Fixed Assets - Equipment

SUBJECT: FIXED ASSETS - EQUIPMENT NUMBER:
FA.4.
DEPARTMENTS & DISTRICTS AFFECTED: ALL AGENCIES, DEPARTMENTS, AND DISTRICTS GOVERNED BY THE BOARD OF SUPERVISORS
EFFECTIVE: 01/01/85 REVISED: 01/88, 01/94, 06/99
 signed
_________________________________ David E. Sundstrom, Auditor-Controller
TABLE OF CONTENTS
1. POLICY
1.1 Purpose 1.2 Authority 1.3 Definitions
2. ACCOUNTING PROCEDURES
2.1 Budget Classification and Account Coding 2.2 Receipt of Equipment 2.3 Issuance of Fixed Asset Number by Auditor-Controller 2.4 Fixed Asset Document (FAD) 2.5 Fixed Asset Identification Tag 2.6 Preassigned Fixed Asset Numbers 2.7 Equipment Listings 2.8 Equipment Purchased for Transfer to Another Agency or Fund 2.9 Sales of Fixed Assets Between Funds 2.10 Surplus, Transfer, Loan, Donation, or Trade-In of Equipment 2.11 Stolen Equipment 2.12 Damage to or Destruction of Equipment 2.13 Missing Equipment 2.14 Assets Dismantled for Parts 2.15 Obsolete Software/Computer Programs 2.16 Physical Inventory of Equipment 2.17 Auditor-Controller Report to Board of Supervisors
3. CONTROL PROCEDURES: FIXED ASSSETS-EQUIPMENT
3.1 Property Officer's Designee 3.2 Property Officer 3.3 Location Control 3.4 Physical Control
4. PHYSICAL SECURITY: ALL COUNTY PROPERTY
4.1 Department/Agency Head and Property Officer Responsibility 4.2 Property Security Suggestions 4.3 Controlled Equipment: Equipment Under $ 5,000
EXHIBITS
SUBJECT: FIXED ASSETS - EQUIPMENT NUMBER:
FA.4.
DEPARTMENTS & DISTRICTS AFFECTED: ALL AGENCIES, DEPARTMENTS, AND DISTRICTS GOVERNED BY THE BOARD OF SUPERVISORS
EFFECTIVE: 01/01/85 REVISED: 01/88, 01/94, 06/99
 signed
_________________________________ David E. Sundstrom, Auditor-Controller
1. POLICY
Each department/agency head is accountable for all fixed asset equipment items assigned to him/her and shall file with the Auditor-Controller a certified inventory of all County fixed asset equipment items in his/her charge as of the date specified in the schedule of fixed asset inventory dates prepared by the Auditor-Controller pursuant to Title I, Division 4, Article 5 of the Codified Ordinances of the County of Orange. The Auditor-Controller shall maintain a central inventory record of fixed asset equipment items acquired by, or under the responsibility of, each department/agency head.
1.1 Purpose
To establish procedures to properly account for and control equipment.
1.2 Authority
Authority Subject
Government Code Section 24051 Inventory of Equipment
Codified Ordinances of the County of Orange, Title I, Division 4, Article 5 Inventory of Equipment
Accounting Standards and Procedures for Counties, State of California Control of Fixed Assets; Accounting for Fixed Assets; Inventory of Equipment
Board of Supervisors' Resolution No. 93-1390 dated December 14, 1993 Delegation of Fixed Assets Policies and Procedures Revisions to Auditor-Controller
1.3 Definitions
1.3.1 Fixed Assets
The State Controller's Manual, Accounting Standards and Procedures for Counties, defines fixed assets as: "tangible assets of significant value having a utility which extends beyond the current year." Generally, fixed assets are classified in three categories: land, buildings and improvements, and equipment.
1.3.2 Equipment
Equipment is defined as movable property of a relatively permanent nature with a significant value. Equipment items which cost $5,000 or more, including sales taxes, freight charges, and any other taxes, are classified as fixed assets. Equipment items are capitalized and are maintained in the County's central Fixed Asset Accounting System.
1.3.3 Installed Equipment or Fixtures
Items of equipment which are permanently installed in a building or structure and are not intended to be removed, such as plumbing fixtures, are considered part of the building, and the cost of these items is added to the overall cost of the building or structure.
1.3.4 Field Equipment
Field equipment is checked out from a pool of such items from a central location for use away from that location. Examples of field equipment are County cars in the PFRD/Transportation pool, and maintenance and repair equipment kept at PFRD/Facilities Operations.
1.3.5 Property Officer
The property officer is a department or agency employee who has been designated by the department or agency head as being accountable for equipment for which the department or agency is responsible, although the ultimate responsibility for the equipment remains with the department or agency head.
1.3.6 Property Officer's Designee
The property officer's designee is an employee in the department or agency designated by the property officer to perform any of the functions described in this procedure for the property officer. Any duties in this procedure to be performed by the property officer can be performed by the property officer's designee.
1.3.7 Fixed Asset Document (FAD)
A Fixed Asset Document (FAD) is a card prepared for each equipment item. The FAD displays the fixed asset number, location information, description, serial number, and other identifying information. See Exhibit I.
1.3.8 Disposition Order Card (DOC)
A Disposition Order Card (DOC) is a document prepared when an agency is disposing of an equipment item. The DOC displays the fixed asset number, disposition date, and other information about the disposed equipment. See Exhibit I.
2. ACCOUNTING PROCEDURES
2.1 Budget Classification and Account Coding
All equipment items which cost $5,000 or more, including sales tax, installation, freight charges, and any other taxes, are classified as fixed assets. Equipment items are budgeted in and charged to the "Equipment" account, Object Code 4000, or, in the case of lease-purchased equipment, to the "Lease Purchase Principal Payment" account, Object Code 3251, and the "Lease Purchase Interest Payment" account, Object Code 3351. Refer to County Accounting Procedure (CAP) No. FA.2., "Fixed Asset Expenditure Coding," for details on specific items that are included in or excluded from the equipment classification.
2.2 Receipt of Equipment
When a department or agency receives an equipment item, the receiver copy of the purchase order or the partial receiving report is completed and signed. The receiver or partial receiving report is then signed by the department or agency property officer, to acknowledge acceptance of accountability for the fixed asset. If the property officer is also authorized to sign receiving reports for payment, the signature of the property officer on the "AUTHORIZED SIGNATURE" line of the receiver or partial receiving report can signify both approval for payment and acceptance by the property officer. After all required signatures are affixed, the receiver or partial receiving report is forwarded to the Claims and Disbursing Section of the Auditor-Controller. If the receiver contains location information, the Auditor-Controller General Ledger Unit can input this location information into the Fixed Asset Accounting System.
2.3 Issuance of Fixed Asset Number by Auditor-Controller
After receipt of the receiver or partial receiving report and payment for the item by the Auditor-Controller, a fixed asset number is assigned to the equipment item by the General Ledger Unit. Refer to Section 2.6 of this procedure for procedures for fixed asset numbers preassigned to certain departments or agencies.
2.4 Fixed Asset Document (FAD)
A FAD showing the assigned fixed asset number and location information is sent by the Auditor-Controller to the department or agency responsible for the equipment item.
2.5 Fixed Asset Identification Tag
The Auditor-Controller sends the responsible department or agency a fixed asset identification tag to be affixed to the equipment item. The fixed asset identification tag displays the fixed asset number as shown on the FAD furnished by the Auditor-Controller. All equipment items are identified for inventory and control purposes by the fixed asset tag, except for:
  1. Items of installed equipment which are considered as part of the structure or other system to which they are attached.
  2. Items to which the fixed asset identification tags cannot be affixed because of the odd sizes or shapes of the items, or because of the manner in which the items are used. If the County property tag will not adhere to an item because of size, shape or use of the item, the department or agency should affix the assigned number in some other manner, i.e., engraving, inscribing, stenciling, etching, or painting the number on the item itself, or labeling the box in which it is kept. The number must be affixed in some way that will ensure identification for accountability.
It is the responsibility of each department or agency head to ensure each fixed asset item is identified by the assigned tag number immediately upon receipt of the tag. Refer to Exhibit II of this procedure for suggestions on where to affix the fixed asset tag to various types of equipment items. Refer to Section 2.6 of this procedure for procedures for fixed asset numbers preassigned to departments or agencies.
2.6 Preassigned Fixed Asset Numbers
The Auditor-Controller issues preassigned sets of fixed asset tags/numbers to departments or agencies for use in tagging fixed assets when received. In order to set up fixed assets in the fixed asset system timely and avoid errors, department or agency staff involved in assigning fixed asset numbers must observe the following procedures:
2.6.1 Fixed Asset Number on Receiver
The fixed asset number(s) must be noted on the receiver copy of the purchase order. Fixed asset items cannot be included in the fixed asset system until a number has been assigned. The total price of the item must be $5,000 or more with discounts included.
2.6.2 Lease Purchases
Send to the Auditor-Controller a list of equipment obtained by lease purchase and the fixed asset numbers assigned to the equipment purchased.
2.6.3 Partial Payments
A fixed asset number must be assigned when a partial payment is made even though the equipment item has not been received. The Auditor-Controller must set up the item in the fixed asset system when the first payment is made. The department or agency must keep track of the number assigned until the equipment item is actually received and tagged.
2.6.4 Department or Agency Responsibility
Department or agency staff must keep track of all fixed asset numbers assigned to them. Auditor-Controller staff cannot research the history of fixed asset numbers assigned by department or agency staff.
2.7 Equipment Listings
Each year after the June 30 records are complete, the Auditor-Controller provides a listing of fixed asset equipment items for which each department or agency is accountable. This list is provided so each department or agency can ensure that their fixed asset records are in agreement with the official fixed asset records maintained by the Auditor-Controller. The annual fixed asset listing should also be used to conduct interim inventories as discussed in Section 3.4.4.
2.8 Equipment Purchased for Transfer to Another Agency or Fund
2.8.1 Background and Description
This procedure is used for fixed assets purchased by one agency or fund for transfer to another agency or fund. This procedure should not be used for older assets which are being surplussed for eventual transfer to another agency. Section 2.10 applies in those instances. Examples of the types of transfers covered by this procedure are shown below:
2.8.1.1 CEO/Information & Technology Equipment
Section 2.8 applies when equipment is purchased by Agency Nos. 037 (Data Systems) and 038 (Data Systems Development Projects) on behalf of other agencies and is transferred to their ownership without an accompanying transfer of appropriations. See Sections 2.8.2, 2.8.3, and 2.8.4. Normally, for CEO/Information & Technology equipment purchases, appropriations will be transferred from 037 Data Systems or 038 Data Systems Development Projects to the owner agency and the equipment will be purchased directly from the owner agency, in which case this procedure would not apply.
2.8.1.2 Bond-Financed Equipmen
Section 2.8 applies when equipment is purchased by a bond-financed fund, but ownership is transferred to the user agencies, such as Probation or PFRD.
2.8.1.3 Equipment Purchased By a Fund for Transfer to Another Fund: No Reimbursement Required
Section 2.8 applies when equipment is purchased by one fund on behalf of another fund, where no reimbursement to the purchasing fund is required from the receiving fund. This situation normally occurs where a fund which receives revenue for a specific program purchases equipment for another fund which operates that program. For example, equipment purchased by the Sheriff's Narcotics Program Fund No. 132, which will be transferred to the Sheriff-Coroner Agency No. 060, would be covered by this procedure. See Section 2.8.5.
2.8.1.4 Restriction
This procedure is solely intended to apply to newly purchased assets which are purchased by one fund or agency, but where ownership is intended to be transferred to a different fund or agency, with no requirement for reimbursement by the receiving fund/agency to the transferor fund/agency. The surplus procedure in Section 2.10 should be used for older assets which one agency wishes to surplus and another agency wishes to receive.
2.8.2 Fixed Asset Numbers Assigned to CEO/Information & Technology
The Auditor-Controller assigns CEO/Information & Technology a block of fixed asset numbers to be used for CEO/Information & Technology equipment and software purchased by CEO/Information & Technology in Agencies 037 or 038.
2.8.3 CEO/Information & Technology Fixed Asset Number Assignment
Upon receipt of equipment, CEO/Information & Technology assigns a fixed asset number, tags the equipment, and prepares a "dummy" FAD, which is completed and forwarded to the Auditor-Controller after payment for the equipment is made and the cost data is obtained from the Expense Budget to Actual report. The Auditor-Controller processes the "dummy" FAD, and forwards the permanent FAD to CEO/Information & Technology.
2.8.4 Transfer List
CEO/Information & Technology prepares a listing of assets, including fixed asset numbers, to be transferred from the purchasing fund/agency which purchased the assets to the receiving fund/agency, attaches the FADs for those assets, and obtains the signatures of both the purchasing (the CEO or his/her designee) and receiving agency head or their designees on the listing. No DOCs are required. CEO/Information & Technology sends the listing with attached FADs to the Auditor-Controller.
2.8.5 Transfers Not Involving CEO/Information & Technology
For transfers of equipment between funds/agencies not involving CEO/Information & Technology, where one fund/agency has purchased equipment on behalf of another fund/agency, the purchasing fund/agency prepares a listing of assets, including fixed asset numbers, to be transferred from the purchasing fund/agency which purchased the assets to the receiving fund/agency, attaches the FADs for those assets, and obtains the signatures of both the purchasing and receiving agency heads or their designees on the listing. No DOCs are required. The listing with attached FADs is sent to the Auditor-Controller. If the purchasing and receiving agency head is one and the same, only one signature is required on the listing of assets.
2.8.6 Auditor-Controller Preparation of DOCs
The Auditor-Controller fills out DOCs based on the transfer list and attached FADs, and makes the changes to the fixed asset system to transfer responsibility for the assets from the fund/agency which purchased the assets to the receiving fund/agency which will be responsible for the assets. The Auditor-Controller sends the new FADs to the receiving agency.
2.8.7 Fixed Asset Inventory
The transferred assets will appear on the fixed asset inventory of the receiving agency, but will continue to reflect the fund/agency which originally purchased the assets as the source of financing of the assets.
2.8.8 Accounting Entries for Internal Service Funds (ISFs)
Fixed assets transferred to ISFs require special accounting entries to ensure that depreciation expense is offset against a revenue account if revenue is not recovered elsewhere (i.e., through the billing rates). Following are the entries required to accomplish this:
Debit Credit
A. Equipment xxx.xx
Deferred Revenue xxx.xx
B. Depreciation Expense xxx.xx
Accumulated Depreciation xxx.xx
Deferred Revenue xxx.xx
Revenue xxx.xx
To record the depreciation and the offsetting revenue.
2.9 Sales of Fixed Assets between Funds
When a fixed asset owned by one fund is sold to another County fund, requiring reimbursement from the receiving fund to the selling fund, the responsible property officers send a memo to the General Ledger Unit detailing the fixed asset description, fixed asset number, and sales price. A FAD must also be submitted with the memo. General Ledger prepares the accounting entries necessary to record the sale and transfers the item from the selling fund to the buying fund in the fixed asset records.
2.10 Surplus, Transfer, Loan, Donation, Trade-In of Equipment
2.10.1 Disposals and Transfers
Disposals and transfers of surplus equipment shall be performed in accordance with Exhibit III, "Procedures for the Disposal of Surplus Equipment." Exhibit III is not included as it is dependent on the County's surplus procedure which has not yet been finalized.
2.10.2 Loans to Another Agency
When a fixed asset item is loaned to another agency, documentation of the loan must be prepared and retained by the property officer. The record of the loan must be signed by the property officers of both agencies in order to document the transfer of accountability.
2.10.3 Equipment Traded In
If old equipment is traded in for new equipment, the agency must show the full description of the equipment being traded in, including the fixed asset number, on the requisition for the new equipment. A DOC for the equipment being traded in must be completed and sent with a FAD to the Auditor-Controller. The purchase order must be cross-referenced on the DOC, and the "Traded-In" box must be checked. The purchase order for the new equipment should list the traded-in equipment, fixed asset number and trade-in amount.
2.10.4 Vehicle Disposals
Surplus vehicles remain in the fixed asset records of the owning agency until the vehicle is auctioned or scrapped. Following are the steps to be taken when a vehicle is declared surplus and ultimately removed from the fixed asset records:
2.10.4.1 Auctioned Vehicles
When vehicles are auctioned by the Transportation ISF, FADs and DOCs are retained by the owner department or agency until after the vehicles are sold. After the auction, PFRD/Transportation sends a list of auctioned vehicles to the Auditor-Controller General Ledger Unit. The list of auctioned vehicles shows the net proceeds received for each one. The owner department or agency prepares a DOC for each disposed vehicle, and sends the FADs, DOCs, and a list of auctioned vehicles to the Auditor-Controller General Ledger Unit. Upon receipt of the FADs, DOCs and lists of auctioned vehicles, the General Ledger Unit removes the assets from the fixed asset records.
2.10.4.2 Scrapped or Junked Vehicles
The owner department or agency must send a written declaration that the vehicle will be junked to PFRD/Transportation. PFRD obtains a "junked slip" (customer receipt indicating that the vehicle has been junked) from the Department of Motor Vehicles for scrapped or junked vehicles. A copy of the "junked slip" is sent to the requesting department or agency. The owner department or agency prepares a DOC for each disposed vehicle. The FADs, DOCs, and junked slips are sent to the Auditor-Controller General Ledger Unit. Upon receipt of the FADs, DOCs and junked slips, the General Ledger Unit removes the assets from the fixed asset records.
2.10.5 Donations of Equipment to Other Organizations or Governmental Agencies
Donations of County-owned equipment to other organizations or governmental agencies must be approved by the Board of Supervisors (Board). After Board approval, the property officer of the agency donating the asset should prepare a DOC for the donated equipment. The DOC, the FAD for the donated equipment, and a copy of the Minute Order or Resolution approving the donation should be sent to the Auditor-Controller. The asset will be removed from the records upon receipt of the completed documents.
2.10.6 Equipment Exchanges with Other Governmental Agencies
Any swaps of County-owned equipment to other governmental agencies in exchange for other equipment must be approved by the Board. The Board action shall contain a description and cost or estimated cost of the equipment being acquired. After Board approval, the property officer of the agency donating the asset should prepare a DOC for the equipment being given to the other governmental agency. The DOC, the FAD for the exchanged equipment, and a copy of the Minute Order or Resolution approving the exchange should be sent to the Auditor-Controller. Upon receipt of the completed documents, the equipment being given to the other governmental agency will be removed from the records. Any equipment acquired in the trade will be added to the records.
2.10.7 Retirement of Dogs or Other Animals
When a dog or other animal is to be retired and removed from the fixed asset records, the property officer of the owner agency should prepare a DOC. The DOC, a FAD, and a memo explaining the circumstances of the retirement, signed by the property officer, should be sent to the Auditor-Controller. The records for the animal will be removed upon receipt of the completed documents.
2.11 Stolen Equipment
2.11.1 Procedure
When fixed assets are discovered to be missing and are believed to have been stolen, the agency must immediately contact the law enforcement agency having jurisdiction (either the County Sheriff-Coroner or a local city police department). Immediately after the Sheriff/police report is completed, the agency must investigate the loss and advise the Auditor-Controller and CEO/Risk Management in writing of the items stolen and the related fixed asset numbers, stating the probability of recovery of the fixed assets, and requesting deletion of the items from the fixed asset inventory and relief of accountability for the items. The letter must also describe the circumstances of the loss and the specific steps which have been taken to modify procedures and increase controls to preclude similar incidents from occurring in the future. A copy of the letter must be sent to CEO/Risk Management by the agency. The letter must be signed by the agency head, or, in his/her absence, by the chief deputy or an assistant director. A copy of the report of the law enforcement agency making the investigation of the suspected theft must be attached to the letter. The Sheriff/police, Auditor-Controller and CEO/Risk Management must be notified immediately upon discovery of the loss. Late notification may interfere with filing an insurance claim for recovery of the cost of the stolen asset.
2.11.2 Security Analysis
If the agency believes that security procedures may be inadequate, it may request a special security analysis be conducted by the Sheriff-Coroner.
2.11.3 Agency Head Appearance at Board Hearing
The agency head is required to appear at the Board meeting at which the request for deletion of fixed assets is heard, to respond to any possible inquiries regarding agency security procedures. See Section 2.17.
2.12 Damage to or Destruction of Equipment
When a fixed asset equipment item is either irreparably damaged or totally destroyed by fire, collision, vandalism, or any other accidental or natural cause, the incident must be investigated and a letter must be submitted immediately by the department or agency to the Auditor-Controller, giving the fixed asset description and number, a description of the circumstances of the damage or destruction, and a report of any findings and recommendations to prevent a reoccurrence. The letter must request removal of the item from the fixed asset inventory and relief of accountability for the item. The letter must be signed by the department or agency head or, in his/her absence, by the chief deputy or an assistant director, and a copy of the letter must be sent to CEO/Risk Management.
2.13 Missing Equipment
When a department or agency determines that a fixed asset equipment item is irretrievably lost, not stolen or destroyed, a letter must be submitted to the Auditor-Controller stating the fixed asset description and number, and an explanation for the missing item. The letter should request deletion of the missing item from the fixed asset inventory and relief of accountability for the item. The letter must be signed by the department or agency head or, in his/her absence, by the chief deputy or an assistant director, and must include a report of any changes to policies and procedures to prevent a reoccurrence. A copy of the letter should be sent to CEO/Risk Management by the agency. The Auditor-Controller includes the fixed asset item in the next fixed asset write-off package submitted to the Board.
2.14 Assets Dismantled for Parts
If an agency needs to dismantle equipment for spare parts and as a result, the original equipment item will no longer be operational or identifiable, the property officer prepares a DOC, attaching a copy of the FAD, and a letter justifying the need for dismantling the asset. These documents must be prepared at the time that the asset is dismantled. The letter must be signed by the agency head or, in his/her absence, by the chief deputy or an assistant director, and forwarded to the Auditor-Controller. The Auditor-Controller includes the equipment in the next fixed asset write-off package submitted to the Board.
2.15 Obsolete Software/Computer Programs
When a computer program that has been recorded as equipment is replaced or is no longer being used, it is often erased or otherwise removed from the storage device of the computer(s) on which it was being used. If an agency needs to dispose of obsolete software and, as a result, the original software is no longer operational, the property officer prepares a DOC, attaching a copy of the FAD, and a letter justifying the need for disposing of the software. These documents must be prepared at the time that the asset is removed. The letter must be signed by the department or agency head or, in his/her absence, by the chief deputy or an assistant director, and forwarded to the Auditor-Controller. The Auditor-Controller includes the equipment in the next fixed asset write-off package submitted to the Board.
2.16 Physical Inventory of Equipment
Federal Office of Management and Budget Circular A-87 (OMB A-87), requires that every County agency head file a certified inventory of fixed assets with the County Auditor-Controller not less than once every two years. On the date specified in the schedule of property inventory dates prepared by the Auditor-Controller, each agency must perform an inventory of the fixed assets under its control. Inventory procedures and requirements are described inCAP No. FA.5., "Physical Inventory of Fixed Assets."
2.17 Auditor-Controller Report to Board of Supervisors
Three times each year (approximately January, May and September), the Auditor-Controller reports to the Board all missing, stolen, damaged, dismantled and destroyed fixed assets. The report lists all such assets for which all documentation has been completed since the preceding fixed asset write-off report. See reporting schedule in CAP No. FA.2 "Physical Inventory of Fixed Assets." The Auditor-Controller requests authorization to delete these items from the fixed asset inventory and to relieve the department or agency head of accountability. Copies of pertinent documentation are submitted to the Board with the report. When action is taken by the Board authorizing the Auditor-Controller to delete the equipment items from the fixed asset inventory, the Auditor-Controller issues a DOC to delete the equipment and sends a copy to the department or agency that is accountable for the assets.
3. CONTROL PROCEDURES: FIXED ASSETS - EQUIPMENT
3.1 Property Officer's Designee
The property officer's designee is designated by the property officer to perform any of the functions described in this procedure for the property officer. The property officer's designee shall be in the same department or agency as the property officer. Any duties referenced in this procedure to be performed by the property officer can be performed by the property officer's designee. The property officer must submit a list of his/her designees to the Auditor-Controller General Ledger Unit Manager each time designees are assigned or changed.
3.2 Property Officer
3.2.1 Designation of Property Officer
Each department or agency head designates an employee within the department or agency as the property officer. Each department or agency submits written notification to the Auditor-Controller of the name, title and telephone number of the person designated and submits written notification each time the property officer is changed.
3.2.2 Responsibilities of Property Officer
3.2.2.1 Approval of Receivers
The property officer must sign all receiving reports for fixed asset equipment items before they are forwarded to the Auditor-Controller, as described in Section 2.2 of these procedures.
3.2.2.2 Assignment of Equipment to Locations
The property officer assigns fixed asset equipment items to a responsible individual at each location in the department or agency. Locations are selected as described in Section 3.3.1.
3.2.2.3 Affixing of Equipment Identification Tags
Upon receipt of the fixed asset tag from the Auditor-Controller, the property officer directs the responsible individual to affix the tag to the equipment and updates the lists described in Section 3.3.4. The property officer also updates the central inventory records by adding location information to the FAD. An updated FAD copy must be returned to the Auditor-Controller for processing.
3.2.2.4 Fixed Asset Records
As described in Sections 3.3.6 and 3.3.7, the property officer maintains, coordinates, and reconciles the department or agency fixed asset location records.
3.2.2.5 Physical Security
The property officer is responsible for implementing and maintaining effective physical security measures for fixed assets and for all other department or agency property.
3.2.2.6 Inventory
The property officer is responsible for coordinating inventories of property under the control of the department or agency, for assembling the certified fixed asset inventory documentation, and for preparing the sixty-day follow-up for missing items, as described in CAP No. FA.2.
3.2.2.7 Disposition Order Cards (DOCs)
The property officer is responsible for ensuring the DOCs are completed timely and accurately for all actions involving fixed assets which require preparation of a DOC.
3.2.2.8 Stolen, Destroyed, Dismantled, and Damaged Fixed Assets
The property officer is responsible for preparing the required letter and for following up on incidents of stolen, destroyed, dismantled and damaged fixed assets.
3.3 Location Control
3.3.1 Selection of Locations
The property officer selects locations of the department or agency for location control of fixed assets. Locations should correspond to one or more offices or geographical work site locations in the department or agency.
3.3.2 Assignment of Equipment to Responsible Individual
The property officer assigns fixed asset equipment items to a responsible individual at each location in the department or agency. Locations are selected as described in Section 3.3.1.
3.3.3 List of Employees Responsible for Equipment
The property officer prepares and maintains a department- or agency-wide list of the names, locations, and telephone numbers of all responsible individuals.
3.3.4 Location Equipment Lists
The property officer provides the responsible individual at each location a listing of fixed assets under his/her control. The property officer is responsible for maintaining a complete listing of fixed assets under the control of each responsible individual.
3.3.5 Changes in Physical Location
The location equipment lists are maintained by the responsible individual at each location. Changes in physical location must be documented and reported to the property officer on the day on which they occur.
3.3.6 Location Records
The property officer maintains a current record, by location, of all fixed assets within the department or agency. If no other method is available within the department or agency, the following method can be employed by the property officer to maintain location records: Utilizing the FADs issued by the Auditor-Controller, sort by location with divider cards separating each location. If locations are identified by organization codes, the Auditor-Controller can provide a computer listing of equipment in location order upon request. These listings can be manually updated for additions and deletions. The Auditor-Controller's computer listing is updated for location changes by submitting updated FADs to the Auditor-Controller.
3.3.7 Reconciliation of Location Records to Auditor-Controller Records
Location records must be reconciled in total by the property officer to the Auditor-Controller's records at least once each year to ensure that department or agency records are in agreement with the Auditor-Controller's fixed asset equipment records. One way this may be accomplished is by performing an interim, annual inventory. Documentation of the reconciliation must be retained by the property officer.
3.4 Physical Control
3.4.1 Securing Unassigned Portable Equipment
All unassigned portable equipment items must be maintained in a secured area and are the responsibility of the designated responsible person at that specific location. This procedure is directed toward portable equipment items available for check out by various department or agency employees for use away from the assigned location. These items must be secured at all times when not in use by means of locked cabinets or locked storerooms. Issuance of these items shall be in accordance with the procedures in Section 3.4.3.
3.4.2 Securing Permanently Assigned Equipment
Easily portable equipment items permanently assigned to department or agency personnel for in-office use should be secured daily by being locked in desks or stored in a locked cabinet when not in use.
3.4.3 Sign-Out / Sign-In Log
Only authorized personnel are permitted to sign out field equipment. A sign-out / sign-in log must be maintained by the responsible individual at each location. Although the format is discretionary, it must include the following:
  1. Description of Item.
  2. Serial number and fixed asset number.
  3. Name of user.
  4. Date and time checked out and returned.
  5. Signature of user, both in and out.
  6. Issuer's initials, both out and in.
This log is used for checking out and returning all equipment items designated for field use.
3.4.4 Interim Inventories
The property officer takes random samples of fixed asset inventories throughout the year to serve as an internal control device and to provide to the department or agency identification of potential internal control inadequacies on a current basis. Such inventories of randomly selected locations are performed as often as deemed necessary by the property officer.
3.4.5 Physical Security Measures
Additional physical security measures for all County property are discussed in Section 4 of these procedures.
4. PHYSICAL SECURITY: ALL COUNTY PROPERTY
4.1 Department or Agency Head and Property Officer Responsibility
Each department or agency head is responsible for ensuring that all County property under his/her control is adequately protected from theft, loss, damage, and destruction. The property officer of each department or agency develops and implements procedures necessary to safeguard all County property under the control of the department or agency, including both fixed assets and controlled equipment.
4.2 Property Security Suggestions
The security measures included on the attached Exhibit IV, "Property Security Suggestions," should be considered for implementation by each department or agency. The responsibility for determining the cost-effectiveness of implementing these security suggestions rests with each department or agency. The cost of the security measures must be weighed against the cost of the assets exposed to loss, the incidence of crime in the area of a particular office, the ease of access to the office, and budgetary constraints.
4.3 Controlled Equipment: Equipment Under $5,000
Each department or agency is responsible for establishing adequate inventory controls for controlled equipment, which is movable property having a utility that extends beyond the current year and a cost of less than $5,000. As with all internal controls, management is responsible for assessing the expected benefits and related cost of control procedures. Therefore, the decision as to which equipment should be controlled is one which must be made by management. Equipment items which are easily portable and susceptible to theft should be controlled. Additionally, there may be other equipment items that should be controlled if specific circumstances and/or dollar values indicate the need for control. Procedures similar to those described in Section 3 must be utilized for all controlled equipment. Periodic inventories of controlled equipment must be performed, using a serial number or a department or agency assigned number to identify the equipment for inventory purposes. The Internal Audit Department reviews and comments upon the adequacy of the internal procedures and inventory controls covering controlled equipment as part of each regularly scheduled department or agency audit.
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