THE UNIVERSITY OF CONNECTICUT HEALTH CENTER
INVENTORY CONTROL
POLICY SUMMARY
The purpose of this manual is to provide the University of Connecticut Health Center (“UCHC”) with the core policies and procedures necessary to establish adequate physical and reporting controls of UCHC capital assets and to tighten fixed asset accounting controls.
Inventory Control was established to comply with regulations, policies and/or
procedures promulgated by the Federal Government, the State of Connecticut, The University
Board of Trustees and the Health Center Executive Council.
The primary responsibility of Inventory Control is to act as a focal point for the
accumulation and dissemination of information related to the inventory of movable
equipment either owned or in the custody of the Health Center.
Another responsibility of Inventory Control is to provide management reports (based on the Equipment Inventory Data File) to academic programs, sponsored projects, clinical activities and central administration. It is also the responsibility of Inventory Control to distribute procedures and forms to all departments to record inventory changes which become the basis for updating the Equipment Inventory Data File.
Inventory control is also instrumental to the Health Center's commitment to HIPAA Security Compliance. All equipment containing ePHI is considered “controlled equipment”, regardless of the cost of that equipment. Inventory Control will provide management reports (based on the Equipment Inventory and Surplus Property Data File) of all non-medical equipment containing ePHI, while Clinical Engineering will handle all medical equipment reporting. Inventory Control and Clinical Engineering are responsible for the secure handling and processing of inventoried equipment containing ePHI by distributing procedures and forms to all departments to record inventory changes. Inventory forms are located in Appendix C of this Manual.
In addition, with the assistance of the Accounting Department, Inventory Control updates a data file of land, buildings, fixed equipment and space for the purpose of complying with the annual State Comptroller's Report of all Personal Property. This report is mandated by Section 4-36 of the Connecticut General Statutes and must be completed on or before August 1 of each year.
II. Capital Valuation and Asset Management
The UCHC fixed asset system’s information can be used for the following purposes:
a) basis for fixed asset financial statement information,
b) insurable values,
c) control and accountability, and accounting for depreciation.
Financial Statement Information
GASB #35 requires all institutions of Higher Education to report depreciation as an operating expense in their financial statements effective June 30, 2002. UCHC’s auditors will now certify the valuation and depreciation of our plant assets. UCHC must have the ability to meet the various requirements for correct and complete presentation of fixed asset financial information.
Insurable Values
Complete fixed asset identification and valuation is a tool to assist in preventing UCHC’s assets from being over or under insured. In the event of a loss, property valuations, descriptions and locations are necessary to ensure full recovery under the policy. Insured losses are normally settled on the basis of replacement cost, new -- less depreciation, less exclusions.
Control and Accountability
The UCHC fixed asset system will be used to maintain information regarding the location, status and responsible party for the control of fixed assets. The system will allow loss, theft or damage to be identified by a comparison of the physical count on hand to the information found in the fixed asset records.
Accounting for Depreciation
Depreciation of fixed assets must be recorded to determine total expense changes in net fixed assets. The amount of accumulated depreciation plus the amount of depreciation expense must be maintained for financial reporting purposes.
Through issuance of this policy UCHC advises all employees involved in the capitalization of fixed assets that the principles outlined in this document shall be adhered to. Further, the responsibility for documenting the appropriateness of project allocations and costs rests with Facilities Management, Materials Management and Accounting personnel.
Purchase requests shall be made on-line on a purchase requisition form. The disbursement may be approved if the department has sufficient funds available. The requisition must be completed with the necessary sub code. The requisition will then be sent to the Purchasing Department where it will receive approval and the purchase order (PO) will be prepared based on the requisition.
The Materials Management personnel are generally responsible for handling the receipt of equipment, tagging the items, maintaining the inventory lists and processing all paperwork associated with transfers, surplus, etc. as well as maintaining the fixed asset subsidiary ledger FFX.
The Purchasing Department has the responsibility of ensuring that the requisition forms and the purchase orders have the proper fund and account codes for input into the system
Purchasing should consult the Accounting when there are questions about the proper accounts to use or the coding of capital assets.
The Accounting Department on a monthly basis has the responsibility, as needed, to:a) record the monthly activity in FFX in the appropriate asset account in the plant fund in FRS,
b) ensure that the account codes are complete and accurate and that repair and maintenance related expenditures are not capitalized,
c) review the repair and maintenance and other necessary accounts to ensure that there are no items that should have been capitalized,
d) reconcile the general ledger asset values to the FFX subsidiary ledgers, and
e) notify and/or discuss with other applicable departments any differences and actions needed to reconcile.
A fixed asset accounting system, FFX that is a subsidiary ledger to FRS, is a computerized system for recording and reporting valuation/monetary amounts associated with fixed asset transactions.
A fixed asset management system is a system of methods, policies and procedures that address the acquisition, use, control, protection, maintenance and disposal of assets.
Fixed Assets
A fixed (capital) asset is a financial resource meeting all of the following criteria:
a) it is tangible in nature,
b) it has a useful life of one or more years,
c) it is not a repair part or supply item,
d) it has a purchase cost denoted value or appraised value greater than the $1,000 threshold established by the State of Connecticut, and
e) site improvements, land improvements and building improvements must have a cost or denoted Fair Market Value (FMV) of $5,000 or more and a useful life of one or more years. The Fair Market Value is the estimated cost as established by a certified appraiser and represents the current market rate for that improvement.
The above cost and useful life criteria do not apply to controllable assets.
Controllable Assets
Certain tangible property should be identified and controlled because of its sensitive, portable and theft-prone nature. Items that have a unit value of less than $1,000, an expected useful life of one or more years and/or a good business reason to identify and control are considered controllable property. These items are to be expensed, not capitalized. It is mandated by the State that UCHC maintain a written inventory listing of controllable property that has been approved by the agency head. Each controllable item should be tagged and maintained on UCHC's perpetual inventory. These items should be flagged as controllable property in the fixed asset system to distinguish them from capital assets. Examples of controllable assets are audio-visual equipment, weapons, small expensive tools, scientific equipment, cameras and guns. In cases of uncertainty as to whether property is considered controllable, your Vice President of Finance and Administration or Chief Financial Officer should make the final determination.
Asset Record: a physical asset is represented in the fixed assets system by an asset record. Asset records contain the basic information about an asset.
Type: in the fixed assets system, type is a code that groups assets with similar characteristics for accounting and Materials management purposes. Broadly, the types include land, buildings and nonstructural improvements and equipment. The broad categories are further defined. Equipment is subdivided into types for furniture: books, maps and records; laboratory and science equipment; firearms, etc. Embedded in the type code are the asset’s useful life, depreciation method, and first-year method of depreciation, capitalization, real or personal property, movable or attached. The type code also identifies the accounting subcodes to be used for all fixed asset transactions fed into the accounting system.
Plant Funds: plant funds consist of unexpended plant, retirement of indebtedness and investment in plant. Unexpended plant contains the cash and expenses for construction, non-structural improvements, land purchases and equipment. Retirement of indebtedness contains the reserve to pay off long-term debt and the interest expense on long-term debt. The investment in plant contains the long-term debt and the fixed assets. The bond and loan proceeds (long-term debt) were used to acquire the fixed assets.
Historical Cost: historical cost is the basis for valuing buildings, land and non-structural improvements acquired through construction or purchase. Cash or the cash equivalent price of obtaining the asset measures historical cost. Historical cost includes not only the contract price but also such other related costs as taxes and other liens assumed, title search costs, legal fees, surveying, filing, grading, drainage and other costs of preparation for the use intended.
Appraised Value: the appraised value is the estimated value of an asset based on the expertise of a qualified independent appraiser. Land, non-structural improvements to land, buildings and equipment acquired by gift and artwork are generally capitalized based upon an appraisal, which establishes the fair market value of the acquisition.
Construction in Progress: incomplete construction of new buildings, renovations to existing buildings and non-structural improvements are capitalized as construction in progress as of June 30 and reported on the University's financial statements. After the work is done the value of the work is added to the cost of the building or non-structural improvement. An acquisition date is recorded and depreciation is started.
Additions: an addition is the acquisition of a new asset or the modification of an existing asset that increases the useful life or the service potential of the existing asset. By definition, any addition to a fixed asset with a value greater than $1,000 is capitalized because a new asset is created.
Improvements and Replacements: improvements and replacements are the substitution of one asset for another. An improvement is the substitution of a better asset for the one currently used. A replacement is the substitution of a similar asset. The expenditure is capitalized if it is determined through consultation or with the applicable-user department that the expenditure increases the future service potential of the asset (meaning the useful life of the improved or replaced asset is extended).
Repairs: ordinary repairs are expenditures made to maintain fixed assets in operating condition. They are charged as an expense in the year in which they are paid on the basis that it is the primary year benefited. Major repairs will be capitalized if it is determined through consultation that the expenditure will benefit more than one year.
Capitalization: capitalization is the recording of a cost that benefits a future period as an asset rather than treating the cost as an expense in the period in which it occurs. Capitalized assets are acquired for use in operations, are long-term in nature and possess physical substance. Capitalized assets may be purchased or built in-house. A useful life of one year and a cost of $1,000 are the threshold for capitalization. Included in the cost of the assets are modifications, attachments and accessories to make the asset useful, freight, insurance, taxes and installations. The exceptions to the $1,000 cost are land, federally purchased equipment transferred in from other institutions; and artwork purchased through the State of Connecticut Commission on the Arts. These are capitalized regardless of the cost.
Depreciation: depreciation is the accounting process of allocating the cost of fixed assets to expense in a systematic and rational manner. Depreciation expense is allocated to those periods expected to benefit from the use of the asset. This is the asset’s useful life. Land, library volumes and artwork are not depreciated. The University uses the straight-line method of depreciation. Depreciation is recognized as of June 30 (the university 's fiscal year). Assets may be sold at a gain because they have not used up their recorded useful lives. If the asset was purchased with Federal funds, the university will return the gain to the Federal Government.
First Year Rule: a full month of depreciation will be calculated if an asset is in service before the 20th of the month.
Straight-Line Depreciation Method: the straight-line depreciation method considers time rather than usage. The cost of the asset less its estimated salvage value is amortized evenly over the estimated useful life of the asset.
Useful Life: the useful life is an estimate of the total time that an asset is usable and in service. The useful life is determined through consultation with the American Hospital Association guide, Facilities Management personnel and users of the equipment. Therefore, it is based upon the university 's experience with the same or similar assets.
Salvage Value: salvage value is an estimate of the worth of the asset when it has been fully depreciated. For the UCHC, the salvage value for all equipment is assumed to be zero.
Real Property
Land: land is a measurable area of the earth's surface. It can be improved or unimproved. All land holdings are capitalized.
Non-Structural Improvements to Land: non-structural improvements to land include expenditures other than ordinary repairs to an outside area such as paving, fencing and lighting. UCHC capitalizes non-structural improvements of $1,000 or more.
Building: a building is a facility intended for the permanent or temporary shelter of persons, animals, plants or equipment. Buildings with a cost of $1,000 or more are capitalized.
Building Record: the building record in the fixed assets system supplements the general asset information with information that describes the characteristics of the building. The building record contains the building number, name, location, construction type, status and primary function. The building record links the different components of the building into one entity.
Building Number: The building number is a component of the building record.
Personal Property
Equipment: equipment is tangible, non-expendable, personal property having an anticipated life of one year or more with a unit acquisition cost of $1,000 or greater.
Tag Number: the Facilities /Materials management Unit assigns a tag number to all capitalized equipment. The tag numbers are bar coded.
Physical Counts: the Inventory Field Representatives make physical counts of all equipment on an annual or cyclical basis. These counts confirm the existence, location and quantity of the equipment.
Scanners: scanners are electronic units that contain lasers that are capable of reading and downloading information in bar codes. The University uses scanners to read the tag numbers on equipment during physical inventory counts and to upload the information to compare what is found to what is recorded in the fixed assets system.
Fixed assets will be reported at historical cost, or if the cost is not practically determinable at estimated cost. Donated fixed assets will be recorded at their estimated fair market value at the time received. Cost is defined as the cash price or its equivalent plus all other costs necessary to place the asset in its intended location and condition for use. Cost would include purchase price plus ancillary charges such as installation, freight, transportation, site preparation, professional fees and legal claims directly attributed to the asset acquisition, sales taxes and other taxes.
Source documentation of acquisition cost will include vendor invoices, canceled checks, check copies, expenditure journals, transfer invoices, purchase orders, real estate closing documents, legislative minutes, certificate of title, price lists, insurance values, appropriation documents and inventory cards.
Land and Buildings
Invoices, real estate closing documents, canceled checks, construction contracts and expenditure vouchers are the most reliable cost sources for land and buildings.
Recording Cost of Buildings
Buildings should be recorded at either their acquisition or construction cost. The cost of new construction should be carefully evaluated and should include all expenditures related directly to acquisition or construction. Any related costs incurred after building acquisitions are added to the building’s cost if they provide future service potential. Building costs include the following:
a) purchase price,
b) direct materials, direct labor and overhead costs incurred during construction,
c) fees such as attorneys, architects and building permits,
d) interest charges incurred during construction, and
e) excavation costs.
Buildings may be acquired by purchase or gift. If they are acquired by gift the Board of Trustees approves the building acquisition. The Facilities Department reviews the minutes of the Board of Trustees’ meetings for information on the acquisition or disposition of buildings. If the buildings are purchased or constructed the Accounting Department obtains information on the acquisition from the project accounts. The Accounting Department maintains the records for buildings, depreciates the buildings and reports the acquisition and dispositions of buildings on the financial statements. The Accounting Department is notified by DPW when a building project is completed and has been accepted. At this point, the building is capitalized. The minimum amount for a capitalized project is $1,000.
If the building is acquired by gift, an appraisal is required. The appraisal is either provided by the donor or obtained by the university. The appraisal will become the historical cost of the asset.
When buildings are acquired, a memorandum is sent to the Office of the State Comptroller, Management Services Division by the university. The memorandum contains the following information: agency number, town code, building number, building name, street number and name, town name, date acquired, cost, fire code and building value.
If the Federal Government paid for part of the building, this information is captured in the fixed assets system.
Cost of Land
Land is non-expendable real property that is capitalized. It may be acquired by purchase or gift. Its acquisition is approved by the Board of Trustees. The responsible department maintains the records for total land and reports the acquisitions and dispositions of land on the financial statements. Details on each acquisition and disposition will be maintained in the fixed assets system.
When land is acquired, a memorandum is sent to the Office of the State Comptroller, Management Services Division by university. The memorandum contains the following information: agency number, town name, and town code, plot name, location of plot, date acquired, cost, owned or leased, usable or unusable, purchased or gift, number of acres, plot number, and number of buildings on plot.
Historical cost is the usual basis for valuing land. Historical cost is measured by the cash or cash equivalent price of obtaining the asset. Any related costs incurred after land acquisition are added to the land's cost if they provide future service potential.
Items that are included as part of acquisition cost for land are:
a) purchase price,
b) legal and title fees,
c) appraisal fees,
d) site preparation,
e) costs of demolition of existing buildings,
f) liens, taxes or other liabilities assumed,
g) permanent improvements, such as landscaping, and
h) grading, filling, leveling, draining and clearing.
Costs that do not provide future service potential are expensed immediately.
When land has been purchased for the purpose of constructing a building, all costs incurred up to the excavation for the new building are considered land costs. Removal of old buildings - clearing, grading and filling - are considered land costs because these costs are necessary to get the land in condition for its intended purpose. Any proceeds obtained in the process of getting the land ready for its intended use, such as salvage receipts on the demolition of an old building or the sale of cleared timber, is treated as deductions in the price of the land.
Land acquired by gift is generally capitalized based upon an appraisal, which establishes the fair market value. If additional expenses are incurred these costs are considered part of the total cost of the land. The university requests an appraisal from a donor to establish the fair market value. If the donor does not provide an appraisal the university has one done. The UCHC Board of Trustees must approve the acquisition of all land by gift.
Improvements with limited lives, such as private driveways, walks, fences and parking lots, are recorded separately under non-structural improvements so they can be depreciated over their estimated lives.
Land paid for or donated in whole or part by the Federal Government is noted in the fixed assets system.
If there is a gain or loss on the sale of land it is reported as a special item on the statement of activities. Land is to be capitalized but not depreciated. It is recorded at historical cost and remains at that cost until disposed.
Cost of Equipment and Machinery
Assets such as furniture, machinery and equipment that meet the threshold level should be capitalized. Costs include all expenditures incurred in acquiring the equipment or machinery and preparing it for use, plus the market value of any trade-ins or exchanges. Some assets individually may fall below the capitalization threshold but may be purchased in large quantities by the university or the System Office. Examples are library books, textbooks and computers, scientific apparatus, motor vehicles, boats and livestock. If such purchases are deemed material or significant by the university, they should be capitalized either individually or in the aggregate and depreciated.
Items that are included in the cost of equipment and machinery are as follows:
a) purchase price,
b) freight and handling charges,
c) insurance while in the onset if FOB shipping point, and
d) assembling and installation costs.
All equipment is depreciated with the exception of artwork, livestock and library volumes.
Each equipment record should contain complete information such as the following:
a) name of item or brief description,
b) specific location (building number and room number),
c) department or unit responsible for custody,
d) name of manufacturer or vendor and address,
e) identification number,
f) manufacturer's serial number,
g) date acquired,
h) method of acquisition,
i) complete expenditure coding (fund, sid, subcode, function),
j) source of funds (restricted or Federal funds),
k) actual cost and ancillary charges (installation, freight, transportation charges, site preparation, professional fees and legal claims directly attributable to asset acquisition); that is, all charges necessary to place the asset in its intended location and condition for use,
l) estimated cost if there is lack of original documentation or because establishing the original cost is not practicable, or if the cost must be established after many years of operating without these records,
m) purchase order number,
n) fair market value or appraised cash value at time of receipt of items either donated, received as surplus U. S. Government property, or received as surplus State property,
o) condition,
p) useful life (in months),
q) prior year and current year depreciation,
r) date of disposition,
s) method of disposition, and
t) title to equipment.
Recording Construction in Progress
Construction in progress should be capitalized and not depreciated. It should be reported with land and other non-depreciating assets at UCHC. Unspent debt proceeds from capital assets related debt should be reported in the net assets section of the statement of net assets as “restricted for capital projects.”
Recording Works of Art and Historical Treasures
Works of art and historical treasures should be recorded at historical cost or donated Fair Market Value.
Depreciation is the process of allocating the cost of tangible property over a period of time, rather than deducting the cost as an expense in the year of acquisition.
Generally, at the end of an asset’s life the sum of the amounts charged for depreciation in each accounting period (accumulated depreciation) would equal the costs less the salvage value. GASB #35 requires UCHC to recognize the cost expiration so that the cost of providing services can be realistically reported in the financial results of UCHC.
The decline in value must be considered if UCHC’s net assets are to be correctly stated.
Criteria needed to Calculate Depreciation
Five factors needed to calculate depreciation on a capital asset are as follows:
a) date placed in service,
b) cost of acquisition value,
c) estimated useful life, and
d) depreciation method.
Estimated Useful Life
All depreciable capital assets must have an estimated useful life of one or more years. Assets that are consumed, used up, habitually lost or worn out in less than one year should not be capitalized.
Estimated useful life means the estimated number of months or years that a capital asset will be able to be used for the purpose for which it was purchased.
UCHC capital assets shall be depreciated over their useful lives using the useful lives listed in.
Methods of Depreciation
There are many methods used to calculate depreciation:
a) straight line,
b) sum of the year’s digits, and
c) declining balance.
UCHC has determined for simplicity and uniformity to adopt the straight-line method of depreciation. GASB #35 has indicated no preference.
The straight-line method of depreciation requires that the salvage value be subtracted from the historical cost or acquired value to determine the asset’s depreciable basis. This ensures the asset will not be depreciated below its salvage value.
Although generally the same depreciation method is not required for all capital assets, once a method has been determined for a particular asset or a class of assets or a group of assets, that method must generally be used for the life of the asset.
Straight Line Method
Depreciable basis (cost less salvage value) is written off evenly over the useful life of the asset.
Each month an equal amount of the asset is considered used up.
Example:
UCHC purchases a copier for $15,000. This asset is considered to have a useful life of five years and a salvage value of $0. Depreciable basis is $15,000 ($15,000 cost) - $0 (salvage value).
Depreciation expense and addition to accumulated depreciation each year is $3,000 ($15,000 divided by 5).
When assets are not purchased at the beginning of the fiscal year, averaging conventions are used to determine how much depreciation should be taken. There are five averaging conventions 1) full month, 2) half-year, 3) modified half-year, 4) mid-month, 5) mid-quarter.
UCHC will use the full month convention for simplicity and ease.
Full Month Convention
Capital assets placed in service at any time during a given month are treated as if they were placed in service on the first day of that month.
Depreciation will be taken for the entire month in which the asset is placed in service.
If the asset is disposed of before the end of the estimated useful life, no depreciation is allowed for the month of disposition.
H. Special Cost Considerations
Special cost considerations occur when dealing with trade-ins, group purchases, gifts or cash discounts.
Group Purchases
If several dissimilar items are purchased for a lump sum, the costs should be allocated to each item as a percentage of that item’s Fair Market Value to total Fair Market Value.
When the university makes an initial purchase of several related capital asset items and the purchase order and invoice show one cost amount, the item(s) must be capitalized if the dollar cost and time thresholds are met. However, where a purchase order or invoice clearly itemizes the costs by item, only the items meeting the capitalization dollar and time thresholds need to be tagged and capitalized.
Trade-ins
Cost of the asset acquired when payment includes both cash and trade-in is the sum of the cash paid plus the Fair Market Value of the asset traded in. If the Fair Market Value is not readily determinable cost may be recorded as the cash paid plus the net book value (cost less accumulated depreciation) of the asset traded in. Purchasing shall inform the Materials management unit of all trade-ins, including the bar code number.
Gifts
Assets acquired by gift should be recorded on the basis of their estimated Fair Market Value at the time of acquisition.
Recording Vehicles
Vehicles should be recorded at historical cost and be depreciated over a determined useful life.
Cash Discounts
Assets should be recorded net of any quantity or trade discount received. The asset is recorded at a cost equal to the amount of cash paid not the gross amount of the invoice.
Costs after Acquisition
After fixed assets have been purchased and in use additional costs are sometimes incurred that range from general maintenance to material additions.
All costs greater than $1,000 incurred to achieve greater future benefits should be capitalized, whereas expenditures that maintain the level of asset service should be expensed.
The major types of subsequent costs incurred are:
a) additions – increase or extension of existing assets,
b) improvements and replacements – substitution of an improved asset for an existing one, and
c) repairs – expenditures that maintain assets in condition of operation.
Additions
Any additions to assets are capitalized since a new asset has been found that increases or lengthens the asset’s ability to provide service.
Capital assets include land, land improvements, buildings, building improvements, construction in progress, machinery and equipment, vehicles, infrastructure, easements, works of art and historical treasures.
Infrastructure
Infrastructure assets are long-lived capital assets that normally can be preserved for a significantly greater number of years than most capital assets and that are normally stationary in nature. Examples include roads, bridges, tunnels, drainage systems, water systems and dams. Infrastructure assets do not include buildings, drives, parking lots or any other examples given above that are incidental to the property or give access to the property.
The requirement to establish specific policies developed by the Health Center is found
in the following:
C. University Board
of Trustees
a. Executive Director and/or the Health Center Executive Council
b. Associate Vice President for Fiscal Services/Controller
c. Director of Property and Materials Management
d. Dean
e. Department Chairpersons
f. Custodial Persons
g. Inventory Control
h. UCHC HIPAA Compliance Officer
Specific responsibilities to carry out the requirements stated above include:
A. Institutional
Responsibility
It is the Health Center's institutional responsibility to provide for a secure
environment, a minimal level of insurance to protect against unforeseen events, and an
inventory system that is centrally supported to assist the department with the equipment
accounting process. Inventory System is defined as the resulting network that is formed by
administratively interacting with all functional areas of the Health Center for the
purpose of communicating and recording the various property transactions that occur during
the course of normal operations.
The inventory
system (includes Clinical Engineering system) will function as one of the
primary tracking mechanisms to account for all equipment used in the process,
storage or transmission of ePHI according to the HIPAA Security Regulation.
The records that are created are audited periodically and
reports of the findings are generated and distributed within the network.
Accountability for each item of inventoried equipment in custody of or owned by the
Health Center logically must reside with each Health Center department. Therefore, it is
the responsibility of each Department Head to account for all equipment in the custody of
their respective departments in accordance with the procedures stated herein.
These procedures
are also in accordance with the UCHC HIPAA Security Policies.
It is also
the responsibility of the Department Head to maintain all equipment in their custody with
a reasonable degree of care and to effect minimal security standards. Finally, the
Department Head is responsible to designate an appropriate administrative person to act as
the Departmental Property Coordinator in order to adequately discharge the responsibility
for the day-to-day maintenance of the department's equipment inventory. If a Departmental
Property Coordinator is not established, the Department Head will be responsible for the
above stated.
C. Department
Property Coordinator
Appointed by the Department Head, the Departmental Property Coordinator is the
administrative person responsible for the day-to-day transactions affecting the
department's equipment inventory. The Property Coordinator's authority and responsibility
for property matters is directly delegated from the Department Head. The specific duties
and responsibilities include, but are not limited to:
- New acquisitions that arrive untagged
- Transfers into and out of the department
- Equipment Loans to other departments, affiliated Institutions, and Health Center individuals
- Location changes
- Assist in HIPAA compliance audits and investigations
Proposed Dispositions
- Transfer to another Institution
- Trade In
- Sell (Internet Auction/Bid Process handled by Materials Management)
- Cannibalize
- Declare Excess
- Lost, stolen or missing items
- Property Coordinator will receive a report of their department's equipment inventory once a year.
- Property Coordinator will verify Inventory Report, noting any changes.
- Department Head will sign Inventory Report, acknowledging report as accurate.
- The Departmental Property Coordinator must maintain a file of temporary location changes (less than three months).
- Location changes affecting the department's inventory for more than three months, must be communicated to Inventory Control via form IC-5.
D. Personal Liability Through
Delegated Custody
Title 4, Chapter 53, Section 4-165 of the Connecticut General Statutes entitled Immunity
of State Officers and Employees From Personal Liability states "No state officer
or employee shall be liable for damage or injury, not wanton or willful, caused in the
performance of his duties and within the scope of his employment. Any person having a
complaint for such damage or injury shall present it as a claim against the state under
the provisions of this chapter."
The specific responsibilities which must be maintained by Inventory Control are:
V. Procedures for Inventory File Transactions
- If the department has several divisions, it would be advisable to designate one Property Coordinator for each division.
- Maintaining Departmental Inventory Records
- Prompt processing of the appropriate forms communicating departmental inventory changes to Inventory Control.
- Assist Inventory Control in conducting an annual physical inventory and audit.
- Establish a repository of information pertinent to Inventory Control, for use by the Faculty and Staff of the Department.
- Assisting Inventory Control in any other inventory related matters.
- Assist in HIPAA compliance audits and investigations.
- The Department Head will receive an Active Status Report with items found in their department. The Department Head and the departmental Property Coordinator will sign this report accepting responsibility for the items found. The Department Head will be formally notified, that is will be his or her responsibility to see that changes to the equipment inventory be communicated to Inventory Control via the appropriate IC forms, or be subject to the consequences of a State Audit.
- It will also be communicated to the Department Head, that items presently listed as active on the inventory report, if not found on the next inventory cycle, must have an explanation in writing, of their new location or disposition, or an appropriate IC form on file with Inventory Control.
- Special consideration will be given to equipment containing ePHI not found on the inventory report. Inventory control will immediately forward any report indicating unaccounted active inventory items that are designated as containing ePHI to the UCHC ISO, who will initiate an appropriate investigation.
- If an active item is not found, it will remain on the Active Status Report with the last date inventoried. A report listing these items will be presented to the Department Head and Property Coordinator to investigate as to their new location or disposition. If located, the item's record will be corrected by the Department Head or Property Coordinator, who will sign the corrected report, thus accepting full responsibility for the changes to the item's record.
- The Department Head will be responsible for filing the appropriate Property IC forms found in Appendix C or a loss report for items which were not found (see Appendix A).
- A copy of both Inventory Reports will be left with the Department Head and Departmental Property Coordinator for their records. The originals will be kept on file in Inventory Control until the next State Audit is completed.
| Bioengineering | IT Department |
| Book Store | Library |
| B.M.C. | Linen |
| Central Warehouse | Medical, Surgical & Clinical Units |
| C.L.A.C. | Pharmacy |
| Clinical Engineering | Reprographics |
| Dental & Medical Stores | Telecommunications |
| Facilities Store Room | Video Communications |
- Each department listed above will be notified by Inventory Control, on or about May 24 each year, of the Annual State Supply Inventory.
- The department will conduct a physical inventory which will be kept on file by the Departmental Property Coordinator for three (3) years or until audited by the State of Connecticut.
- The Department Head and the Departmental Property Coordinator will complete the Inventory Certificate, IC-10. The IC-10 must be returned to Inventory Control by the date specified in their notification.
- The information must be processed in the time frame mandated by the State Comptroller, as stated in the Annual State Supply Inventory Notification.
- Description should state uniform property nomenclature
- ePHI identifier will be completed
- Equipment Owner will be identified
- Screening Statements must be completed with certifications as follows:
- G.T. $500. & L.T. $10,000. - Department Head certifies.
- G.T. $10,000. & L.T. $25,000. - Dean also certifies
- G.T. $25,000. - Assistant Vice Chancellor for Research
and/or Executive Council Designee also certifies.
- The coding is reviewed for accuracy.
- The budget is reviewed for availability of funds.
- Policy issued by Funding source is reviewed for appropriateness of purchases.
- Final Reviews are made for:
- Screening Statements
- Grants and Contracts/Budget Office Approval
- Object Coding Accuracy
- ePHI identification
- Questionable purchase requisitions are returned to Inventory Control for the following reasons:
- Review availability of excess equipment to offer as an alternative to purchasing new items(s).
- Item(s) are stocked in the Central Warehouse.
- Multiple purchase requisitions for component equipment.
- Contractual service to construct equipment.
- Acceptable purchase requisitions are formalized as signed purchase orders and copies are forwarded to:
- Vendor (5) Data Processing
- State Comptroller (6) Accounts Payable
- State Purchasing Dept. (7)
- UCHC Purchasing Dept.
- Inventory Control will assign and affix tag numbers to all equipment.
- All tag numbers issued or unissued, active or inactive, must be accounted for.
- Equipment will be delivered by Materials Management personnel to requisitioning department for signed acknowledgment.
- Inventory Control personnel verifies each item and updates the inventory database.
- Inventory Control, along with Accounting and Hospital Accounting, reconciles all additions to the Inventory File with the monthly capital expenditure report.
5. New Acquisitions - Transfers In, Gifts, Donations, etc.
a. Items missing accounting or vital inventory information: UCHC Inventory Control will
make an estimate based on like items of the same or similar age already in the database.
(For Gifts/Donations of Art See Item 4)
- Property will review and sign the form. The completed form will then be forwarded to the Development Office for further processing. All required information and signatures must be documented on Form IC-1.
- All documents relating to the gift/donation must be included with Form IC-1, such as:
(1) A letter of transmittal from donor.
(2) If the gift/donation is valued at $5,000 or more, a certified appraisal documenting the value
will be required.
- Record the gift/donation
- Generate the appropriate IRS forms if necessary
- Generate an acknowledgment letter to the donor, including a copy of the fully executed IC-1 form as their receipt.
- Tag the item
- Verify condition
- Note any unusual circumstances
- Update the inventory database, including fair market value
- After the acceptance by the Art Advisory Committee, the Art Committee Chairperson will fill out Inventory Control form IC-1A, for "Gifts/Donations of Art". All documents relating to the gift/donation must be included with Form IC-1A, such as:
- A letter of transmittal from donor.
- If the gift/donation is valued at $5,000 or more, a certified appraisal documenting the value will be required.
- The Art Committee Chairperson will forward the completed
IC-1A form to the Development Office for further processing after:
- All pertinent information has been filled out
- Art Committee has accepted gift/donation
- The Development Office will copy the IC-1A form and send it to the University of Connecticut Foundation. The Foundation will:
- Record the gift/donation
- Generate the appropriate IRS forms if necessary
- Generate an acknowledgment letter to the donor, including a copy of the fully executed IC-1A form as their receipt.
- After receiving the IC-1A Form from the Development Office, Property will then locate the item(s) and:
- Tag the item
- Verify condition
- Note any unusual circumstances
- Update the inventory database, including fair market value
- Inventory Control will inventory all art assets in the time frame required by the State and Federal government or as needed.
- Tag the item
- Verify condition
- Note any unusual circumstances
- Update the inventory database, including fair market value
- The custodial department shall establish, and honor schedules to accomplish maintenance routines.
- Repairs of equipment containing ePHI will be in accordance with the UCHC System Maintenance Procedure
- The custodial department shall be responsible for arranging the necessary regular maintenance of equipment.
- Documentation of regular maintenance should be forwarded to Inventory Control via form IC-9, "Maintenance of Equipment Notice."
- All major repairs (in excess of 50% of acquisition cost) shall be communicated to Inventory Control via form IC-9.
- Repairs that exceed the acquisition cost must be approved by the appropriate Financial Officer via form IC-9.
- Repair orders that materially change the expected useful life of an equipment item will be considered for recapitalization. This decision will be made in conjunction with the appropriate Financial Officer and Inventory Control.
- The custodial department will be notified by Inventory Control when an item is recapitalized.
F. Loans, Leases
and Consignments
- Tag the Item
- Prepare Data Input
- Verify Condition
- Note Any Unusual Circumstances
G. Transfers
From Other Organizations
- Tag the Item
- Prepare Data Input
- Verify Condition
- Note Any Unusual Circumstances
H. Transfers
of Equipment, Location Changes, Moving and Storage Requests - (Interdepartmental)
I. Property Loaned To: Another
Department, Institution, etc.
J. Transfer to Another Institution
(See supplemental procedures in Appendix B)
K. Equipment Trade-Ins -
(New Purchases Only)
- Excess equipment redistribution
- Cannibalization
L. Sales - Bid Process for Departmental Requests Only
(Does not apply to surplus sales)
M. Equipment
Retirement (Cannibalize)
"Cannibalize" will be defined as the removing of serviceable parts from
damaged or obsolete equipment, for use in the repair of other like or related equipment.
VI. Policies and Procedures for Property Declared Excess/Surplus
Pursuant to Public Act 91-256, The University of Connecticut Health Center has authority
for the transfer and/or disposal of surplus, unused and/or unserviceable equipment and
supplies. In fulfilling this obligation, the UCHC
Surplus Property Program Director (in his/her absence, the Director of
Materials Management)
shall implement the following policies and procedures:
Excess Property shall be defined as those items no longer required for the needs of the
custodial department as determined and approved by the Department Head.
Surplus property shall be defined as those item(s) no longer required for the needs of
the Health Center as determined and approved by the UCHC Surplus Property Program
Director.
The UCHC Surplus Property Program Director, or his/her designee, shall inspect the
item(s) and determine which disposition method will be in the best interest of the Health
Center. Options may include, but will not be limited to:
- The UCHC Surplus Property Program Director, or his/her designee, will attempt to identify other Health Center and/or University departments which can utilize surplussed items, by communicating the availability of surplus property. Departments that have on-line computer capability through the Health Center's Surplus Inventory System or Web site will not require notification.
2. Sale and/or Transfer to Other State Agencies
- The UCHC Surplus Property Program Director, or his/her designee, will attempt to identify other State agencies which can utilize surplussed items, by communicating the availability of surplus property. State agencies that have on-line computer capability through the Health Center's Surplus Inventory System or Web site will not require notification.
3. Trade-in
- The Director of Purchasing, or his/her designee, will attempt to identify opportunities to achieve lower prices by utilizing surplus property as trade-ins when purchasing new equipment and/or supplies.
4. Sale (Bid or Auction Process)
- At the discretion of the UCHC Surplus Property Program Director, or his/her designee, surplus property may be offered for sale by soliciting competitive bids. Such sales will be the result of public notice in a minimum of three newspapers, or a major newspaper with full state coverage, no less than ten (10) days prior to the scheduled sale.
- At the discretion of the UCHC Surplus Property Program Director, or his/her designee, surplus property may be offered for sale through a selected Auction process. Such sales will be the result of public notice in a minimum of three newspapers, or a major newspaper with full state coverage, no less than ten (10) days prior to the scheduled sale.
- Other forms of approved bid procedures may also be followed with approval of the Director of Purchasing or his/her designee.
5. Public Sale
- Sales to the general public will be held every Friday (except on Holidays) through the Health Center's Surplus Property Store or on an "as needed" basis and shall be the result of public notice in a minimum of three (3) newspapers or a major newspaper with full State coverage, no less than ten (10) days prior to the scheduled sale. Since the Health Center's Surplus Property Store is open every Friday, public notice may be done on a monthly or periodic basis. Every item offered for sale to the general public will be sold "as is and where is" and will be either publicly auctioned or will be clearly marked with a price which has been determined by the UCHC Surplus Property Program Director, or his/her designee, as a fair market price based on his/her knowledge of the existing market, the condition of the item(s), and other salient factors. All item(s) sold may be subject to the current State of Connecticut State sales tax. A record of receipt/sale will be supplied to all customers, and a copy will be retained by the UCHC Surplus Property Program Director for three years or until audited.
- Other forms of approved public sale procedures may also be followed with the approval of the Director of Purchasing, or his/her designee.
6. Discard/Disposal
a. In the
event that the UCHC Surplus Property Program Director, or his/her designee, determines
that
no other Health Center and/or University departments have been identified as potential
recipients of surplus
property, the property may be donated and/or sold to an approved non-profit organization.
The following are examples of approved organizations:
- State and Municipal Schools
- Approved Humanitarian Relief Efforts
- State Municipalities
- Approved Hospitals and Clinics
7. Discard/Disposal
PROCEDURES FOR REPORTING LOSS OR DAMAGE TO HEALTH CENTER PROPERTY
INTRODUCTION
I. Reporting of Loss or Damage to Health Center Property
- To provide a uniform method of reporting loss or damage to Health Center property, the following procedures must be followed:
- T