The University has a significant investment in fixed assets, such as land, buildings, fixed and moveable equipment, which are used to carry on the institution's mission and objectives. The purpose of this policy is to ensure that the University's fixed assets are acquired, safeguarded, controlled, disposed of, and accounted for in accordance with state and federal regulations, audit requirements, and generally accepted accounting principles.
The Commonwealth Accounting Policies and Procedures (CAPP) Manual requires that all state agencies maintain an accurate inventory of fixed assets. Failure to maintain proper internal control over fixed assets could result in the University not achieving management standards if lack of control is determined to be a significant audit finding. Additionally, Office of Management and Budget Circular A-110: Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations requires that the University maintain a detailed record of equipment and that no less than every two years a complete and accurate physical inventory be completed.
The University will comply with state and federal policies relative to fixed asset management. Instances where testing by Fixed Asset Accounting, Internal Audit or the Auditor of Public Accounts reveals an excessive amount of items not properly reflected in the fixed asset records will be reported to the President and area Vice President.
The Director of Financial Operations and Materiel Management is responsible for the coordination, development and implementation of policies and procedures that comprise the university-wide fixed asset system. This system facilitates internal controls over the acquisition, disposal and inventory information of fixed assets, and enables the University to comply with federal and state regulations and meet regulatory or audit reporting requirements. Responsibility for maintaining the integrity of asset data in the system lies with the departmental fixed asset custodian, through proper notification of all changes to Fixed Assets Accounting. Updating the fixed asset system on a timely basis to record changes in the operational status, location or demographic information about fixed assets is the responsibility of Fixed Assets Accounting. Procedures and forms relative to fixed asset management are located on the Fixed Assets webpage.
- Fixed Asset Criteria
Fixed assets tracked in Longwood's asset system are divided into three categories: capital, controllable and Equipment Trust Fund. Capital assets are those with an expected useful life greater than one year and a cost of $5,000 or more. Controllable assets include technology items in which theft or loss of such items would represent a significant risk to the University (including, but not limited to, computers, netbooks, iPads, iPods, Kindles, iPhones or other mobile technology). This requirement does not apply to portable media such as USB drives. Equipment Trust Fund (ETF) assets are those costing $500 or more and funded by bonds issued through the Virginia College Building Authority (VCBA).
Items representing construction in progress are not entered into the fixed asset system until the construction or renovation is substantially complete. The classification of a renovation as a fixed asset depends upon the significance of the renovation to the structure.
- Fixed Asset Classifications and Capitalization Thresholds
- Land - Real estate without any land improvements.
Capitalization Threshold: $5,000
- Infrastructure- Improvements not specifically identifiable to an individual building, to include parking lots, fencing, sidewalks, irrigation/drainage systems, tunnels, signs and lighting. Capitalization Threshold: $5,000
- Buildings - Real estate used for shelter, dwelling or other similar agency purposes.
Capitalization Threshold: $5,000
- Building Improvements - Improvements subsequent to initial building construction.
Capitalization Threshold: $100,000
- Construction In Progress - Temporary capitalization of labor, materials and equipment of buildings or other capital assets/projects that are being constructed.
Capitalization Threshold: $5,000
- Equipment - Fixed equipment includes equipment affixed to the building; moveable equipment includes office furniture, fixtures, machines, window air conditioning units, medical, laundry, and kitchen equipment, and vehicles.
Equipment Capitalization Threshold: $5,000
Fixed Equipment Improvements/Replacements Capitalization Threshold: $50,000
- Library Books- Periodicals, journals, books of reference and other books for use in libraries. Capitalized at actual cost of acquisition.
- Intangible Assets - Include software, patents, trademarks, copyrights, land and water use rights, easements and right-of-ways.
Software Capitalization Threshold: $25,000
Other Intangibles Capitalization Threshold: $100,000
- Equipment Trust Fund (ETF) Program Assets -
The ETF Program provides funding that allows higher education institutions to purchase equipment for instructional use. Equipment purchased with ETF funds is not owned bytheUniversity, but is tied to facilities agreements with the Virginia College Building Authority (VCBA). Once a facilities agreement has been satisfied, ownership passes to the University. In addition to general rules applicable to all equipment, specific guidelines apply to the acquisition, maintenance, and disposal of ETF equipment. ETF equipment:
- Must be used in programs of instruction, research and academic support throughout its useful life or until ownership passes to Longwood.
- Is eligible for surplus only after ownership passes to Longwood.
- Must be replaced with departmental funds if lost or stolen.
- Must be an individual item that costs at least $500 or must be a functional unit where the aggregate cost of individual components is $500 or greater. Components of a functional unit perform a specific task and must remain assembled as a unit.
- Must be decaled within 45 days of receipt for identification and tracking purposes.
- Must be maintained in good working condition by the department and must be physically located in accordance with fixed asset records.
- Fixed Asset Ownership and Custody
Each department is responsible for designating a fixed asset custodian. This individual is responsible for accurately maintaining the fixed asset inventory for the department. All fixed assets are owned by the University and not by a specific individual,departmentorother operating unit. Generally, the University has sole ownership of all equipment acquired regardlessofsource of funding or method of acquisition with the following exceptions:
- Equipment acquired through sponsored projects where the federal government or other sponsor retains title to the equipment or where the sponsor furnishes equipment merely for the duration of the project;
- Equipment on short-term loan from another institution;
- Leased equipment;
- Equipment Trust Fund equipment until terms of Facilities Agreement are met
- Inventory of Fixed Assets
Fixed asset custodians are responsible for conducting an annual inventory within their respective department. Inventory listings are provided once a year by the Fixed Assets Accounting Office from the University's inventory system. The custodian is responsible for ensuring that asset information is correct, providing information to update the fixed asset system to reflect necessary changes, and completing a "Certification of Completion" form indicating that the inventory has been completed and is accurate.
- Acquisition/Addition of Fixed Assets
The "Addition to Fixed Assets Inventory" form must be completed by the fixed asset custodian to document fixed assets acquired through donation, fabrication, transfer from other universities or agencies, or simply found in the department and not listed on the department's inventory report. The form must be submitted electronically to Fixed Assets Accounting within five days of receipt (or discovery) of the fixed asset. Capital Planning is responsible for providing information concerning construction and renovations, excluding equipment.
Departments receiving a gift-in-kind (gifts other than cash and securities) should notify the Foundation immediately upon receipt, as failure to comply with IRS regulations could result in a loss of the tax deduction to the donor and/or penalties to the University.
- Fixed Asset Tagging
Materiel Management personnel are responsible for the physical tagging of University assets. Assets meeting the criteria are identified with tags that are affixed to the asset unless not physically practicable. Assets purchased with University funds are identified by a blue Longwood University asset tag. Assets purchased with ETF funds are identified with a red Longwood University asset tag. Items needing to be re-tagged are issued a white polyester tag. Assets may also be engraved. Assets that do not have tags or engraving are identified as such in the fixed asset system.
- Disposal or Transfer of Fixed Assets
Fixed asset custodians are responsible for safeguarding all equipment and other fixed assets assigned to their department, including itemsnolongerneeded, until the Surplus Property Report is signed and the items have been removed by Materiel Management or a completed transfer form is received by Fixed Assets Accounting. Custodians are responsible for recording any disposals or transfers of assets by completing and submitting required forms within five days of disposal or transfer. Unallowable and allowable disposals and transfers include:
- Unallowable disposals and transfers
- Sale of assets by a department (permitted through surplus property only)
- Gift or transfer outside of the University (except for federal research equipment which may be transferred with appropriate federal approval)
- Allowable disposals and transfers
- Stolen assets (Theft to be reported to Campus Police.)
- Assets destroyed (Loss due to fire, flood, etc. to be reported to Risk Management.)
- Surplus property
- Trade-in for new equipment
- Transfers to other University departments or other state agencies/institution
- Transfer of Fixed Assets to Offsite Locations
Equipment may be utilized off campus for University business only, when appropriately authorized. Authorization does not grant permission for personal use, use by third-party contractors, or use for non-University purposes. Offsite equipment is subject to the same University and Commonwealth rules and custodial responsibilities as on-premise equipment. The custodian for each department is responsible for maintaining the appropriate records to track the location of any equipment that is being utilized away from University premises.
- Depreciation/Amortization of Fixed Assets
The University uses the straight-line method of depreciation/amortization for all depreciable/amortizable fixed assets (land and construction-in-progress are not depreciated). Useful lives are based on information provided by the Commonwealth Accounting Policies and Procedures (CAPP) Manual. Useful lives are subject to modification if facts and circumstances at the University differ from these guidelines.
Approved by the Board of Visitors, December 2, 2011.
Revised and approved by the Board of Visitors, June 15, 2012.
Revised and approved by the Board of Visitors, December 7, 2012.
Revised and approved by the Board of Visitors, December 06, 2013.