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State of Connecticut
Office of the State Comptroller |
PROPERTY CONTROL MANUAL
This page last updated on September 8, 2021.
PROPERTY CONTROL SYSTEMS
| 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 |
| Fiscal Policy Statewide Services | 860-702-3440 | |
Property represents the largest category of investment made by the State of Connecticut. The state's inventory includes assets ranging from land, buildings, inventory, artwork, furnishings and equipment to automobiles, boats, railcars, airplanes and livestock. Despite its importance, however, property control is sometimes a low priority for State agencies. Many agencies face severe staff limitations in this area. In an era of tight budgets and limited personnel, other pressing needs have made property control a lower priority. However, limited staff and tight budgets are two very good reasons why property control policies need to be updated and improved.
Property control procedures can save the State a substantial amount of money in a number of ways, including averting equipment loss and theft, by helping agencies avoid unnecessary purchases, and by helping to lower the State's insurance premiums.
Approved System
All state agencies with the exception of Legislative Management, Judicial Branch, the Community Colleges, the State Universities and the University of Connecticut are required to use the Core-CT Asset Management Module as their property control system to record and control all property owned by and/or in the custody of a State agency. Agencies with inventory that meets the capitalization threshold may choose to use the Core-CT Inventory Module.
Approval of Office of the State Comptroller
Written approval must be secured from the Office of the State Comptroller's Fiscal Policy Statewide Services Unit before a system is selected by an agency exempt from using the Core-CT Asset Management Module. Written approval must also be secured from the Office of the State Comptroller's Fiscal Policy Statewide Services Unit for any inventory system, including the Core-CT Inventory Module. This also applies to changes from one property control system to another. Office of the State Comptroller's Fiscal Policy Statewide Services Unit is available for assistance and consultation relative to the various systems available.
Types of Systems
There are two basic types of systems, software packages and agency developed automated systems, either type may be used. There are many software packages available that are inexpensive and can establish or enhance a property records control system. Established software packages provide the benefits of learning from the experience of others in already proven property records systems. They feature report writers that permit users to generate their own special reports with little or no programmer assistance. Agency developed automated systems are also acceptable.
The property system must include a control account for each reportable category on the Form CO-59, Asset Management/Inventory Report/GAAP Reporting Form and a detailed subsidiary record for each individual item in the category. The subsidiary records must be reconciled with the control account. Subsidiary records must be maintained by location regardless of the type of property system selected. The Property System must be reconciled annually with the respective official records maintained by the Office of the State Comptroller, and/or other sources such as the State and Federal Property Distribution Center (PDC). The Property Control System will provide for the establishment of record retention and record destruction schedules.
The Property Control System (Assets and Inventory)
The main purpose of the property control system
is to help ensure that the State's property is acquired, managed and
disposed of in the best interest of the State and its citizens. This mission
is promoted through the development and maintenance of adequate accounting
and property records both at the State and agency level. Such records are an
essential tool for management in its effort to make sound decisions based on
timely and accurate information.
Management must review the status of items stored at off-site premises (exclusive of computerized backup) and ensure there is a formal plan to utilize the items at the agency within a reasonable period of time.
Excess levels of all property should be avoided because State property should be productive and utilized. Property not being used during a reasonable period of time is comparable to cash being maintained in non-interest bearing accounts. Items without immediate use should be declared surplus. Storage costs should be eliminated for items stored off-site that do not have an identified use to the agency.
The following property management techniques should be considered:
Identify items on hand, which exceed the level of usage that is usual for your agency. For example, if there are 25 of an item on hand and your department is using only 2-3 every six months, an excess inventory situation exists and inventory is not being effectively utilized.
When there is an excess of current needs, management should review the ordering decision process and make appropriate corrections; reduce the level of future orders and establish a formal plan to reduce existing inventory levels.
Identify obsolete items on hand, which have not been used during the past six months. Determine whether there is a future use for the items. If no future use is identified, determine whether the items can be utilized in another department.
Asset Management System
An effective asset management system requires:
Tagging Personal Property
All assets must have a unique identification. Tagging each asset is the most
common way to identify an asset. The primary purpose of tagging is to
maintain a unique identification number for each asset owned by the State.
Tagging is important for:
Tag Information
The tag should provide a unique number and the property owner's name (agency name). The format of the tag used serves the primary purposes of identification; therefore, the number should be the predominant feature on the tag. The numbering sequence utilized should be a simple, consecutive series of numbers. Numbers should be assigned in consecutive order without regard to asset type or location. However, agencies may designate different color tags and/or a specific series of identification numbers for different asset types, if desired.
The consecutive numbering allows each asset item to carry a unique number
throughout its entire life regardless of change in location, responsible
person, or other data elements assigned to the asset item, until such asset
is retired or disposed of. Once disposition has occurred, the number is
retired. The retired identification number should be maintained in a history
file for three years after disposition for audit trail control purposes.
Items incapable of receiving a physical tag will be assigned a unique tag
identification number for control purposes. These types of untaggable assets
include heat-sensitive or finely-tuned equipment items for which physical
tagging would be impractical or would otherwise alter the item's usefulness.
The unused tags should be stored in an agency logbook or otherwise
controlled to avoid duplicate use of tag numbers.
Use of serial numbers in lieu of tags is not recommended, however, in
certain instances may be reasonable and is not specifically disallowed.
Serial numbers can be recorded to support the inventory tag number.
Types of Tags
No single statewide identification tag is mandated for inventory purposes. Agencies may continue to use current tag formats as long as the following tagging procedures are met. There are several options for identifying assets and are listed below.
Metal tags
These tags come in a variety of sizes, shapes and colors, and should have
the agency name stamped on them. Brass and aluminum are the normal materials
used. Normally, the identification number should be painted or enameled so
that it will stand out more easily from the tag itself. These types of tags
are more permanent. They work very well on machinery, vehicles, furniture
and other equipment subject to wear, accumulation of oil and grease, or
periodic repainting. However, these tags require time and effort to apply
and are prone to be knocked off.
Decal tags
These tags are available in a variety of forms and should have the agency
name stamped on them. This type of tag works well on office furniture,
office machines and small plant equipment. However, great care must be
exercised when applying the decal to be sure that the surface is free from
grease, furniture wax, oil or other substances that will prevent the tag
from properly adhering to the surface. Variations in temperature also may
prevent proper adhesion.
Bar coding
Bar codes are similar to applying decals. Bar coding can be done by tagging
specific items and also has the capability of coding a specific room, in
total. There are hand held scanners that can read the bar coding which
results in improved periodic inventory taking.
Stencil
A template of the tag number is made out of cardboard or similar material,
and then the template is spray painted on the item.
Etching
A special tool is used like with engraving. Usually used on items that are
small and/or handled a lot, where a regular tag would fall off or wear out.
When to Tag
As soon as each item is received and accepted, an identification number must
be assigned, recorded on the receiving report or other source document and
marked.
Who Should Tag
Who assigns the tag number and who does the tagging varies from State agency
to State agency. Since property recordkeeping normally is the responsibility
of the accounting department, this department might assign the number and
tag any new assets. The individual responsible for maintaining the asset
records should supervise this operation to insure compliance with
requirements.
Where to Tag
The placement of the tag is important. It is important to know where to find
a tag when verifying the asset to the property control record. For some
items there is no good place to put tags. Tags must be placed consistently
and they must be accessible. The tag should be placed in an area where the
number can be seen easily and identified without disturbing the operation of
the item. This placement will allow for easy periodic inventory taking.
Inventory Management System
The items stored collectively must meet the capital threshold. The storage
area must be secured. An agency must perform a cost evaluation to determine
if it is beneficial to retain inventory. In other words, is the benefit of
storing the inventory worth the cost? The following should be included in
the cost evaluation: The staff time involved, personnel costs, overhead
costs of the storage area, are among the costs that should be considered
before establishing an inventory.
An effective inventory management system requires:
Managing Inventory Levels
Inventory is an asset that must be more closely guarded because inventory,
if not managed properly, can lead to excessive spending. The best way to
view inventory is to think of it as cash, an asset of the State. The State
manages cash by ensuring it is adequately safeguarded and maintained in
accounts that maximize earning power. Cash is not maintained as dormant so
inventory should not be considered dormant either. Keep in mind, excess
inventory levels should be avoided. Inventory items not being used during a
reasonable period of time wastes State funds that could be used elsewhere.
Safeguarding Inventory
Safeguarding the inventory items is important to prevent theft and loss of
State property that must be replaced by expending additional State funds.
Review the adequacy of existing physical safeguards designed to protect
State property that is under your responsibility. Appropriate safeguards
should be implemented to prevent potential losses.
Property Record (Assets and Inventory)
Off-Site Copy of Property Record (Assets and
Inventory)
A copy of the agency's detailed property records must be filed off-site in
case of a partial or total loss of the building that contains the property
records. This will provide the detailed information to substantiate a loss,
if necessary. The copy can be in any electronic format or hard copy. Core-CT
Assets and Inventory modules' property records are backed up and stored
off-site.
Record Retention and Destruction of Records (Assets and Inventory)
A carefully planned Property Control System will provide for the
establishment of record retention and record destruction schedules.
Periodically, each agency should conduct an analytical review of all its
books, records, papers and documents to determine whether the
administrative, fiscal and/or legal requirements mandate the retention of
this data.
When the analytical review has been completed, each agency should submit to
the Public Records Administrator, State Library, for approval, retention
schedules for all such books, records, papers and documents.
As a general rule, records affecting the fiscal operations of any agency may
be destroyed after those records have been audited. However, purchase orders
for equipment must be kept for "the economic life of the equipment" per
Connecticut State Library directive "State Agencies' Retention/Disposition
Schedules" revised 1/2010. The record retention schedules are available on
the State Library Website (http://www.cslib.org).
As required by statute prior approval must be obtained from the Public
Records Administrator to destroy any public record.
Do not destroy any public record without the proper authorization. The
RC-108 form, "Records Disposal Authorization", can be downloaded from the
Website.
We refer you to Sections 11-8 and 11-8a of the Connecticut General Statutes.
Also, please direct questions pertaining to record retention, schedules, and
destruction of records to the Public Records Administrator at 860-757-6540.