Personal Property Inventory Management Document Code No.: FES 10-1 (AEP)
Department/Issuing Agency: Executive Administration/Facilities Management Division
Effective Date: May 3, 1988
Approved: /s/ Tim Hill
Type of Action: New. Replaces Executive Order 2073 dated July 1, 1978 and Executive Order 3002 dated August 15, 1973. Signed document (PDF, 8.02 MB)
1.0 SUBJECT TITLE: Personal Property Inventory Management 2.0 PURPOSE: 2.1 To establish uniform procedures for the accurate maintenance and accountability of a fixed asset personal property inventory, management of all King County owned or leased personal property, including assignment, acquisition, inventory maintenance and disposal procedures. 3.0 ORGANIZATIONS AFFECTED: All King County Executive departments, offices and agencies. 4.0 REFERENCES: 4.1 Revised Code of Washington, Chapter 36.32 - County Commissioners, Sections 36.32.210 through .230. 4.2 Revised Code of Washington, Chapter 36.34 - County Property. 4.3 U.S. Office of Management and Budget Circular A-102 - Uniform Requirements for Grants to State and Local Governments, Property Management Standards. 4.4 King County Code, Chapter 2.16.090 - Administration, Section F., Facilities Management Division. 4.5 King County Code, Chapter 4.56 - Sale and Lease of County Property. 4.6 County Administrative Officer memorandum dated December 7, 1981, "Personal Property Inventory." 4.7 King County Financial Policy Number 8, "Purchase Order Requirements." 4.8 Financial Accounting Standards Board (FASB) Statement 13, "Capital Leases." 5.0 DEFINITIONS: 5.1 "Assignment" means the authority by which only the Director, DEA or his designee, Facilities Personal Property, can dispose of personal property assets or reallocate and attribute to County agencies the use of all personal property owned or leased by the County and not otherwise allotted or assigned by County Charter or Ordinance. 5.2 "Disposal" means the process by which Facilities Management controls the removal of personal property from County possession. Listed are the classifications for disposal of personal property: 5.3 "Expendable Personal Property" means non-inventoriable personal property which does not qualify as a fixed asset because it does not meet minimum useful life and unit cost criteria. (See "fixed asset" definition, 5.4.). King County Property stickers (unnumbered) are available from Facilities Personal Property for expendable, non-inventoriable personal property. 5.4 "Fixed Asset" means, in King County's property management program, a tangible object with an estimated useful life of longer than one year and a unit cost including sales tax of $150.00 or greater. Fixed assets are grouped into the following categories: (1) Land (2) Buildings (3) Fixtures - attachments which are intrinsic to buildings and are not intended to be removed and which cannot be removed without damage to the buildings. For example, a building air conditioning system is a fixture. However, a portable air conditioning unit is equipment. (4) Improvements - paving, fencing, landscaping, etc. (5) Construction in progress (6) Machinery and Equipment - such as furniture, vehicles, machinery (considered to be inventoriable personal property assets) 5.5 "Inventory Contact Person" means the custodial Department/Division's designee appointed to conduct physical inventories and act as liaison to Facilities Management with regard to the maintenance of the agency's personal property inventory. 5.6 "Inventory Specialist" means Facilities Management personal property staff trained to provide instruction and advice to agencies regarding compliance with procedures for personal property management. An Inventory Specialist also conducts inventory audits, makes fair market appraisals of personal property, performs data entry and verification tasks and conducts sales. 5.7 "King County Identification Number" means a unique number printed in sequential order on a self-adhesive sticker/tag with the inscription "Property of King County". These tags are attached or assigned to each piece of personal property by inventory contact persons. 5.8 "Location Code" means an alpha/numeric coding system denoting building and room locations within a specified agency. 5.9 "Personal Property Asset" means all fixed assets in the Machinery and Equipment category: moveable, tangible inventoriable assets that are not intrinsic to buildings or land. For the purpose of King County property management all County weapons/firearms are considered "personal property assets" regardless of cost. 5.10 "Physical Inventory" means a systematic and recurring accounting for personal property assets, during the conduct of which, physical verification by location is performed by the inventory contact or specialist. 5.11 "Surplus" means to transfer to Facilities Management personal property determined by the custodial Department/Division inventory contact as no longer required or useful. 5.12 "Transfer" means the reassignment of custodianship within and among County agencies for County personal property assets. 5.13 "Reactivate' means re-entering an inventory item that has been removed from the inventory records due to reported loss or theft. 6.0 POLICIES: 6.1 King County will implement and maintain a perpetual personal property inventory system. 6.2 The Director, Department of Executive Administration or his designee, King County Facilities Management Division Personal Property Branch, has sole authority for reassignment and disposition of all King County personal property not otherwise assigned by the King County Charter or Ordinance. 6.3 The Facilities Management Division, Personal Property Branch, is accountable for the establishment of inventory procedures which will control and monitor all King County personal property and the disposal of surplus personal property. 6.4 All King County Executive departments, offices, and agencies will comply with their personal property management responsibilities and procedures as specified in this document. 7.0 PROCEDURES: 7.1 ACQUISITION PROCEDURE. There are four major methods of personal property asset acquisition. This section outlines the most common method which is acquisition with County or grant monies by means of the purchase order/record of contract system. This type of acquisition includes personal property items acquired under the terms of a capital lease-purchase agreement. Existence of a capital lease is to be determined in accordance with procedures established by the Office of Financial Management, Accounting Services. (Refer to Appendix 9.2 for special instructions.) If assets are acquired by donation, construction by County employees or evidence conversion refer to Appendix 9.2 for special instructions. Action By: Personal Property Branch Staff Action: Action By: Originating Agency Inventory Contact Person Action: 7.1.3 When Personal Property is received and payment has been authorized, tag the item by: 7.1.3.1 Attaching a numbered King County property identification tag to the item in an easily spotted location, or 7.1.3.2 Etching the identification tag number in an easily spotted location if exposure to weather or the type of operation prohibits the use of tags. 7.1.4 Complete Facilities Management Personal Property Acquisition Form (see Appendix 9.1 for sample forms). 7.1.5 Attach a copy of the billing invoice to Personal Property Acquisition Form and forward to Facilities Personal Property Branch. 7.1.6 If a County personal property asset is used for trade-in toward the purchase of a different personal property asset, complete the "trade-in" section of the Acquisition Form. Action By: Personal Property Branch Staff Action: 7.1.7 Check Personal Property Acquisition Form for accuracy and detail. 7.1.8 Enter data in King County Personal Property Inventory system. 7.1.9 Verify data in audit trail of next computer system update. 7.1.10 File Acquisition Form in appropriate agency's yearly file. 7.1.11 Furnish upon agency request an updated computer printout listing the current status of the agency's inventory. 7.2 INVENTORY MAINTENANCE PROCEDURE. 7.2.1 Transfers: Agencies monitoring property transfers within their organizations can do so on a simplified transfer form designed to indicate room or building location changes. (Refer to Appendix 9.1.1.C for sample form.) Action By: Originating Agency Inventory Contact Person Action: 7.2.1.1 Complete "Transferred" section of the Personal Property Transfer Agency Inventory Form. (See Appendix 9.1 for sample form.) When a transfer of property is to or out of a proprietary fund, such transfer is treated as a disposal-acquisition. (Refer to Appendix 9.3.)
Action By: Receiving Agency Inventory Contact Person Action: Action By: Originating Agency Inventory Contact Person Action: 7.2.1.4 Forward a copy of completed and signed Personal Property Transfer Form to Facilities Personal Property Branch.
Action By: Personal Property Branch Staff Action: 7.2.1.5 Check form for accuracy and detail. 7.2.1.6 Enter data into King County Personal Property Inventory system. 7.2.1.7 Verify results of data entry in audit trail of next computer update. 7.2.1.8 Furnish upon agency request updated computer printout which lists the current status of the agency's inventory. 7.2.2 Annual Inventory Certification:
Action By: Personal Property Branch Staff Action: 7.2.2.1 Issue inventory printouts, inventory change forms and annual notification to agency inventory contact persons by August 1.
Action By: Agency Inventory Contact Persons Action: 7.2.2.2 Conduct annual physical inventory of all County owned or lease-purchased personal property assigned to and under the custodianship of their agency. 7.2.2.3 Document any and all corrections and changes to the agency's inventory listing on the Inventory Change Forms and forward to the Personal Property Branch by October 1. (See Appendix 9.1 for sample form.) 7.2.2.4 If unable to locate a personal property asset, the procedure outlined in Section 7.3.611 "If stolen/lost" should be followed.
Action By: Personal Property Branch Staff Action: 7.2.2.5 Check Inventory Change Forms for accuracy and detail. 7.2.2.6 Enter data in King County Personal Property Inventory system. 7.2.2.7 Verify data in audit trail of next computer system update. 7.2.2.8 Furnish all inventory contact persons with updated inventory printouts by December 1.
Action By: Agency Inventory Contact Persons Action: Action By: Personal Property Branch Staff Action: 7.2.2.11 Data enter December changes and return to directors/managers their finalized inventory printouts within twelve working days and in no case later than February 16th.
Action By: Agency Director/Manager Action: 7.2.2.12 Review agency's inventory printout. Prepare and sign a cover memorandum which states the printout represents an accurate recording of the personal property assigned to the agency. Return memorandum with the finalized inventory printout to the Personal Property Branch no later than February 25th.
Action By: Personal Property Branch Staff Action: 7.2.2.13 Submit to the King County Executive for his approval, summary information regarding agencies' annual personal property replacement costs and depreciated values. 7.2.2.14 File on the first Monday of March as required by R.C.W. 36.32.210 with Records and Elections the full and complete King County Personal Property Inventory for the twelve-month period ending December 31 of the preceding year. 7.2.2.15 Prepare and distribute to the County and Department Directors an annual shortages report containing information regarding personal property reported lost or stolen.
7.3 DISPOSAL PROCEDURE. Action By: Custodial Agency Inventory Contact Person Action: 7.3.1 Determine personal property is no longer required for use by custodial agency. Complete personal property disposition form with recommended method of disposal and forward to Facilities Management Personal Property Branch. (See Appendix 9.1 for sample form.) "Trade-in's" are an exception. Refer to Section 7.1.6. Action By: Personal Property Branch Staff Action: 7.3.2 Appraise value and requirements of County use. Notify custodial agency of determined disposal method. 7.3.3 If to be surplussed: 7.3.3.1 Coordinate shipment of property to storage. 7.3.3.2 Return copy of personal property disposition form with "received" portion completed to originating agency's inventory contact. 7.3.3.3 Make appropriate adjustments to King County Personal Property Inventory system. 7.3.3.4 Furnish upon agency request an updated computer printout listing the current status of the agency's inventory. 7.3.4 If to be dismantled and used for parts: 7.3.4.1 Make appropriate adjustments to King County Personal Property Inventory system. 7.3.4.2 Furnish upon request an updated computer printout listing current status of the agency's inventory. 7.3.5 If to be scrapped/discarded: 7.3.5.1 Conduct scrap sale or make arrangements to discard appropriately. 7.3.5.2 Make appropriate adjustments to King County Personal Property Inventory system. 7.3.5.3 Furnish upon agency request an updated computer printout listing current status of the agency's inventory. 7.3.6 If stolen/lost: Action By: Custodial Agency Inventory Contact Person Action: 7.3.6.1 Complete Theft/Loss form and Disposition form.
Action By: Director/Manager Action: 7.3.6.2 Authorize and sign Theft/Loss form to be forwarded to Facilities Personal Property Branch.
Action By: Personal Property Branch Staff Action: Action By: Custodial Agency Inventory Contact Person Action: (a) Send to the Facilities Management Personal Property Branch a Disposition form indicating the item is to be reactivated.
Action By: Personal Property Branch Staff Action: Action By: Personal Property Branch Staff Action: 8.0 RESPONSIBILITIES: 8.1 The Executive Administration Department, Facilities Management Division, is responsible for management of King County's personal property inventory and disposal program including: 8.1.1 Compliance with all applicable County codes and State laws governing the inventory and disposal of King County's fixed asset personal property. 8.1.2 Compilation of a complete personal property inventory from data submitted by County agencies; submission to the County Executive of inventory information for all King County fixed asset personal property; certification and filing of the inventory with the Records and Elections Division. 8.1.3 Review and reconciliation of all agencies' inventory listings including: 8.1.3.1 Performance of audits and physical inventories to verify the accuracy of agency listings. 8.1.3.2 Review and processing of all inventory transaction documents submitted by King County agencies including resolution of discrepancies and inaccuracies with agencies. 8.1.3.3 Establishment of standard inventory procedures for department inventory contact persons. 8.1.4 Coordination with agencies and the Office of Financial Management to ensure completion of the annual year-end reconciliation of fixed asset personal property transactions to ARMS. 8.1.5 Maintenence of a "surplus" personal property program controlling and coordinating the transfer of personal property from one King County agency to another. 8.1.6 Management of King County's personal property disposal program including appraisals, determination of salvage values, determination of the propriety and advisability of selling and supervision of all sales or disposals of personal property. 8.2 All King County Executive department or office directors, division managers, and administrators of other Executive agencies are designated as custodians of the fixed asset personal property assigned to their respective agencies. As custodians they are responsible for compliance with and implementation of King County's fixed asset personal property inventory regulations within their agencies and for: 8.2.1 Appointment of an adequate number of personnel within their agency to function as inventory contact persons responsible for maintaining a physical inventory and for reporting to the Facilities Management Division all changes to that inventory. 8.2.2 Submission to the Facilities Management Division each year of a signed annual physical inventory document. When signed by the appropriate agency director, or manager, this document represents an accurate recording of the personal property under the custodianship of that agency reflecting acquisitions, changes and loss of personal property. 8.2.3 Review of all incidents of reported theft or loss of personal property assigned to their agencies and the submission to Facilities Personal Property of a "Theft-Loss Report" documenting any such thefts or losses. (See Appendix 9.1 for sample forms.) 8.3 The appointed inventory contact person in each agency is responsible for: 8.3.1 Submission of inventory forms which report the following personal property transactions to the Facilities Management Division in accordance with established inventory procedures: acquisition, relocation, reorganization, theft, loss or recommendation to surplus or dispose of any item of personal property. 8.3.2 Completion of a thorough annual physical inventory of all personal property items and submission of all corrections and changes to the Facilities Management Division. 8.3.3 Coordination with the Facilities Management Division to assist with resolution of inventory discrepancies or inaccuracies. 9.0 APPENDICES: These appendices are available from the Facilities Management Division: 9.1 Sample Forms 9.1.1 Acquisition, Transfer and Disposition Forms: these forms are obtained from the Personal Property Branch, Facilities Management Division, and are used by agency inventory contact persons to report all such transactions to Facilities Personal Property Branch. 9.1.2 Theft/Loss Report Form: this form is obtained from the Personal Property Branch and is used by agency managers to document suspected theft or loss of personal property assigned to their custodianship. This report supplements but does not replace the Disposition Form which must be submitted by the inventory contact person. If theft is suspected, a copy of the police report must be attached to the Theft-Loss Report Form. 9.1.2a Samples - Theft/Loss Report 9.1.3 Annual Inventory Change Form: this form is distributed by Facilities Management Personal Property Branch for use only during the annual inventory certification process described in Section 7.2.2. 9.1.3a Samples - Annual Inventory Change Form 9.2 Special Acquisition Instructions If personal property assets are acquired by capital lease, donation, construction by County employees or by evidence conversion, the agency inventory contact person must notify the Facilities Management Personal Property Branch of the acquisition. In addition to the procedure outlined in Section 7.1, "Acquisition Procedure", the following information must be included by the agency inventory contact person when completing the Personal Property Acquisition Form. 9.2.1 Capital Lease Acquisitions If at its inception a lease meets one or more of the following four criteria, the lease shall be classified as a capital lease and the asset acquired shall be classified as inventoriable personal property. (1) The lease transfers ownership of the property to the County by the end of the lease term. (2) The lease contains a bargain purchase option. (3) The lease term is equal to 75 percent or more of the estimated economic life of the leased property. However, if the beginning of the lease term falls within the last 25 percent of the total estimated economic life of the leased property, including earlier years of use, this criterion shall not be used for purposes of classifying the lease. (4) The present value at the beginning of the lease term of the minimum lease payments equal or exceeds 90 percent of the fair value of the leased property. However, if the beginning of the lease term falls within the last 25 percent of the total estimated economic life of use, this criterion shall not be used for the purposes of classifying the lease. The purchase cost of assets acquired via capital lease is equal to the present value at the beginning of the lease term of the minimum lease payments during the lease term. However, if the amount so determined exceeds the fair value of the leased property at the inception of the lease, the amount recorded as the purchase cost of the asset shall be the fair value. Existence of a capital lease is to be determined in accordance with procedures established by the Office of Financial Management, Accounting Services. 9.2.2 Donations 9.2.3 Construction by County Employees 9.2.4 Evidence Conversion 9.3 Proprietary Fund "Transfers" Special Instructions: Property transferred from or to a proprietary fund is treated as a disposition/acquisition by that fund. Payment, through recording an expenditure in the fund receiving the property, is made in the form of an interfund transfer. The fund releasing the property shall record a revenue. This process requires a disposal form be submitted to the Personal Property Branch of the Facilities Management Division. The County agency acquiring this property must submit an Acquisition Form. On this form, the Interfund Transfer document number is substituted for the Purchase Order number. The dollar amount on the Interfund Transfer is to be considered the purchase cost.
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