Accounting Policies and Procedures

Capital Asset Policy

Effective Date: July 9, 2019

Board Approval: January 9, 2019

1. Purpose

• 1.1. To provide policy and procedures which govern the acquisition and disposition of State-owned capital assets and Federal Surplus Property.

2. References

• 2.1. Utah Administrative Code Rule (UAC) R33-26. State Surplus Property.

• 2.2. Utah Code Annotated Section 63A-4-402, State surplus property program – participation by institutions of Higher education.

3. Definitions

• 3.1. Capital Asset: Land, buildings, building improvements, vehicles, machinery, equipment, and all other tangible or intangible assets that are used in operations and that have initial useful lives greater than one year and original cost or acquisition value greater than $5,000.

• 3.2. Real Property: Land, buildings, and related improvements purchased with College funds, bequeathed or donated to the College or from DFCM.

• 3.3. Highly Pilferable Property: Property that is susceptible to theft, valued between $500-$4,999.

• 3.4. Electronic Data Devices: Computers, tablets, smart phones, digital copiers, multifunction printers, portable data storage devices, and other similar items.

• 3.5. Retirement/Transfer Notice: An official College document used to record the transfer of property from one department to another and/or to retire property from a department’s inventory records. The notice is to be sent to the Fiscal Office for processing.

• 3.6. Property Custodian: Employee designated as the person responsible for Capital Asset property within a department or program.

4. Policy

• 4.1. Accounting Responsibility: It is the policy of Tooele Technical College to properly account for Capital Assets from acquisition to disposal, in accordance with financial standards. The Fiscal Office will maintain inventory records on all Capital Assets, Highly Pilferable Assets and Real Property.

4.2. Reporting Requirements of Property

• 4.2.1. Department/Program Responsibility: Each department or program that acquires, holds, or disposes of property must ensure that such property is:

  • 4.2.1.1. Properly reported when acquired (Through purchase, donation or transfer).

  • 4.2.1.2. Properly inventoried and safeguarded.

  • 4.2.1.3. Properly reported at time of disposal.

• 4.2.2. Fiscal Office Responsibility: The Fiscal Office is responsible for ensuring all Capital Asset property is appropriately tagged and its receipt noted on the asset accounting system.

• 4.2.3. Valuation (Historical Cost): Historical cost is the basis for valuing Capital Assets, including the cash equivalent price of obtaining the property and getting it ready for its intended use (freight charges, installation costs, etc.).

• 4.2.4. Valuation (Donated Property): Capital Asset property donated to the College is recorded at its documented fair market value at the time of the donation.

• 4.2.5. Grant/Contract Property: The College must maintain records for all property purchased under training grants and contracts and comply with all regulations. This obligation continues until project termination or expiration of useful life, whichever is required by the awarding agency. The grant administrator is responsible for inventorying and safeguarding the assets.

• 4.2.6. Title Status: Status of title to Capital Asset property acquired under a grant or contract shall be determined at the time of acquisition. Generally, title is either:

  • 4.2.6.1. Vested in the College at the time of acquisition.

  • 4.2.6.2. Vested in the College on a permanent basis, generally upon completion of the project.

5. Disposal of Property

• 5.1. It is the policy of the College to dispose of property in a manner that will maximize the return or benefit to the College, consistent with laws governing disposal of state property (UAC R33-26-200).

5.2. Disposition Methods (College-Owned Surplus Property)

Disposition of college-owned surplus property items shall be through the following methods:

• Online auction

• Live auction

• Disposal

• Direct sale to the public

• Donation to a public school or state administered program

• Another method approved by the fiscal office

5.3. Disposition of Electronic Data Devices (UAC R33-26-202)

The security risk of a potential data breach from improper disposal or sale of an electronic data device outweighs the potential revenue. The College will ensure that all surplus State owned electronic data devices are disposed of in accordance with the following procedures:

• 5.3.1. Surplus electronic devices may not be sold or gifted via on-line auction or any other means.

• 5.3.2. The Director of Information Technology shall certify:

  • 5.3.2.1. All connectivity to sensitive, confidential, protected and classified data has been removed and that the device no longer has access to the College network.

  • 5.3.2.2. Must be disposed of through the vendor under contract with the State.

5.4. Federal Surplus Property

• 5.4.1. Federal surplus property items are not available for sale to the general public. Donation shall be administered in accordance with the procedures identified in the State Plan of Operation for the Federal Property Assistance Program.

• 5.4.2. Public auctions of federal surplus property are authorized under certain circumstances and conditions, coordinated by the fiscal office and regulated by the U.S. General Services Administration.

5.5. Public Sale of College-Owned Vehicles (UAC R33-24-401)

• 5.5.1. College-owned surplus vehicles may be purchased at any time by the general public.

• 5.5.2. Federal surplus property auctions to the general public may be accomplished on occasions and subject to the limitations indicated previously.

6. Property Location, Maintenance and Use

• 6.1. Departments shall maintain records identifying the current location of each item of Capital asset property to allow any item to be located within a reasonable time.

7. Security and Losses

• 7.1. Security: The director of the responsible department and the property custodian are responsible to adequately provide for the physical security of property in their custody. Special precautions shall be taken to safeguard portable and highly pilferage property.

• 7.2. Reporting Losses: Loss, theft or destruction of property must be timely reported to the Director/Manager over the department. Loss of Capital Asset property must also be reported to the Fiscal Services department before the items can be removed from the department’s inventory. The report must include applicable inventory numbers and, in the case of theft, the police case number/report.

8. Verification of Inventory of Capital Asset Property

• 8.1. At least annually, the Fiscal Services Office will conduct a physical inventory of all Capital Asset property. Departments will be responsible to verify and complete the required inventory. Missing property will not be removed from the department list without verification of diligent effort by the department Director and approval by the Fiscal Office.

9. Estimated Useful Lives

• 9.1. Property, plant, and equipment is depreciated using the straight-line method over the following estimated useful lives: