PUBLICATION DATE:
29TH OCT 2010 / IMPLEMENTATION DATE: 1ST JAN 2011
ASSETS MANAGEMENT POLICY / POLICY No: FP.1.2
TABLE OF CONTENTS
Page
1. Introduction 2
1.1 Definition 2
1.2 Types of Fixed Assets 2
1.3 Categories of Fixed Assets 2
1.4 Other Controllable Assets 3
2. Asset Utilization and Security 4
2.1 Asset Utilization 4
2.2 Asset Security 4
2.3 Theft and Damage to Assets 5
3. Asset Disposal 5
3.1 Decision to Dispose 6
4. Asset Registers and Reporting on Assets 6
4.1 Required Information for each Asset in the Fixed Asset Register and the Memo Asset Register 6
4.2 Changes to Asset register 7
4.3 Basic Rules for Maintaining Asset records 8
5. Physical Asset Verification 8
5.1 Objective 8
5.2 Scope, Frequency and Method of Asset Verification 8
5.3 Procedure for Asset Counts 9
6. Special Cases for Asset Ownership & Control 9
6.1 Donated Assets 9
Appendix 1- Asset Movement Form 10
Appendix 2- Asset Disposal Form 11
i
icipe Asset Management Policy
/ POLICIES AND PROCEDURESPUBLICATION DATE:
29TH OCT 2010 / IMPLEMENTATION DATE: 1ST JAN 2011
ASSETS MANAGEMENT POLICY / POLICY No: FP.1.2
1. Introduction
icipe’s goal is to have systems in place for accurately recording and monitoring transactions related to fixed assets and for safeguarding all its assets. The asset registers must contain relevant, accurate, sufficient information and be updated in a timely manner.
The purpose of this policy is to provide guidance when dealing with the monitoring and control of assets.
1.1. Definition
A Fixed Asset is an asset that has a useful life greater than one year and is used for the purpose of an entity’s activities.
1.2. Types of Fixed Assets
The following list describes the types of assets most commonly used by icipe. It is illustrative, not exhaustive.
· Land & Buildings
· Motor Vehicles (These include Motorbikes and Marine hull)
· Furniture – Items such as Shelves, Chairs, Desks and Tables
· Computers – Items such as PCs, IT Servers and Softwares
· Office Equipment – Items such as Printers, Scanners, Photocopiers, Cameras etc
· Scientific Equipment – Items such as Microscopes, Generators, Fridges etc
1.3. Categories of Fixed Assets
icipe assets are normally divided into:
· Fixed Assets: These are assets bought using core funding and have a value equal or greater than US$500. These are capitalised and depreciated over the predetermined useful life of the asset, as stated below;
Type of Asset / %Land and buildings / 2.5
Scientific equipment / 12.5
Furniture and office equipment / 12.5
Motor vehicles / 25.0
Computer equipment / 25.0
Fixed Assets acquired between January and June are depreciated for the whole year, while those acquired after June are depreciated for half year in the year of purchase. icipe may choose to depreciate leased land, based on the remaining lease period, if management deem it necessary.
icipe will aim to replace its computers when they are four years old and vehicles when eight years subject to availability of replacement funds.
· Core Assets: These are assets bought using core funding and have a value below US$500 and not less than US$200. These are expensed in the year of purchase but reflected as assets in a note in icipe Financial Statements.
· Restricted Assets: These are assets bought using restricted funds and have a value over US$200. These are expensed in the year of purchase, and included in icipe Financial Statements as a note.
The control of both Core and Restricted assets is similar to the controls in place for Fixed Assets.
Assets with lesser individual values but represent a significant capital outlay when considered collectively for example, furniture, such as a conference room table and chairs should be considered collectively as one asset.
1.4. Other Controllable Assets
Assets costing less than US$500 but are expected to be in use for more than one year are expensed in the year of purchase. The Unit custodian of the asset may wish to keep control over such assets.
Examples include but not limited to:
· Small office equipment such as printers and fax machines;
· Mobile phones, extinguishers, hand held radios, data memory sticks, wireless access points, UPSs;
· Certain small laboratory or field equipment;
· TVs sets and certain audio visual equipment.
The role of the Finance Unit for “other controllable assets” is limited to help provide a format to the Unit which has custody of the asset to keep proper records and maintain control over the assets.
2. Asset Utilization and Security
2.1. Asset Utilization
· Use of assets will be restricted to the purposes for which they were acquired. It is the responsibility of Vote Holders or their delegates to regularly review asset performance to identify under-utilised and under-performing assets.
· Restricted assets, acquired and used by a given project, may be made available for use in other projects, if such other use complies with the acquiring project agreement and does not interfere with the work of that project.
2.2. Asset Security
· Users are personally responsible for assets under their control. Technical units who handle assets under repair are also responsible for the security of the assets.
· The safeguarding of equipment such as laptops and digital cameras is particularly important because of their attractive and portable nature but also because of the confidential information that they may contain. Steps that can be taken include but are certainly not limited to :
§ Keep your office locked when unattended and when travelling;
§ Do not leave items unattended in public places (e.g. airports, airplanes);
§ Do not leave items unattended in vehicles;
§ Always clearly label items to deter theft;
§ Transport laptops in secure bags or cases;
§ Do not flaunt cameras or cell phones in public places.
· Custodians for assets managed in a pool have to ensure that the assets they are responsible for are always securely shared and safeguarded.
· When an asset has been officially handed over to a Technical Unit for maintenance or repair, the responsibility for the security of the asset rests with the Technical Unit. The Technical Unit should take measures such as secure cabinets or other devices to ensure the security of the assets at all times while under their care.
· icipe security officials may question individuals removing equipment from icipe campuses. Staff transporting equipment should be prepared to present a Staff I.D. card and a written authorization from the Vote Holder in charge of the asset. For items that are frequently taken out of the icipe compound such as laptops, security personnel maintains a detailed running list of laptops taken out of the icipe compound whether personal or official. These laptops will have to be declared and checked by the security personnel, every time one leaves the campuses.
2.3. Theft and Damage to Assets
The Human Resources Manager is to be notified by the custodian and Vote holder immediately of any cases of theft or damage of icipe assets. The Security Manager is also to be notified in cases of theft or malicious damage. The HR manager will follow up with Insurance and alert the Asset Accountant. The Security Manager will launch investigations into the loss of the asset and prepare a written report covering all relevant matters and make recommendations. The report will be forwarded to the Director of Finance and Administration (DFA) and the Human Resources Manager (HRM). A copy will be used to support subsequent insurance claims if appropriate.
In case negligence is established, the HRM will, if necessary take any or a combination of the following actions:
· Recover replacement cost of item from staff salary/ dues;
· Temporarily suspend member/s of staff implicated in the report pending investigations;
· Recommend dismissal of member/s of staff whose responsibility is clearly established;
· Refer the matter to the Diplomatic Police Unit for further investigation;
· Refer the case to the Institute’s legal representative for guidance regarding instituting criminal proceedings.
The responsible Vote Holder will have an Asset Disposal form completed for his/her approval before the asset can be written off.
3. Asset Disposal
Asset disposal is the removal from usage of an asset or part thereof when the asset is sold, dismantled, abandoned or otherwise disposed-off.
3.1. Decision to Dispose
Assets for disposal will be identified on an on-going basis and systematically at least once a year. Recommendations to dispose of assets can be made by the user, Vote Holder, the relevant Technical Unit or other relevant stakeholders. Asset Disposal forms will be submitted to the Procurement Manager who will prepare a summary list of all assets. The DFA must approve any disposal be it the result of transfer, sale, donation, destruction or theft.
Once the decision to dispose of an item is made:
· The Procurement Manager coordinates the disposal process by convening the necessary meetings of the Disposal Subcommittee and providing the necessary information.
· Assets for disposal will be handed to Procurement. The Disposal Subcommittee will dispose assets based on the approvals given above. Procurement Manager will then forward forms for disposed assets to the Assets Accountant.
· Assets for transfer should be handed to the receiving department and the Asset Movement form filled and given to the Assets Accountant.
· Disposal by Destruction should only be used when all other methods have been exhausted. All arrangements for destruction must be carried out under the supervision of the Procurement Manager.
· The Asset Accountant removes assets from icipe Asset Registers based on the Asset Disposal Forms.
4. Asset Registers and Reporting on Assets
4.1. Required Information for each Asset in the Fixed Asset Register and the Memo Asset Register
Every asset that is set up in the system has one master record. The master is required in order to depreciate, control, and track assets. When the Asset Master is created, the system automatically assigns depreciation information to each asset based on the pre-defined depreciation factors (e.g. straight-line or reducing balance, percentages etc). icipe uses straight line method to depreciate its assets. The Asset Registers consists of the Fixed Asset Register and, the Core and Restricted Memo Asset Register.
Both Asset Registers should include the following fields:
1. Asset code
2. Asset description e.g. laptop computer
3. Assets category e.g. building, furniture, and scientific, office or computer equipment
4. Zonal location e.g. Duduville, ITOC, Ethiopia and other stations
5. Physical location e.g. Finance department & office reference
6. Cost (this should include all costs necessary to bring the asset into usable status)
7. Custodian name
8. Funding project
9. Asset status/condition e.g. New
10. Make and Model e.g. Toshiba D400ES
11. Serial number
12. Starting depreciation period
13. Depreciation accounts in the balance-sheet
14. Depreciation method
15. Depreciation percentage.
16. Disposal date if known with certainty
17. For vehicles, the plate number, engine number and chassis number
4.2. Changes to Asset Register
Communication of any change throughout the year should be made to the Asset Accountant in order to maintain accuracy of the Asset Registers. Accurate information from this system is therefore dependent upon the completion by departments of the appropriate forms (Asset Disposal form or Asset Movement form).
Data updates are required for the following changes especially:
· Change of custodian
· Change of location
· Change in condition
· Disposal, through sale, damage or theft.
4.3. Basic Rules for Maintaining Asset records
· The Asset Accountant is responsible for maintaining updated records in the Asset Registers. S/he enters or amends Asset records in the system only after proper authorised documentation has been submitted.
· S/he is responsible for ensuring that both Assets Registers reconcile with the general ledger assets accounts, investigating discrepancies and correcting records to ensure accuracy of information.
· The Asset Accountant must ensure that regular physical verification is carried out; S/he coordinates the physical count and safeguards the count reports. These reports are then used to verify the corresponding Asset Registers; namely the Fixed Asset Register and the Memo Asset Register. Any variation will be properly investigated and corrective action recommended for approval by the Accounting Manager prior to their implementation by the Asset Accountant.
5. Physical Asset Verification
5.1. Objective
The main objectives of a verification exercise include:
· Verification of the existence, location, custodianship and condition of the asset.
· Updating and ensuring icipe records accurately describe the physical assets.
· Ensuring that the assets can be easily identified against present and future records.
· Identifying those assets currently in use and ensure that proper maintenance procedures exist.
· Identifying obsolete assets to start the disposal process.
5.2. Scope, frequency and Method of Asset Verification
An essential control in ensuring that the following objectives are achieved is a periodic physical verification. Once a year, Finance will confirm the list of assets (and all their related information, including condition) with each custodian as recorded in the Asset Registers.
· Whenever necessary, Finance reserves the right to carry out any type of verification or physical count. Vote Holders may also be requested to conduct such exercises.
· Vote Holders are encouraged to carry out projects asset verification exercise as required.
· After the end of the project period, all assets shall be verified by Finance and transferred to core asset pool at no value, thereafter they will be assigned for further usage on a need basis as determined by Senior Management.
5.3. Procedure for Asset Counts
· Each Vote Holder must also appoint a knowledgeable Verification Officer to work with Finance staff as a verification team.
· The Asset Accountant will produce the physical assets listing for each location from the latest data held in the Asset Registers.
· The Verification Team will use the listing to verify and confirm the information. Differences must be duly noted and unregistered assets added.