Good planning is critical to reaching the goals of implementing a fixed asset accounting system and being prepared for GAAP reporting. It is the responsibility of the entire school administration, not just the treasurer.
Establishing Board Policies and Procedures
In order to begin the planning process, the District Board needs to establish policies and procedures and assign the responsibilities.
A good reference is the following excerpted version of a manual once prepared by the Auditor of State's office:
Fixed Asset Manual for Ohio Local Governments which is obtainable from the SSDT website.
The District Board needs to address each of the following issues. They may get assistance from the district treasurer, a representative from an appraisal company, and/or a C.P.A.
Capitalization limits determine what fixed assets will appear on the GAAP schedules as well as what is reported during the EMIS financial reporting period. Both dollar and useful life thresholds can be set. The Board needs to decide values for these. Any item with a dollar cost and/or useful life less than the threshold will not be capitalized.
These are items which are inventoried and reported on the system as fixed assets but which do not meet the capitalization criteria. However, the district may want to maintain information for tracking and insurance purposes and/or to help prevent loss or theft of such items. The Board needs to determine what types of items to include and/or a dollar threshold.
Percent for Foundations
A certain percent of the original cost of buildings can be assigned to the foundation in order to exclude building foundations on the Insurable Values Reports. The district's insurance company needs to be contacted to obtain this percent.
Transfer and Disposition of Assets
The Board needs to decide if the transfer of assets from one location to another is permitted, and if so, under what conditions, with whose approval, and what forms to use. Similar decisions should be made for the disposing of a fixed asset; who is responsible, under what conditions, who must provide prior approval, and what forms are required.
The Board should set policy to determine whether or not operating leases should be maintained on the system. Capital leases are maintained on the system if they meet the capitalization limits.
Taking an Inventory
The Board must decide whether or not to hire an appraisal company to do an initial inventory and what specific information it wants to gather and in what form. Careful planning at this point is critical in order to get maximum benefit. For more information on using an appraisal company, please refer to the Using an Appraisal Company chapter in this training guide.
The Board should decide whether or not to tag items, and if so, whether or not to have an appraisal company do it as they inventory.
Organizational Unit in Charge
At some point the Board must decide which organizational unit will be responsible for which items. This could be classroom teachers and/or various staff persons.
Locally Defined Codes
The EIS software requires the use of a number of codes. Some of these are set by the Ohio Department of Education. However, others are to be defined locally by the school district. These include the following:
Item Condition Codes.
Organizational/Department Unit Codes.