In today’s higher education landscape, managing resources and assets is more crucial than ever. With reduced funding and increased scrutiny, institutions must adopt efficient and compliant capital asset management practices to thrive.
The Risks of Departmental Self-Certification
Many institutions rely on departmental self-certification for the tracking of capital assets, which often leads to inaccuracies over time. This method increases risks and can significantly impact profit margins, especially if federal auditors uncover discrepancies in asset inventories.
For example, if a federal auditor were to come to your campus and check the function of your space and your inventory based on F&A rate calculations, it could put you in a risky situation. Especially if they only find 8 out of the 10 items they were looking for. This could lead to a 20% extrapolation on your calculation for all of your depreciation on equipment. Errors in self-certification can result in financial penalties and diminished trust from stakeholders.
An End-to-End Solution For Capital Asset Management
Ensuring your institution maximizes reimbursement costs and maintains compliance requires a holistic approach to asset management. Our experts at HCA Asset Management, work with education institutions all over the country to optimize reimbursement costs and meet compliance standards when it comes to capital asset management. Here are the primary components we emphasize in the process:
- Field Inventories: At the core of effective capital asset management is the accurate tracking of physical assets. At HCA Asset Management, we conduct comprehensive field inventories to ensure that every asset within your institution is meticulously accounted for. Our team of experts physically verifies the presence, location, and condition of each asset, using advanced tools to capture precise data. This process helps identify discrepancies early on, preventing potential compliance issues and optimizing the accuracy of financial reporting. Field inventories not only provide a clear picture of your institution’s assets but also lay the groundwork for informed decision-making and effective resource allocation.
- Data Integration: Your ERP system may have an asset management module, but most will not have an inventory module, or fields to effectively track when an asset was last verified. Loading your institution’s information into the latest capital asset tracking technology, such as KEPR, creates seamless data management. What is KEPR? It’s a powerful software designed for the specific purpose of improving the efficiency and accuracy of the capital asset inventory process. It integrates various data points to provide a comprehensive view of an institution’s capital assets, and offers the fastest time to inventory compared with traditional inventory methods. KEPR works with any type of tag technology, including RFID tags. Brand new innovations like this can enhance decision-making processes by offering detailed insights and facilitating compliance with regulatory standards.
- Reconciliation Assistance: Even with thorough field inventories, discrepancies between recorded and actual assets can occur. Reconciliation assistance can address these challenges head-on. This step involves cross-referencing field inventory data with your records, investigating missing or misreported items, and updating your asset database to reflect the true state of your capital assets. By resolving these discrepancies, your institution maintains compliance, optimizes financial performance, and avoids potential losses from untracked or undervalued assets.
“HCA Asset Management and Greg have been a part of the University of Tennessee’s F&A rate process since 2003. Their team is knowledgeable, flexible and the reports we receive are accurate and easy to interpret. HCA and Greg have been a critical “asset” in increasing UT’s federal cost reimbursement by increasing our F&A rate.”
– Verna Howard, Associate Controller, The University of Tennessee
How To Get Your Capital Asset Management On Track
Efficient asset management is vital for the financial health and compliance of higher education institutions. By adopting comprehensive asset management solutions like those offered by HCA Asset Management, institutions can navigate the complexities of asset tracking, reduce risks, and optimize financial performance.