Chapter 5

ACCOUNTING FOR STATE PROPERTY AND
MAINTAINING THE PROPERTY CONTROL SYSTEM

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:

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:
 

1. Name of town
2. Date of acquisition
3. Method of acquisition
4. Complete expenditure coding - Fund, Department, Sid, Program, Account, Budget Reference, and Chartfield.
5. Original Cost - If applicable, plus other related costs as taxes and other liens assumed, title search costs, legal fees, surveying, filling, grading, drainage, and other costs of preparation for the use intended or the Appraised Value.
6. Appraised By
7. Dimensions - Number of acres
8. Additional Costs

a. Amount
b. Description
c. Purchase order reference

9. Deed - If a copy of the deed is not available, the data can be obtained from the Office of the Town Clerk in the town in which the land is located.

a. Kind
b. Date
c. Where recorded
d. Where filed

10. Miscellaneous - Additional information may be recorded depending upon the needs and requirements of the particular agency.
11. Date of Disposal
12. Manner of Disposal
13. Amount Received

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:

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:

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 06106-1308
Attn: Patrick O'Brien, Phone: 860-418-6353 e-mail: patrick.obrien@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 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. Live Stock
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 capital lease should be recorded in this category at the beginning of the lease term. The initial recording value of a lease is the lesser of the fair market value of the leased property or the present value of the minimum lease payments (excluding interest payments). Operating leases are not reportable. 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. Capital Leases
Equipment being purchased under a capital lease should be recorded in this category at the beginning of the lease term. The initial recording value of a lease is the lesser of the fair market value of the leased property or the present value of the minimum lease payments (excluding interest payments). Operating leases are not reportable. Refer to leases within the Policy chapter of the manual. The State Accounting Manual, section "Installment Purchases, Lease Purchase And Capital Leases", elaborates criteria for determining if a lease is capital.

 

The property control record for CAPITAL 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. 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 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.
17. Condition
18. Useful Life (in months)
19. Date of Disposition
20. 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:

1. Assigned Identification Number

2. Name of Artist - First and Last

3. Subject Name - if a painting, portrait, mural, statue, etc.

4. Brief Description of Each Piece

5. Medium (Oil Painting, Watercolor, Drawing, Graphics, Sculpture, Photography-Mixed Medium or Other)

6. Dimensions: (Height, Width, and Depth)

7. Signature Location

8. Other Inscriptions and/or Labels

9. Date Crafted

10. Is it an original or copy

11. Date of Acquisition

12. Method of Acquisition

13. Cost at Acquisition

14. Location

15. Name/Address/Telephone Number

16. Appraised Value

17. Appraiser

18. Date of Appraisal

19. Date of Disposition

20. Method of Disposition

21. Amount Received at Disposition

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.

1. Item Description
2. Cost of Each Item
3. Raw Materials on hand
4. Materials partly processed - Goods-in-process that require additional work.
5. Description of items
6. Storage location
7. Unit of measure
8. Cost
9. Minimum and maximum levels
10. Reorder quantity
11. Date and quantity of additions to inventory
12. Date and number of inventory requisition
13. Quantity deleted from inventory
14. Inventory balance

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:

1. Item Description
2. Storage location
3. Unit of measure
4. Unit Cost
5. Minimum and maximum levels the number of items that should be on hand before ordering and the greatest number of items on hand that can be effectively maintained in inventory without incurring unnecessary storage or handling charges and with a minimal risk of the inventory becoming obsolete.
6. Reorder quantity
7. Balance available to fill an order
8. Date, quantity, and dollar value of items received into inventory
9. Date and number of inventory requisition
10. Quantity deleted from inventory
11. Inventory balance on hand both quantity and dollar value

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.

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://www.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://www.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.

The Office of the State Comptroller recommends that physical inventories be conducted annually as follows:

• The agency should establish a timetable and coordinate the effort necessary to conduct the inventory. Identify all locations where property is stored. A building diagram is often helpful in ensuring that all areas are accounted for. All supervisory personnel should meet a few weeks prior to the physical inventory for a planning meeting. The areas discussed at the planning meetings should include the specific counting, procedures, each person's responsibilities, cut-off procedures, the timing of the physical inventory, etc. As a result of the meeting, written procedures should be prepared for use by counters and supervisory personnel.
• A second planning meeting should take place after the aforementioned meeting. The second meeting should involve supervisory personnel and the individuals performing the counts. At the second meeting, the counters should be instructed concerning the counting procedures and all procedures agreed upon at the initial meeting. Written instructions should be distributed to individuals performing the counting. The units of measurement should be determined prior to counting. For example: Quantities may be in units, boxes, pounds, etc.
• The individual performing the physical inventory will be permitted access to each room controlled by the agency being inventoried.
• Items to be counted should be physically arranged to facilitate simplified counting. All "like products" should be consolidated into one area.
• Inventory should be counted in a systematic consistent manner (e.g., left to right, top to bottom).
• Supervisory personnel should observe the counting and inspect the goods. Inventory counts should be documented on pre-numbered inventory tickets, pre-numbered inventory sheets, or electronically.

Methods for Conducting the Physical Inventory

Manual Counts:

• A log should be used to account for all tickets/sheets (if used) issued to the individual counters. The log should also note the tickets/sheets used and unused. All unused tickets/sheets should be returned.
• Counters and checkers should initial each ticket/sheet.
• All inventory tickets/sheets must be pre-numbered for accurate accountability. If sheets are used, supervisory personnel should ensure that all used and unused sheets are received back from the counters and posted to the control log. If tickets are used, the top copy of the ticket should be removed from the goods, placed in numerical sequence and returned to the supervisor for posting to the control log.
• Errors should be corrected on tickets/sheets by crossing out the incorrect quantity and writing in the correct quantity. Individuals making changes should note their initials next to the changes. Items that will not have any activity prior to the physical inventory may be pre-counted. Pre-counting items helps alleviate time pressures during the physical inventory.
• The counting sheets must be made available for audit.

Electronic Counts:

• The electronic device, if used, must have a userid login to account for the person who performed the count. Electronic devices are an alternative way to collect the physical inventory data. Electronic devices used must be the property of the State and not a counter's personal device.
• Any software used on an electronic device must conform to the policies in this manual.
• The electronic records must be made available for audit.

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

• Items found that are not listed must have a property record established at the time of the physical inventory. The item should be subsequently researched and entered into the system. Items reported on the agency inventory report and found to be located elsewhere will require a transfer document to be completed, to record the change of location.
• Once all the agency locations have been checked, the additions and deletions to departmental inventory records must be updated immediately.

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:

 

1. Reducing the reconciliation to the most basic level of comparison;
2. Being the easiest method of detecting data entry differences; and
3. Being a comprehensive approach to ensure that each transaction is properly recorded.

 

Corrections do not require a form, but corrections that involve "costs" should be noted on a control sheet for reconciliation purposes.

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