Handbook of Business Procedures
Feb. 17, 2005
Dec. 10, 2015
16.1. INVENTORY CONTROL AND PROPERTY MANAGEMENT OVERVIEW
Inventory Services is responsible for maintaining adequate controls over personal property for The University of Texas at Austin. Inventory Services also assists with accounting for inventory-related items, year-end reporting to regulatory bodies, and preparing of related financial reports for internal and external reviewers.
The associate vice president and controller is the president's designated property manager for the university with the Inventory Services finance manager listed as the alternate property manager. The property manager is required by Texas State Government Code 403.2715 to maintain property records and to be the custodian of all property possessed by the university.
University unit administrators are responsible for all personal property in their care in accordance with established inventory policies and procedures. They are also responsible for ensuring that the annual physical inventory of property assigned to their department is completed each year. The annual physical inventory process and timeline are prescribed by Texas state law and are administered by the property manager. Refer to Texas State Government Code Chapters 403.272, 403.273,403.275, and 403.278 for the state’s requirements of a property manager.
B. Inventory Definitions
Personal property consists of capitalized or controlled assets not classified as real property. Government Furnished Equipment (GFE) is included in the capitalized and controlled assets categories.
Capitalized assets are capital assets that have a value equal or greater than the capitalization threshold established for a given asset type.
Controlled assets are assets that the state has determined as high loss risk to be secured and tracked because of the nature of their possession. The term does not include capitalized assets, real property, improvements to real property, or infrastructure.
Government Furnished Property (Equipment) (GFE) means property in the possession of, or directly acquired by, the government and subsequently furnished to the contractor for performance of a contract. All assets, including GFE, follow the capitalization threshold outlined in the State Property Accounting (SPA) Process User’s Guide.
Capital, controlled, and federally owned assets are placed on the university's inventory system as they are acquired and are accounted for each year by a physical inventory. New acquisitions that do not meet the criteria for capital, controlled, or federally-owned assets are considered expensed items. Department heads are responsible for the custody, safekeeping, and proper use of expensed items in addition to their department’s assets.
C. Accountability and Responsibility for Property in The University’s Possession
University property is state property and may be used for official purposes only. Federally-owned property is property of the United States government and must only be used for approved purposes only. Privately-owned property belongs to a private entity and must be treated as agreed upon between the donor and the university.
The president of the university has assigned the responsibility of inventory custodian for property accountability to each respective department head. The unit administrator or custodian may delegate the responsibility for the proper care, maintenance, and safekeeping of property assigned to his or her custody. To ensure adequate separation of duties, a noncustodian or inventory contact must be appointed to assist the unit administrator in fulfilling his or her responsibilities. Unit administrators must establish internal controls that ensure the following:
- Assets are kept physically secure at all times.
- Capitalized and controlled equipment is tagged with a university barcode tag, and federal equipment is additionally tagged with a federal tag for identification and tracking purposes.
- Inventory is taken periodically with documented changes (e.g., location, barcode, condition, etc.), reconciliation, and annual physical inventory certification.
- All Inventory Services policies and procedures are followed and adapted as appropriate to meet each department’s needs.
D. Inventory Contact Training
Inventory training is available online on the Inventory Services website. In addition to this online training, Inventory Services hosts a monthly Q-and-A format session for inventory contacts that have specific questions about any current processes or procedures.
To set up a one-on-one training session with Inventory Services personnel, inventory contacts should email INVgeneral@austin.utexas.edu to schedule an appointment.