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ARKANSAS TECH

UNIVERSITY

INVENTORY CONTROL

MANUAL

SEPTEMBER 2005

PROPERTY MANAGEMENT OFFICE

204 BRYAN

EXT. 6087

FAX 968-0227

INTRODUCTION

The purpose of this Inventory Manual is to present a uniform method of maintaining asset records for

Arkansas Tech University. Included in this manual are guidelines and procedures for inventory control

that is congruent with university policy, state regulations and general accepted accounting procedures.

This manual will attempt to assemble all policies, procedures, and instructions that are to be used in the

maintenance of Arkansas Tech University’s Inventory Control System (ATUIS).

OVERVIEW

Why property management is important to Arkansas Tech University.

Property management is an important function at the University. Prudent inventory practices help pro-

tect the University’s multi-million dollar investment in equipment, provide documentation needed for

insurance coverage, audits and support various cost recovery methods associated with assets of the

University. Additional benefits include:

 Readily identify location of equipment

 Support departmental management needs

 Comply with external regulations

 Allows the University to have an accurate record of its investment in equipment

 Allows the University to produce timely and accurate property reports

 Provides for the timely transfer and disposition of equipment

As of July 1, 2005, Arkansas Tech University reported 6,927 items valued at $14,026,584 under its

property control system. Included are 1,076 items with a value of $7,120,564 that have been capital-

ized. Between the fiscal years 2001-2004 the office has, with the permission of State Marketing and

Redistribution, deleted 1,397 items that were deemed to have no utility. These items had a purchase

value of $2,633,362.

ROLE OF THE PROPERTY MANAGEMENT OFFICE

The Property Management Office (PMO) while maintaining accountability for all movable property

within the University provides a benefit to each department in helping meet their educational and op-

erational objectives. PMO provides assistance in handling any property management related issue that

arises from the time of purchase or other method of acquisition through the asset’s disposition. PMO is

directly responsible for maintaining a yearly inventory of all University equipment, tagging University

and Foundation donated property, maintaining accurate inventory records, adding financial data to the

property management system, and overseeing the internal transfer, and the pick-up and disposal of

non-utilized property.

The goals for the Property Management Office include:

1. Provide a means of collecting, storing, updating and retrieving equipment inventory infor-

mation.

2. Provide departments with accurate and timely information concerning equipment under

their control.

3. Provide database for calculating and documenting equipment placement by building and

room.

4. Comply with inventory management principals governed by the University and state

guidelines.

5. Provide data for capitalization and depreciation entries for the University’s general ledger.

6. Record and reconcile the results of the annual equipment audit as received from University

departments.

7. To timely process departmentally prepared Transfer, Addition, Deletion forms so as to

maintain records accurately and reflect the current status of departmental equipment.

8. Comply with all disposition and transfer regulations established by the State of Arkansas

Department of Finance and Administration, Division of Marketing and Redistribution.

ROLE OF UNIVERSITY MANAGEMENT

The University has delegated to deans, department heads, directors and other University officers the

responsibility for management of University assets under their control. These officers are responsible

for ensuring that policies and practices applicable to the work of property management are followed.

These responsibilities may include:

• Emphasize the importance of appropriate and compliant property management within their

school or business area.

• Appoint a person to serve as Departmental Property Coordinator.

• Ensure the implementation of property management policies and processes.

• Locate and report to the Property Management Office all items of equipment assigned to the

office during the yearly inventory.

• Notify Property Management of all changes in the status of equipment between annual audits.

This shall include, but is not limited to, assets stolen, lost, transferred, cannibalized or disposed.

• Return, in a timely manner, property tag forms indicating location and serial number of newly

acquired assets.

DEPARTMENTAL PROPERTY COORDINATOR

Each University department head should appoint a Departmental Property Coordinator. The depart-

mental coordinator will be responsible for the day-to-day inventory processed within the department

and will serve as the contact person to the Property Management Office. The coordinator must be a

full-time employee and may not be a student.

RECEIVING and TAGGING NEW EQUIPMENT

One of the most important tasks assigned to the Property Management Office is identifying newly ac-

quired equipment, applying appropriate tags, and recording information about the equipment into ledg-

ers and the Arkansas Tech University Inventory System (ATUIS). ATUIS is the official University

property record system. No other system can be used as a means of officially documenting property

for the University. It is the University’s general ledger for equipment.

Equipment Receiving Tags:

Capital Equipment purchases will receive University inventory tags. In everyday language Capital

Equipment might be defined as any equipment falling within a cost threshold, is moveable (not perma-

nently affixed to a building or structure) and has a life of over one year. Arkansas Tech University’s

capitalization threshold is an acquisition cost of $2,500 or more, including the cost of all accessories

necessary to make the equipment usable for the purpose for which it was acquired. Departmental

Property Coordinators are reminded that State Auditors will separately inventory capital items on a

yearly basis.

Non-capital equipment purchases, with a cost threshold of between $1,000 and $2,499.99, will receive

official University inventory tags but will not be capitalized. Many items in this cost range are consid-

ered “sensitive” items and may pose a special risk of loss due to its marketability and portability. Such

items as computers, camcorders, digital cameras, musical equipment, power tools etc. deserve special

attention from the Departmental Property Coordinator.

Gifts and foundation purchases are considered property of the University. Gifts are not the personal

property of faculty, staff or students, although they may have been the primary contact or the delivery

point for the donation and the primary user. All gifts and foundation purchases with an original pur-

chase price or fair market value of $2,500 or more are considered capital items. All gifts and founda-

tion purchases with an original purchase price or fair market value, as determined by Arkansas Tech

University, between $1,000 and $2,499.99 will be tagged as non-capital equipment and tracked on

ATUIS.

Equipment fabricated by University shops and service areas are treated as purchased assets and must

follow all capitalization guidelines. When fabricated cost equals or exceeds $2,500 and is expected to

have a useful life of over one year, it must be reported to the PMO as a capitalized item. Fabricated

items falling within the cost threshold of $1,000 to $2,499.99 will be tagged as non-capital equipment

and tracked on ATUIS.

Modifications to existing equipment are not tagged but may increase the capitalized value of a current

asset if it increases its value or useful life. (i.e. modifications to the existing mainframe computer that

increase its value or its useful life.)

Tagging Process:

The initial process of placing an item on the inventory system begins when a Purchase Order is re-

ceived by the PMO. From this PO the item will immediately be assigned an official university prop-

erty tag and pertinent information entered into ATUIS. Inventory cards are then sent to Accounts Pay-

able and a copy of the PO and the inventory tag is sent to the Departmental Property Custodian. Once

the equipment has arrived in the department, it is visibly tagged and the PO copy is returned to the

PMO with the location and serial number of the item included. The item now has a location designated

by the department. Any movement must be communicated to the PMO.

Tags should be affixed in an easily accessible location. The recommended placement on equipment is

on the front of a computer CPU*, inside a desk drawer or inside corner of furniture, otherwise place the

tag in a visible front portion of the item. Never tag equipment on the bottom. Remember the more ac-

cessible the tag, the easier and more efficiently an inventory or verification of an asset can be executed.

*A special note concerning computers as they pose a unique challenge. Computer systems are pur-

chased as a “bundle” on a single PO. A CPU, monitor, keyboard, and mouse are considered part of the

bundle. For administrative purposes, the CPU box will be tagged and tracked as the main unit of a mi-

crocomputer system. As such, the CPU only is considered complete and tracked on ATUIS.

TRANSFER of PROPERTY

Since Arkansas Tech University acquires, transfers and disposes of property on a daily basis, it is nec-

essary to employ strict procedures when handling University property. When property is relocated

from one physical location to another within a department the Departmental Property Coordinator

should be alerted. The DPC should contact the Property Management Office and a simple relocation

can be entered into ATUIS. If the Department will need assistance with physical transfer a transfer of

location form may be completed on line at Netscape. Simply go to Associate Vice President for Ad-

ministration and Finance, Forms and manuals. The Physical Plant will be contacted by PMO, a work

order will be created and plant staff at their earliest convenience will relocate the item.

If you are changing the accountability of any tagged equipment between departments, it is considered

an interdepartmental transfer, whether the asset is physically moved or not. In this case an equipment

transfer form must be submitted to the Property Management Office prior to the transfer of the equip-

ment. It is necessary to establish an original purchase value for each transferred item relative to the

capitalization threshold. The transfer of capital equipment requires a matching entry in the departmen-

tal capital asset ledger.

The Role of Computer Services:

The Computer Services Department has a custodial role in the maintenance, setup, and transfer of all

computer and technical equipment on the Arkansas Tech University campus. Members of the Com-

puter Services team will be called on by you at various times to install, service or transfer equipment.

With over 1,600 microcomputer systems with a value in excess of $2,500,000 it is vital that we have a

succinct method for the transfer and removal of computer equipment. When computer services installs

new equipment the Departmental Property Custodian is responsible for the tagging, serial and location

reporting of each computer. If Computer Services installs used equipment the DPC will file a Techni-

cal Equipment Received Form. This form will include tag number and the new location of each item.

When Computer Services removes equipment the DPC is responsible for the filing of a Technical

Equipment Removal Form. This form will detail each piece of equipment removed from the depart-

ment, including tag number and serial number, the staff member that removed the items and the date

the items were removed. Computer Services will report to the Property Manager detailing the com-

puters that are in their possession and their location.

TRADE-IN OF PROPERTY

Departments may trade-in equipment, but must first contact the Property Management Office. The ac-

quisition of a piece of equipment from a vendor for some specified amount of money and an existing

piece of University tagged equipment is a two part process, a disposition and an acquisition. Before an

item can be offered for trade it must be properly disposed through the State Department of Finance and

Administration, Office of Marketing and Redistribution. Once approval to trade is received from

M&R, the Property Management Office will notify the department. At this time and not before, the

item will be considered disposed.

SALE OF PROPERTY

Property belonging to the state can only be sold to non-state agencies through an auction or sealed bid

process. All requests to sell must be sent to the Property Management Office and an official request

then filed with the Office of Marketing and Redistribution. All revenue received from the auction or

sealed bid process will be forwarded to the Office of Marketing and Redistribution. That portion re-

turned to Arkansas Tech University will be recorded as miscellaneous revenue.

DISPOSAL OF PROPERTY

Disposal of property does not mean throwing something away. When dealing with state property it

means a series of actions that lead to the final disposition of the item. Remember, the department is

liable for all equipment under its care for the life of the item.

The first step in the process of disposal is to determine if the property is excess. Excess describes a

lack of use or benefit a piece of equipment can give to a department or an inability to satisfy its initial

purpose. This item may be considered functional but obsolete. Other items are simply not functional

with an unreasonable cost of repair or cannot be repaired.

The second step is to complete a Transfer to Storage Form. The form can be found on line using Net-

scape and opening the Associate of Vice President for Administration site. When the Property Man-

agement Office receives the request a value will be placed on the equipment, appropriate journal en-

tries made and the Physical Plant will be notified. A work order will be issued and the Physical Plant,

at their earliest convenience, will pick up the item.

The Properties Management Office works with the Physical Plant Director to properly delete items on

monthly basis incompliance with regulations established by the Office of Marketing and Redistribu-

tion.

Disposal of Computers:

In addition to the traditional disposal requirements, the University must deal with situations that may

compromise our database security, licensed software agreements, and sensitive proprietary information

that may be stored on computer hard disk. The University must certify that a listed computer no longer

has confidential or sensitive data on any storage media, or certify that the hard drive has been removed

and destroyed.

The disposal or removal from campus of any University computer must be coordinated through the

Property Management Office and the Physical Plant. The University must comply with all regulations

concerning the disposal or removal of computer equipment established by the State Department of Fi-

nance and Administration.

Disposal of Equipment that may have Environmental or Health Impacts:

Departmental Property Coordinators that feel they have excess property that poses an environmental or

health concern must so note the concern in writing at the time they complete a request for disposal.

The University will comply with all Department of Environmental Health and Safety standards.

CANNIBALIZATION

Cannibalization is the act of disassembling or dismantling making that property unable to perform its

intended use. The Department Head is charged with the responsibility of monitoring the cannibaliza-

tion of University equipment. It is against state and university policy to remove component parts from

state property without prior approval from Marketing and Redistribution. Only the Property Manager’s

Office will request approval from the state. Once approval is received and an item is disassembled, it

is considered excess and will be picked-up by Physical Plant for appropriate disposal.

PERSONALLY OWNED PROPERTY

Arkansas Tech University will not insure personal property of faculty, staff, or students, even if it is

being used on the University campus in support of Tech business. The University has no interest nor

accepts any responsibility for this type of property if lost or stolen. It is recommended that your de-

partment head be provided with a listing of all personally owned property to avoid the possibility of it

being mistaken for Arkansas Tech University property. Should there be confusion, the proof of owner-

ship will lie with the individual. Personal property should be marked according to ownership.

OFF-CAMPUS USE of PROPERTY

When any equipment belonging to Arkansas Tech University or under the custody of Arkansas Tech

University, is going to be used off-campus, this off-campus use shall be approved by the appropriate

departmental official and that office shall keep a record and have available at all times the University

property number, asset description, location, signature of both the individual using the property and the

Departmental Custodian as well as the expected return date.

When Arkansas Tech University property is to be used off-campus “long-term” or periods up to one

semester, the department head to which the item belongs must notify, in writing, the Property Manag-

ers Office. This notification should include the property tag number, the person responsible for the

item, location of the item and expected date of return. Justification for the faculty and staff using the

University’s assets at a location other than on Tech property should be included so the University’s

insurance coverage will apply to those pieces of equipment the same as it would if they were located

on Tech property. A file will be maintained for the State Auditors.

The Off-Campus Use of Property form should be available in each department, or found online using

Netscape and opening the Associate Vice President for Administration and Finance site.

REPORTING THE LOSS, THEFT, OR DESTRUCTION OF PROPERTY

Any University property destroyed, stolen or otherwise missing must be reported to the University De-

partment of Public Safety at the time it is discovered. Public Safety will assist the department in locat-

ing the property. If the property cannot be located and the item is considered stolen the incident must

be reported to the Property Management Office by the University Department of Public Safety. The

report will outline the circumstances under which the property was lost, stolen or damaged. The report

will include the property tag number, serial number, description, and building and room number. A

request to dispose the property, along with a copy of the Public Safety report, will be forwarded to the

Department of Marketing and Redistribution. Upon relief of accountability the item will be removed

from the University property records and a Record of Theft File created for review by the State Audi-

tors.

YEARLY INVENTORY and PROPERTY AUDIT

The purpose of the yearly Physical Inventory is to verify the accuracy of the ATUIS asset management

system. The inventory is a team effort involving the Property Management Office, departments and

schools.

If a department maintains good property management practices on a routine basis, then the physical

inventory is truly a matter of verification and should pose little stress or inconvenience on the depart-

ment. Good practices will include but not be limited to:

9 Property Management receives Purchase Orders on a timely basis

9 All equipment is tagged and verification of location and serial number returned to Property

Management on a timely basis

9 Forms are properly completed when the status, location, or custodianship of equipment changes

9 Off-Campus Use forms are filled out and updated annually

9 Disposals are processed on a timely basis

9 Excess equipment is not stored

9 Computer change-outs are recorded by both the department and Computer Services and for-

warded to Property Management on a timely basis

This task should not be rushed through just prior to the inventory, but should be part of an ongoing

management process throughout the year.

The yearly inventory of property is standard business practice. The process will be initiated and coor-

dinated by the Property Management Office. The Departmental Property Custodian shall perform the

physical inventory with oversight from the department head. This process generally assures that the

personnel who perform the process are not the same people who have custody of the property.

A complete itemized property listing will be sent to each Departmental Coordinator on a yearly basis

during the month of April. The listing will include all items assigned to the department with an origi-

nal purchase value in excess of $1,000. Special attention must be given all capital items, those with a

value of $2,500 or more. Each item should be visually verified and its location compared to the PMO

list. Any differences should be noted. Any missing property or property under your custody that is not

on the PMO list should be noted along with is location and property tag number. A list of missing

property will be forwarded to Public Safety Office for proper investigation.

The timely completion of the property inventory is a University priority. Departments will have 15

working days to conduct the physical inventory, sign the “Certification Letter” that accompanies the

schedule and return the inventory schedule to the Property Management Office. These reports will be-

come permanent record of completion and serve as documentation for all audit purposes. Each file is

available for review by the Arkansas Division of State Auditing on a yearly basis.

Upon return of the departmental inventory schedule, and each department’s inventory has been recon-

ciled, the Property Management Office may conduct a random sample test of sensitive property as pre-

viously described. This audit may be the request of the Division of Legislative Audit, the President of

the University, or the Division of Finance and Administration.

The Arkansas Division of Legislative Audit begins their yearly audit each September. Included in this

audit is a random sampling of capital equipment. Each department will have capital items selected for

this sample. When these audits are scheduled, PMO will give as much notice as possible. The De-

partmental Coordinator will be actively involved and escort the auditor. We must be able to locate and

identify property as requested by auditors, and provide property related documentation upon request.

All equipment that is currently located off-campus must be accounted for. Auditors may inventory as-

sets at their off-site location, or request the asset user to bring the equipment to campus to be invento-

ried. During this sample inventory audit all offices, lecture rooms, laboratories, and storage areas are

requested to be free of excess, broken, or surplus equipment. Do not store excess equipment. There-

fore each department must send all broken, inoperable and surplus equipment to storage using the

proper forms.

A failure to complete the annual state audit is a subject for a negative state audit comment and the pos-

sible disapproval of the University’s property management process. The importance of each depart-

ment’s role in this procedure cannot be overly expressed.

CONCLUSION

This procedure manual addresses some of the most often asked questions regarding property at Arkan-

sas Tech University. However we realize that it will not answer all the questions you might have. If

you have additional questions, or would like help in solving a property related problem, please contact

the Property Management Office at ext. 6087.

PROPERTY MANAGEMENT

PROPERTY REMOVAL REQUEST FORM

Send Completed Form to:

Property Management Office

204 Bryan

Date_____________________________

Department________________________

Account Number____________________

Tag Number Description Condition Location

PMO ONLY

Request Made By________________________________

Phone___________________

To Be Completed By Property Management Office

Date Forwarded to Plant_________________

Removed By__________________________ Date_____________

Clear Form

PROPERTY MANAGEMENT

INTERNAL TRANSFER of EQUIPMENT

Send Completed Form to:

Property Management Office

204 Bryan

Date_____________________________

Department________________________

Account Number____________________

Tag Number Description Current Location New Location

PMO ONLY

Request Made By____________________________

Phone_________________

To Be Completed By Property Management Office

Date Forwarded to Plant________________

Transfer Completed By________________________ Date______________

Clear Form

PROPERTY MANAGEMENT

INTER-DEPARTMENTAL EQUIPMENT TRANSFER REQUEST

Send Completed Form to:

Property Management Office

204 Bryan

Date_____________________________

Department_______________________

Account Number___________________

Tag Number Description Current Location New Department New Location PMO only

Request Made By______________________________

Phone_________________

To Be Completed By Property Management Office

Date Forwarded to Plant____________________

Transferred Completed By________________________ Date_____________

Property Received By____________________________ Date_____________

Clear Form

PROPERTY MANAGEMENT

RECEIPT of DONATED EQUIPMENT

Send Completed Form to:

Property Management Office

204 Bryan

Date________________

Department___________________________

Account Number_______________________

The following item(s) was donated to Arkansas Tech University.

1. __________________________________________________

__________________________________________________

2. __________________________________________________

__________________________________________________

3. __________________________________________________

__________________________________________________

Donor____________________________________________________

___________________________________________________

Special Features____________________________________________

Maintenance or Setup Required________________________________

Physical Location of Equipment________________________________

Property Received By________________________________________

* For inventory purposes, the Office of Finance and Administration, Arkansas Tech University will

establish fair market value.

Clear Form

PROPERTY MANAGEMENT

EQUIPMENT REPAIR and EXCHANGE

Keep this Form in Department Until Property is Returned.

If Property was Exchanged Send Form to Property Management

204 Bryan

Date_____________

Department________________________

Account Number____________________

Date Item Returned__________________

Tag Number________________________ Value____________________________

Description_________________________ Serial Number______________________

Reason for Return________________________________________________________

Company Name__________________________________________________________

Company Address________________________________________________________

Phone Number_______________________

Department Head_____________________

Signature

If the item is exchanged for any reason send this form to Bryan 204.

Clear Form

PROPERTY MANAGEMENT

TECHNICAL EQUIPMENT RECEIVED

When Receiving used Technical Equipment

From Computer Services

Send Completed Form to:

Property Management Office

204 Bryan

Date_______________________________

Department_________________________

Account Number_____________________

Tag Number Description New Location PMO only

Property Received By__________________________

Property Delivered By__________________________

Clear Form

PROPERTY MANAGEMENT

TECHNICAL EQUIPMENT REMOVAL

If Computer Services Removes Technical Equipment

From Your Department

Send Completed Form to:

Property Management Office

204 Bryan

Date_____________________________

Department_______________________

Account Number___________________

Tag Number Description Old Location PMO Only

Equipment Removed By__________________________

DPC__________________________________________

Clear Form

PROPERTY MANAGEMENT

REQUEST for TRADE-IN

When Requesting Approval to Trade

Current Inventory for New Items

Send Completed Form to:

Property Management Office

204 Bryan

Date_______________________________

Department_________________________

Account Number_____________________

I would like to request the trade of the following Arkansas Tech University property:

Tag Number Description Current Location Trade-In Value PMO ONLY

Is the item currently working and fully functional? ___________________________

The item will be traded in on the purchase of________________________________

The new item is found in Purchase Order Number ____________________________

By completing this form I understand that I cannot commit or release this item for trade-in without

written approval from the Property Management Office.

Dean or Department Head____________________________________

Signature

Clear Form

GIFT-in-KIND

ACKNOWLEDGEMENT

The Arkansas Tech University Foundation has received a gift-in-kind contribution from:

____________________________________________

(Name and Address)

The gift is best described as follows:

_____________________________________________

The gift was given for ___________________________ on __________________.

(Department) (Date)

__________________________ __________________________

VP for Development Department Head

*Fair market value will be determined, for inventory purposes, by the Office of Finance and

Administration.

Clear Form

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