BUSINESS OFFICE                                                                                                44-02-016

FIXED ASSET INVENTORY SYSTEM

 

POLICY STATEMENT.

The Division of Veterans Healthcare Services (DVHS) requires each New Jersey Veterans Memorial Home (VMH) to develop and maintain a Fixed Asset Inventory System to accurately account for fixed assets such as land, land improvements, buildings, building improvements, or equipment such as vehicles, furniture, fixtures, office equipment, computers, copiers, etc., with an original cost of $1,000 or more and an expected useful life of three (3) years or more.

PURPOSE.

The purpose is to establish and maintain policies to account for fixed assets in accordance with generally accepted accounting principles (GAAP).  A Fixed Asset Coordinator will be assigned by each facility to manage the program.

Additionally, this policy sets forth the minimum requirements for the establishment and maintenance of a VMH Equipment Inventory System:

  1. To fix stewardship responsibility for the State’s assets;
  2. To provide a means of control to determine that State assets are not stolen, misappropriated or lost, and are disposed of according to the law;
  3. To obtain optimum insurance coverage levels and provide important proof-of-loss evidence when insurance claims are filed;
  4. To locate excess or surplus items that can be made available to other agencies or to be sold at public auction, as per Dept. of Treasury Circular Letter 08-03-DPP, attached here as 44-02-012A;
  5. To permit the development of depreciation and cost services information for possible reimbursement through Federal grant programs.

 
DEFINITIONS.

Equipment Inventory Process – is a control required by the State Treasury Department under Circular Letter 11-19-OMB, Asset Inventory Requirements; attached here as 44-02-016A.

Fixed Asset Inventory System - is a control required by the State Treasury Department under Circular Letter 01-07-OMB, Fixed Assets; attached here as 44-02-016B.

GAAP - Generally Accepted Accounting Principles.

GASB – Governmental Accounting Standards Board.

NJFAS – New Jersey Fixed Asset System; an outmoded system replaced by the RFAS.

OMB – The New Jersey Dept. of Treasury, Office of Management and Budget maintains the central system and produces the consolidated reports required for the financial reports and audits. These reports are based on the asset transactions reported by agencies directly responsible for the inventory and maintenance of the asset.

RFAS – Revised Fixed Assets System; replaced the NJFAS. This is an automated system designed to report and account for fixed asset activity for the various State agencies.

PROCEDURE.

  1. Identification of Units Involved:

    1. The Fixed Asset Coordinator shall initiate the Data Entry Form from the report received from the Storekeeper.

    2. The Fixed Asset Coordinator is responsible for entering the item into the Fixed Asset Inventory System.

    3. The Fixed Asset Coordinator is responsible for the entry and transfer of assets from one Department to another within the facility on a continual basis.

  2. Sequence of Actions:

    3. The sequence of actions has been established to facilitate their flow, and to establish areas of responsibility.

    1. The Fixed Asset Coordinator will ensure that a Data Entry Form is generated utilizing the information on the Receiving Report Form for any capital item costing more than $1,000.00 or for any item of equipment/furniture, i.e., chair, computer, bed, table, etc.

    2. The minimum description of equipment includes but is not limited to:

      1. Description of the equipment (type of item, brand name, model and serial number, etc.)

      2. Acquisition date;

      3. Cost (purchase price or fair market value for donated assets);

      4. Purchase Order and Voucher Numbers;

      5. Inventory number (decal, stencil or sequentially numbered tags for control, etc.);

      6. Location (Statewide Land and Building Asset Management (LBAM) System) land or building identification number, address, building name, floor, etc.;

      7. Organizational unit charged with custody of the equipment;

      8. Source of the monies from which the equipment was acquired (General State Funds, Federal Grants, Special Revenue Funds, etc.).

    3.  The completed Data Entry Form is then submitted to the Accounting Department.

    4. Based on the information received, an inventory tag is assigned.  Numerical sequence control is maintained by the Fixed Asset Coordinator.

    5. The Fixed Asset Coordinator enters the item into the Fixed Asset Inventory System.

    6. Items which cost less than $1,000 may be kept on the inventory system if deemed valuable and vulnerable, such as; computers, paintings, fax machines, tools, medical items, etc.

    7. At a minimum of once a year, the Fixed Asset Coordinator will run a master       inventory list for each department.  Verification of the list shall be completed and the master list signed by the Department Head.

    8. A complete physical inventory listing of the assets should be taken annually by the end of each fiscal year (June 30th), and must be submitted to OMB prior to July 31 of each year. Certification of compliance with an annual inventory must be submitted to OMB as part of the year-end capital asset certification requirements.

    9. To remain useful, the master inventory must be updated as assets are acquired or disposed. Updating should be done continuously, and cyclical counts for inventory purposes are encouraged in order to distribute the workload throughout the year. If acquisitions and dispositions are accurately recorded, the inventory as disclosed by physical inspection should equal the amounts shown by the perpetual records.

    10. All inventory differences should be investigated and the perpetual inventory records must be adjusted accordingly.

    11. Disposal of non-computer surplus assets shall conform to the Department of Treasury’s Division of Purchase and Property (DPP) procedures, as outlined in Circular Letter 08-03-DPP (44-02-012A).

    12. DPP guidelines on the disposal of computer equipment are outlined in Circular Letter 00-17-DPP.

 

Revised:  June 2011

 

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