CSOP 4.0 Physical Inventories

SUBJECT:

Physical Inventories

SOURCE:

Capital Asset Management

ORIGINAL DATE

OF ISSUE:

February 2004

DATE OF

LAST REVISION:

January 2015

CSOP NO:

4.0

RATIONALE:

Physical inventories are completed to 1) secure university assets, 2) verify location for compliance with OMB Uniform Guidance, and 3) assist organizations with effective management of capital equipment.

 
“A physical inventory of equipment shall be taken and the results reconciled with the equipment records at least once every two years.  Any differences between quantities determined by the physical inspection and those shown in the accounting records must be investigated to determine the causes of the difference.” (Reference OMB Uniform Guidance)

 

To ensure compliance, the State Board of Accounts annually selects an audit sample. In addition, federal agencies request equipment lists for auditing purposes on a regular basis.

CSOP:

Each organization is required to complete a physical inventory of its moveable capital assets at least every two years. The inventory process includes the following parts:

Prepare for Inventory
Schedule Inventory
Inventory Assets
Reconcile Inventory
Certify Inventory

 

Prepare for Inventory

Review the Best Practices for Physical Inventory document. This document may be able to help you identify more efficient ways to conduct your inventory.


Schedule Inventory
The capital asset office will contact the organizations required to do an inventory to schedule the use of the mobile scanning devices.  The amount of time needed to complete the physical inventory varies by the number of assets to be inventoried.  Estimates of time for various asset quantities can be seen below.

 

# of Assets in Inventory Average # of days to Complete Inventory
1-100 15 business days
101-500 30 business days
501-2,000 60 business days
2,001 - Over 90 business days


Bloomington and Indianapolis:  The campus capital asset representative will contact the organization’s inventory representative to schedule the inventory date.  On the day your inventory is to start, a representative from the organization will pick up the mobile scanning device(s) and capital asset office personnel will train the inventory representative on the use of the mobile scanning device.

Southeast, Northwest, Kokomo, South Bend and East:  The university capital asset office will contact the campus inventory representative to schedule the inventory date.  A scanner will be shipped with a minimum of $1,000 insurance to the asset representative of the campus and will usually require a signature for delivery.  The campus representative will conduct scanning for a given period of time making sure that all tags on the Asset Detail List have been scanned.  Reciprocally, the scanner will be returned with identical insurance coverage paid for by the sending campus to:

Indiana University
Capital Asset Office- Poplars Building
400 E 7th Street, Room 437
Bloomington, IN  47405

Inventory Assets
Every two years, each organization is responsible for the inventory of all assets capitalized under their organization code in the Kuali Financial System (KFS).  This list of assets can be created by running the Asset Detail List report in IUIE.   All assets on this list with an IU tag number must be scanned.  All non-tagged assets must be updated in KFS by using the Asset Edit document only after physical inspection of the asset.  

All assets with a capital asset tag not scanned must have an “Exception to Standard” filled out by the organization inventory personnel and signed by the fiscal officer.  The Capital Asset Manager will indicate whether there will be an exception made for these assets.

Off -Campus Assets  
Contact your campus capital asset office to determine if off-campus assets will be granted an exception to scanning.

Loaned Assets  
All capital assets on loan should have a current Equipment Loan Document in KFS.  (Financial Policy I-140 Off Campus)

Asset Missing Tag
If it is suspected that the asset is missing the IU tag, contact the Capital Asset Office before you put a replacement tag on the item.  There are many similar types of equipment within an organization.  Verification of serial number, model number and testimony from the everyday equipment handler should be obtained before a replacement tag should be affixed and entered in KFS.  The Asset Location Global document is used in KFS to perform the tag replacement.  

Reconcile Inventory
The following two documents are used in the inventory reconciliation process:

Bar Code Error Document
When the capital asset office uploads the scanning file, any records that do not pass validity checks against the asset database are created into the bar code error document.  It is possible the capital asset office might contact you in order to reconcile errors on this document.  All errors must be reconciled before inventory is considered complete.

Asset Inventory Reconciliation
The Asset Inventory Reconciliation report is ran by the organization capital asset representative to confirm that all assets have been inventoried.  All assets presented on this list require an action in order to resolve the inventory.  If tagged assets are on this list, the organization should schedule to pick up a scanner again to complete their inventory.

Certify Inventory
After the reconciliation process is completed, organizations must return the signed Physical Inventory Certification prior to May 31st to their campus capital asset office.  The certification denotes that all equipment is present and accounted for or the necessary documents have been issued to update the asset database.  Certifications must be signed by the fiscal officer.  The fiscal officer will be held accountable for accuracy of the inventory in the event of an audit.

DEFINITIONS:

Capital Equipment- must have an acquisition value of at least $5,000 and a useful life expectancy of one year or more.

Equipment-The term “equipment” includes delivery equipment, office equipment, machinery, furniture and fixtures, factory equipment and similar fixed assets.

Mobile scanning device- a hand-held data collection terminal used to scan the IU tag number affixed to equipment.

CROSS

REFERENCES:

Policy FIN-ACC-I-140-Off Premise Capital Equipment Control

Policy FIN-ACC-I-170 Capital Movable Asset Physical Inventories, Tagging and Location Changes

RESPONSIBLE

ORGANIZATION:

Organizations that purchase capital assets.