SECTION C: BUSINESS AND SUPPORT SERVICES
- SECTION CA | Appropriations and Revenue Sources
- SECTION CAA | Appropriations
- SECTION CAB | Bond Issue
- SECTION CAC | Time Warrants
- SECTION CAD | Certificates of Indebtedness
- SECTION CAE | Loans and Notes
- SECTION CAF | Ad Valorem Taxes
- SECTION CAG | Investments
- SECTION CAH | Sale, Trade or Lease of College Property
- SECTION CAH.1 | Sale, Trade or Lease of College Property
- SECTION CAI | Grants, Funds and Donations
- SECTION CAJ | Rentals and Service Charges
- SECTION CB | Depository of Funds
- SECTION CC | Annual Operating Budget
- SECTION CD | Accounting
- SECTION CD.1 | Accounting
- SECTION CD.2 | Cash Handling Procedures
- SECTION CD.3 | Fixed Assets
- SECTION CD.4 | Financial Reports and Statements
- SECTION CD.5 | Accounting Inventories
- SECTION CD.6 | Accounting Audits
- SECTION CD.7 | Accountability
- SECTON CD.8 | Travel Procedures
- SECTION CD.9 | Taxation of Gifts, Prizes, and Awards to Employees
- SECTION CE | Purchasing and Acquisitions
- SECTION CF | Safety Program
- SECTION CG | Site Management
- SECTION CH | Equipment, Supply and Records Management
- SECTION CI | Transportation Management
- SECTION CJ | Insurance and Annuities
- SECTION CK | Facilities Planning and Standards
- SECTION CL | College District Auxiliary Enterprises
- SECTION CM | Technology Resources
- SECTION CN | Information Security
- SECTION CO | Intellectual Property
BUSINESS AND SUPPORT SERVICES
The purpose of this procedure is to set forth the guidelines for the physical and reporting control of the College’s assets, including accountability over the assets, meeting financial reporting needs, and generating asset management information.
FIXED ASSET PURCHASE PROCEDURE
When purchasing an asset, a determination needs to be made if the asset needs to be capitalized and/or tagged.
If the asset is over $5000 it needs to be capitalized and charged to account 6000 and tagged (See CAPITALIZATION PROCEDURE below), with the following exceptions:
Subscription-based information technology arrangements (SBITAs), - if the net present value is over $50,000 may be need to be capitalized.
Leases, if the next present value is over $50,000 may need to be capitalized.
If the asset is under $5000, but is a CONTROLLED ITEM like Computers and Laptops, printers, scanners, fax machines, Audio Visual Equipment, or Items bought with grant monies, it needs to be charged to account 6001 and tagged.
To determine if an asset needs a tag, refer to the TAGGING EQUIPMENT section below. If the asset does need a tag, it can be obtained from the Chief Accountant in the Business Office by sending an email with the details and location of the asset. Once the asset is received a tag needs to be placed on it.
For Projects, contact the Chief Accountant for a Project Number so that all expenses for that Project can be tracked and added to the total for that Project.
ROLES AND RESPONSIBILITIES
The major responsibilities each party has in connection with the Capital Assets Procedures are as follows:
The Comptroller is responsible for the establishment and maintenance of an adequate fixed asset accounting system that allows for the proper presentation of plant assets in the financial statements and the overall safeguarding of fixed assets.
The Comptroller is responsible for ensuring the fixed asset accounting system is being properly maintained, including the identification of capital assets, accurate use of codes, determination of useful lives, reconciliation to the general ledger, and financial reporting. This includes updating the fixed assets inventory and notifying the Comptroller regarding any inventory changes, evaluating loss, damage destruction, disposal, theft, trade-ins, sale, and/or transfer of College assets and providing recommendations with regard to the disposition of these assets, review and posting of depreciation through the Fixed Assets System on an annual basis, and the reconciliation of the fiscal year additions in the Fixed Assets System to the general ledger on not less than a quarterly basis. The Comptroller and the Director of Grants will be notified before taking any action on fixed assets that are purchased with federal funds that are deemed to be lost, damaged, destroyed, or scheduled for disposal.
The designated employee is responsible for:
Providing the Comptroller designee with the necessary documentation to review assets invoiced as equipment (capitalized and non-capitalized) for final determination as a fixed asset;
The proper tagging of all movable equipment;
Providing department heads with current records of the property for which they are responsible;
Updating the fixed assets inventory and notifying the Comptroller regarding any inventory changes;
The Comptroller or their designated employee ensures account codes are classified correctly for equipment, capital assets, and grants on purchase requisitions and invoices.
All Department Heads are responsible for:
Reading and understanding the Fixed Assets Procedure;
Maintaining current inventory records for all in-use fixed assets within their assigned department.
Assuring property is given proper care and protection and is used for official purposes only,
Ensuring that College property is used only in the conduct of official College business;
Notifying the Comptroller designee whenever fixed assets are transferred/acquired, sold, donated, destroyed, stolen, lost or otherwise disposed of by using the Equipment Transfer Form;
Identifying and reporting to the Comptroller designee any surplus property which is usable but not needed in his/her area, or which is beyond economic repair and therefore needs to be disposed of;
Assisting in updating taking physical inventory lists for their department.
Capital Assets, which include furniture and equipment, collections library books, buildings, land, and other improvements, are deemed by Navarro College as assets with a cost or value equal to or greater than $5,000 at the date of acquisition, and an expected useful life of more than one year. Capitalized fixed assets are acquired for the use in normal operations and are not for resale.
All capitalized fixed assets are entered into the Fixed Asset Management System.
Each lease will need to be evaluated to determine the criteria for capitalization
Assets costing below $5,000 that are considered controlled items are expensed in the
fiscal year of purchase and are not capitalized but maintained through the Fixed Asset
Management System; however, new GASB rules say that if purchasing several items at
once that are under $5,000 per unit, but have a useful life of over a year and the
total price is over $5,000, those must now be capitalized (an example would be several
laptops under $5,000 per unit, but more than $5,000 in total).
Costs incurred to keep a fixed asset in its normal operating condition that do not
extend the original useful life of the asset or increase the asset’s future service
potential are not capitalized. These costs are expensed as repairs or maintenance.
CLASSIFICATIONS OF CAPITAL FIXED ASSETS
Capital fixed assets are items that are:
Permanent in nature, tangible durable (economic useful life greater than one year);
Held for purposes other than investment or resale; and
Have a cost that equals or exceeds certain thresholds established by the College in accordance with state and federal guidelines (where federal, state, or local policy conflicts the more stringent of the policies shall be applied).
Capital fixed assets include equipment (both movable and fixed), land, land improvements,
buildings, building improvements, technology equipment and infrastructure and any
determined capital leases.
Equipment consists of property that does not lose its identity when removed from its
location and is not changed materially or expended in use. Sub-classes in this account
include computer equipment, audiovisual equipment, office equipment, athletic equipment,
recreational equipment, lab and research equipment, appliances, medical equipment,
food service equipment, buildings and ground equipment, heavy equipment, musical instruments,
vehicles, furniture, and fixtures.
Land is the solid part of the earth’s surface whether improved or unimproved. The
land account should include all land purchased, leased, donated, or otherwise acquired
by the College. Purchased land should be carried on the records at cost. Donated land
should be recorded at the appraised market value of the land at the time of its donation.
Land Improvements include excavation, fill and grading, removal, relocation, or reconstruction
of property, add telephone and power lines, and the construction of retaining walls.
Buildings are roofed structures used for the permanent or temporary shelter of persons,
animals, plants, or equipment. The buildings account includes the value of all buildings
at purchase price or construction cost by campus location. When buildings are constructed,
all identifiable direct costs are included in the valuation. Direct costs include
labor, material, shipping costs, and professional services to construct the building,
together with insurance, interest and other costs incurred during the period of construction
to ready the building for its intended use.
Building Improvements are improvements made to existing buildings. Any renovation
or alteration to an existing building that adds useful space to the structure or extends
the facility’s useful life will be considered a capital asset. Conversely, improvements
that do not add useful space to the structure, or extend the facility’s useful life
will be considered maintenance and repair.
Technology Equipment consists of long-lived capital assets that normally are technological
in nature and are the basis of the College’s information/connectivity infrastructure.
Technology equipment includes all hardware, software, and cabling associated with
College wide systems. Software licenses, maintenance fees, and donations to the College
should not be capitalized.
Infrastructure consists of long-lived capital assets that normally are stationary
in nature and normally can be preserved. Infrastructure assets include roads, bridges,
tunnels, drainage systems, water and sewer systems, dams, and lighting systems.
SBITA subscription-based information technology arrangements: a contract that conveys control of the right to use another party's (a SBITA vendor's) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange-like transaction. (Note: Contracts for SBITA's should have a 30 day opt-out clause for either party to help reduce the number of SBITA's that must be capitalized).
VALUATION OF CAPITALIZED EQUIPMENT
The valuation of equipment, whether purchased or fabricated, is based on unit cost.
The total unit cost is determined by the sum of:
The cash disbursed (purchase price less applicable discounts plus applicable transportation and installation charges) for each unit;
The net book value of any assets given in exchange; and
The present value of any liability incurred.
If the equipment is acquired by gift, the valuation is the fair market value at the
date of the gift, if determinable. Otherwise, an appraised value is used. If acquired
by loan (usually from a grant or contract sponsor), the value assigned to the equipment
by the sponsor will be used.
GIFTS IN KIND
Gifts of donated capital equipment that meet the $5,000 threshold and have a useful life greater than one year should be added to the fixed asset program to ensure an accurate accounting of all College owned equipment. If a department directly receives a gift in kind they should inform the designee immediately.
The Comptroller designee will provide detailed information of gifts in kind to the Comptroller upon receipt of the gift or through a quarterly report submitted to the Comptroller. Gifts to Navarro College should run through the Navarro College Foundation and/or the President's Office.
ACQUISITION OF EQUIPMENT
The acquisition of equipment starts with the creation of the purchase requisition. All orders for equipment must be submitted to the Purchasing Department. The purchase requisition should itemize the equipment being purchased and not be put as one unit or as “as per quote#…”.
Purchases are subject to fund availability and budget limitations.
After budget approval, all equipment is purchased in accordance with the Purchasing Procedures and Budget Procedures of the College.
Maintaining a positive identification of assets is the primary purpose of tagging. Tagging is important to:
Provide an accurate method of identifying individual assets,
Aid in the physical inventory
Control the location of all physical assets,
Aid in the maintenance of fixed assets, and
Provide a common ground of communication for both the Finance Office and the assets’ users.
Generally, anything that falls into any one of these categories is considered a controlled item and needs to be tagged:
Computers and Laptops, monitors, printers, scanners, fax machines
Audio Visual Equipment
Items bought with grant monies
Other equipment above $1,000 such as kitchen, musical instruments, health and fitness, or office machines. Assets not needing a tag are:
When tagging equipment, consistently place asset tags in the same location on each similar type asset. If possible, the tags shall be accessible for viewing. Place the tag where the number can be seen easily and identified without disturbing the operation of the item, which will assist with the physical inventory. For equipment where tags may become unreadable or fall off due to location of the tag, environmental exposure, or otherwise, the equipment will be tagged by engraving the equipment or using metal asset labels or permanent ink marker.
Caution: Do not tag artwork, sensitive technical equipment, or other items where tagging will affect its function, value, or the ability to return it under warranty. For vehicles the tag shall be on each vehicle title. The designee must maintain a file for all untaggable assets.
Depreciation is the allocation of the total acquisition cost of a fixed asset over its estimated useful life.
Land, certain land improvements, construction-in-progress, works of art, historical treasures and similar assets are not depreciated.
Depreciation of fixed assets is computed on a straight-line basis over their estimated useful lives. The expected life of the asset is based on the recommended table form the Texas Higher Education Coordinating Board and Best Accounting Practices.
Furniture and Equipment
Varies based on lease
Varies based on lease
Varies based on lease
MAINTENANCE OF ASSETS
In order to maintain an adequate fixed asset accounting system that allows for overall safeguarding of fixed assets, the Fixed Assets System requires periodic update and maintenance to remain current and valuable. Additional fixed asset acquisitions, transfers, sale of surplus, disposal and corrections must be entered into the system in a timely manner. It is imperative that those responsible comply with this document to establish and maintain accurate fixed asset records.
PHYSICAL INVENTORY OF CAPITALIZED EQUIPMENT
The Comptroller designee may provide Department Heads with a listing of all capitalized property by departmental areas periodically. Using the listing of capitalized property as a basis, a joint inventory will be conducted by the Department Head and the accounting staff (may solicit outside vendor to conduct inventory, with focus on rotation of campuses. Advance notice will be given to individual departments regarding specific dates. The purpose of a physical inventory is to verify the existence and condition of equipment and ensure the accuracy of college accounting records.
Discrepancies will be noted and investigated by the Comptroller designee. The results of the inventory, including unresolved discrepancies, will be reported to the Comptroller.
Lost or stolen property must be reported as soon as the loss is known. In the case of known or suspected theft, the Department Head must notify campus police who will submit a report to the appropriate staff.
DISPOSITION OF ASSETS MOVABLE EQUIPMENT
The Comptroller designee is responsible for changing the status of records when the disposition of assets occurs. In general, surplus or obsolete equipment may be disposed of by transferring to another department, discarding, donating, or selling the asset. When selling, donating, or disposing of assets, the department responsible for the asset must complete the Equipment Transfer Form located on the Single Sign-On Portal of MyNC. Once the Equipment Transfer Form is completed, create a request to dispose of the asset in Work Requests on the Single Sign-On Portal of MyNC and attach the Equipment Transfer form to the request. This will get the request both to the Physical Plant and the Comptroller designee for the disposition of the asset simultaneously.
MOVEMENT OF ASSETS MOVABLE EQUIPMENT
In the event an asset is to be moved from one location to another or from one department to another, the department responsible for the asset must complete the Equipment Transfer Form located on the Single Sign-On Portal of MyNC. Then create a request to move the asset in Work Requests on the Single Sign-On Portal of MyNC and attach the Equipment Transfer to the request. This will get the request both to the Physical Plan and the Comptroller designee for the disposition of the asset simultaneously.
Under no circumstances should any College owned property be moved without prior consent.
Submitting this form will ensure that inventory listings provided to the Departments are accurate.
SALE OF SURPLUS EQUIPMENT
The Vice President of Finance and/or their designee is responsible for the sale of all items (both equipment and supplies) to be sold by the College, excluding items sold by an office or department as a part of their regular responsibility (e.g., Cosmetology).
With approval of the Vice President of Finance or his/her designee, the College may directly transfer materials or equipment that can be used for instructional purposes to a public school or school district, assistance organization, or state agency at a price or for other consideration or no consideration that the College and the other entity determines appropriate.
The Director of Grants will comply with Uniform Grant Guidance 200.313(c)(1)(i) and (ii) and 200.313 (d) and will contact the awarding agency for specific disposal instructions for disposal of equipment purchased with federal funds.
The Comptroller or their designee will manage the disposition of surplus property in compliance with procurement law. Any surplus property advertised for sale that does not sell will be disposed of in an expeditious manner.
Purchasing laws and regulations will be followed on all sales transactions of surplus property.
Updated: Augsut 31, 2023