APPROVED: COMMISSIONER. III. Purpose: To establish procedures for accountability of State fixed assets and supplies.

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1 DIVISION OF CORRECTION STATE OF MARYLAND DEPARTMENT OF PUBLIC SAFETY AND CORRECTIONAL SERVICES DIVISION OF CORRECTION PROGRAM: SUPPLY AND SERVICES DCD #: 75-1 TITLE: Property Accountability ISSUED: October 3, 2005 AUTHORITY: ASSISTANT COMMISSIONER DIRECTIVE APPROVED: COMMISSIONER I. References: A. DGS Inventory Control Manual B. DCDs 75-2, 75-5 C. ACA standard D. DPSCS Financial Operations Manual II. Applicable to: DOC Headquarters, Maryland Correctional Enterprises, and All Institutions III. Purpose: To establish procedures for accountability of State fixed assets and supplies. IV. Definitions: A. Accountable officer means a supervisory or administrative employee with sufficient authority to direct the care and utilization of property assigned to him/her. B. Property officer is responsible for creating and maintaining independent inventory control accounts and automated and perpetual inventory records in accordance with departmental, DGS and DOC standards, as well as approved automated inventory programs. C. Buildings are structures for housing humans, marine, plant or animal life, materials, supplies, equipment and mechanical apparatus. D. Capital equipment (non-expendable item) means any equipment item or furnishing having a probable useful life in excess of one (1) year and a procurement cost of $100 or more per unit, such as, furniture, machinery, instruments and other apparatus. Capital equipment includes motor vehicles if the procurement cost is $100 or more. It also includes sensitive items having a procurement cost of $50 or more and a useful life of one (1) year or more. Firearms and other weapons, regardless of cost, are considered capital equipment. Page 1 of 8

2 V. Policy: E. Fixed asset includes land, land improvements, buildings, and capital equipment. Fixed asset does not include materials, supplies or non-capital equipment. F. FMIS Financial Management Information System. G. Land means any land that is titled to or designated in any matter confirming ownership by the State of Maryland. H. Land improvement includes any improvement such as electrical, plumbing and heating systems, traffic signal devices, signs, storage tanks above or below ground level, filtration systems, drainage components, sidewalks, bridges, fences and grounds beautification, including all landscaping. I. Materials and supplies (commodity) means any item that is consumed, expended or changed in form by use, such as food, office supplies, raw materials, building and maintenance supplies, repair parts items purchased for resale, storeroom supplies and other similar items needed to support routine operations. J. Motor vehicles include all automobiles, station wagons, light and heavy-duty trucks, graders, tractors, and other highway and off-road motorized wheeled equipment. Marine vessels and aircraft are considered motor vehicles. K. Non-capital equipment (expendable item) means miscellaneous equipment, furniture, desktop articles and the like, having an acquisition cost of less than $100, sensitive items with an acquisition cost of less than $50, or items with a useful life of less than one (1) year. L. R*STARS Relational Standard Accounting and Reporting System M. Sensitive items are capital or non-capital equipment items that are prone to theft and concealable in a handbag or briefcase, such as a pocket or electronic desk calculator, recording device, portable tool, hand radio, camera and the like. Equipment items that are too large for concealment in a handbag or briefcase, such as typewriters, projectors, chain saws and the like, shall be considered sensitive items if there is a history of loss or theft within a particular agency. Security items shall be included as sensitive items regardless of cost. Firearms and other law enforcement type weapons are always considered sensitive regardless of acquisition cost. It is the policy of the Division of Correction to comply with the policy and procedures set forth in the Inventory Control Manual published by the Department of General Services. Page 2 of 8

3 VI. Procedures: A. Land, Land Improvements, and Buildings 1. Record-keeping Requirements Each specific item shall have an item identification, construction cost code and contractor, acquisition cost and date, physical location, source of funds and the amount, and any justification for transfer or disposal. 2. Reconciliation of Inventory Records a. The institutional property officer shall maintain a control account for land, land improvements, and buildings. b. Inventory records shall be reconciled at least once a year with the control account and the balance per R*STARS. (1) If the total dollar value of inventory records covered by a control account equals the account balances, no action is necessary. (2) If there is a difference, the transactions during the reconciliation period shall be analyzed, and the necessary adjustments made to the inventory records, control account, and/or R*STARS. 3. Physical Inventory Not Applicable. 4. Reporting Requirements The inventory value of fixed assets shall be entered into FMIS annually in accordance with instructions from the Department of Budget and Management. B. Capital Equipment 1. Record-keeping Requirements The following information shall be maintained on all capital equipment: a. Item identification; b. Name of supplier and purchase order number; c. Acquisitions cost and date; Page 3 of 8

4 d. Physical location; e. Serial number, if any; f. Source of funds; g. Justification of transfer or disposal; h. Detailed records by category ( equipment or motor vehicles ) and location. 2. Equipment Identification all items shall be marked with a property identification number and the words State of Maryland Property upon the receipt of the item by the accountable officer of the facility. 3. Physical Inventories a. Capital equipment shall be inventoried by the accountable officer as follows: (1) non-sensitive items annually. (2) sensitive items a complete physical inventory at least once each year. (3) the 1/12 th inventory system shall be used. The warden/designee shall schedule each department or unit to conduct the 100% physical inventory. Once reconciliation is completed, the property officer shall complete a 10% spot check of the inventory. b. The accountable officer shall forward the inventory results to the property officer. c. Inventory requirement may be met by periodic checks throughout the inventory cycle. However, by the end of each cycle, all items shall have been physically checked. 4. Reconciliation of Inventory Records a. The property officer shall check the physical inventory with the inventory records to verify that records exist for all items. b. If items are missing, the property officer shall complete Form DGS 950-8, Report of Missing or Stolen State Property. Page 4 of 8

5 c. If property is stolen, the local police department shall be promptly notified. d. The total dollar value of inventory records covered by reconciliation is to equal the account balance. If there is a difference, the transactions recorded during the reconciliation period shall be analyzed and the necessary adjustments made to the inventory records and approved by the warden/designee. 5. Reporting Requirements the inventory value of capital equipment shall be entered into FMIS in accordance with instructions from the Department of Budget and Management. C. Non-Capital Equipment 1. Record-keeping equipment serial numbers shall be recorded since they are required when reporting property stolen or missing. This is the only recordkeeping requirement. 2. Equipment Identification the accountable officer shall mark all items with State of Maryland Property. 3. Physical Inventory not required. 4. Reporting Requirements inventory values need not be reported to the Department of General Services or Comptroller of the Treasury. D. Materials and Supplies 1. Record-keeping Requirements a. Perpetual inventory records shall be maintained at each facility for all items purchased as materials and supplies. b. The records shall contain the following: (1) Item identification; (2) Quantity received and purchase order number; (3) Quantity withdrawn and withdrawal ticket number; (4) Balance of inventory on hand; (5) Adjustment to the balance on hand; (6) Unit of issue; Page 5 of 8

6 (7) Unit of issue cost; (8) Supplier s name, purchase order number, unit cost, and order quantity; (9) Economic reorder quantity (EOQ); (10) Vendors lead time; (11) Economic reorder point (EOP). c. The records shall be maintained on Form DGS Reconciliation of Inventory Records a. The inventory clerk shall compare the perpetual inventory card balance to the physical count. b. If the record balance differs from the physical count, the variance shall be investigated and the record balance shall be adjusted to the physical inventory. It shall be recorded as an adjustment and be approved by the warden/designee. The adjustment shall be recorded on a voucher listing the date, item description, commodity code, unit of issue, unit cost, amount of variance in dollars and reason for the adjustment. 3. Physical Inventory a physical inventory of commissary and dietary supplies will be taken monthly, at the end of the monthly cycle, and will be completed within three (3) working days. A physical inventory of all other inventoried materials and supplies must be taken at least once during the last 90 days of each fiscal year. 4. Reporting Requirements a list of all materials and supplies shall be prepared by item description, unit of issue, last unit of issue cost, and balance on hand. The grand total in dollars shall be reported on Form DGS by August 15 to the Department of General Services. E. Transfer of Equipment 1. The accountable officer shall notify the property officer when an equipment item is to be transferred to another department or location at the facility. 2. The property officer shall complete sections A. and B. of the Property Transfer Request Form (Appendix 2), sign the form and submit it to the agency head/designee for review and signature. Page 6 of 8

7 3. After approval of the transfer, the property officer shall: F. Repair of Equipment a. record the transfer on the Computerized Inventory System, and b. retain the form for the property records file 1. When an equipment item is in need of service and is to be sent out for repair, the property officer shall prepare a Property Repair Request (Appendix 3) and contact the appropriate vendor for pickup/delivery of the item. 2. The vendor shall sign a copy of the Property Repair Request when the item is picked up/delivered for service and provide an estimated date of return of the equipment item. 3. When the equipment item is returned, the staff member receiving the item shall sign section III. of the Property Repair Request and give the property officer a copy of the form to retain for the property records file. G. Disposal of Equipment The property officer shall complete the Excess Property Declaration form in accordance with the Inventory Control Manual and DCD H. Each warden shall be responsible for designating the property officer and as many accountable officers as is reasonably required. I. Each warden shall establish the proper management/internal controls so that property is prudently safeguarded. As a part of this process, each facility shall use the threepart, carbonless Materials/Supplies Requisition form (see Appendix 1) when ordering materials and supplies. J. Each warden shall issue an institutional directive to implement and comply with this DCD, which shall contain, at a minimum, property officer and accountable officer procedures and responsibilities, inventory procedures and frequency, inventory reconciliation procedures, excess reporting and disposition procedures, missing and stolen reporting procedures, identification marking procedures, internal transfer procedures and temporary loan procedures. Page 7 of 8

8 VII. Attachments: A. Appendix 1: Materials/Supplies Requisition B. Appendix 2: Property Transfer Request, DC Form 75-1aR C. Appendix 3: Property Repair Request, DPSCS/DC Form 75-1bR VIII. Rescission:, dated December 7, 2001 Distribution: A L Page 8 of 8