HomeMy WebLinkAboutAsset Management1 | P a g e
Asset Management – Standard Operating Procedures
I. Purpose
All Departments within the City of Cape Canaveral (COCC) are required to adhere to the Asset
Management Standard Operating Procedures pertaining to acquisition, use, and disposition of
fixed assets. The City Manager delegates authority to the Finance Department as the Asset
Management authority in order to establish and maintain a system of internal control to
safeguard the city’s property.
These procedures provide reasonable standards for compliance with Generally Accepted
Accounting Principles (GAAP), Governmental Accounting Standards Board (GASB), and the
Governmental Accounting, Auditing, and Financial Reporting (GAAFR).
Adherence to these procedures will facilitate accurate record keeping related to the acquisition,
control, and disposition of property. The combination of accurate accounting records and strong
internal controls must be in place to protect against and detect the unauthorized use of the city’s
Capital and Non-Capital Assets.
II. Asset Management
City Departments have the primary responsibility for the care, custody, maintenance, records and
control of all property. They will maintain up-to-date departmental records and initiate such
forms as are necessary to fully inform Asset Management with respect to the custody, records,
control and all transactions involving said Asset so that Asset Management may properly carry
out its responsibilities.
Department Directors have responsibility for the following:
Promptly reporting any loss, damage, transfer, or misuse of property or Asset to the
Asset Management as well as any other city entities necessary.
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Performing a yearly inventory of Capital Asset in conjunction with the Finance
Department, including any supporting documentation needed to complete the process.
Definition of Asset:
A Capital Asset is defined as a tangible or intangible, non-consumable property with an
acquisition cost of at least $1,000.00. Capital Asset has a normal useful life of at least one year
and is used to conduct city operations. The cost of an Asset includes the purchase price plus all
costs to acquire (shipping and handling), install, and prepare Asset for its intended use. This
term embraces both tangible (land, buildings, building improvements, vehicles, machinery,
equipment, works of art, historical treasures, and infrastructure) and intangible assets (easements,
software, water rights).
Reporting:
The cost to acquire, construct or improve a Capital Asset is not recognized immediately as
expense when incurred, but instead is deferred (capitalized) and allocated over the estimated
useful life of the Capital Asset in the form of a depreciation expense. With the depreciation
schedule as follows:
ASSET TYPE DEP. # YEARS SALVAGE VALUE
Landscaping 5 20 No Salvage Value
Vehicle-Heavy Duty Specialized 5 20 10% Of Original Cost
Vehicle-General Purpose 4 7 $1,000.00
Specialized Tools 9 15 No Salvage Value
Christmas Ornaments 1 5 No Salvage Value
Computers & Assoc. 1 5 $200.00
Sidewalks 2 30 No Salvage Value
Lawn Maintenance Equip. 8 10 No Salvage Value
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Buildings 3 50 20% Of Original Cost
Road Paving 5 20 10% Of Original Cost
Stormwater Baffle Boxes 2 30 No Salvage Value
Power Tools (Small) 1 5 No Salvage Value
Office Furniture 5 20 10% Of Original Cost
Office Equipment 4 7 10% Of Original Cost
Signs 8 10 No Salvage Value
Air Conditioner Components 4 7 No Salvage Value
III. Acquisition of Capital Equipment
Identification of Capital Assets
Asset Management is responsible for reviewing all Purchase Order Requisitions for appropriate
account numbers and requests for items to be flagged for asset tagging to be used by the
Purchasing Department to create a Purchase Order. All Requisitions are reviewed daily, returned
to purchasing in a timely manner as to not slow the purchasing process.
Delivery/Input.
Capital Asset acquired on a purchase order or contract will be identified and stamped with a
“Fixed Asset Stamp” and/or will have a supporting Excel Worksheet to record expenses until
completion of Capital Project. The Asset Management has responsibility for providing a record
of the tag number, equipment serial number and copies of supporting documents (delivery
report/invoice/etc,). The Asset Management is responsible for completing an Asset Input Sheet
with all supporting documents into electronic storage (\\cape-main\finance\FIXED
ASSETS\2017-2018) followed by entering the Asset into the Springbrook Software.
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Direct Delivery to Department/Pick-up by Department.
When Capital or Non-Capital equipment is delivered directly to a department or the department
picks up the equipment directly from the vendor, it is the responsibility of the department to
notify the Purchasing Department of the delivery. The Purchasing Department will notify Asset
Management who will then tag the item and enter it into the Springbrook Software.
Location of Capital Assets.
The location of each item of Capital Asset is noted in the identification process. Current records
as to movement of equipment are maintained in such a manner that any item of equipment can be
located for inspection or inventory purposes within a reasonable time. The responsible
department will notify Asset Management of any changes in location.
Physical Inventories.
The Capital Asset inventory will take place annually during the month of June. It is the
responsibility of each department to complete the physical inventory within the appointed
time. Supporting documentation such as inventory listings and discrepancy reports will be
generated for each department, and departments will be responsible for reconciling any and all
discrepancies using the format provided by Asset Management. It is the responsibility of the
departments to maintain all support documentation for lost, stolen, loaned, deleted and damaged
equipment. If needed, Asset Management will assist in processing those forms.
If there is a change in the director of a department during the year, the department should take a
physical inventory at that time. Asset Management may verify the departmental inventory on the
basis of statistical sampling. If the sample shows gross discrepancies, the department will be
requested to take a complete physical inventory.
Results of inventories.
Departments will submit to Asset Management their inventory listing that properly identifies all
discrepancies disclosed by physical inventory. The listing will be signed by the department head
indicating that the physical inventory of all or certain classes of property was completed on a
given date, and that official property records were found to be in agreement with the physical
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inventory, except for reported discrepancies. The listing will be furnished with a minimum of
delay at the completion of the physical inventory.
Removal of Equipment from Records (Retirement).
In order to retire Capital or Non-Capital equipment items from property inventory records, an
Inventory Adjustment Form must be completed. Upon completion, Asset Management will
remove equipment from department equipment inventory records.
The proposed disposal of property or equipment by cannibalizing, junking, salvaging, selling,
donating or trading-in these items, must also be recorded on an Inventory Adjustment Form
following the above procedures.
Trade-in of Capital or Non-Capital Equipment.
Departments must prepare and submit a written request whenever equipment is being traded in.
The request should include a complete description of the equipment, the vendor, the monetary
value offered for the equipment, and requisition number. The department should provide a
Purchase Order number to Asset Management when it becomes available.
Lost or Stolen Capital or Non-Capital Equipment
When a determination has been made that Capital or Non-Capital equipment has been lost or
stolen, the individual or department accountable for the equipment should immediately notify the
police. An Inventory Adjustment Form will then be completed and submitted with supporting
documents to Asset Management.
If negligence is suspected, the City Manager may request an internal investigation designating
investigator(s). Employees may be charged for any loss or damage to city property that is
attributable to their negligence or unauthorized use.
Transfers& Relocation of Capital/Non-Capital Equipment.
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It is the responsibility of departments to notify Asset Management of all relocations of Capital
and Non-Capital equipment items as follows:
Inter-Departmental Transfers. When Capital and Non-Capital equipment is transferred
between departments, an Inventory Adjustment Form must be completed and signed by
the appropriate department heads involved in the transfer of Capital and Non-Capital
equipment. This form should then be forwarded to Asset Management to update the
inventory records.
Relocation of Entire Department. When an entire department relocates, the department
should conduct a complete physical inventory of Capital and Non-Capital equipment.
Sale of Capital and Non-Capital Equipment. Asset Management, in accordance with
city policy, may offer Capital and Non-Capital equipment for sale. Asset Management
will identify property and complete Inventory Adjustment Form and provide supporting
documents. Asset Management will then record and report property accurately in
Springbrook Software.
Donation of Equipment. Asset Management in accordance with city policy may donate
city equipment. Any non-profit organization may qualify for a donation. The department
must submit a letter, requesting donation to Asset Management. Then the department
will coordinate with purchasing officer and other personnel to assist with donation.
Junked or Salvaged for Parts. An Inventory Adjustment Form must be prepared
whenever it is proposed to dispose of city owned Capital or Non-Capital equipment by
junking or salvaging the equipment for parts. Departments should follow the procedures
outlined above in the section entitled Removal of Equipment from Property Records.
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IV. Reconciliation/Annual Reporting
The Finance Department along with Asset Management does reconciliation of all Capital and
Non-Capital assets, they are responsible for running the balances of assets from Springbrook and
determine how often that procedure is completed.
In accordance to GAAP, the Finance Department will track and report Capital Assets in the
Financial Statements as well as transactional activity during the year (capital outlay
expenditures, depreciation expenses, acquisition/disposals of capital assets).
Any questions or concerns regarding this SOP can be directed to the point of contact below.
Melinda S. Huser
Deputy Finance Director
M.Huser@cityofcapecanaveral.org
321-868-1220 Ext 201 321-868-1248 fax
100 Polk Avenue. P.O. Box 326
Cape Canaveral, FL 32920
www.CityofCapeCanaveral.org