25.35 Procurement of Fixed Assets, Chancellor's Office Business Policies & Procedures

Purpose:

To establish policies and procedures associated with fixed assets.

Policy:

The following procedures will be used for processing fixed asset purchases.

Procedures When Purchasing Fixed Assets:

1. Business Processing Staff (with assistance from other departmental staff) determine whether or not an item being purchased qualifies as a fixed asset. In general, the item must be valued at $5,000 or more and have a useful life of 2 years or more. However, there are further guidelines set forth in FASOM Section 08.03 (including a decision tree related to fixed asset components and attachments).
2. When purchasing fixed assets, a Purchase Order must be created (for any dollar level of fixed asset purchase) and commodity level accounting must be used. See Section 25.15 Purchase Orders for instructions related to processing the purchase order.
3. When the assets are received, department staff knowledgeable about the asset(s) being purchased answers these questions and provides the following information about the item(s) being purchased to Business Processing Staff (Note: the Fixed Asset Information Sheet (optional) can be used to gather this information):
   • Is the item being purchased an attachment to an item already on inventory (see FASOM Section 08.03 for clarification)? If so, what is the inventory number of the parent asset already on inventory?
   • Is the item being purchased a component to an item already on inventory (see FASOM Section 08.03 for clarification)? If so, what is the inventory number of the parent asset already on inventory?
   • Is another asset being traded-in on the purchase of this item? NOTE: Prior approval from the Controller's Division is required prior to making a trade-in. If so, what is the inventory number of the asset being traded in? A Property Disposition Request (PDR) needs to be processed for the item being traded in. What is the PDR# that was processed?
   • Does the asset being purchased replace an item already on inventory (other than by trade-in)? If so, what is the inventory number of the asset being replaced? A Property Disposition Request (PDR) needs to be processed for items being replaced. What is the PDR# that was processed?
   • Provide the following information about the item being purchased:
     • Description (noun first)
     • Serial Number
     • Make
     • Model Number
     • Manufacturer
     • Location of Asset (building and room number)
     • Department Responsible for Asset
4. Business Processing Staff contacts the Accounting Technician (Kyla Reid) in the Controller's Division at 541-737-0827 or kyla_reid@ous.edu to request asset tag number(s).
5. The Controller's Division Accounting Technician will mail the physical tags to the Business Processing Staff.
6. Business Processing Staff coordinates with appropriate department staff to affix the physical tag to the asset in a visible location.
7. To prepare an invoice for payment, Business Processing Staff:
   1. Assembles supporting documents (price quotes, purchase orders, receiving documents, invoices, inventory information, etc.) as an invoice packet;
   2. Matches descriptions, quantities, etc. between what was ordered and what was received;
   3. Attaches a Payment Voucher form or a Payment Sticker(the sticker can be formatted to print on labels and printed off sheets at a time) (both of these are optional);
   4. Assigns the index from which the payment should be made; and
   5. Signs/initials and dates invoice packet as "verified."
8. The Business Processing Staff routes the invoice packet to the Department Head or Department Approver for approval.
9. The Department Head or Department Approver approves the invoice packet for payment with an approval signature/initials and the date. The Department Head or Department Approver approves invoices for payment within the following parameters:
   1. Approval means attesting that the payment is (1) within his or her delegated authority to approve; (2) a lawful, legitimate, and necessary expenditure of state/OUS funds; (3) an appropriate charge to the index designated; and (4) within budget.
   2. The approval is made within delegated authority on file with Business Processing staff. If the payment is over the designated dollar limit for that index, the Department Head performs this approval. For payments less than or equal to the designated dollar limit, the Department Head or Department Approver performs this approval.
10. The Department Head or Department Approver routes the invoice packet to Business Processing Staff for input into FIS.
11. Upon confirming that the invoice packet has all necessary approvals, the Business Processing Staff assigns the appropriate account code*, inputs the payment in FIS**, and records the FIS invoice number.

     

    *NOTE: Since a Purchase Order has previously been issued, the account code(s) have already been determined. Verify the appropriate account codes were assigned. Fixed asset account codes depend on the type of funds used:

    • 40101 for purchases made with E&G funds (also used for gift, grant, and contract funds)
    • A8011 for purchases made with Service Department or Auxiliary Department funds

    See FASOM Section 02.12 for assistance in determining the appropriate account code.

    **NOTE: Business Processing Staff includes the following information about the item(s) being purchased in the text of the payment document:

    • If the item being purchased is an attachment to an item already on inventory, include in the text that it is an attachment and the inventory number of the parent asset already on inventory.
    • If the item being purchased is a component to an item already on inventory, include in the text that it is a component and the inventory number of the parent asset already on inventory.
    • If another asset is being traded-in on the purchase of this item, include in the text that another asset is being traded in and the inventory number of the asset being traded in. Also include the PDR # that was processed to remove the traded-in asset from inventory.
    • If the asset being purchased replaces an item already on inventory (other than by trade-in), include in the text that another asset is being replaced and the inventory number of the asset being replaced. Also include the PDR # that was processed to remove the replaced asset from inventory.
    • For the item being purchased, include the following information in the text:
      • Inventory number assigned
      • Description (noun first)
      • Serial Number
      • Make
      • Model Number
      • Manufacturer
      • Location of Asset (building and room number)
      • Department Responsible for Asset (including Organization Code for that department)

    Ideally this information would be included in the text at the time the payment is processed. However, if that is not possible, the text can be added at a later date in Banner form FOATEXT.

 

12. The Business Processing Staff routes the invoice packet to the FIS Approver.
13. The FIS Approver approves the payment in FIS if, upon examining the invoice packet:
    1. All necessary approvals have been made.
    2. The information which has been entered into FIS agrees with information on the invoice packet.
    3. The invoice appears reasonable and within the normal range of business activity for the Department.
    4. Prior to final approval in FIS, the Approver brings any unusual items to the attention of the Business Services Manager for resolution. The Business Services Manager:
       • reviews the unusual items,
       • clarifies the facts and circumstances (as needed),
       • researches applicable laws, rules, regulations, policies, past practices, and approved exceptions,
       • consults with Controller's Division staff and Controller (as needed) to determine resolution, and
       • coordinates communication of resolution to Department Head and appropriate Department Approver.
14. Periodically (at a minimum of quarterly), Business Processing Staff reconciles documentation with activity in FIS.
15. Following the reconciliation, Business Processing Staff files the invoice packets in accounts payable archive files.

Internal Control Guidelines:

One individual must not have the ability to:

• place orders with vendors,
• receive items purchased,
• pay invoices,
• keep the accounting records, and
• review the accounting records.

An individual performing all five steps has the ability to abuse the system and misappropriate funds without timely detection. It is recommended that a different employee (e.g., supervisor) perform at least one of the five steps so that all transactions have the involvement of two persons.

Authoritative References:

• FASOM Section 2.12 - Account Codes: Capital Outlay
• FASOM Section 08.03 - Fixed Assets: Non-Expendable Personal Property

Forms:

• Fixed Asset Information Sheet
• Payment Sticker
• Payment Voucher form

Banner Input Forms:

FAAINVD Invoice/Credit Memo Cancel Form

FAAINVE Invoice/Credit Memo Form

FOATEXT General Text Entry Form

FPAPDEL Purchase Order Cancel Form

FPAPURR Purchase Order Form

Banner Query Forms:

FAICHKH Check Payment History Form

Shows status of check (e.g., check date and date cashed for final reconciliation).

FAIINVL Invoice/Credit Memo List Form

(Open, Paid, Suspense, or Hold)

FAIVNDH Vendor Detail History Form

More specific information can be obtained by querying on elements in the lower block.

FFIMAST Fixed Asset Master Query Form

FFIFALV Fixed Asset List Form

FGIDOCR Document Retrieval Inquiry Form

Query on posted invoices with option of seeing FGQDOCP document postings (accounting detail information)

FOIAPHT Approval History Form

Query by document code to display originating user and approver.

FOIDOCH Document History Form

Query by asset tag number. Shows other documents tied to the payment (e.g., invoice, PO, and check)

Banner Reports:

FARINVA Invoice Activity Report

Print detail and summary invoice activity for a specified period of time.
CAUTION: Remember to enter 05 option of Vendor ID to avoid getting ALL vendors activity within a given time period.

FWRFAIA Non-Expendable Inventory Annual Report

NOTE: Be sure to complete the parameter(s) for the Organization Code to print only your department's list of inventoried item(s)

FWRFAIP Non-Expendable Inventory Investment In Plant Report

(Sort by Location or Organization)

FWRVHST Single Vendor History Report

Print detail and summary invoice activity for a specified period of time.

Last Updated: 04/25/03