Public schools are always looking for ways to save money. One of the best ways to do this is by better managing assets. In a nutshell, fixed asset management (FAM) is the process of ensuring that all the school’s tangible resources are being used as efficiently as possible and generating the most value for students in the long run. This can be done through a variety of different strategies, including:
- – Keeping track of assets
- – Making sure that everything is up-to-date
- – Leveraging technology in new ways
This guide will help you to get started with fixed asset management at your school. You’ll learn what it’s about and how it works, as well as how you can successfully implement these strategies in your own school setting.
Introduction
Fixed asset management is the process of making sure that no unused or under-utilized resources are being wasted. It involves keeping track of a school’s assets and then leveraging those assets to generate more value for students in the long run.
There are many benefits to implementing fixed asset management: it can help public schools save money, increase efficiency, and optimize the use of limited resources. Plus there are state and federal reporting requirements regarding fixed assets.
Fixed asset management is an important process for any organization with valuable resources; public schools are no exception. Here’s what you need to know about fixing your school’s assets—and why you should get started now.
What is fixed asset management?
Fixed asset management is the process of cataloging, tracking, and reporting on a district’s fixed assets. It involves maintaining a master list of all assets that meet the district’s reporting requirements along with all the necessary information about each asset. Read more here for a more in-depth look at what assets meet reporting requirements and what properties you should be tracking for each asset.
Fixed Asset Management Strategy
The key to a good fixed asset management strategy is keeping track of your inflow and outflow of assets. That means always documenting both new assets that have been purchased (or donated to the district) and old assets that have been retired (either because they have broken or reached the end of their useful life). While this may seem like a simple rule to follow, the realities of a school district’s day-to-day duties mean that it can be quite difficult to ensure that all inflows and outflows are properly documented.
Key individuals in this process will be school principals and IT departments as they will be responsible for most of the new purchases as well as for the removal of old/broken assets. Ensure that all of these individuals are not only trained on what and how to document the purchase or disposition of assets, but are also provided simple forms or instructions for this documentation. The easiest way to ensure compliance to by ensuring an easy process. We’ve made free downloadable and brandable asset forms for you to use.
If your IT departments and Principals do not have access to directly add new assets or remove old assets from your fixed asset management software. Ensure they are given clear directions on the proper district official to submit all their purchase and disposition information to.
Keeping track of assets
While it may seem tedious, keeping track of ALL your assets really is the key to successful management. This means assigning each item a unique Asset ID along with a record of the important pieces of information such as Serial Number, Manufacturer, Model, Acquisition Cost, Building Location, Room Location, and Useful Lifespan. To assign unique ID numbers you simply need to increase the last number used by 1 for each new asset. It doesn’t matter what type of item the asset is, just continue to assign new ID’s in numerical order. Don’t forget, 2 C.F.R. Part 200.313 stipulates that all items purchased with Federal funds must be identified separately. We recommend simply adding an “F” to the beginning of the Asset ID number for all Federal assets so they will always be discernable.
It is common these days to use a barcoding system so that asset ID numbers can easily be scanned into a software system using a handheld scanner or a smartphone device. For those that do use a barcode system, we offer high-quality barcode stickers that are sure to last as long as your assets.
Making sure that everything is up to date
One of the key aspects to fixed asset tracking is making sure that all assets are up-to-date. This is imperative because it helps a school keep track of what they have, where they’re located, and how much it’s worth. It also ensures that you don’t end up investing in something you already own; this can save your school a lot of money over time by avoiding “re-purchases” of items you already have but aren’t being used.
It’s important to note that even though assets may be up-to-date on paper, they may not be in reality. In other words, if you have an asset on paper but can’t locate it, then it’s not actually an asset for your school anymore, this is called a Ghost Asset. Ghost assets most often occur when items are disposed of but never removed from the fixed asset tracking system. The opposite is a Zombie Asset, which is an asset that you own but is not being tracked in your system. This can lead to re-purchasing an asset because no one was aware that you had it. A common example is a new laminator that was purchased at the school level but then lost in a closet in the library because there is no record of the asset when the school needs to use the laminator again and doesn’t readily see one they will purchase a new one assuming one does not already exist.
The only true way to make sure that your fixed asset master list is up to date is by performing a complete physical inventory of the school district. Due to the rate at which schools need to purchase and dispose of assets, it’s recommended that a physical inventory be performed at least once a year. A physical inventory of all assets purchased with Federal funds is required every two years in order to continue to stay eligible for federal grants.
Leveraging technology in new ways
Fixed asset management can be done in a variety of ways. With the technological advances we’ve seen in recent years, many public schools are realizing that they can use technology to enhance their fixed asset processes and ensure that assets are being used as efficiently as possible.
One example of this is by investing in software that manages fixed assets, such as an asset tracking program or an enterprise resource planning (ERP) system. These programs are specifically designed to manage assets and help organizations effectively plan for future growth. They’ll also help with the methodical evaluation of your current inventory, which will allow you to make better decisions about what needs to be purchased and when.
With a high-quality asset tracking system you will also have scan-in/scan-out ability which means that a handheld or mobile barcode scanner can be used to scan barcoded asset ID tags to automatically enter them into the system, remove them from the system, or transfer them from one location in the district to another. Removing the potential error of typos from manually entering asset changes can be extremely helpful for maintaining accurate records. Software that includes scanning functions will also greatly reduce the time needed for performing your annual fixed asset physical inventory.
Tracking software can also help when it comes time for your district to sell off or dispose of parts of its inventory — you’ll know exactly how much each item is worth and make more informed decisions about who you should be selling to and what prices you should charge.
The Benefits of Fixed Asset Management for Public Schools
Reducing Waste and Saving Money
The benefits of fixed asset management are numerous, and they only grow as the process evolves. One key way that FAM can yield benefits is by preventing unnecessary waste. This can be done by selecting new items for programs when old ones have expired, which would otherwise be thrown away. Proper fixed asset management also helps public schools save money by ensuring new assets are only purchased when it is certain the needed item is not already present in the district.
Disaster Preparedness
When disaster strikes, such as a fire, flood, tornado, or another natural disaster, having an up-to-date fixed asset master list will be instrumental in ensuring your district receives that maximum reimbursement for all damaged property. By having an accurate picture of exactly what was in the affected buildings and what the value/purchase costs of those items were, you can quickly and seamlessly file your claim with the insurance company. One reason it is recommended to use an external company to perform your annual fixed asset physical inventory is to have an impartial 3rd party record of all your assets to provide the insurance adjuster. Having independently obtained records can reduce the time for claims processing due to the increased credibility of the supplied numbers.
Compliance and Financial Reporting
State and federal requirements mandate regular fixed asset inventories as laid out in GASB 34 guidelines. Federal regulations state physical inventories need to be completed every two years, while many states request accurate inventories annually. Being out of compliance can risk failed audits from state regulators and/or rejection for future federal grants. Capitalized assets must also be maintained accurately to ensure proper depreciation for yearly financial reports.
Improved planning and budgeting capabilities
One of the biggest benefits of fixed asset management is that it provides a better planning and budgeting process. By knowing which assets are being used, you’ll be able to plan for when they will need to be replaced or repaired. You’ll know what assets you have, where they are, and how they’re being used.
This helps with both spending and saving money. For example, let’s say a school has two floor buffers. One is in use all the time while the other one only gets used occasionally. With fixed asset management in place, it can be determined that one of these buffers is not really being used efficiently and could be reassigned to a different school that needs it more than the current one does.
Everything will also be tracked so if an asset breaks down or needs repair, there will be a clear history about how much time it was in use and when it broke down. This becomes very important for budgeting purposes because then you know exactly how much money you need to replace the broken-down asset with a new one and don’t need to worry about predicting replacement costs from estimates on things like usage length or purchase date.
Conclusion
The process of fixed asset management is designed to help ensure that public schools have the necessary equipment for their staff to do their jobs well. Familiarizing yourself with the practice, and implementing it in your school can help you get the most out of your assets while reducing the amount of time and complexity needed for tracking. If you’re in need of a wall-to-wall fixed asset physical inventory our experts at Divot Assets would love to help!
