708R - Inventory

Purpose

The purpose of this regulation is to define inventory procedures and property classifications. This regulation also outlines responsibility and accountability for managing property in the Frederick County Public School system.

Scope

This regulation is applicable to all personnel who have responsibility for purchasing and/or managing property in the school division.

Definitions of classifications

The following are the classifications of property as applied to Frederick County Public Schools.

1. Real Property – land, buildings, installed equipment and fixtures that are part of the original site/building, i.e. air-conditioning units and boilers. Also includes improvements to land and buildings valued in excess of $30,000.

2. Fixed Property – generally describes furnishings or equipment of a value more than $500 and less than $30,000 but are installed in, physically attached to, or made a part of the permanent structure or property. The expected life of these items normally ranges from ten years to the life of the permanent structure. Examples include student lockers, bleachers, auditorium seating, science lab units, attached shelving and cabinets, playground equipment, stage lighting, electronic scoreboards, and built-in freezers.

3. Non-expendable Property – describes furniture and equipment that retains identity and utility during use, has parts that are repairable or replaceable, has a useful life expectancy of greater than two years and a unit value of over $500.

4. Expendable Property – describes furnishings, equipment or supplies that, because of their composition, have a one-time use or limited life span generally ranging from one to two years and generally does not exceed $499 in unit value. (Examples include administrative and instructional supplies, custodial supplies, certain motor and repair parts, and selected equipment such as desk lamps, pencil sharpeners, rolodexes, and calculators.) Also included as expendable property are items over $500 in unit value, but have a useful life of less than two years that, when put in use, are chemically or physically altered to the extent that they cannot be economically reused for their original purpose or become an integral component. These include high value repair parts, certain computer boards, and electric motors.

Property Accountability

The following procedures outline requirements of the school division and are in accordance with the Government Auditing Standards Board ruling #34.

A. General Overview

1. Each account manager is accountable and responsible for all expendable, fixed, and non-expendable property committed to his or her charge.

2. Unless specifically identified under Section B (below) – Specific Information/ Exceptions – expendable property will not be inventoried with an asset listing or record.

3. Accountability for non-expendable property is maintained from initial acquisition to final disposition in one of two manners:

a) For non- expendable property valued at more than $500 and less than $5,000, a written property record is not required. Rather, the property shall be recorded at the time of purchase through the general ledger financial system (accounts payable system). Thereafter, periodic inventory recordation shall be in the form of digital pictures, video or any other manner that verifies possession and can be used to value property for insurance purposes.

b) Second, for non-expendable property valued at $5,000 or more, the property shall be recorded at the time of purchase through the general ledger financial system (accounts payable) and the property shall be in written form and recorded in the fixed asset system subject to depreciation. Property transactions to add, delete, or transfer such property must be properly recorded and the records maintained in accordance with Policy and Regulation 717 - Disposal of Obsolete Equipment and Materials.

4. Real property records shall be maintained and managed by the superintendent or designee.

B. Specific Information/ Exceptions

Certain classifications of expendable and non-expendable items less than $5,000 per unit are not exempt from an inventory record requirement. Items purchased with federal and certain state funds may have separate restrictions. Each account manager is still accountable and responsible for all property committed to his or her charge. For the following classifications of items, a system of inventory shall be maintained by designated individuals. Therefore, any purchase of the below listed items by the account manager shall be communicated to the designated authority using procedures developed by such authority. (Example: purchase of a video projector should be reported to the Media Services department with respective departmental forms as prescribed by the departmental directive.)

Computer hardware items over $500 – Information Technology Department

Computer software over $500 – Information Technology Department

Textbooks – Instructional Department

Audio-visual equipment – Media Services

Calculators – Instructional Department
Vocational equipment $300 and over purchased with state funds – Career and Technical Education Coordinator (note lower limit for state funds)
Vocational equipment $500 and over purchased with federal funds – Career and Technical Education Coordinator

Food Service: purchased food, supplies, commodities – Food Services Specialist (USDA requires perpetual inventory for commodities, SL-12 form requires physical monthly inventory.)

Vehicle Fuel – Transportation Department

Warehouse stock items (inventoried by warehouse manager)

C. Reporting Procedures 

1. Expendable Property

A centralized computer inventory record shall be maintained for all expendable property that is stocked and issued from a central supply.

A physical inventory count shall be made at least annually to verify stock balances. The inventory will be conducted within 60 days of the end of the fiscal year.

An annual stock status report shall be prepared for the finance department through June 30 of each fiscal year and shall be submitted by July 15.

The account manager will ensure that expendable property issued to or purchased for their locations is consumed solely in support of, and in the best interest of, the school division.

There is no requirement for a periodic inventory of expendables issued to a school or department, except for those items listed under specific items in section B.

2. Non-expendable Property

A systematic procedure to account for all non-expendable property that is either in stock or used throughout the school system shall be maintained.

For non-expendable property valued at less than $5,000 per unit, a video, digital, or other automated procedure will document and archive all property for valuation and insurance purposes. There is no requirement for a disposal or transfer form to be completed when the utility of this classification of property changes.

For non-expendable property valued at $5,000 or more per unit, a video, digital, or other automated procedure will document and archive all property for valuation and insurance purposes. Also, a property record will be created by the finance department to track the property location, purchase cost and date, and value. Each account manager shall be responsible for verifying the property in this classification on an annual basis. Each account manager shall be responsible to submit a disposal and/or transfer form to the finance department when the use or location of the property changes.

3. Gifts and Donations

All gifts or donations of property to the school division shall be classified as non-expendable, expendable, fixed or real property. All associated documents for non-expendable, fixed or real property shall be submitted to the finance department for inclusion in the property record. 

4. Fixed and Real Property

A systematic procedure to account for all fixed and real property shall be maintained. For all fixed and real property, a video, digital, or other automated procedure will document and archive all property for valuation and insurance purposes. Also, a property record will be created by the finance department in order to track the property location, purchase cost and date, and value. The superintendent or designee shall be responsible for verifying the property in this classification on an annual basis. Each account manager shall be responsible to submit a disposal and/or transfer form to the finance department when the use or location of the property changes.



Approved: October 11, 2001

Amended: August 29, 2007