1 FIXED ASSETS Presented By: Cynthia Autenrieth, Aaron Helfenberger, and Karen Worthy Reporting and Fixed Assets Office

2 Our goal is to educate you on the processes, procedures, and everyday activities of the Reporting & Fixed Assets Office

3 Agenda What is a fixed asset and why is it important?How is a fixed asset acquired? How do you maintain and dispose of fixed assets? (forms) Annual Inventory Individual Responsibilities

4 What is a Fixed Asset? A fixed asset is defined as University property such as land, buildings, and equipment, with a total cost equal to or greater than $5,000 and a useful life of two or more years. EXCEPTION: Software must be over $100,000

5 Examples of Fixed AssetsBuildings Infrastructure Art Collections Campus Vehicles Equipment

6 Expanded Definition Total Costs= purchase price + other costs incurred to place the asset in its location and condition for use. Shipping/delivery costs Installation/set up fees Interest costs, legal fees, etc. incurred during the construction of an asset (i.e. buildings) DOES NOT APPLY: Service contracts Extended warranties

7 Maintenance Costs Maintenance costs are expenses incurred to keep assets in normal operating condition and to help maintain the original use of the asset. Maintenance costs do not extend the life of an asset beyond the expected useful life. Examples: repairs, replacement parts, painting, service agreements, etc. MAINTENANCE COSTS = FIXED ASSET

8 Capitalization & DepreciationA fixed asset becomes ‘capitalized’ when it is recorded on the financial statements as an asset. A fixed asset is ‘depreciated’ by allocating the cost of the asset over its useful life. Straight line method (total cost-salvage value/useful life) NOT depreciated: land, certain land improvements, construction-in-progress, works of art/historical treasures

9 Example of DepreciationAsset Costs $12,000 Useful Life 5 years Depreciation $12,000/5=$2,400 year expensed If cost was $12,000 and useful life was 1 year, the amount of the item would be expensed in full in the year purchased. Fiscal Year 2017 2018 2019 2020 2021 Amount 2,400 Fiscal Year 2017 2018 2019 2020 2021 Amount 12,000

10 UNCC Total Assets ($1,671,841,157)

11 Fixed Assets Expenditures

12 UNCC Fixed Assets by Type

13 Facts and Figures Approximately 5700 capitalized fixed assets FY16As of June 30, 2016 total fixed assets were $1,239,260,548 or approximately 74% of UNC Charlotte’s total assets University fixed asset expenditures have increased by 53% in the last 5 years

14 The Fixed Assets OfficeImplement and follow policies set by the Office of the State Controller Follow Business Process Standards issued by UNC System Ensures fixed assets are: properly acquired accounted for maintained disposed of

15 Policy Statement #601.15 CONTROL AND MANAGEMENT OF UNIVERSITY EQUIPMENT & OTHER PROPERTYAvailable at (formerly policy # 79) Highlights: Fixed assets definitions Responsibilities for each level of staff involved with fixed assets Obligated to comply with fixed assets procedures Supplemental Procedures to Policy # highlights: Requirements during Annual Inventory Process for lost and stolen assets

16 How is a fixed asset acquired?Capital Improvement Projects (Budget Office) Entering requisitions in 49er Mart

17 Question # 1 The $3,000 repair of the heating element on the pretzel cart is a fixed asset. TRUE OR FALSE

18 Answer # 1 The $3,000 repair of the heating element on the pretzel cart FALSE, IT IS A REPAIR

19 Question # 2 The one year service contract that costs $22,000 for tuning the concert piano is a fixed asset. TRUE OR FALSE

20 Answer # 2 The one year service contract that costs $22,000 for tuning the concert piano FALSE, IT IS A SERVICE CONTRACT

21 Question # 3 What is not included in the total cost of a fixed asset? Shipping Installation Extended Warranties

22 Answer # 3 What is not included in the total cost of a fixed asset? Shipping Installation Extended Warranties

23 Question # 4 Which one of these is a capitalized fixed asset?Equipment Land Art Buildings All of the Above

24 Answer # 4 Which one of these is a capitalized fixed asset? EquipmentLand Art Buildings All of the Above

25 Any Questions

26 Fixed Asset Requisition ProblemsProblems with descriptions and quantity Problems with lack of information in Internal Notes Problems with account codes

27 Example 1

28 Poor Requisitions (Example 1)

29 Problem With Example 1: Unclear Description (GEM e4)Solution: Enter Layman’s Term Description in Internal Notes or attach Internal Document providing information. Example: Electric Vehicle Reason: Informs Fixed Assets on what the asset is and assigns an identifiable name for Inventory purposes.

30 49er Mart

31 Example 1 - Corrected

32 Example 1 - Corrected

33 Example 2 -Server

34 Poor Requisitions (Example 2)

35 Poor Requisitions (Example 2)

36 Problem With Example 2: Assets are being purchased out of one account, when multiple accounts should be used Solution: When purchasing assets, be sure to purchase each asset out of its proper account Reason: When proper accounts are not used, expense accounts are incorrect and financial statements will be inaccurate.

37 Example 2 - Corrected

38 Example 2 - Corrected

39 Example 2 - Corrected

40 49er Mart

41 Example 2 - Additional

42 Example 3 Bioreactor

43 Poor Requisitions (Example 3)

44 Poor Requisitions (Example 3)

45 Poor Requisitions (Example 3)

46 Problem With Example 3: No reference to the related items included in the asset. Non-capital items appear to be purchased out of the incorrect account. Solution: Reference the items included in the asset. Example: (Items 1-8 all make up one asset - Bioreactor) Reason: Not referencing all items included in the asset allows the asset to be capitalized below its true value.

47 Example 3 - Corrected

48 Fixed Asset Account Codes

49 Account Codes (continued)Maintenance Contracts/Service Agreements: Contracts between the University and a vendor specifying a level of ongoing support for a product or piece of equipment. Maintenance agreements often cover a one-year or longer time period.

50 Account Codes (continued)Support Services: Services purchased from independent contractors or external organizations for professional and consultative personal services. These services are needed for maintenance and/or ongoing operations and cannot be provided by the current staff. Such services are normally procured when there is no maintenance contract or service agreement to fall back on. An example of this type of expense would be payment for support services related to software when there is no maintenance contract or service agreement in place.

51 Account Codes (continued)Repair & Maintenance Services: A one-time or short-term agreement between the University and a vendor to remediate a problem with a product or piece of equipment.  Often the agreement rate is based upon an hourly labor charge plus parts and supplies.  Both parts and labor are recorded in the same account. Note that repairs are corrective and restorative following wear and deterioration; maintenance is preventive and anticipatory.

52 Account Codes (continued)Software Accounts: Software is only capitalized if over $100,000. Any software purchased under $100,000 is coded as non-capital.

53 Account Codes (continued)Software Accounts Software is only purchased out of a software account if it is software that can be installed and operated on multiple assets, including replacement assets, if the original equipment fails. If an asset is purchased and software is purchased with the asset that can only operate with the related asset, then the software will be purchased out of the same account as the equipment.

54 Capital Project Account Codes

55 Requisition Reminders!Enter an understandable asset description Use the correct account codes for each line item Utilize Internal Notes to communicate all important asset related information.

56 49er Mart Requisition

57 Question # 1 You just purchased a microscope for $6,200. Which account code will you use? PC/Workstation/Printer Non-Capital Science Equipment > 8 year life Capital Office/Reception Capital Science Equipment Non-Capital

58 Answer # 1 You just purchased a microscope for $6,200. Which account code will you use? PC/Workstation/Printer Non-Capital Science Equipment > 8 year life Capital Office/Reception Capital Science Equipment Non-Capital

59 Question # 2 You just purchased software for an i-Security Server that costs $8,600 and the software can operate on multiple servers. Which account should you use? Software–Servers Capital Software-Servers Non-Capital Maint Contract–Server Software Software-Mainframe Non-Capital

60 Answer # 2 You just purchased software for an i-Security Server that costs $8,600. Which account should you use? Software–Servers Capital Software-Servers Non-Capital Maint Contract–Server Software Software-Mainframe Non-Capital

61 Question # 3 You are purchasing a server. Along with this server, you are purchasing a 1 year support agreement for $7,000 to address any complications. Which account code should you use for the support agreement? Repairs/Maint-Servers Consult Fee Server Support Services Server Equipment Non-Capital Maint Contracts-Servers

62 Answer # 3 You are purchasing a server. Along with this server, you are purchasing a 1 year support agreement to address any complication for $7,000. Which account code should you use for the support agreement? Repairs/Maint-Servers Consult Fee Server Support Services Server Equipment Non-Capital Maint Contracts-Servers

63 Question # 4 The printer you purchased previously is not functioning correctly now. A service agreement was never purchased for this equipment. Today you called the vendor for technical assistance and were charged $250. What account code should you use? Repairs/Maint-Servers Consult Fee PC/Printer Support Services Server Equipment Non-Capital Maint Contracts-Servers

64 Answer # 4 The printer you purchased previously is not functioning correctly now. A service agreement was never purchased for this equipment. Today you called the vendor for technical assistance and were charged $250. What account code should you use? Repairs/Maint-Servers Consult Fee PC/Printer Support Services Server Equipment Non-Capital Maint Contracts-Servers

65 Any Questions

66 Fixed Asset Forms Equipment Disposition/Transfer FormFabricated Equipment Form Off Campus Location Form Trade-In Form Transfer Approval Form

67 Fixed Assets eForms (Coming Soon)The Controller’s Office and the Information Technology Services (ITS) Imaging Team are developing new electronic forms (“eForms”) to replace the existing Fixed Asset Excel forms currently in use. These eForms are expected to be released in May 2017

68 Quick Look at the FA eFormsDisposition Form Surplus; Cannibalism; Lost/Missing; Stolen; Change Location or Custodian; Trade-In; Transfer to Another Dept or Outside Agency Off-Campus Fabricated Equipment Building and Infrastructure (FM use ONLY)

69 FA eForms Training When: ITS will offer training sessions May 3-5 Where:  CHHS Room 386   Who should attend:  Inventory Coordinators, Business Officers, Research Administrators, and frequent preparers of the current Fixed Asset forms ***Please share with departments so those who need to attend can sign up. Please Kendra Chalmers at to get link for sign-up.

70 FFIPROC: Fixed Assets QueryThis form is used to initiate a query to obtain an asset number. You will be able to query based on the Purchase Order, Description (as entered in the system), Serial Number, etc. Access given to Inventory Coordinators

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74 FFIMAST: Fixed Assets Master QueryThis form is used when you have the asset number and wish to obtain additional information about an asset such as the Asset Cost, Net Book Value (NBV), Custodian, In-Service Date, etc.

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77 Fixed Assets Equipment Disposition/Transfer FormFor assets that are: - Surplused - Stolen (plus Police Report) - Traded-In - Transferred - Lost/Missing (plus statement of attempts to locate) - Custodian name change - Room/building change

78 Capital Fabricated EquipmentFabricated Equipment is defined as tangible property that is built or assembled from individual parts that have a combined cost of $5,000 or more and a useful life of 2 or more years.

79 Fabricated Equipment FormThis form must be completed when a department begins to build an asset that will be fabricated. It must be forwarded to the Fixed Assets Office.

80 Fabricated Equipment SpreadsheetSecond, the department will keep track of each item that is attached to the fabrication using the Fabricated Equipment Spreadsheet. Use the Fabricated Equipment account code Reference name of the project in the internal note (49er Mart) Complete and return to us on June 15 for each fiscal year.

81 Off Campus Location FormTo be used when an asset is located off campus Risk Mgmt. Signature only required if department obtains insurance. Examples: Equipment used at the NC Research Campus in Kannapolis Backup servers located in another state

82 Off Campus Location Form page 2

83 Trade-In Approval Form4 signatures are required To be completed in addition to Disposition/Transfer Form

84 Transfer Between Agencies Approval FormTo be completed in order to transfer fixed assets to and from the University To be completed in addition to Disposition/Transfer Form

85 Grant Transfer Approval FormTo be completed with the Transfer between Agencies Approval Form and sent to the Office of Grants & Contracts Administration (Formerly Research Cost Management) Needs Vice Chancellor of Business Affairs’ approval

86 Grant Property Grant property that costs over $5,000 is bar coded and accounted for by the Fixed Assets Office Purchases of equipment from grant funds must be made under established purchasing policies AND follow the terms and conditions of the grant If a grant has additional requirements related to its fixed assets, contact the Office of Grants & Contracts (Formerly Research Cost Management), to ensure all obligations are met Under no circumstances can grant property be transferred without the written approval of the Vice Chancellor of Business Affairs See Policy# for more information: (formerly policy # 56)

87 Gift Property Gift property that costs over $5,000 is bar coded and accounted for by the Fixed Assets Office Acceptance of gifts should be coordinated with the Vice Chancellor for Development Always view the equipment before accepting it See Policy# for more information: (formerly policy # 28)

88 Tagging Tag has a bar code and six digit numberPer UNC-System Standards, assets must be tagged within 60 days of invoice payment date All fixed assets are physically tagged except for buildings, infrastructure, land, and mainframe software.

89 Annual Inventory Inventory is conducted from August to JuneDepartment liaisons will receive notification from our office and will have 6 weeks to complete Check your assets listed before Inventory Control comes to verify them Custodian is responsible for making all assets available during inventory

90 Annual Inventory (cont.)Inventory Control Dept. will physically check 100% of department’s assets Strongly recommended that laptops be tracked at the department level After physical inventory, we will send you an updated list for your Department Head to sign and return to us within 10 business days.

91 Department Inventory ReportPrinted name of Inventory Clerk: ORG Code: 12800 Round: Printed name of Department Contact: Ron Greer Inventory Key: Department Name: Receiving & Stores Aug Rnd 1 F = Found Department Contact: By Signing, I confirm that there are no changes to the listed assets other than those noted on this form NF = Not Found Phone Number: (704) Signature of Department Contact: S = Surplus (requires Disposition Form) Required to be obtained by Inventory Control prior to leaving the department ST = Stolen (requires Disposition Form # of Assets: 15 Total Inventory Value: $243,625.93 and Police Report) Result of Physical Inventory (see key at top right) CORRECTIONS Noted Below (when applicable) Information Currently in Fixed Asset System Location should be… Custodian Name should be… Other Changes as Noted (Including Clearer Description) [For example: "MFKR s/b Kawasaki & serial # s/b QB ] Asset # Location Description MFKR Serial # Model Acquis- ition Date Acquisition Cost Custodian Name Custodian Status RS0000 Utility Vehicle Club Car CLBCAR (S-2) 1995/04/06 6,825.04 Greer, Ronald P. EMPLOYEE Van Ford Minivan FORD 1FTDA14U2TZB35238 (74403-R) Aeros 1996/05/29 15,850.09 Pickup Truck DODGE RAM 1B7HC16Y31S751807 1500 (PM 4241) 2000/05/22 14,474.41 Pickup Truck 1 Ton Cab W/Lift Gate &Rails DODGE 3B6MC36511M540652 (PM-6368) RAM 2001/03/12 23,645.12 Forklift TOYOTA 67461 7FGU25 2003/02/25 24,152.03 2005 Pickup Truck 1FTYR10DX5PA56298 (7505) RANGER 2005/01/28 10,500.00 1FTRF12W85NB60974 F150 PL 9835 2005/05/20 13,782.00 Tiger Star Cargo Van Tiger LS4BAB3D06GI22651 (S-10) Star Va 2007/04/30 14,947.00 Box-Style Diesel Powered Truck Sterling JLSBBE1S17K000757 (PK-6536) 2008/03/06 33,158.00 Commercial Grade Utility Vehicle (T-Mag) Mag LKHNC1CH69AT10357 (RS-1) T-Mag 2009/05/13 8,724.00 LKHNC1CH89AT10358 (RS-2) T-Mag Commercial Grade Utility Vehicle (t_mag) LKHNC1CHX9AT10359 T-Mag (RS-3) LKHNC1CH69AT10360 (RS-4) T-Mag Commercial Forklift HYSTER P005V03624J H90FT 2011/01/28 39,848.00 Kawasaki Mule Passenger Utility Vehicle KAWASAKI 1AFCP16CB502825 MULE 4000 2012/05/30 11,548.24

92 Final Inventory Report (needs signature!)

93 Department Inventory ReportPrinted name of Inventory Clerk: ORG Code: 12800 Round: Printed name of Department Contact: Ron Greer Inventory Key: Department Name: Receiving & Stores Aug Rnd 1 F = Found Department Contact: By Signing, I confirm that there are no changes to the listed assets other than those noted on this form NF = Not Found Phone Number: (704) Signature of Department Contact: S = Surplus (requires Disposition Form) Required to be obtained by Inventory Control prior to leaving the department ST = Stolen (requires Disposition Form # of Assets: 15 Total Inventory Value: $243,625.93 and Police Report) Result of Physical Inventory (see key at top right) CORRECTIONS Noted Below (when applicable) Information Currently in Fixed Asset System Location should be… Custodian Name should be… Other Changes as Noted (Including Clearer Description) [For example: "MFKR s/b Kawasaki & serial # s/b QB ] Asset # Location Description MFKR Serial # Model Acquis- ition Date Acquisition Cost Custodian Name Custodian Status RS0000 Utility Vehicle Club Car CLBCAR (S-2) 1995/04/06 6,825.04 Greer, Ronald P. EMPLOYEE Van Ford Minivan FORD 1FTDA14U2TZB35238 (74403-R) Aeros 1996/05/29 15,850.09 Pickup Truck DODGE RAM 1B7HC16Y31S751807 1500 (PM 4241) 2000/05/22 14,474.41 Pickup Truck 1 Ton Cab W/Lift Gate &Rails DODGE 3B6MC36511M540652 (PM-6368) RAM 2001/03/12 23,645.12 Forklift TOYOTA 67461 7FGU25 2003/02/25 24,152.03 2005 Pickup Truck 1FTYR10DX5PA56298 (7505) RANGER 2005/01/28 10,500.00 1FTRF12W85NB60974 F150 PL 9835 2005/05/20 13,782.00 Tiger Star Cargo Van Tiger LS4BAB3D06GI22651 (S-10) Star Va 2007/04/30 14,947.00 Box-Style Diesel Powered Truck Sterling JLSBBE1S17K000757 (PK-6536) 2008/03/06 33,158.00 Commercial Grade Utility Vehicle (T-Mag) Mag LKHNC1CH69AT10357 (RS-1) T-Mag 2009/05/13 8,724.00 LKHNC1CH89AT10358 (RS-2) T-Mag Commercial Grade Utility Vehicle (t_mag) LKHNC1CHX9AT10359 T-Mag (RS-3) LKHNC1CH69AT10360 (RS-4) T-Mag Commercial Forklift HYSTER P005V03624J H90FT 2011/01/28 39,848.00 Kawasaki Mule Passenger Utility Vehicle KAWASAKI 1AFCP16CB502825 MULE 4000 2012/05/30 11,548.24

94 Final Inventory Report (needs signature!)

95 FA -- Off Campus Agreement

96 FA -- Off Campus Agreement (pg. 2)

97 Missing Assets A missing asset list is compiled during the Annual Inventory. The Fixed Asset Office will departments a list of assets that were missing to be confirmed by departments. Inventory Control re-verifies any assets that have since been found. Final missing assets are forwarded to the Vice Chancellor of Business Affairs, the respective Vice Chancellor over the impacted department, Department Heads, and Internal Audit. They are also included on the State Bureau of Investigation Report. Campus departments are responsible for safeguarding their assets and documenting the procedures in place to do so. This applies to not only capital equipment, but also to non-capital equipment that is sensitive to theft or misappropriation (such as computers).

98 Department Head ResponsibilitiesTake adequate precautions to ensure that arson, damage, theft, embezzlement, or misuse of any asset is prevented. Comply with University, State, and Federal Policies and Guidelines regarding inventory verification, inventory disposal, and reporting lost or stolen inventory. If stolen/missing asset(s) contains sensitive data such as personal identifying information, contact is also made with the responsible oversight office over the investigation and reporting of loss of sensitive data (Legal Office, ITS, Internal Audit). Upon a change in management, conduct an internal review and account for all assets (Recommended by UNC-System Standards as a “Best Practice”).

99 Property Liaison ResponsibilitiesAssist with tagging of assets and Annual Inventory Locate department assets before your scheduled inventory verification Notify Fixed Assets Office of changes in the status of assets. (i.e. – stolen, lost, location change, missing/defaced tag, transfers, surplus, traded in) (Use Fixed Asset Equipment Disposition Form for this)

100 Accountability Fixed Assets have become more scrutinized in recent years during state audits Not following correct policies and procedures leads to audit findings Could lead to restrictions on how we spend state funds!

101 Question # 1 If you have equipment you no longer need and use, you can give it away to another department or state agency for their use by sending them an to tell them to come pick it up? TRUE FALSE

102 Answer # 1 If you have equipment you no longer need and use, can you give it away to another department or state agency for their use by sending them an to tell them to come pick it up? TRUE FALSE

103 Question # 2 A Fixed Asset Equipment Disposition / Transfer Form should be completed when you: No longer need or can use equipment Want to transfer equipment or supplies to another department An asset cannot be located during annual inventory process You want to loan equipment to another institution, agency, etc. All of the above

104 Answer # 2 A Fixed Asset Equipment Disposition / Transfer Form should be completed when you: No longer need or can use equipment Want to transfer equipment or supplies to another department An asset cannot be located during annual inventory process You want to loan equipment to another institution, agency, etc. All of the above

105 Question # 3 During the Inventory process the department liaison should: Know the location of every asset listed on their department’s report Accompany Inventory Control as they verify the list of assets Make any corrections or additions to the inventory list All of the above

106 Answer # 3 During the Inventory process the department liaison should:Know the location of every asset listed on their department’s report Accompany Inventory Control as they verify the list of assets Make any corrections or additions to the inventory list All of the above

107 Question # 4 If more than one purchase order is being used to build one asset that will total $5, or greater you must complete a ______________ form and forward to Fixed Assets before fiscal year end. Disposition Transfer Form Off-Campus Equipment Agreement Fabricated Equipment Form Trade-In Approval Form

108 Answer # 4 If more than one purchase order is being used to build one asset that will total $5, or greater you must complete a ______________ form and forward to Fixed Assets before fiscal year end. Disposition Transfer Form Off-Campus Equipment Agreement Fabricated Equipment Form Trade-In Approval Form

109 Important Takeaways All employees are responsible for protecting the University’s property Use correct account codes and give full descriptions of assets for requisitions in the internal notes section in 49er Mart Assets must be tagged within 60 days of invoice payment date When applicable, complete the correct Fixed Assets Forms Prepare for your Annual Inventory Visit our website:

110 Reporting & Fixed Assets OfficeDepartment This is to be used for Fixed Assets Forms and/or General Fixed Assets Inquiries Laura Williams Controller Tony Georges Assistant Controller-Financial Reporting (704) Kendra Chalmers Senior Plant Fund and Reporting Accountant (704) Kim Seamans Senior Financial Reporting Accountant (704) Wardell Kerson Financial Reporting Accountant (704) Cynthia Autenrieth Plant Fund & Reporting Accountant (704) Aaron Helfenberger Fixed Assets Officer (704) Karen Worthy Fixed Assets Accounting Tech. (704) Debbie Richard Capital Projects Budget Analyst (704)

111 Inventory Control PersonnelRandy Duncan Director of Materials Management Ron Greer Warehouse Manager (704) John Cashion Stock Supervisor (704) Dan Schulte Stock Clerk (704) Bill Fanning Stock Clerk (704)

112 Questions?