Conducting a fixed asset inventory audit is a critical task for every school district. This process allows districts to keep track of their valuable assets, identify issues before they escalate, and make informed decisions regarding future investments. In recent years, K12 asset management software has emerged as a game-changer, streamlining the inventory process and ensuring accuracy and efficiency. This article explores how to conduct a successful fixed asset inventory audit in large school districts, the benefits of using a K12 asset management software, and the services we provide here at Divot Assets.
Understanding the Importance of Fixed Asset Inventory Audits
A fixed asset inventory audit is a vital tool for every school district’s finance department. It
enables the district to take stock of its possessions and pinpoint potential problems before they balloon into major issues. The value of a school physical inventory lies in the data it offers, rather than the sheer number of assets discovered. An audit reveals what you possess, whether it’s operating correctly or necessitates attention, what is in use versus what is in storage, where your assets are physically situated, and where to allocate your next budget dollars.
Frequency of Fixed Asset Physical Inventory
While most public K-12 school districts conduct annual physical inventories of their fixed assets to maintain GASB34 compliance, every public institution should conduct an audit at least every two years. This is in line with the federal reporting standards for property bought with Title 1 funds. However, other circumstances would necessitate a physical audit. For instance, a school fixed asset inventory would be beneficial anytime you have new or changed responsibilities in the budgeting process.
Leveraging Fixed Asset Management Software
Fixed asset management software has become an essential tool for conducting fixed asset inventory audits. It not only simplifies the audit process but also ensures that the data recorded is accurate and up-to-date. This software can keep track of all assets, from acquisition to disposal, and provide real-time data on their status.
Divot Assets, for example, offers K12 Asset Pro, a state-of-the-art inventory management software designed specifically for school districts. This software enables districts to manage their assets efficiently and effectively, saving time and resources in the process.
Timing of Fixed Asset Inventory Audit
The timing of a fixed asset inventory audit can significantly impact its effectiveness. To minimize disruption to the learning environment, it’s crucial to plan around school finals or standardized testing periods. Also, coordinating with the IT/Technology department is a key consideration. If the technology department maintains scan in/out records of one-to-one devices, these records can be utilized as part of the inventory audit.
The Role of Different Stakeholders in Inventory Audit
A successful inventory audit requires the collaborative effort of the K-12 faculty and staff. The IT department, teachers, students, and facility managers all play crucial roles in conducting a successful audit.
IT Department: The IT department is responsible for cataloging all IT-related assets and school technology during the inventory management audit. With the rise of 1:1 technology in schools, the IT teams face the challenge of auditing thousands of mobile assets.
Teachers: Teachers play a critical role in reducing the auditing workload for the district’s IT team. With the help of barcode-scanning technology, teachers can verify student devices in their classrooms and update those assets in the district’s asset management software.
Students: The student body is responsible for having their assigned school laptops ready to go on the day of the scheduled inventory audit. Without their cooperation, the IT team could fail to account for most of the mobile assets in the school district.
Facility Managers: K-12 facility managers are responsible for auditing non-IT-related assets, including HVAC systems, water heaters, lighting fixtures, plumbing, and more.
Types of Inventory Auditing Methods
Different auditing methods can be used to assess a district’s inventory and create an accurate audit report. These methods include traditional physical inventory count, cycle counting, ABC inventory analysis, and cutoff analysis.
1. Traditional Physical Inventory Count
A standard audit is conducted by comparing the district’s current asset inventory with the inventory found in the audit. Any discrepancies should be flagged for further inspection.
2. Cycle Counting
Instead of a traditional, physical audit, some organizations audit their district inventory over time using the “cycle counting” method.
3. ABC Inventory Analysis
In a traditional ABC analysis, assets are grouped and audited according to their value. This method separates assets into groups such as mobile assets, fixed assets, and facility assets.
4. Cutoff Analysis
In a cutoff analysis, your IT department and all other teams involved in the inventory auditing process would halt their day-to-day operations to focus solely on the auditing process.
Maintaining Inventory Audit Standards
Even with a detailed auditing checklist, assigned roles and responsibilities, and a flawless itinerary planned, the tools used could make or break the success of the inventory audit. A tool like K12 Asset Pro from Divot Assets can help schools master their
inventory audit procedures.
Your school district’s inventory audit will only be as good as the standards applied to it. To ensure your school district is maintaining high standards for your inventory audits, pick one or two auditing methods and stick with them. The better a district can maintain real-time inventory records, the easier and cleaner the yearly audit will be.
Regular inventory audits can also help prevent fixed asset theft in your district. This is a huge benefit for school districts that are worried about losing vulnerable mobile assets, such as student laptops. Inventory auditing also alerts K-12 IT teams of any missing or stolen school technology that could potentially disrupt classroom instruction.
