reported to the Insurance & Risk Management Board. Fine art items
that are lower than deductible but meet the capitalization threshold
may not be reported to the Board but must be included on the CO-59.
Each property control record for ART must contain the following minimum data:
M. Inventory
Includes Materials and Goods in Process and Stores
and Supplies Inventory
The Inventory property control record for ALL inventories must contain the following minimum data:
1. Description of items
2. Storage location
3. Unit of measure
4.
Cost
5. Minimum and maximum levels
6. Reorder quantity
7. Date and
quantity of additions to inventory
8. Date and number of inventory
requisition
9. Quantity deleted from inventory
10. Inventory balance
1. Materials & Goods-In-Process
Items under this section
represent any resalable articles which are manufactured, fabricated
or assembled in a school, prison or in any shop that is under the
jurisdiction of any State agency.
The property record for INVENTORY MATERIALS & GOODS-IN-PROCESS item should contain the following data.
2. Stores & Supplies
A separate perpetual (continuous) inventory
should be maintained of all stores and supplies (including repair
parts for machinery, plumbing, general housekeeping, etc.) if the
cost of the entire inventory meets the capitalization threshold.
Perpetual inventories with a cost less than the capitalization
threshold would not need to be maintained. Due to the rapid rate of
turnover, strong internal control is especially important. A
perpetual inventory system can provide the strongest possible
internal control over the inventory of merchandise. The information
required for a perpetual inventory system can be processed
electronically or manually. In a manual system a subsidiary record
card is used for each type of merchandise on hand. If the agency has
in stock 100 different kinds of products then 100 inventory record
cards will make up the subsidiary inventory record. It should be
reconciled annually for verification of amounts.
The property record for STORES & SUPPLIES INVENTORY should contain the following data:
The inventory system must be maintained on a first-in, first-out (FIFO) basis. Listing the minimum and maximum levels on each inventory card strengths controls over the amount invested in the inventory. By maintaining quantities within these limits, overstocking and out-of-stock situations can be avoided. An adjusting entry can be made to reflect shortages, overages, or out-of-condition stock as disclosed by an annual or periodic physical inventory.
Intangible Assets
All intangible assets that meet the definition
in GASB 51 should be classified as capital assets. All guidance
related to capital assets should be applied to intangible assets.
Intangible assets are recorded in the same manner as capital assets
and are subject to depreciation.
GASB 87 states that the lease asset should be measured at the amount of the initial measurement of the lease liability, plus any payments made to the lessor at or before the commencement of the lease term and certain direct costs.
Transfers
A transfer is any movement of an asset by virtue of
change in location, for example by department, building, or floor.
The entire asset may be transferred or there may be a partial
transfer of the asset. This is particularly useful for those pieces
of equipment that are changed frequently. Each request for transfer
must be submitted to the Agency's Property Control Unit on a
suitable agency form authorizing the transfer of the property.
Such forms should provide for a complete description of the property transferred, the name of the transferor and the transferee. The property control unit copy provides the basis for moving a subsidiary account from one department and putting it in the records of another department, thus effecting a change in the record of responsibility. Property should not be transferred without formal written authorization. Unless transfers are formally authorized, property cannot be controlled.
Property Transfer Within An Agency
The Office of the State
Comptroller has developed an Property Transfer Within An Agency form
CO-58. The
Property Transfer Within An Agency is in Appendix B and is also
available on the Office of the State Comptroller's Website at
http://osc.ct.gov/agencies/forms/index.html..
Property Transfers Between Agencies
The CO-64
Property Transfer Between Agencies form is to be used to track
movement of assets between agencies. Transfer of assets between
agencies most commonly occur when agencies are consolidated or one
agency claims a surplused asset of another agency. The CO-64 must be
completed when the asset is transferred. The CO-64 form is in
Appendix B and is also available on the Office of the State
Comptroller's Website at
http://osc.ct.gov/agencies/forms/index.html.
Physical Inventory (Assets and Inventory)
A complete physical
inventory of all property must be taken by the end of the fiscal
year (June) to insure that property control records accurately
reflect the actual inventory on hand within the current fiscal year.
The key to ensuring an accurate physical inventory is the quality of
the planning effort prior to conducting the physical counts. Core-CT
asset agencies must use the Asset Management Module for the physical
inventory of assets. Agencies using the Core-CT Inventory Module
must use the Inventory Module for physical inventory. Agencies with
Inventory that do not participate in the Core-CT Inventory Module
must also conduct an annual physical inventory.
Physical Inventory Staffing
The individual responsible for the
day to day property management function should not conduct the
physical inventory so internal controls, specifically segregation of
duties, are maintained. Inventory count activities should be
conducted by count teams made up of a team supervisor and agency
personnel. The agency must determine the method of staffing the
inventory count team that best utilizes its available resources.
Guidelines for Conducting a Physical Inventory
It is permissible
to perform physical inventories prior to the end of the fiscal year
to redistribute the major time commitment involved. However, an
adequate control system must exist for updating the inventory
balance from the interim inventory date to year-end. The accuracy of
the interim transactions may be tested during an audit.
In addition to the verification of the property control records, a physical inventory will identify if unrecorded or improperly recorded transactions have occurred, identify any excess, defective or obsolete assets on hand and identify losses not previously revealed. Conducting a physical inventory will enable you to inspect the physical condition of each item with respect to the need for repairs, maintenance, or replacement. /p>
TThe Office of the State Comptroller recommends that physical inventories be conducted annually as follows:
Methods for Conducting the Physical Inventory
Manual Counts:
Electronic Counts:
Property Movement (Assets and Inventory)
There should be no movement of property while the physical inventory is being conducted in order to ensure that items are not counted twice or inadvertently not counted. Transfers should also be prohibited during counting. If the movement of assets is unavoidable (such as certain dining operations), control sheets should be established for each area where previously counted assets are being transferred to work areas. To avoid double counting, assets should not be transferred back from working areas to storage areas.
Updating the Property Record
Lost/Missing/Unaccountable/Expired/Spoiled/Damaged Property
Property that is deemed "lost, missing, unaccountable, expired,
spoiled or damaged" as a result of taking a physical inventory must
be removed from the property record. Instructions for reporting this
property are prescribed in chapter 8 of this manual. The property
must be immediately removed from the property record and a CO-853
form must be completed. Agencies using the Core-CT Asset Module must
"retire" the asset until such time as it may be recovered. If the
item is found it is added back to the property record in the Core-CT
Asset Module as "reinstated". Agencies using the Core-Inventory
Module must adjust the inventory in Core-CT and complete a CO-853.
Obsolescence
Asset or Inventory items found to be obsolete or no
longer needed by the agency are to be surplused and removed from the
property record. Follow the instructions in Chapter 9 of this
Manual, Disposition of Surplus Property to dispose the items.
Reconciliation
All internally prepared property control
accounting records, and other related property management data shall
be reconciled to the property system. Agencies using the Core-CT
Asset Management Module and Core-CT Inventory Module must ensure the
accounting data maintained is valid. The format used for the
reconciliation must establish an "audit trail" so that the
reconciliation can be traced to the source documents.
It is critical to account for all physical inventory tickets/sheets issued to counters because the used tickets/sheets will become the basis for summarizing and recording the physical inventory in the accounting records.
The principle of the reconciliation process is to reconcile the property control accounting data on a detail, line-by-line individual transaction basis. This method has the advantages of:
Corrections do not require a form, but corrections that involve "costs" should be noted on a control sheet for reconciliation purposes.