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Policy 4040 - Fixed Assets

The purpose of this policy is to ensure that the Board’s fixed assets are acquired, safeguarded, controlled, disposed of, and accounted for in accordance with state and federal regulations, auditor requirements, and applicable accounting pronouncements. This policy also addresses the following issues related to fixed assets: * General provisions about the property management system used to account for and control these assets * Ownership of the Board’s fixed assets * Assignment of responsibility and accountability for fixed assets * Capitalization thresholds for fixed assets.

Policy Document

I. Policy Statement

As a part of its obligation to publicly account for the resources dedicated to the education of students of the Howard County Public School System (HCPSS), the Board of Education of Howard County is responsible for compiling and reporting information on the system’s fixed assets to the county government and other entities as part of its annual financial statements. These assets, the tangible items that typically have significant value, include property, facilities, and other assets that make up and enhance the physical environments for students and staff. Therefore, the HCPSS must establish and maintain control over these items.

II. Purpose

The purpose of this policy is to ensure that the Board’s fixed assets are acquired, safeguarded, controlled, disposed of, and accounted for in accordance with state and federal regulations, auditor requirements, and applicable accounting pronouncements. This policy also addresses the following issues related to fixed assets:

  • General provisions about the property management system used to account for and control these assets

  • Ownership of the Board’s fixed assets

  • Assignment of responsibility and accountability for fixed assets

  • Capitalization thresholds for fixed assets.

III. Definitions

Within the context of this policy, the following definitions apply:

  1. Fixed Assets – A resource that meets all the following criteria:

    1. Is tangible in nature

    2. Has an extended useful life of at least one year

    3. Is not a repair part or supply item

    4. Has an acquisition cost of $5,000 or more.

    Items meeting the fixed asset criteria are classified by major categories, such as:

    1. Land

    2. Buildings

    3. Improvements to sites and facilities

    4. Furniture and fixtures

    5. Machinery and equipment

    6. Construction-in-progress

    7. Vehicles.

  2. Fixed Asset Management System – A system of procedures to account for and report on the acquisition, depreciation, transfer, and disposal of all fixed assets.

IV. Standards

  1. The HCPSS Fixed Asset Management System will maintain control and ensure accountability of fixed assets.

  2. The Fixed Asset Management System will track and monitor the movement of all fixed assets from one location to another.

  3. The Fixed Asset Management System will use sequentially numbered tags either affixed to or assigned to all fixed assets as appropriate.

  4. All newly acquired fixed assets are to be marked upon receipt and acceptance labeled to identify the asset as HCPSS property.

  5. All fixed assets will be disposed of in accordance with Policy 4080 - Disposition of Property.

  6. The principal/account manager/designee of each school or location:

    1. At least annually conduct a review of the fixed assets located in his/her school or location.

    2. Notify the Accounting Office and other appropriate school system staff of any items that are either missing or not included in the Fixed Asset Management System inventory.

    3. Implement a process for safeguarding and monitoring the use of fixed assets by staff and students.

  7. The Accounting Office will coordinate a physical inventory of Board assets every three years.

  8. The Accounting Office will coordinate a review of fixed assets at least annually.

  9. The Accounting Office will produce and distribute annual fixed asset reports.

  10. Information on the fixed assets of the school system will be incorporated into the annual audited financial statements and the Comprehensive Annual Financial Report provided to the Superintendent and the Board.

V. Responsibilities

  1. The Accounting Office will maintain of the Fixed Asset Management System.

  2. The Chief Business and Technology Officer will comply with the regulations and procedures of this policy.

  3. The Chief Business and Technology Officer has overall responsibility for the Fixed Asset Management System.

  4. The principal/account manager/designee will ensure their schools/programs compliance with this policy and its procedures.

VI. Delegation of Authority

The Superintendent is authorized to develop appropriate procedures to implement this policy.

VII. Reference

  • Annotated Code of Maryland, Education Article, § 4-115

C. Relevant Data Sources

D. Other

  • Government Accounting Standards Board Statement 34, Basic Financial Statements for State and Local Governments

  • Fixed Asset Transfer/Disposal Form (FIN-Form 240)

VIII. History

ADOPTED: November 26, 2002

MODIFIED: October 2, 2018

REVISED: May 12,2011

EFFECTIVE: October 2, 2018