May 24, 2012

UNIVERSITY OF ARKANSAS PROPERTY TRAINING

SESSION

We appreciate the opportunity to be here with you today!

UNIVERSITY OF ARKANSAS PROPERTY TRAINING SESSION

Property Accounting:

Michael White – Associate Controller Janice Harrison – Project/Program Specialist Poli Navarro – Fiscal Support Analyst Renee Rogers – Fiscal Support Analyst Matt Rolniak – Fiscal Support Technician

WHO ARE WE?

Jean Schook – Associate Vice Chancellor/Treasurer

Donna Carter – BASIS Training Coordinator

Wenoah Goodson – Surplus Warehouse Manager

GUESTS:

1. Familiarize you with what we do 2. Discuss changes in University policies

governing the equipment inventory process on campus

3. Provide a greater understanding of the importance of the equipment inventory process

4. Explain the overall process involved with the procurement of equipment, tracking of equipment, and disposal of equipment

5. Provide some helpful tips to our users on resources available, and where to go for answers to questions

6. Receive feedback from you all as to what we can do to help you!

WHAT ARE OUR GOALS TODAY?

Capital Asset – A capital asset is defined as real, personal, or intangible property that has a value equal to or greater than the capitalization threshold and has an estimated life greater than one year.

SOME USEFUL DEFINITIONS:

Types of Capital Assets: 1. Land – real property. All land is capitalized no matter the

cost 2. Buildings – A building is a structure with a historical cost

equal to or greater than $50,000, which is permanently attached to the land, has a roof, is partially or completely enclosed by walls, and is not intended to be transportable or moveable.

3. Infrastructure – infrastructure items are assets that are long-l ived capital assets, with a cost equal to or greater than $50,000, which normally are stationary in nature and can be preserved for a significantly greater number of years than most capital assets. Examples include roads, uti l ity tunnels, irrigation systems, etc.

4. Land Improvements – consist of betterments, site preparations and site improvements that ready land for its intended use. Examples include parking lots, fences, playing fields, landscaping, sidewalks, etc., with a cost of $50,000 or more

SOME USEFUL DEFINITIONS:

5. Equipment – fixed or movable tangible assets to be used for operations, having a useful l ife of one year or more, and have a cost of $2,500 or more (for now at least!!)

6. Construction in Progress – the accumulation of all costs involved with construction projects. These costs are reclassified to buildings, infrastructure, or improvements depending on the nature of the project.

7. Library Holdings – Library holdings are generally defined as collections of books and reference materials. A l ibrary book is a l iterary composition bound into a separate volume and identifiable as a separate copyrighted unit. Library reference materials are information sources other than books which include journals, periodicals, microforms, audio/visual media, computer-based information, manuscripts, maps, documents, and similar items which provide information essential to the learning process or which enhance the quality of academic, professional or research l ibraries.

SOME USEFUL DEFINITIONS (CON’T)

8. Intangible assets – Assets that are identifiable in that they are either separable from the University or arise from contractual or other legal rights AND possess these characteristics:

I. Lack of physical substance, II. Have an initial useful life in excess of one year III. Are nonfinancial in nature. As such, financial assets such as

cash, investments, receivables and prepayments would fall outside the definition of intangibles.

SOME USEFUL DEFINITIONS (CON’T)

Examples of Intangible Assets: 1. Software – Purchased software with a cost of

$500,000 or more 2. Software – Internally developed with a cost of

$1,000,000 or more. 3. Easements – with a cost of $250,000 or more. 4. Land Use Rights – with a cost of $250,000 or

more. 5. Trademarks and Copyrights – with a value of

$250,000 or more. 6. Patents – with a value of $250,000 or more.

SOME USEFUL DEFINITIONS (CON’T)

Cost: includes the actual amount paid for an item (or fair market value if a gift). It includes any freight charges and sales or use tax. It also includes any amount credited for a trade-in allowance. Any expenses incurred for set-up of any special equipment is also included. All expenses associated with getting the item in its usable condition should be considered part of the cost of the item.

SOME USEFUL DEFINITIONS (CON’T)

Depreciation: The systematic expensing of the costs associated with capital assets. The University utilizes a straight line depreciation method. Costs are amortized, or expensed, over a period of years….usually three or five years for equipment depending on the class of the equipment.

SOME USEFUL DEFINITIONS (CON’T)

When a piece of equipment is fully depreciated, we no longer have to inventory it.

FALSE!!!!!!!!!!!!

TRUE OR FALSE:

Property Accounting 1. Responsible for the reporting of all the University’s Capital

Assets. a) Responsible for maintaining ledgers of all the different types of

capital assets. b) The equipment ledger system is an application within BASIS

called AIMS.

WHAT DO WE DO?

1. What does the acronym BASIS stand for?

Business and Administrative Strategic Information System

2. What does the acronym AIMS stand for?

Asset Inventory Management System

3. What does the acronym TARGET stand for?

Transaction Approval-Review Gateway via Electronic

BONUS QUESTIONS!

2. Responsible for making payments on the University’s bonded debt, capital leases, and notes payable.

3. Responsible for coordinating the physical inventory process

a) Scheduling with departments b) Delivering scanners to departments c) Uploading information into AIMS d) Notifying departments that “Missing Assets for a

Budgetary Unit” job can be run in AIMS to get their non-scanned equipment

WHAT DO WE DO? (CON’T)

3. Other duties as assigned

WHAT DO WE DO? (CON’T)

Surplus Warehouse (part of Business Affairs):

1. Responsible for the pickup of “surplus” equipment and other surplus supplies

2. Serves as a conduit of surplus equipment and supplies to facilitate transfers from one department to another

3. Conducts public auctions throughout the year to dispose of all unneeded equipment and other surplus supplies

4. Obtains permission from the appropriate State agencies for special disposition of equipment

SURPLUS

1. Requisition of equipment at department level 2. Issuance of purchase order 3. Receipt of equipment 4. Payment of invoice for equipment 5. Adding item into AIMS using a control number 6. Tagging of equipment – usually by a Property

Accounting representative. Branch stations and other off-campus locations tag their own items.

THE LIFE CYCLE OF A PIECE OF EQUIPMENT

7. Update AIMS property record with detail information – tag number assigned, serial number, contact person, description, location, etc.

8. Department inventories the item each year

THE LIFE CYCLE OF A PIECE OF EQUIPMENT

9. Department decides item is no longer necessary and decides to dispose

a) Department can transfer item to another department using the ABRL command in AIMS

b) Department can obtain prior permission from Surplus Warehouse to cannibalize or possibly donate (very rare). Both of these MUST be preapproved!!!

c) Can trade the item in on a new item. Trade-in MUST be indicated on requisition so Purchasing can obtain permission from the State

d) Can build and submit a surplus batch in AIMS. The batch will go through the TARGET process.

THE LIFE CYCLE OF A PIECE OF EQUIPMENT (CON’T)

10. Item is removed from the department’s inventory when one of the outlined circumstances happens

THE LIFE CYCLE OF A PIECE OF EQUIPMENT (CON’T)

1. The commodity code that is selected for the requisition is very important because the code dictates what account number is selected for the purchase

2. The account number is very important for Property Accounting because it is by account number that new equipment items are found for adding to the system

IMPORTANCE OF GETTING THE REQUISITION RIGHT

EXAMPLE OF REQUISITION IN UPS

REQUISITION/PURCHASE ORDER

Commands for entering a req: REQH, REQL and REQT

If a department wants to trade in equipment when new equipment is purchased, the dept wil l enter 2 l ines.

Line #1 Description of the new equipment the department wants to purchase Line #2 Description of the old equipment. This information is sent to the Marketing and Redistribution Office in Little Rock by your buyer for trade in approval.

Provide the fol lowing information: Brand/Model U of A Tag Number Serial Number Condition Age Location and Contact for pickup of the trade in equipment

Commodity code - use a trade in code Negative Dollar amount of trade in if known.

REQUISITION/PURCHASE ORDER

Some commodity codes can have multiple possible account numbers, capital and non-capital. These req’s are marked with a follow-up code that enables Property Accounting to review, and change the account number if necessary before the expense actually is recorded in accounting

ADDING EQUIPMENT TO INVENTORY

Poli Navarro adds new equipment items from a report that is generated from a data warehouse query. This query pulls all items with a capital expense account number (account numbers beginning with 805xxxxx)

ADDING EQUIPMENT TO INVENTORY (CON’T)

If it is determined that items showing up on the report should not be classified as equipment, Poli will do a GJIM transaction called an “AC”, or account change. These transactions probably show up on your DBR’s as an “in and an out” since they usually are done within the same DART category.

ADDING EQUIPMENT TO INVENTORY (CON’T)

If the expense account that is used is not a capital account number, we have a few opportunities to catch the item for capitalization. One: we periodically query the accounting detail of typical supply type expense account numbers and analyze purchases greater than $2,500; Two: we happen to run across the purchase when out tagging; Three: by input from you at the department level.

ADDING EQUIPMENT TO INVENTORY (CON’T)

After Poli has added the new items in the system, he generates a report for Matt Rolniak. Matt uses this report to know what items need to be tagged. He makes arrangements with the department personnel to tag the items or delegates some of the items to an hourly or work-study employee we sometimes have. Update information is then provided to Poli after the item is tagged.

TAGGING EQUIPMENT

Matt will prepare a schedule for the following fiscal year in the Spring of the current year. You all have opportunities at that point to ask for rescheduling. Of course, there are always things that come up unexpectedly, so there are ways to be able to reschedule later on in the process…..we just need communication of the need as soon as possible.

When your inventory time comes around, you will receive a scanner to perform your inventory. Some very large departments get two scanners.

PHYSICAL INVENTORY

DEMONSTRATION OF HOW TO USE THE SCANNER

PHYSICAL INVENTORY (CON’T)

For a video on using the scanner, go to https://finance-test.uark.edu/scannervideo.asp

After you have completed your scanning and returned the scanner to Property Accounting. A Property Accounting staff member will upload the information. All original uploaded files are saved “as is” for documentation purposes. The files are duplicated for our use, and the data is “scrubbed” before begin submitted into AIMS. After the information has been uploaded, the departments will then be notified that their not-scanned items can now be seen in AIMS. The department will run the job to produce the list of items not scanned. The job name is AIJMCAB (Missing Assets for a Budgetary Unit).

PHYSICAL INVENTORY (CON’T)

You all will then have two weeks to track down the items, or provide explanations for why the items were not scanned. Possible explanations can be:

1. Item was in different location than what was listed 2. Item had no inventory tag (ask Property to re-tag) 3. Item was stolen (must file police report) 4. Item was off-campus (must have off-campus form on file) 5. Item was sent in for repairs

If the items are found, or can be verified as still in our possession, the records are updated by the departmental inventory contacts by using the ABRL command in AIMS.

PHYSICAL INVENTORY (CON’T)

If the items cannot be found or verified and have been determined to be “Missing”, “Cannibalized without Permission”, or “Discarded without Permission”, the records must be updated using the PAID command in AIMS.

Items noted as “MISSING”, “CANNIBALIZED” etc. on the PAID’s are subject to further action by the Vice Chancellor for Finance and Administration.

If too many items cannot be located, it can have serious ramifications for our campus. That is why there has been a lot more emphasis put on the overall equipment inventory process.

PHYSICAL INVENTORY (CON’T)

1.A – Asset The basic screen to see all the important information related to a specific asset tag

number whether capital or non-capital. 2.ABRL – Asset BU, Responsible emp. & location

Used to transfer an asset to another budgetary unit; reassign an asset to a different responsible employee; or to change the location code on an asset record if the asset has moved between physical inventory cycles.

Also used to clear up your non-scanned inventory items. 3.PAID – Primary capital Asset Identifiers

Used to update other information such as descriptions, make, model, serial numbers, etc.

Also used to update inventory items for status after all the physical inventory process is complete (e.g. mark as “M” for missing, “D” for discarded, “C” for cannibalized, etc.)

4.DAI – Departmental Asset and/or Information Used by departments to record their non-capital, or “blue tagged”, inventory items. Used to update information such as descriptions, make, model, serial numbers, etc. on

blue tagged inventory items.

COMMONLY USED COMMANDS IN AIMS

5.LABU – List Assets for a BU Used as a quick reference list to see a BU’s current inventory items

by status and capital code. Status categories include: AU for Active Untagged capital asset; AI for Active Inventoried capital asset or active department asset; AN for Active but Not inventoried capital asset; AQ for Active and Queued for surplus; and D for Disposed.

6.LASN – List Assets by Serial Number Can be used to look up items if the only thing you have is the serial

number. This can be a very valuable tool during the surplus process. 7.LALH – List Asset Location History Can be helpful in tracking down missing equipment. This screen will

show all of the location history of a particular piece of equipment. 8.LAPO – List Asset for a PO number. Can be used to look up items that were added from a particular PO

number.

COMMONLY USED COMMANDS IN AIMS (CON’T)

9. SPB – Surplus Batch Number • This is the first step in the surplus process

10. SA – Surplus Asset • This is the command to populate the surplus batch with the

individual items, both capital and non-capital. 11. SPBA – Surplus Pickup Batch Approval

• This is the command to actually submit the complete surplus batch into TARGET.

COMMONLY USED COMMANDS IN AIMS (CON’T)

My Assets: This is where you can browse the University owned assets for which you are responsible, or select an asset by its Tag Number. Options are available to view or e-mail detail information about an asset, or to request a change to an asset’s Budgetary Unit, Location, or Responsible Employee.

https://admin.uark.edu/natcgi/uwologon

FUNCTIONS AVAILABLE IN WEB BASIS

Discussion of policies

305.1 - Capitalization of Intangible Assets, Revised August 20, 2010, Associate Vice Chancellor for Financial Affairs - (71.55 KB)

305.2 - Capitalization Thresholds for Buildings/Facilities and Other Improvements/Infrastructure, August 14, 2002, Associate Vice Chancellor for Financial Affairs - (3.32 KB)

VARIOUS POLICIES

Fayetteville Policies and Procedures 313.2 Inventory/Equipment Capitalization Thresholds

Fayetteville Policies and Procedures 313.3 University Equipment

Fayetteville Policies and Procedures 313.4 Property Accountability

VARIOUS POLICIES

1. Gifts/Foundation purchases

2. Items purchased on Research Grants

3. Federal Surplus Property

4. Export Controls – EAR: Export Administration Regulations (U.S. Bureau of Industry and Security – U.S. Dept. of Commerce): ITAR: International Traffic in Arms Regulations (U.S. Department of State)

MISCELLANEOUS ITEMS:

THANK YOU!! Please contact Property Accounting if you

have any equipment inventory questions at 575-4854 Please contact your buyer in Purchasing for

assistance with procurement. Please contact the Surplus Warehouse for

surplus property issues at 575-2325

THE END