Welcome to Capital Asset Management Introductions

CAMS Mission The mission of the University Capital Asset Management department is to provide the highest quality service and guidance in asset management to university organizations, while fulfilling the financial recording and reporting requirements of the university. In this presentation you will see the tools we use to record assets, and the tools we make available to assist organizations with asset management. We will also look at the reporting tools for Capital Asset Management. In essence you will see how the Capital Asset Management System helps us fulfill our mission.

Roles and Responsibilities Compliance Services Consulting Services System Support and Training Services Compliance Services Ensuring the compliance of organizations with Generally Accepted Accounting Principles, GASB and AICPA accounting and inventory standards and university policy. Upholding the integrity of capital asset inventory by following and complying with federal inventory standards, as outlined in OMB Circulars A-21 and A-110. Providing authoritative guidance on the interpretation of standards, policies and procedures by creating and maintaining Capital Asset and Inventory Management Standard Operating Procedures. Identifying and amending university policies related to capital asset and inventory management using the University Financial Policy Committee procedures. Upholding the integrity of the general ledger system and capital asset management system by ascertaining the validity and accuracy of balances between both systems and ensuring the timeliness of monthly reconciliation. Supporting the preparation of the university financial statements, by providing detailed audit work papers related to plant fund accounting, capital asset accounting, capital lease accounting and bond accounting. Supporting and facilitating Campus Capital Asset meetings for review of capital asset and inventory management. Consulting Services Aiding organizations in inventorying capital assets. Responding to and assisting organizations with questions and concerns relating to plant fund accounting, capital asset accounting, and capital lease accounting. Responding to and assisting organizations with questions and concerns relating to capital asset documentation and data management. Responding to and assisting organizations with the use of the capital asset management system. System Support and Training Services Developing, supporting and maintaining the capital asset management system, reporting tools, and FIS attributes. Providing regular training to organizations related to the capital asset management system and capital asset documentation.

Asset Categories Capital Movable Capital Non-movable Non Capital Equipment Fabrications Lease Purchases Capital Non-movable Art and Museum Bonds Buildings & Building Improvements Infrastructure Land Leasehold Improvements Library books Non Capital Different types of assets are housed in Capital Asset Management System. We use the Asset Type code to distinguish between movable and non-movable asset categories. The asset type code also assigned the useful life to the asset. The inventory status code is used to distinguish between capital and non-capital. Movable equipment transactions are processed in the Capital Asset Builder. Non-Movable assets like Buildings and Infrastructure are created from a monthly summary report. These transactions are added manually using the Add Asset Document. Transactions are identified by the object sub type code which is generated from the object code. Non-Capital assets can be created by organization using the Add Asset Document.

Major Components of CAMS Capital Asset Builder Pre-Asset Tagging Non-Movable Additions Documents and Maintenance Screens Inventory Process Depreciation Reconciliation Reports The Capital Asset Builder is a module with-in the FIS. The CAB application houses the processes and business rules we use to create assets. Pre-Asset tagging is used to tag equipment as it is delivered to the organization, before the asset is created. Today non-movable additions are added to the system using the Add Asset and Add Payment document. As part of the Kuali project these will be incorporated into the asset creation module. We will take a brief look at CAMS FIS documents: Retirement, Transfer, ELR, Fabrication and the Maintenance Screens. In addition we will describe the inventory, depreciation, and the reconciliation processes for IU.

CAB Menu Information from the General Ledger and the purchasing system is pulled together in the Capital Asset Builder to create assets or add payments. In the CAB load process reconciliation is performed to insure that the records from purchasing system match the amounts extracted from the general ledger. The Invoice Line Item screen is used to process purchase orders. The General Ledger Transaction Screen is where a Financial Document was processed with a capital object code. Assets that have been created can be viewed from the Maintain Asset Screen. We have one person that creates assets for the seven campuses.

Invoice Line Item Screen A purchase order is retrieved and line items on the PO may need to be added or split to create an asset(s). If there is more than one invoice for a given PO the pending invoice will appear at the bottom the screen. Before creating an asset or inserting from pending business rules require the user to allocate the additional changes. To add a line item take the scissors and drop it on the paste icon for the line item. To create the asset take the line item scissors and drop it on the asset book.

Allocate Additional Charges Click on the Allocate button on target invoice, and pending invoice. Additional charges are allocated first by matching account/object codes, any remaining amounts are allocated to all line items.

Insert from Pending Drag scissors to Paste icon on target invoice.

Add line 8 to line 1 Drag scissors on line 8 and drop on paste icon on line 1.

Create View Asset Screen Transactions processed from the Invoice Line Item screen, and the GL Transactions will all take you to the Create View Asset Screen. At the create view asset screen the asset creator will select the asset type code. The asset type code is used to group assets for depreciation. If the manufacture and model number can be determined from the description this information will be entered in the appropriate fields. Once the location (building, room) are set you are ready to save the asset. If pre-asset tagging information exists this information (asset type, building, room) would be provided by the organization. If pre-asset tagging information does exist the asset creator would only needed to click on the save button.

General Ledger Transactions The General Ledger Transaction screen is where we apply payments or create assets from Financial Documents. The following financial documents: Cash Receipt, Distribution of Income/expense. General Error Correction, Internal Billing, Service Billing, and Procurement Card documents have a dialog box appear when a capital movable object code is used. The user will be expected to enter an asset number if they are “modifying an asset” or if they are capitalizing the expense for the first time to enter “pending asset information.” When the transaction is approved and the General Leger updated the transaction will be loaded into CAB and processed from the General Leger Transaction screen. Asset creator can expand on the FIS document to view the document. Asset Creator can check the box at the left to select the documents for processing.

Modify an Asset This is the screen the user would see when selecting the “modify an asset” option on a Financial Document. If the user does not know the IU tag number or asset number selecting the “asset” button will navigate them to the Capital Asset Lookup screen.

Enter Pending Asset Information If the expense was capitalized for the first time the user would select “Create New Asset.”

Create View Asset Screen By gathering the information up front the asset creator can select a check box and create the assets for all transitions with minimal intervention. For Financial Transactions all the asset creator needs to do is click on the save button at the Create View Asset Screen.

Pre-asset Tagging Pre-asset tagging allows organizations to tag equipment as it is delivered to their organization. Lookup by Purchase Order To create the Pre-asset Tagging record click on the Add New or Modify Purchase Order button.

Pre-asset Tagging (tagging) screen We have an nightly extract from the Purchasing System to select PO’s with a unit cost of $5,000.00 or more, and a capital equipment object code. To save time I have navigated us past the first screen where the manufacture and asset type code are entered. On this screen they will enter the tagging information. When the asset is created in CAB this table will be checked for information.

Documents Route for Approval Add Asset Asset Retirement Asset Transfer Equipment Loan/Return Fabrication Request No restrictions for documents, because they route for approval. Add asset documents for non-capital additions to route for approval. The retirement document has special conditions routing for sold, gift, and external transfer. In addition it routes to the University Capital Asset Office The transfer document routes to the FO for the receiving and current owner. ELR routes to the Borrower and FO. Fabrications route to the FO and University Capital Asset Office.

Maintenance Screens & Security Maintenance Screens do have restrictions University Capital Asset Office Campus Capital Asset Offices Organizations Capital Asset Management security is divided into three levels. The University Capital Asset Office, which can modify all assets. The Campus Capital Asset Offices which can modify those assets located on their campus, and departmental users. The campus security is maintained by a Maintenance Security Table. The departmental user security is restricted by the users chart and organization code entered on their FIs User document. We do recognize organization hierarchy so a user can modify all assets that report up to the chart-organization code entered on the FIS user Document. A CAMS Security Document can grant access by organization where necessary.

Accuracy of Data Additions (CAB/Add Asset Document) Transfers Retirements Inventory Updates The Capital Asset Management System uses system edits to insure data integrity. Each code (i.e., asset type code, condition, acquisition type) has lookup tables. Some fields have edits based on values selected form lookup tables. For example the Add Asset document will not allow you to enter a capital object code if you have selected a non-capital acquisition type. In addition reconciliation reports are also used to verify additions, retirements, and transfers. Location information is verified against tables populated by the Bureau of Facilities files.

Add Asset Document Non-movable Additions Today non-movable assets (i.e. buildings, library books, art) are created on the Add Asset Document. The acquisition type of ‘N’ new identifies to the document that an asset is being created that does not require ledger entries. The use of acquisition type code ‘N’ is restricted by an edit to the University Capital Asset Office. Once an asset has been created for a building account additional payments are added using the Add Payment Document. For buildings, Infrastructure, and land improvements the asset type code identifies the project as CIP. When the project is completed the asset type code will be changed to identify the asset category, and assign the useful life. In addition the create date will be set, and depreciation expense will begin. The Add Asset Document is also used to create non-capital assets. Non-capital assets are added at the discretion of the department. Non-capital assets reside in the same tables as capital equipment; they are distinguished by the inventory status code. Non-capital assets do not have the same restrictions as capital assets. To create a non-capital asset the user must enter an account, campus, asset type code, inventory status, acquisition type and description, all other fields are optional. Non-capital assets are not routed for approval. Gifts, Transfers-in, and Found

Asset Retirement The Asset Retirement Document is used for assets that have left the university premises permanently. Once the document is approved the inventory status is changed to identify the asset as retired. This document is initiated by the organization, approved by the fiscal officer and routed to the University Capital Asset Office for approval. Retirement reasons like Gift, Sold require additional routing. Normally equipment is transferred to Materials Management for disposition.

Asset Transfer The Asset Transfer Document is used to change ownership and inventory responsibility of an asset. When an Asset Transfer is processed the account amounts on the payment records are reversed out of the current chart organization (balance sheet) and added to the chart organization (balance sheet) to which the asset is being transferred. The owner account on the asset record is changed to the receiving organization from the AT document. The Asset Transfer Document is approved by the fiscal officer of the owner account the and the receiving account. This document is not reviewed by the University Capital Asset Office. The asset transfer is processed against one asset.

Equipment Loan/Return When capital equipment leaves the IU campus for thirty-one days or more an Equipment Loan/Return Document is required. The borrower’s address is captured on the Equipment Loan/Return Document. If the borrower is not the initiator of the document it will route to the borrower for approval, as well as the fiscal officer. This document is used only as a tracking feature there is no impact on the General Ledger.

Fabrication Fabrications of movable equipment allow organizations to capitalize expenditures that are necessary to build a piece of equipment. The cost of individual components may be less than the capitalization limit; however, the finished, tangible asset must have a total cumulated cost that does meet the capitalization limit. Process Organizations submit a fabrication request, and supporting documentation. Once approved the asset number must be submitted on all procurement transactions. Currently we allow materials and direct labor to be capitalized as part of the fabrication. The labor is billed on an Internal Billing Document.

CAMS Maintenance Screens Capital Asset Maintenance Location Maintenance Tag an Asset Merge an Asset Separate an Asset System Manager Maintenance The following screens will not be covered in this presentation: Tag an Asset, Merge an Asset, Separate an Asset, and the System Manager Maintenance screen. If Pre-Asset tagging is not used then the tagging information is entered on the Tag an Asset screen. The Merge an Asset function is used to combine assets. The Separate an Asset allows you to create additional assets. The System Manager screen is used to close fabrications.

Capital Asset Lookup On CAMS documents if you double click in a blank asset number field you will be navigated to the Capital Asset Lookup Screen. If an asset number is present double clicking will take you to the Capital Asset Maintenance Screen.

Capital Asset Maintenance The Capital Asset Maintenance screen displays all of the asset, payment and depreciation information. Using the Capital Asset Maintenance Screen you can create: Components Warranties Repair Histories ============================================ This screen is where departments update location information. The “document” button will display the document history for the asset.

Location Maintenance The Location Maintenance screen is used to update the Campus, Building, and Room data. This screen allows updates to multiple assets. When location changes are made to assets the system updates the last inventory date. Indiana University Policy states that when equipment is moved the Capital Asset Management System should be updated within 30 days.

Physical Inventory Intermec Antares Trakkers scan equipment. Filecopy utility is used to extract file and copy to PC. File Uploaded to FIS Bar-code Error Document Inventory Reconciliation Report Currently we use the Intermec Antares Trakkers (pc) to scan equipment. A file copy utility is used to extract the file from the trakker and copy the file to a designated computer. The updates are loaded into the asset system using the Bar-code Inventory Document in the FIS. Data that does not pass referential integrity checks will drop into an Error Document. Once the records on the error document have been processed the Inventory Reconciliation Report is run to identify assets missed during the physical inventory. When the items on the Inventory Reconciliation report have been addressed a Certification Letter is sent to the organization for signature.

Depreciation Depreciation expense is calculated from a stored procedure that updates the asset database on a monthly basis. The Straight Line method is the basis for the calculation, along with a method for Salvage Value. Federally owned payments are excluded from the depreciation calculation. In addition, no Deprecation will be taken on Art and Museum Objects, Land, or Leasehold Equities. Each asset is depreciated from the asset create date, and the assets useful life assigned to the asset type code. Non-Movable assets use a ½ year convention for assigning the create date. The Deprecation entries Debit Object Code 51XX, Depreciation Expense, and Credit the appropriate Accumulated Depreciation Object Code based on the Object Code Sub Types in the Asset Object Code Table. Any assets that you do not want to receive depreciation would need an asset type code with a zero life. In addition the object sub type code is used to exclude payments with federally owned object codes. While the payments that are university funded are eligible for depreciation.

Asset Object Code Table Year Chart SubTY Cptlztn Accum Depr 2005 BA AM 8615 BD 8601 8905 5112 CM 8610 8910 5115 CO IF 8604 8904 5157 Noticed the AM – Art does not have an accum, or depr object code. We don’t depreciate Art which is why these fields are null. CO is federally owned.

Reconciliation Additions Retirements Transfers Depreciation Expense Ending Balances Reconciliation reports are used to verify additions, retirements, and transfers. For additions reports confirm that CAB+CAMS = General Ledger. Retirements and Transfers confirm amounts in GL = Amounts in CAMS. Reconciliations are processed by asset category. Art Buildings Fabrications Infrastructure Land Leasehold Improvements Library Books Movable Equipment

Pre-Defined Queries Capital Asset Management has made available the following reporting categories to assist organizations in asset management. Inventory Control Reports Nbr of rpt 9 Depreciation Reports Nbr of rpt 4 Edit Reports Nbr of rpt 10 Summary Reports Nbr of rpt 4 Internal Reports Nbr of rpt 15 Screening Reports Nbr of rpt 1 Capital Lease Reports Nbr of rpt 2 Most reports allow you the option to include non-capital assets.

Movable Equipment Activity For Year Ending June 30, 2004 Total net capital assets $1,707,160,245.18 Capital Asset Management Staff Plant Fund Accountant Asset Creator Inventory/Tagging Manager Data Manager