Summary
School fixed asset audits are a key tool in the school finance department’s toolbox. A wall-to-wall fixed asset physical inventory will allow the school district to take stock of what they own and identify problems before they become big issues. The value of a school physical inventory is in the information it provides, not the number of assets you find. An audit will tell you what you have, whether it’s functioning properly or requires attention, what is being used and what is being stored, where your assets are physically located, and where to invest your next budget dollars. Here are some tips on when to do a school fixed asset inventory audit.
How often should you do a school fixed asset physical inventory?
While most public K-12 school districts conduct yearly physical inventories of their fixed assets to maintain GASB34 compliance, every public institution should be conducting an audit at least every two years to comply with the federal reporting standards of property purchased with Title 1 funds (2 C.F.R. Part 200.313 [d][2]). However, there are some other reasons when a physical audit may be called for as well. A school fixed asset inventory is a good idea any time you have new or changed responsibilities in the budgeting process. You may need to do an audit when you’ve just been assigned a new position in finance, when your district has hired a new CFO, when you are changing fiscal years, when there has been a sudden loss or turnover in school property, such as from a natural disaster, or when there are sudden changes to how much funding your district gets from the state.
“The value of a school physical inventory is in the information it provides, not the number of assets you find.”
Assuming nothing has drastically changed at your school, it’s recommended to take stock of what you have and make sure everything is in good working order at least once per year. The cost of maintaining technology can be expensive and often goes unnoticed until something breaks. By doing an inventory regularly, you can better plan for these costs in the future.
When is the best time to conduct a fixed asset invenotry audit?
While every district has different conditions which may constrain when it is best to perform an audit there are two main factors we recommend considering:
- Reducing disruption to the learning environment
- Coordinating with the IT/Technology department
To reduce disruption to the learning environment it’s critical to plan around any school finals or standardized testing. Neither teachers nor students like to be disrupted while preparing for, or taking, difficult tests! Additionally, when possible, it is always best to avoid disrupting the classroom routine in the first week back from any major school breaks, such as the summer or winter breaks.
Coordinating with the IT/Technology department is also an important consideration. With one-to-one technology being nearly universal for upper grades now, if the technology department takes scan in/out records of one-to-one devices at either the beginning of the year (when devices are issued to students/teachers) or at the end of the year (when devices are collected from students/teachers) those records can be used as part of the inventory audit. Using the IT records can reduce the need to disrupt students to count each device during the school day. If this method is being employed it is best to schedule a fixed asset audit within 8 weeks of the device scan in/out so as to ensure records are new enough to be reliable.
“Assuming nothing has drastically changed at your school, it’s recommended to take stock of what you have and make sure everything is in good working order at least once per year.”
Coordinating with the IT department is also important to ensure new technology that has been purchased has already been deployed to its final destination. It’s great to know that there are 50 new LCD projectors or 100 new iPads in the IT storage room, but it’s even better to do an audit after they have been deployed to their final locations so that this information can accurately be recorded in the fixed asset inventory records and easily be compared against in future years.
How does an audit help in the long term?
A physical inventory is a great idea at the beginning of the budgeting process. It will provide you with an accurate list of what you have, how much it’s worth, where it is located, and if it is in use or in storage. As you plan your spending for next year, making decisions with this information in hand will help you effectively allocate your funds to maximize the value of your fixed assets.
Up-to-date asset records are also extremely helpful in times of emergency. When a natural disaster strikes, an audit will tell you what requires attention to get back up and running quickly. Records from an audit performed within the last two years, especially by a qualified third-party, are the best way to ensure receiving the maximum amount of insurance reimbursement for lost items as well. It may even help identify areas in need of contingency planning before disaster strikes to minimize any potential damage to your school district’s infrastructure.
What are the advantages of doing a school fixed asset physical inventory audit?
The main advantage of a school fixed asset inventory audit is in the information it provides. The value of an audit isn’t in the number of assets you find, but in what it tells you. A school auditor can tell you what you have, whether it’s working properly, and where to invest your next budget Dollars.
In addition to the value of information, a school fixed asset inventory audit can save money. If you find that many items are not functioning properly but can be repaired, then that means less money will need to be spent on new equipment. It also means that when equipment does need replacing, there will be a better idea of what should be replaced and what might last a little while longer.
How should schools handle their assets?
Schools are, in essence, big warehouses of assets. From classrooms to playgrounds, they can be a minefield for any unsuspecting school district inspector. One of the most important tools in the finance department’s toolbox is the school fixed asset audit. However the better a district can be at maintaining real-time inventory records, the easier and cleaner the yearly audit will be. Simple forms for transferring assets from one location to another or for disposing of obsolete or broken assets can go a long way in keeping an accurate handle on your assets. All staff should be given access to and made aware of transfer and disposal forms and each school should have one administrator ultimately responsible for these forms. With the amount of technology in schools, generally, the IT department carries the biggest load for maintaining assets, so it is often the best place to start for controlling assets transfers and disposals. Informing all staff what the district’s definition of an asset is can also be extremely helpful in gaining participation and help from your district employees.
Conclusion
Whether you are a school district or a school, it’s important to take good care of your fixed assets. To help with this, it is recommended that schools do a physical inventory audit annually. This will allow you to identify the life cycle of your fixed assets and plan accordingly for their replacement or renewal. It can also help you track your fixed assets more efficiently, which will save you time and money in the long term. Keeping on top of your fixed assets is an important part of running a school district or school, so be sure to do an inventory audit at least once a year!