PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS Revised May 2014 Issued by the Finance Department 1.0 INTRODUCTION 1.1 The assets (Property, Plant and Equipment) of Dundalk Institute of Technology are primarily for the purposes of fulfilling the Institute's missions of teaching, research, public service and general Institute programmes and related administrative uses. Therefore the Institute has a responsibility to manage, control and safeguard such Institute assets, to ensure maximum benefit is obtained from these assets in the course of providing educational instruction to students, and must ensure the maximum return is obtained by the Institute in the event of asset disposal No use of Institute assets shall be permitted which interferes with the conduct of these functions, or which is inconsistent or conflicts with the Institutes academic mission. Institute assets are not available for unrestricted use for other purposes. 2.0 PURPOSE 2.1 The purpose of this document is to ensure that a documented, controlled and audited procedure exists within Dundalk Institute of Technology so that Assets are safeguarded through the proper recording of the purchase, transfer, management, control and disposal of all Fixed Assets. An integrated Fixed Assets Register must also be in place identifying each item of Fixed Asset by Historic Cost, Code, sub account, location and Net Book Value, and this procedure documents the control and maintenance of this Register. 3.0 OBJECTIVES 1 | Page
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
1.0 INTRODUCTION
1.1 The assets (Property, Plant and Equipment) of Dundalk Institute of Technology are primarily for the purposes of fulfilling the Institute's missions of teaching, research, public service and general Institute programmes and related administrative uses.
Therefore the Institute has a responsibility to manage, control and safeguard such Institute assets, to ensure maximum benefit is obtained from these assets in the course of providing educational instruction to students, and must ensure the maximum return is obtained by the Institute in the event of asset disposal
No use of Institute assets shall be permitted which interferes with the conduct of these functions, or which is inconsistent or conflicts with the Institutes academic mission. Institute assets are not available for unrestricted use for other purposes.
2.0 PURPOSE
2.1 The purpose of this document is to ensure that a documented, controlled and audited procedure exists within Dundalk Institute of Technology so that Assets are safeguarded through the proper recording of the purchase, transfer, management, control and disposal of all Fixed Assets. An integrated Fixed Assets Register must also be in place identifying each item of Fixed Asset by Historic Cost, Code, sub account, location and Net Book Value, and this procedure documents the control and maintenance of this Register.
3.0 OBJECTIVES
3.1 To provide an organised and accountable method of monitoring and controlling the acquisition, custody, transfer and disposal of the Institute’s fixed assets.
3.2 To ensure value for money in acquiring fixed assets and to maximise residual value in the disposal of same, where applicable.
3.3 To protect the Institute from any conflict of interest, either potential or real, which may arise between the Institutes Department/Functional Areas, services, offices etc. in the acquisition or disposal of fixed assets and any persons or groups purchasing such fixed assets from the University.
4.0 SCOPE
4.1 This procedure documents the procedure for the purchase, disposal, identification, bar-coding, physical location and audits of Fixed Assets within the Institute. It also documents the way in which Fixed Assets are categorised within the Institute.
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
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5.0 DEFINITION
5.1 According to the Generally Accepted Accounting Practice in Ireland [GAAP] and specifically FRS 15-Tangible Fixed Assets; Fixed Asset can be defined as an item of property, plant, equipment or fixtures & fittings etc. whose useful life exceeds one year and it is intended for continuing use, rather than a short-term, temporary assets such as class materials/stocks. This is to include all items funded through the Capital programme of the Department of Education and Science Third Level Building Unit.
5.2 Fixed Assets are classified under the following major categories;
Land
Buildings
Computer Equipment/ Computer 3 Yrs.
Laboratory Equipment
Audio Visual Equipment
Motor Vehicle
Furniture
5.3 Depreciation can be defined as the measure of the cost or revalued amount of the economic benefits of the tangible fixed asset during the period used. It is the allocation of the cost of the asset over its useful life. This calculated on a straight line basis using the following estimated useful lives;
Land Not depreciated
Buildings 50 Years
Computer Equipment 3 Years
Equipment/other (incl. Fittings & Fixtures) 5 Years
Motor Vehicle 5 Years
Furniture 5 Years
5.4 Those assets that are immovable e.g. fixtures and fittings permanently or solidly fixed to the physical structure of the building are to be capitalised and depreciated as part of the building category. All other fixtures and fittings are to be depreciated over 5 years and all equipment items depreciated over 5 years.
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
6.0 POLICY
6.1 All purchasing and procurement of Institutes fixed assets shall be carried out in strict compliance with the Institutes policy.
6.2 It is the Institutes policy to ensure that all of its fixed assets are managed in accordance with current best practice. That these fixed assets are safeguarded by appropriate identification, recording, verification of existence and costs.
6.3 In this regard, all Institutes fixed assets are recorded in a consolidated Fixed Assets Register (FAR) module called Assetware Manager. This will meet custodial obligations for internal control. The maintenance of such a register of fixed assets should be in line with the scheme laid out in 8.1: Recording/Control of Fixed Assets below.
6.4 All acquisitions of fixed assets require approval as set out in the DKIT Procurement Procedures and Policies (on the DKIT website).
6.5 In accordance with the Irish Generally Accepted Accounting Practice (GAAP), all fixed assets capitalised on the Assetware Manager are depreciated on straight line basis using the estimated useful lives outlined in 5.3 Depreciation.
6.6 Those assets that are immovable e.g. fixtures and fittings permanently or solidly fixed to the physical structure of the building are to be capitalised and depreciated as part of the building category. All other fixtures and fittings are to be depreciated over 5 years and all equipment items depreciated over 5 years.
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
7.0 PROCEDURE
7.1 Purchase of Fixed Assets
All Institutes fixed assets shall be purchased and procured in strict compliance with its policies outline on the Procurement Procedures and Policies (on DKIT website). The Principles of openness, transparency, and value for money shall be applied. This is done using the requirement set out by the National Procurement Services.
7.2 All Fixed Assets should be coded to Agresso Nominal Account Code B340 and the correct Asset category selected.
7.3 Donated Fixed Assets
Where a department receives an asset as a gift or donation, such department must contact the Fixed Assets section of the Finance Department within Dundalk Institute of Technology to agree an appropriate valuation for the asset for the purposes of the Fixed Asset Register (FAR). These valuations are generally based on current market value; based on whether new or used.
8.0 RECORDING/CONTROL OF FIXED ASSETS
8.1 The Fixed Asset Register (ASSETWARE)
Dundalk Institute of Technology uses an asset management system known as Assetware, which is integrated with Agresso in the recording of all capitalised Fixed Assets and which meets its custodial obligations as well as external funding bodies’ requirement. Dundalk Institute of Technology is also required by both External Auditors and the Comptroller and Auditor General to maintain an Asset Register of capitalised assets and to physically account for the existence of these assets.
Under the Fixed Assets Register (FAR), there will be common criteria for the recognition of fixed assets which is reconciled to the Institutes’ Financial Statement. The Fixed Assets Register (FAR) will make it easier to account depreciation, ensure accuracy in tracking and accounting for fully written off assets and disposals. The operation of Assetware is solely the responsibility of the Fixed Assets Term in the Finance Department.
8.2 Process of Recording Assets on Assetware
During the financial year, a list of Fixed Asset additions is compiled on an on-going basis (monthly) by running a TransReport on Agresso. At the end of each financial month, the compiled list is then reconciled to the General Ledger on Agresso. This is to make sure that all fixed assets purchased for the
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
month are correctly coded and all items not meeting the capitalisation limit of fixed assets are removed/coded out**.
The list of additions is then included on the Fixed Asset Register, with particular attention being paid to the number of items purchased, historic cost and a description of each item. Where applicable a Dundalk Institute of Technology Fixed Asset tag number is then assigned to each line item. All assets are then tagged accordingly by a member of the Fixed Assets Term in the Finance Department and the Fixed Asset Register is updated with the Barcode Number and location of the asset.
**From 1 September 2009, equipment costing less than €3,000 (incl. VAT) per individual item is written off to the income and expenditure account in the year of acquisition. Where individual items of equipment purchased are below the capitalisation limit (€3,000) and the total purchase invoice is in excess of the limit, these items are individually capitalised in the normal way. All desktops , iPads, Notebooks and laptops are capitalised regardless of cost.
8.3 What is capitalised on Fixed Assets Register (ASSETWARE)
This process is performed on Assetware and will be managed and maintained by the Fixed Assets term of the Finance Department within the Institute. All fixed assets purchased, which meets the capitalisation limit (see 8.2 **) should be coded to Agresso Nominal Account Code B340. All items not meeting this limit will be journal out of B340 to either sub account 8106 or 8107 (class materials/ equipment).
For elaborations on what is coded to B340 fixed assets, please see Appendix IV (Flow chart)
8.4 Information included on each individual asset
Once an individual asset is uploaded on to Assetware, the system automatically assigns a unique number to the asset known as “Assetcode”. Details included once the “Assetcode” has been generated are;
Description Asset Class Barcode Supplier ID & Name Transaction Number Order Number Invoice Number Purchase Date Cost Total Capitalised Depreciation Sub Account
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
Other details which are optional fields but may assist in easier identification and verification of the assets (especially with certain equipment e.g. Desktops, Laptops, iPads, Notebooks etc.) are;
Serial Number Model and Make Manufacture
All moveable fixed assets, which have been included on “Assetware”, should be appropriately tagged with an asset tag number, to clearly identify it as being the property of the Institute.
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Figure 1: Asset View
PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
8.5 Asset Tags
Assets Tagging is the process of numbering fixed assets, which allows the tracking of movable fixed assets from one location to another. Asset tags are used as part of this process.
Tagging provides an accurate method of identifying individual assets, aid in the physical tracking, control the location of all physical assets, acts as theft deterrence and provide a common ground of communication for the Finance Department and the assets users.
A tag number is entered into the “ZebraDesigner” software package for designing Labels. DKIT s’ asset tags are pre-printed labels with barcodes which is unique to each asset. These asset tags will be issued by the Fixed Assets Term in the Finance Department to the asset assignee (with responsibility for the asset – Computer and Lab Technicians). Other equipment’s outside the control of these technicians will be asset tagged by a member of the Fixed Asset Term.
Asset tags should be placed if possible where they can be; Easily accessible for viewing Easily identifiable without the disturbing the operations of the asset
This will assist during fixed assets audits process.
8.6 Audit of Fixed Assets
Frequently, Fixed Assets Audits (Stock Takes) are carried out by the Fixed Assets Term in the Finance Department to monitor and control movements and transfers of these fixed assets.
An Asset Tracking system has been developed as an add-on to the existing Assetware Manager System, known as “Assetware Tracker” (Auditor 4).
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Figure 2: Sample of DKIT Asset Tag
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
This is to facilitate the auditing (checking) of all capitalised fixed assets on a cyclical basis. The process of carrying out an audit of these fixed assets is particularly relevant for an Institute like DKIT.
The Fixed Assets Term should periodically under-take an audit of all capitalised fixed assets. This audit is driven by a physical location, which will require the auditor (a member of the Fixed Assets Term) to go to a particular location and physically scan all fixed assets there with bar-code, using a bar-code reader. These scanned details are then uploaded on to the Assetware Tracker.
At the end of the audit, the scanned uploaded assets are then compared with the FAR. An audit report is then generated, showing assets that were found and assets not found. A list of assets not found during this process will require being investigated further and corrective action taken. This will involve communication with the asset assignee, individual user (in the case of Laptop, iPads, Notebooks etc.) and the Department /Cost Centre/Research Centre/ Budget Holder where required.
It is in the interest of Dundalk Institute of Technology to carry out audits of each individual functional area every 12-15 months periodically.
8.7 Reconciliations
Each individual functional area should keep an accurate record on a spreadsheet of all fixed assets located within the department. A monitoring system should be put in place by each department as a security measure for moveable fixed assets loaned out to students. The Finance Department will only have details of moveable fixed assets loaned out to staffs.
9.0 RESPONSIBILITIES
9.1 All Staff
All Dundalk Institute of Technology staffs must take responsibility for protecting its fixed assets (especially moveable fixed assets) in their custody. It is the responsibility of all staffs to ensure that assets are used for authorised DKIT purposes.
9.2 Departmental/Functional Areas Responsibility
At the departmental level, each Head of School, Head of Department, Budget Holder is responsible for ensuring that a register of assets owned is maintained, these include; Computers, Laptops, iPads, Notebooks, Laboratory equipment, teaching and research equipment.
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
9.3 Fixed Assets, Finance Office
The ultimate responsibility for the maintenance and the recording of transactions within the Fixed Asset Register rests with the Fixed Assets Term in the Finance Department. Any queries relating to the Fixed Assets should be addressed to the Fixed Assets Term.
9.4 Assets-On-Loan
Dundalk Institute of Technology permits members of staff to borrow, and remove from the premises, assets for use for Institute related activities only. No use of Institute assets is permitted which interferes, is inconsistent or conflicts with the Institutes academic mission. These are mainly moveable fixed assets such as Laptops, iPads etc. Any staff in possession of these types of moveable fixed assets must fill-out an Asset-On-Loan Form (see Appendix I) Borrowing Institute assets for personal use is not permitted by the Institute.
To initiate a request to borrow an asset from the Institute, the staff member completes an Assets-on-Loan Form (refer to Appendix I), before the commencement of the Loan Period. On this form the staff member clearly identifies the asset they wish to borrow, the dates and duration of the loan period, and the reason for borrowing the asset i.e. the use to be made of the asset. The staff member then signs this form and passes it to their Head of Department / Function.
The Head of School/ Department / Function ( where applicable) reviews the request, ensures that the reason for the loan does not conflict with the Institute’s mission, and then signs the form, and passes it to the Technician responsible for the asset. The original copy of the form is then sent to the Fixed Assets Term in the Finance Department, and a copy is retained by the department/function area.
When the staff member returns the asset after use to its rightful place within the Institute, they must contact the relevant Technician to arrange for the completion of the “Confirmation of Asset Return” section of the Asset-On-Loan form. The original of this must also be sent to the Fixed Assets Term in the Finance Department for the purpose of Fixed Assets audits.
A copy of the Asset-On-Loan Form is retained in each Department on file for future reference, and audit purposes. All Originals must be forward to the Fixed Assets Term in the Finance Department. This is kept on file for the external auditors and the General Comptroller’s audit.
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
9.5 Transfer of Fixed Assets
If an item of fixed assets is removed from a particular location, a Transfer of Asset Form must be completed and signed by the person conducting the transfer (refer to Appendix II). The original copy of this form is then sent to the Fixed Assets Term in the Finance Department where Fixed Assets Register is then amended accordingly.
9.6 Disposal of Fixed Assets
Each Head of Function (including the Estates Manager) is responsible for identifying & highlighting surplus / damaged assets – property, plant & equipment for disposal. Obsolete assets should be written off and physically disposed of on an annual basis.
The Head of Function where the asset resides is responsible for filling out a Disposal of Capital Assets Form (refer to Appendix III). The principle underlying this process is that it is the Heads of Functions, who initiated or approved the purchases of the fixed assets for their departmental use; consequently they have the primary fiduciary responsibility to manage, control and safeguard such Institute assets.
To ensure maximum benefit is obtained from these assets in the course of providing educational instruction to students and that maximum return is obtained by the Institute in the event of asset disposal.The disposal form must clearly identify
The relevant asset, The reason for disposal, The suggested method of disposal (see notes below),
- Memo as to Method of Disposal (Explaination to the method of disposal used; e.g if used for parts – state location of the disposed item and why it is been used for parts; if Recycle – state how this was done; if Donated – state who received the asset(s) and the process (if any) e.t.c.
The original cost, Dundalk Institute of Technology’s Asset Tag Number/Barcode.
The next step is for the Heads of Department/Function to get approval for the asset disposal.
If the net book value of the asset is under €2,500, then the Director must sign the form to approve the disposal.
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
If the net book value of the asset is above €2,500 then the Finance & Audit Committee must approve disposal and the reference of the meeting approving the disposal should be entered on the form and passed to Governing Body for approval at the next meeting.
ONLY WHEN THESE STEPS ABOVE HAVE BEEN COMPLETED SHOULD THE FORM BE SENT TO THE FIXED ASSETS TERM IN THE
FINANCE OFFICE
The Finance Department then completes the following steps:
(a) Updates the Fixed Asset Register
(b) Inserts the date on which this is done on the disposal form
(c) Fills out the invoice and disposal proceeds information
(d) Processes the necessary accounting entries to record the disposal
The operation and management of all of these procedures is subject to audit on an annual basis, in accordance with the existing procedures of the Finance Department, and the Comptroller and Auditor General.
Discrepancies or non-conformance of this procedure are reported to the Governing Body, as appropriate.
NOTES
The Booklet “Public Procurement” on Tendering for Public Sector contracts outlines that disposal of Government property should be done either by: Public tendering or (Major Property & Equipment) Auction Alternative options to the above which the Institute may consider
might include: Donation Immediate disposal because of zero value The Financial Controller & Head of Development are jointly responsible
for organising Auction & Sale by Public Tender.
9.7 Disposal of Fixed Assets to a Staff Member
In the case of redundant equipment or instances may arise where staff members wish to purchase equipment, in particular Computers, Laptops, IPad, Printers etc., which
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
is no longer in use by the Institute. Furthermore, a staff member who has sole use of equipment may wish to purchase it before the end of the asset’s useful life. The following procedure sets out the process to be followed in such instances to facilitate staff purchases while meeting audit requirements.
9.7.1 Procedure
Where a staff member has identified an asset to be purchased, the following procedures below should be followed;
The individual staff member should contact the Fixed Assets Team in the Finance Department, to request an independent valuation of the asset(s) being purchased.
The Fixed Assets section will arrange, through the Procurement office to source an independent market price for the asset(s). {The higher of the Net Book Value of the asset or €100 per asset.}
The Finance Department will then approve a price (notifying the Financial Controller and President if need be) and notify the individual staff member.
The Purchase Asset and Disposal Forms (see Appendix III and IV) should then be completed and forwarded to the Fixed Assets section of the Finance Department. The forms must be signed by the staff member purchasing the asset and the relevant Head of Department/ Function.
The asset(s) will transfer to the staff member on receipt by the Finance Department of Cheque, Bank Draft or Cash for the approved price.
A receipt will be issued to the purchaser when proceeds have been received by the Finance Department.
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
APPENDIX I
DUNDALK INSTITUTE OF TECHNOLOGY
ASSETS-ON-LOAN FORM
Asset Barcode Number
Description Of Asset
Reason For Loan
Date Of Commencement Of Loan
Latest Date Of Return Of Asset
Employee Signature
APPROVAL OF LOAN
Head Of Department/ Function Signature
CONFIRMATION OF ASSET RETURN
Date Asset Returned To DKIT
Employee Signature / Date Technician Signature / Date
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
APPENDIX II
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
DUNDALK INSTITUTE OF TECHNOLOGY
TRANSFER OF FIXED ASSETS BETWEEN DEPARTMENTS
Date
DKIT Asset Tag Number
Serial Number
Description Of Asset
Original Location
New Location
Reason For Transfer
APPROVAL OF TRANSFER
Head of Function - Current LocationSignature / Date
Head of Function - New LocationSignature / Date
Pass Completed Form To The Finance Office
CONFIRMATION OF TRANSFER & RECORD UPDATE
Date Fixed Assets Register Updated
Finance Department Signature / Date
Appendix IIIDUNDALK INSTITUTE OF TECHNOLOGY
DISPOSAL OF CAPITAL ASSETS FORM
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PROCEDURES AND GUIDELINES FOR THE PURCHASE, CONTROL AND DISPOSAL OF FIXED ASSETS
Revised May 2014Issued by the Finance Department
DKIT Asset Tag Number: _______________________________________________________
Description Of Asset: __________________________________________________________
Reason for Disposal: ___________________________________________________________
____________________________________________________________________________(Please note that a letter/email to the Fixed Assets Term in the Fnance office will be required confirming the method selected above)Head of Department/Function Signature: ______________________________________
APPROVAL OF DISPOSAL REQUEST
_________________________________ ______________________________Finance & Audit Committe/ Director Signature/ Date
Date of Meeting:_____________________
___________________________________Approved by Governing Body
Date of Meeting:______________________
Pass Completed Form To The Finance Office
CONFIRMATION OF ASSET DISPOSAL & RECORD UPDATE
Date Asset: Scrapped Traded in Sold Recycled Used for Parts _____________
Date Fixed Assets Register Updated: __________________________________________
