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HomeMy WebLinkAboutP-0600 - Fixed Asset Capitalization PolicyPOLICY FOR INSERTION INTO THE POLICY MANUAL MEETING DATE: 06/22/98 NUMBER: P:0600 EFFECTIVE DATE: 07/01/97 REVISIONS: 06/05/2001 POLICY: Fixed Asset Capitalization Policy FIXED ASSETS CAPITALIZATION POLICY (Effective July 1, 2000) For the purposes of this policy, fixed assets aze defined as assets that have a useful life of more than one year and exceed $5,000 in value. Certain other assets maybe classified as fixed assets at the discretion of the Purchasing and Finance Directors to insure controls are in place to prevent theft or misuse. In addition, inventory accounting and tracking of certain assets excluded from capitalization, as fixed assets will be required. Fixed assets acquired with grant funds will be recorded in accordance with the specific grant requirements. All records of fixed assets will be maintained in the department of Purchasing and Central Services. The Finance Department shall supervise a physical audit of fixed assets at least annually. Department heads shall be responsible for adequate control over fixed assets and other inventoriable assets assigned to their respective departments, Transfer and Disnosal_of F' ed Assets . - .-- Transfer of fixed assets between departments and disposal of assets is subject to the approval of the Purchasing and Central Services Director. • 8. ITEMS FOR DECISION -CONSENT AGENDA A motion was made by Commissioner Carey, seconded by Commissioner Brown to approve those items on the Consent Agenda as stated below: a. Appointments This item was removed and considered after the Consent Agenda. b. Minutes The Board approved the minutes from the following meetings: Dec. 9, 2000 retreat, Feb. 20, 2001 meeting with the Nursing Home Advisory Committee, Feb. 20, 2001 regular meeting and Feb. 26, 2001 quarterly public hearing. c. Pyrotechnics Permit -Orange County Speedway This item was removed and considered after the Consent Agenda. d. RFP Award: Marketing, Advertising and Design Services for the Chapel Hill/Orange County Visitors Bureau This item was removed and considered after the Consent Agenda. e. Motor Vehicle Tax Refunds The Board approved four requests for motor vehicle property tax refunds, in accordance with the resolution, which is incorporated herein by reference. f. Property Tax Refunds The Board approved three requests for property tax refunds, in accordance with the resolution, which is incorporated herein by reference. ~ Delegation to the Board of Equalization and Review of Power to Compromise The Board approved a resolution as stated below, delegating authority to the Board of Equalization and Review to compromise, settle, or adjust tax bills on discovered property. RESOLUTION DELEGATING COMPROMISE AUTHORITY TO BOARD OF EQUALIZATION AND REVIEW WHEREAS, North Carolina General Statues 105-312 (k) authorizes the Board of County Commissioners to delegate compromise powers to the Board of Equalization and Reivew; NOW, THEREFORE, IT IS RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF ORANGE COUNTY THAT the Board of Equalization and Review is authorized to consider compromises, settlements, and adjustments to discoveries as allowed under G. S. 105-312 and G. S. 105-312(k). This, the 5th day of June 2001. h. Fixed Asset Capitalization Policy Amendment (~ ~ Q~= l The Board adopted an amendment to the policy on the valuation of fixed assets for accounting and financial reporting purposes to bring the County into compliance with GASB Statement 34. i. Bid Award: County Building Fiber Optic Cable Installation This item was removed and considered after the Consent Agenda. L Home and Community Care Block Grant The Board approved the Home and Community Care Block Grant funding plan. k. Sign Translation Project -County Commissioners' Goal This item was removed and considered after the Consent Agenda. I. Employee Assistance Program Contract Renewal The Board approved and authorized the Chair to sign the contract with Magellan Behavioral Health for the EAP renewal under the small business plan model for 2001-2002, subject to contract review and approval by staff and the County Attorney; and authorized the Manager to continue the agreement for Town of Hillsborough inclusion in the County EAP program. . ~ ;~ • ORANGE COUNTY OARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 5, 2001 SUBJECT: Fixed Asset DEPARTMENT: Finance, Purchasing and Central Services Action Age da Item No. ~_ ~dment PUBLIC HEARING: (YIN) No ATTACHMENT(S): INFORMATION CONTACT: Pam Jones, ext 2650 Amended Policy Ken Chavlous, ext 2450 TELEPHONE NUMBERS: Hillsborough 732181 Chapel Hill 968.4501 Durham 688 T331 Mebane 336-227-2031 PURPOSE: To consider adoption of an amendment to the policy regarding the valuation of fixed assets for accounting and financial reporting purposes to bring the County in compliance with GASB Statement 34. BACKGROUND: In 1997, the Government Finance Officer's Association (GFOA) developed a "recommended practice" that governments formally adopt fixed asset capitalization policies establishing the capitalization threshold for assets at $1,000. This threshold doubled the original recommendation of $500. The key concept underlying this guidance by the GFOA was that fixed asset systems that attempted to incorporate data on numerous smaller assets were often costly and difficult to maintain and operate. In addition, the GFOA views capitalization as primarily a financial reporting issue, since most governments have controls in place to account for small value items. In June 1998, staff recommended and the Board formally adopted a fixed asset capitalization policy that followed the GFOA recommendation. By adopting the policy with the $1,000 threshold. County staff was able to "clean up" the fixed asset system by eliminating many items of immaterial value and subsequently reduce the time involved in the inventory, accounting and financial reporting processes while maintaining control over the smaller assets at the departmental level. The GFOA recently amended its fixed asset capitalization "recommended practice" increasing the threshold to $5,000. It is advised that governments issuing Comprehensive Annual Financial Reports (CAFR) follow this recommendation. Staff mentioned, in the fall presentation of the County's CAFR, the upcoming financial reporting requirements associated with the Governmental Accounting Standards Board (GASB) Statement 34. One of the major components of GASB 34 is the requirement to depreciate assets. Increasing the County's fixed asset limit will significantly reduce the work Involved in this aspect of the GASB 34 implementation. As was the case with the last fixed asset action, processes are already in ,r place to properly account for the items which fall under the limit. In order to impact the current year financial statements, the policy amendment would need to be effective Juiy 1, 2000. FINANCIAL IMPACT: There is no expenditure of funds or revenue derived from this action. As mentioned above, increasing the fixed asset limit will significantly reduce the time involved in the financial reporting aspects of asset accounting. RECOMMENDATION(S): The Manager recommends that the Board adopt the amendment to the Fixed Asset Capitalization Policy increasing the asset limit to $5,000 effective July 1, 2000. • • 1 ~ L~ • POLICY FOR INSERTION INTO THE POLICY MANUAL MEETING DATE: 06!22/98 NUMBER: P:0600 EFFECTIVE DATE: 07/01/97 REVISIONS: POLICY: Fixed Asset Capitalization Policy Recording of Fixed Assets For the purposes of this policy, fixed assets is defined as: • Assets whose useful life exceeds one year; AND • Assets whose unit costs exceeds $1,000; OR • Assets upon which a serial number is assigned by the manufacturer. Certain other assets may be classified as fixed assets at the discretion of the Purchasing and Finance Directors to insure controls are in place to prevent theft or misuse. Fixed assets acquired with grant funds will be recorded in accordance with the specific grant requirements. Maintenance of Fixed Assets All records of fixed assets will be maintained in the department of Purchasing and Central Services. The Finance Department shall supervise a physical audit of fixed assets at least annually. Department heads shall be responsible for adequate control over fixed assets assigned to their respective departments. Transfer and Disposal of Fixed Assets Transfer of fixed assets between departments and disposal of assets is subject to the approval of the Purchasing and Central Services Director. s° 1 APPROVED 11/4/98 2 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS REGULAR MEETING - JUNE 22, 1998 b 7 8 The Orange County Board of Commissioners met in regular session on Monday, June 22, 1998 at 7:30 p.m. in the Board 9 Room at the Southern Human Services Center, Chapel Hill, North Carolina. 10 11 COUNTY COMMISSIONERS PRESENT: Chair Margaret W. Brown, and Commissioners Moses 12 Carey, Jr., William L. Crowther, Alice M. Gordon and Stephen H. Halkiotis. 13 COUNTY ATTORNEY PRESENT: Geoffrey Gledhill 14 COUNTY STAFF PRESENT: County Manager John M. Link, Jr., Assistant County Managers Rod 15 Visser and Albert Kittrell and Clerk to the Board Beverly A. Blythe (All other staff members will be identified 16 appropriately below) 17 18 NOTE: ALL DOCUMENTS REFERRED TO IN THESE MINUTES ARE IN THE PERMANENT 19 AGENDA FILE IN THE CLERK'S OFFICE. 20 21 22 1. ADDITIONS OR CHANGES TO THE AGENDA 23 Item 9-f "Disposition of Chapel Hill-Carrboro City Schools Property" was deleted from the agenda. 24 A motion was made by Commissioner Carey, seconded by Commissioner Halkiotis to add for consideration an 25 appointment to the Chapel Hill Transportation Board under regular appointments. 26 VOTE: Unanimous 27 28 2. CITIZEN & AUDIENCE COMMENTS a, Matters on the Printed Agenda Chair Brown stated that citizens who have indicated a desire to speak on an item that appears on 31 the printed agenda will be recognized at the appropriate time. 32 33 b. Matters not on the Printed Agenda 34 Mrs. Edith Hubbard, Chair of the JOCCA Board of Directors, asked to meet with the County 35 Commissioners in October to talk about additional funding for JOCCA. 36 Jack Davis made reference to fire inspection fees and the determination of the courts in his case against the 37 Town of Hillsborough. He said that the Town has entered a judgment against him with the credit bureau and he feels this 38 is against the law. He asked the County's help in removing this judgment. County staff will investigate and report back 39 to the Board. 40 Brenda Crowder-Gaines, Vice Chair of the Board of Health, thanked the County Commissioners for their 41 support. She voiced her concern about the three health education positions in the budget which were nat funded. They 42 have already started health education out of the Office of Community Education but there are only two people in that 43 office and they will not be able to take care of the requests they receive. She listed the health education components 44 that would have been covered by these positions and said that these positions would have facilitated what they are trying 45 to doing in certain communities in this County. She asked that the County Commissioners reconsider funding these 46 positions. 47 Bessie Wiggins spoke about the health education positions. She presented a petition with 113 names 48 asking that these positions be reconsidered. She also submitted a letter of support from the Northern Resource Center 49 Board. 50 Mariah McPherson, member of the Human Relations Commissions, said that the Human Relations 51 Department is one department that is actually generating income for Orange County. This department will bring in 52 $132,465 in revenue this year. The hiring of the position they requested will increase the revenue they receive. She noted that Oliver Melvin does a great job in helping people. She supports this department and asked the County Commissioners to fund this position saying that they need it and the public needs it. She feels that Human Relations is __ the most important thing on earth. 56 57 4 Marvin Block appointed for an unexpired term ending June 30, 2000 Agricultural Districts Advisory Board. Nancy Goodwin reappointed for a term ending June 30, 2001 b. Minutes The Board approved the minutes for the Oct. 6, 1997 regular meeting; Oct. 30 1997 bimonthly work session; Nov. 3, 1997 regular meeting; and, Nov. 20, 1.997 work session on solid waste: c. Renewal agreement -Town of Hillsborough fire inspections This item was moved to the end of the Consent Agenda for separate consideration. d. Lease approval -Cedar Grove/Efland Cheeks Family Resource Center. Northern Human Services Center The Board approved and authorized the Chair to sign a renewal lease with the Cedar Grove/Efland Cheek Family Resource Center to occupy space at the Northern Human Services Center. e. Budget Ordinance Amendment #11 The Board approved budget ordinance amendments and grant project amendments incorporated in these minutes by reference. f. Employee Assistance Program contract renewal This item was moved to the end of the Consent Agenda for separate consideration. g, Petition for addition -Wagon Farm Road and Waaon Farm Court, Cheeks Township The Board approved a petition from the N.C. Department of Transportation tv add Wagon Farm Road and Wagon Farm Court in the Wagon Farm Trail subdivision, Cheeks Township, to the state-maintained secondary road system. h. HOME Program - OPC Acquisition Program The Board approved and authorized the Chair to sign a development agreement with the Orange-Person- Chatham Mental Health Agency for HOME funding in the amount of $40,000 for rental property acquisition and rehabilitation. i. Housing rehabilitation contract award The Board approved two housing rehabilitation contracts with MDH Construction Company for rehabilitation of properties at 205 Efland Ave., in the amount of $37,140; 605 Lipscomb Grove Church Road, in the amount of $36,000; and 519 Lipscomb Grove Church Road, in the amount of $36,000. is Amendments to Orange County regional landfill tipping fee schedule The Board approved increasing the landfill tipping fee from $35 for mixed solid waste and construction and demolition materials, to $38 per ton for those materials, to become effective July 1, 1998. k. Personnel ordinance revision -living wage The Board approved an amendment to the Orange County Personnel Ordinance to establish a minimum Nage of $8 per hour for most County employees. I. Audit contract for June 30. 1998 fiscal near The Board awarded and authorized the Chair to sign a contract for Deloitte and Touche L.L.P. for auditing services for the fiscal year ending June 30, 1998, at an estimated cost of $56,300. m. Fixed asset capitalization policy The Board approved adoption of a policy regarding the valuation of fixed assets for accounting purposes, rhich would classify fixed assets as those whose useful life exceeds one year, and whose unit cost exceeds $1,000, or ~~ which a serial number is assigned by the manufacturer. n. Property tax refunds/release The Board approved two requests for property tax refunds and one request for release of property taxes s listed below: ORANGE COUNTY • BOARD OF COMMISSIONERS Adion Agenda Item No. B-rte ACTION AGENDA ITEM ABSTRACT Meeting Date: June 22, 1998 SUBJECT: Fixed Asset Capitalization Policy . DEPARTMENT: PURCHASING AND Public Hearing: No CENTRAL SERVICES Budget Amendment Reqd? No ATTACHMENT(S): INFORMATION CONTACT: Ken Chavious, ext 2450 Proposed policy Pam Jones, ext. 2650 Telephone Number- Hillsborough 732-8181 Chapel Hill 967-9251 Mebane 227-2031 Durham 688-7331 PURPOSE: To consider adoption of a policy regarding the valuation of fixed assets for accounting purposes. BACKGROUND: Both the Local Govemment Commission (LGC) and the Govemment Finance Officer's Association (GFOA) recommend that governmental entities have formal policies in place to provide accountability for fixed assets. It is further recommended that the governing body formally adopt such policies. • The current policy capitalizes all items which have a useful life of one year or more and cost in excess of $500. This policy has not been formally adopted by the Board. Based on recommendations from the County's auditors and a survey of Counties of similar financial resources, a change in the capitalization policy is recommended. The policy recommended to the Board capitalizes all assets which exceed one year of useful life AND whose cost exceeds $1,000 in purchase price OR has a serial number. Both the current and the proposed policy track all data processing equipment regardless of cost. As referenced earlier, this change is in some respeds promulgated by comments made by the auditor's during the 1996-97 audit. The auditors recommended that we "dean up' our fixed asset reporting by increasing our level of value. This recommendation was not considered an audit exception or finding, only a policy consideration. In reviewing our fixed assets the auditor cited many items of immaterial value which could be removed to provide a more efficient means for accountability. In accordance with this, the Purchasing Department has been effeding additions and deletions to the current asset system commensurate to the proposed policy. Staff felt that this revamping of the fixed assets should indude formal Board adoption of a fixed asset policy as recommended by the LGC and GFOA. It is proposed that the policy be retroactive to July 1, 1997 in order to have the change refleded in the 1997-98 audit. RECOMMENDATION: The Manager recommends that the Boani adopt the Fixed Assets Capitalization Policy with an effective date of July 1, 1997. • FIXED ASSETS CAPTfALIZATION POLICY (Effective July 1, 1997) Recording of Fixed Assets For the purposes of this policy, fixed assets is defined as: • Assets whose useful life exceeds one yeaz; AND • Assets whose unit costs exceeds $1,000; OR • Assets upon which a serial number is assigned by the manufacturer. Certain other assets may be classified as fixed assets at the discretion of the Purchasing and Finance Directors to insure : ontrols are in place to prevent theft or misuse. Fixed assets acquired with grant funds will be recorded in accordance with the specific grant requirements. Maintenance of Fixed Assets All records of fixed assets will be maintained in the department of Purchasing and Central Services. The Finance Department shall supervise a physical audit of fixed assets at least annually. Department heads shall be responsible for adequate control over fixed assets assigned to their respective departments. Transfer and Disposal of Fixed Assets Transfer of fixed assets between departments and disposal of assets is subject to the approval of the Purchasing and Central Services Director. z C~