To keep your institution’s asset management compliant, physical capital asset inventory verification is required every two years per 2 CFR 200 Uniform Guidance (UG). Some state and agency-specific mandates may require inventory verification every year or have different capitalization thresholds or have specific capitalization thresholds that differ peer institutes. It is critical to review agency-specific requirements for assets purchased under sponsored agreements.
The UG also lists requirements for your property records, in other words, the FIELDS you need to have in your asset system to comply with the regulations. These requirements are meant to ensure that your asset system can demonstrate the ability to account for and track equipment that has been partially or fully acquired with federal funds.
When examining asset management system requirements, it is important to keep in mind that data validation will assist in compliance and keeping records clean and consistent:
- The funding sources used to purchase an asset must be available in your asset system. The ability to easily track who purchased the asset and where the funding came from is critical for financial reporting and UG compliance.
- Asset management location fields – such as building and room numbers – should be validated against institutional space management records. This practice prevents inconsistent room identification during the physical inventory. Validated asset location fields at the room level are also critical to optimizing the equipment depreciation allocation in your F&A proposal.
- Personnel names used in asset management systems should ideally be validated against payroll or human resources tables. For example, the asset custodian’s name should be tied to an employee number or a formal employee name to prevent free form entry. This can also assist in recognizing asset transfers or asset retirements. If the asset custodian is no longer active in the payroll tables, Property Control/Accounting can be alerted to update the corresponding asset data associated with that employee.
The asset verification process can be streamlined with new mobile verification software or RFID tag scanning. Asset management systems that allow for mobile asset verification via smartphone help reduce hardware costs and easily put the verification process into the hands of your staff. A particularly helpful system allows for verification of the asset without downloading an application onto the user’s phone. Formerly in a decentralized asset verification process, property control staff had to take the word of the end-users of the asset status. Now, these verifications can provide proof that the asset was physically scanned, or a photo was taken.
To learn more about how RFID tag technology can help your institution remain compliant, click here.
If you need help with keeping your institution’s asset management compliant, our team would love to help! Reach out to us here to start a conversation.