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Section 12 - Property Accounting

Section 12.1 - Custodianship of Property

Date: 9/24/07 — Approved: Finance Board, editorial change 12/12/07

The Associate Executive Director of the AS is accountable for the supervision, control, and inventory of all property in the custody of the AS The responsibility for the adequacy of the equipment record for property has been delegated to the AS Controller.
The Controller has been delegated the authority to prepare, and after necessary consultations, define responsibilities for property control and accountability. The Controller or delegate also develops, installs, oversees, maintains, and controls the AS's fixed asset accounting system, FAS.
The private use of AS property is not permitted. No one connected with AS in any capacity may use any AS property of whatever description for any personal purposes.

ACQUISITION OF TITLE

AS title is acquired whenever property is purchased or constructed using AS funds or received as a donation or transfer. Divisions must assure that their staff and students are informed that equipment acquired for a specific individual's use remains AS-owned property after the individual's position is terminated.

AUDITS OF EQUIPMENT RECORDS

Movable equipment records may be audited by the following:

• AS Accounting Department
• AS external auditors (Public CPA firm)
• Trustee Auditors, CSU System
• Other auditing agencies as prescribed by law.

Audits normally evaluate how well the AS has followed:

• Policies and procedures established by the AS Finance Board
• Regulations established by applicable agencies; and
• Regulations established by authorized AS-wide divisions.

Audits of equipment will at a minimum include an annual inventory of all items performed by the Division and a tri-annual spot check of all items greater than $5,000 performed by an AS staff person from outside the division.

CUSTODIAL DUTIES AND RESPONSIBILITIES

Assignment Limitations

The assignment of land, equipment, or any other property for use and custodial oversight by a division does not give the division legal title to it, only the right to use it as long as necessary. The assignment of the property does not exclude its use, at the same time, for other purposes by other divisions. The second use is not to interfere with the efficient use of the property for the purpose first assigned.

Procedures and Operations

The AS Controller is responsible for developing and issuing necessary operating procedures and forms for AS property accounting functions, providing for the operation of the FAS Fixed Asset system, and providing general supervision of property accounting functions.

Division Head Responsibilities

The custodianship of property purchased by or assigned to a division is the responsibility of the Division Director. This responsibility includes ensuring that physical security is maintained over all property (whether or not recorded on inventory records and whether on or off-campus); affixing AS-numbered labels to items meeting the criteria established for tracking of items; preparing property reports as required; conducting physical inventories at least annually; and documenting and reporting all acquisitions, disposals, and changes in status of division equipment.
Division Directors ensure that employees take adequate measures for the security of all equipment assigned to their division. Division Directors should also review with the Associate Director the types of insurance provided by the AS to ensure adequate coverage.
Authorized removal of any piece of AS property from A.S. premises should only be for AS-related activities.  The Director of the division loaning equipment to employees, students, or other institutions of higher education is responsible for approving, documenting, and maintaining the appropriate records for the loaned item.  AS property cannot be taken off campus for personal use, private use, or any other use incompatible with the AS's mission

Division Directors develop and administer internal procedures for their division for the removal of AS property from AS premises. These procedures must reflect AS policies, and are subject to evaluation during periodic reviews of the divisions' equipment records.

EMPLOYEE RESTITUTION FOR MISSING OR DAMAGED PROPERTY

Conditions for Employee Restitution

Before employees can be assessed for the loss of or damage to AS property assigned to them by their division:

• They must have been informed, in writing, that they are responsible for the property. If loss of or damage to the equipment would cause a financial hardship to the individual they are encouraged to contact their insurance agent to arrange for insurance on the item(s).
• They must have used the equipment assigned to them as described under "Definition of Employee Responsibility" in this section.
• They must also have accepted such responsibility.

The written documentation may be a signed loan agreement or a letter from the division stipulating personal responsibility.
Employees may also be assessed if they use property without explicit or implicit departmental knowledge or authorization.

Definition of Employee Responsibility

AS employees using AS property assigned specifically to them are responsible for that equipment. They may be asked to reimburse the AS if the equipment is lost, stolen, misplaced, or damaged because of neglect. If loss of or damage to the equipment would cause a financial hardship to the individual they are encouraged to contact their insurance agent to arrange for insurance on the item(s).
Employees are responsible for property or equipment as follows:

• When they have received written permission to remove it temporarily from the AS's premises according to AS procedures;
• When the equipment is portable in nature and is for their sole and exclusive use in their work (for example, pagers, two-way radios, etc.); and/or
• When they use AS property for which they have not been granted explicit or implicit authorization.

Procedures for Determining Liability and Reimbursement

The A.S. Controller or delegate determines the procedures to follow in assessing employees for missing or damaged property. In general, these procedures are:

• The employee's Division Director determines whether the employee used reasonable care in the security of the equipment or if the employee was negligent. Employees should be able to appeal the determination of their Division Director through the appropriate grievance procedure.
• Reimbursement should be made within a reasonable length of time - not more than six months.

LOANS TO OTHER DIVISIONS

When equipment is loaned to another division for more than one semester, the division must report this status to the A.S. Accounting Office.

UNLOCATABLE OR STOLEN EQUIPMENT

Replacement of Equipment

Lost or stolen equipment can be replaced only with funds obtained from the division unless eligible for alternate funding.

Reporting of Lost or Stolen Equipment

All equipment - All lost or stolen equipment of $25 or more must be reported within 12 hours of discovery of the loss to the A.S. Business Office. The report must include what happened and any changes to policies and/or procedures that will be implemented to prevent similar future loss. The University Auditor must be notified by the Business Office within 24 hours when the net book value exceeds $1,000.  When evidence points to possible theft, the division must immediately also notify University Public Safety. A complete description of the equipment, including the manufacturer's serial number, should be provided.  This report should also be provided to the Business Office and an “Asset Equipment Disposition” form should be completed and sent to the Accounting Office once it is determined that the lost or stolen asset will not be recovered.

PROPERTY VALUED AT LESS THAN $1,000

All employees have the responsibility for the prudent use, care, and safeguarding of AS property. The fact that a piece of equipment is valued at less than $1,000 and is not recorded on the property records does not alter this responsibility.
Items of equipment should not be considered expendable based solely on their recorded value being less than $1,000 and their not being identified with an AS fixed asset tag.

Surplus Disposal

When equipment is no longer needed by the responsible, assigned division, the division must report the excess equipment to the AS Accounting Office.

REMOVAL OF AS PROPERTY

Generally, no one is permitted without approval to remove from the buildings and grounds any property belonging to the AS, even though it may seem to be of no value, unless it is removed according to the information in this section. This includes removal of property designated as eligible for scrap or recycling.

Permanent removal

The AS Controller authorizes the permanent removal of property from AS premises for use in AS-related activities. "Permanent" removal means there is no intent to return the property to the AS premises. The A.S. Controller develops guidelines as to when the removal is permissible and procedures for documenting the removal and may further delegate this authority as necessary for efficient operations.

Temporary removal

The Division Director or delegate develops guidelines for the division under which property may be temporarily removed from A.S. premises for use in AS-related activities. "Temporary" removal means there is intent to return the property to AS premises within 12 months. The temporary removal of property does not release the Division Director from custodianship responsibilities.

Documenting temporary removal of AS property

The division assigning the equipment for off-campus purposes must adequately document removals of property from AS premises.

SECURITY MEASURES

All lost or stolen equipment must be promptly reported to the appropriate divisions as outlined above. Suggestions for maintaining security over A.S. property include:

• Avoid leaving offices unlocked while unattended;
• Lock small and valuable equipment in cabinets and drawers when not in use;
• Record manufacturer's serial numbers in divisions records whenever these numbers are not included in the divisions movable equipment item description; and/or
• Secure by bolting or other means, typewriters, personal computers, and other portable equipment, to discourage thefts.

TRADE-INS

Before trading in a piece of equipment, the division should check with the A.S. Accounting Office to determine if another need for it exists within AS

PERSONAL PROPERTY

Those who choose to bring personal property onto AS premises should contact their insurance agent to be certain their property is properly insured. It may be desirable for personal property brought onto A.S. premises to carry a sticker, prominently displayed, identifying the owner. The A.S. assumes no responsibility for any loss, theft, or damage to an employee’s personal property brought onto AS premises, or AS-leased premises, even if the property is brought to the AS to be used in connection with his or her work. The AS carries no insurance to cover any of these losses.

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