LAREDO INDEPENDENT SCHOOL DISTRICT

District personnel are charged with the proper handling and accountability of District property and fixed assets. The information contained in this policy manual is intended to ensure that a property management system is in place, which permits the tracking of all District property and reconciliation between physical inventories and accounting records.

TABLE OF CONTENTS

Fixed Assets Department

1. Definition of Fixed Assets
2. Criteria for Fixed Assets
3. Basis of Fixed Assets
4. Control of Fixed Assets
5. State Laws Regulating Purchase an Disposal of Fixed Assets
6. Accountability for Fixed Assets
7. Inventory of Fixed Assets
8. Burglary-Vandalism-Lost Report Procedure
9. Procedures for Requesting Replacement of Stolen Items
10. Request for Permanent Transfer or Disposal of Fixed Assets

DEFINITION OF FIXED ASSETS

Fixed Assets are:

Physical items of equipment or property having an expected life longer than one year, of a significant value at purchase and may be reasonably identified and controlled through an inventory system.

There are five major classifications of District fixed assets and some minor classifications, which provide a more detailed description. All fixed assets of the District will fall within one of the five major classifications. These classifications are:

1. Land
2. Buildings
3. Improvements other than Buildings
4. Machinery and Equipment
   • a. Motor Vehicle Equipment
   • b. Office Equipment
   • c. Special Department Equipment
   • d. Computer Equipment and Software
5. Books over $5,000

Definitions of each of the major and minor classifications of the District are as follows:

LAND

Any land purchased or donated to Laredo Independent School District will be placed on the fixed asset inventory at the price paid for the land at the time or purchase or the appraised value of any land, which is donated or traded to the district.

BUILDINGS

District buildings will be placed on the fixed assets inventory at actual cost of the building. If the building is donated or received in trade, it will be recorded at appraisal value. Major renovations or construction of additions to existing buildings will be recorded on fixed asset inventory at actual cost after value if the building is established.

Replacement items of a maintenance nature such as carpeting, flooring, water heater; restroom fixtures will not be recorded as fixed assets. Only those items that will improve the long-term value of the buildings will be considered as additions to the value of the buildings.

IMPROVEMENTS OTHER THAN BUILDINGS

Improvements may, or may not, be placed on fixed assets records. The Accounting Department will make the determination. Items that are deemed to be fixed assets will be recorded at cost. Examples of improvements that will be placed on fixed assets records are as follows:

Fencing and Gates
Lighted Ball Fields
Air Conditioning and Heating Systems

MACHINERY AND EQUIPMENT

Machinery and Equipment include any moveable piece of property purchased, donated, or built by the Maintenance Department. Purchases of all items of Machinery and Equipment are made through the Purchasing Department in accordance with State Purchasing Laws and District Local Purchasing Policies and Procedures. Specifications will be developed in conjunction with the department for which the equipment is purchased. This equipment is placed on fixed asset inventory at cost or at estimated value if donated.

MOTOR VEHICLE EQUIPMENT

Motor Vehicle Equipment is defined as that which is self-powered/motorized, and most of, which is mobile. The Transportation Department maintains all vehicles and legal titles. The Transportation Department coordinates the acquisition of state exempt license plates and District logos.

OFFICE EQUIPMENT AND FURNISHINGS

Office Equipment and Furnishings are items of furniture and office equipment. These items will be inventoried based on a room count at each campus or department. Only one room tag will account for all furnishings within a classroom or room. The capitalization policy is $500 for inventoried assets but the district will tag all sensitive items such as TVs, VCRs, cameras, etc.

SPECIALIZED DEPARTMENT EQUIPMENT

This classification of equipment is that which is for special use by a particular department to meet its unique needs. This category may include all types of equipment not included in motor vehicle, office equipment and data processing equipment and software classifications. Examples include storage tanks, dummies, specialized printers, and specialized equipment for students, etc.

DATA PROCESSING EQUIPMENT AND SOFTWARE

Data Processing Equipment includes processing and equipment used centrally or by individual schools and departments of the District. Related expenditures such as initial cabling for data processing equipment will be included as fixed assets, initial license fees for software is also capitalized. Not included, as fixed assets are payments for changes in cabling and maintenance charge on software. The capitalization threshold for software purchases and equipment is $500 per unit. However, the district will inventory and tag all PC’s, printers, faxes and data processing equipment.

BOOKS

Books over $5,000 purchased by the district are recorded as fixed assets at cost.

BOOKS, TEXTUAL MATERIALS AND ACADEMIC SUPPORT MATERIAL

All textbooks and other items purchased from district, state, or federal funds are to be labeled as Laredo I.S.D. Property. Reference materials, periodicals, and audio/visuals tapes, etc used for student and teacher reference must be marked or labeled Laredo I.S.D. Property.

CRITERIA OF FIXED ASSETS

The capitalization threshold for FIXED ASSETS is furniture and equipment and other assets having a cost per unit of $500.00 or greater and all electronic equipment.

The following are considered electronic equipment items and subject to inventory and tagging.

Telephone Systems	Audio Visual Equipment
Computer	Scientific/Labratory Equipment
Computer Printers	Medical//Health Equipment
Computer Scanners	Musical Equipment
Fax Machines

BASIS OF FIXED ASSETS

Fixed assets are included in the financial records on an original cost basis. In some situations, the purchase or acquisition documents may not be available for general fixed assets already on hand. If reliable historical, an estimate or appraisal of the original cost of such documentary evidence as may be available (such as price index, levels at the time of acquisition) may be used. The goal of such valuation is to record a fair market value at the date of acquisition. The intent is not to expend and excessive amount of monies in ascertaining exact costs. If fixed assets are acquired by gift, then the appraised value on the date received is the appropriate amount to include in the fixed assets record of the district.

Fixed assets may be acquired by several methods:

1. Purchase
2. Lease-Purchase
3. Construction
4. Tax Foreclosures
5. Gifts

All fixed assets acquired in some manner other than gifts or donations are recorded at their estimated fair market value at the time of receipt.

CONTROL OF FIXED ASSETS

In addition to entries involving the general ledger accounts, detailed subsidiary records should be maintained to maximize to control of fixed assets. These records should include the following information

• The description of item purchased
• Date of purchase
• Purchase price
• Life expectancy
• Location number
• Inventory number
• Fund from which purchased

In the subsidiary, all fixed assets belonging to a given school are grouped together by major classification (e.g. land, buildings, and equipment records for a particular school segregated from the other schools). Reports may be requested by major classification for purposes of verification. The subsidiary record, regardless of its physical form, should at least provide for a complete description of the item to permit positive identification, cost and purchase data, and its location.

Adequate accounting procedures and records for fixed assets are essential to the protective custody of school property. In addition to protective custody, an appropriate computer system designates responsibility for custody and proper use. It also provides data for management of fixed assets and for financial control in developing financial reports and adequate insurance coverage.

Of paramount importance is the security of the system. Any material change in the customary recording of distribution or disposal of fixed assets is a financial matter that should be decided by the district Finance Department. Management must impose discipline throughout the organization so that an appropriate level of internal control will be maintained to assure that adequate custody of fixed assets is maintained.

STATE LAWS REGULATING PURCHASE AND DISPOSAL OF FIXED ASSETS

State law requires that all purchases made for the Laredo ISD be made in one of the following ways:

1. All purchasing costing in excess of $25,000.00 must be made through the formal bid process, state contract (General Service Commission) and/or the Regional Service Cooperatives. Through the formal bid process, the bid request is advertised according to state law. All sealed bids are received by the Purchasing Department who will tabulate the bids and make recommendations to the Board of Trustees, who will award the bid to the bidder that provides the best value.
2. All purchase of supplies, material or equipment must be made through the Purchasing Department.

State law also provides for disposition of salvage or surplus property as follows:

1. Salvage and surplus property owned by the district may be disposed of by sale by competitive bids or auction, trade in for new property, or by being destroyed as worthless if it cannot be sold.
2. Disposal of fixed assets purchased with federal funds requires TEA approval.
3. The Chief Financial Officer must approve all other fixed assets disposal.
4. General Services Commission requested by the district can dispose of buses.

ACCOUNTABILITY FOR FIXED ASSETS

It is the responsibility of every employee to safeguard District property and assets. Every employee has a duty to promptly report any suspected or real incident of theft, damage or loss of District property or assets to his or her supervisor. District principals, assistant principals, supervisors, managers, and directors are responsible for insuring Laredo ISD property under their control is adequately protected against damages, theft or other loss. They must also ensure that all such property is used correctly and only for District business use. Property may not be removed from Districts locations except for District business or repair.

Fixed Assets Department is required to conduct random department audits for asset inventories and site location change or a principal or Director requires a joint on-site inventory by the outgoing and incoming director to transfer accountability.

INVENTORY OF FIXED ASSETS

Inventory records for fixed assets of the Laredo ISD shall be maintained by the Fixed Assets Department. This inventory shall be updated on a regular basis and shall be reconciled to the general ledger fixed assets account.

Annually, usually at the end of the school term, an inventory of all District property shall be made under the supervision of the Fixed Assets Department. The purpose of the inventory is to verify the accuracy of the supervision of the fixed assets records. During July or August of each year, each campus/department head shall receive a computer printout of all equipment assigned to his or her campus/department. The principal/director is required to review the inventory results of all fixed assets assigned to their campus/department. An independent consultant will take the district’s inventory. All items on the printout must be accounted for.

The Fixed Assets Department shall make all corrections and adjustments to inventory records to reflect actual inventory count. If there is a change in principal/director during a fiscal year, the Fixed Assets Department shall be notified of the change with sufficient time for an inventory to be made of the fixed assets of the campus/department. Upon completion of the final inventory, any discrepancies shall be reported to the Chief Financial Officer for appropriate action.

BURGLARY VANDALISM-LOSS REPORT PROCEDURE

The following are the procedures for reporting incidents involving burglaries, break-ins and vandalism:

a. If night security discovers the incident, he/she must notify the campus principal/department director and the police department.

b. The principal or director will go to the campus and verify that an incident has occurred, being careful not to disturb any equipment/materials that may be used as evidence by the Police Department in conducting an investigation.

PROCEDURES FOR REQUESTING REPLACEMENT OF STOLEN ITEMS

1. Submit a memorandum to the Director of Fixed Assets with a list of items that must be replaced.
2. Attach copies of Burglary/ Vandalism/Loss Report to verify that items were reported stolen.
3. Request will be forwarded to the Finance Department.
4. Purchase requisition must be submitted to initiate purchase by the organization requesting replacement of stolen items.
5. Stolen items will be replaced to the extent that the insurance proceeds will cover. Other items will need funding approved by the Chief Financial Officer.

REQUEST FOR PEMANENT TRANSFER OR DISPOSAL OF FIXED ASSETS

The Fixed Assets Department will pick up items for permanent transfer from one campus or department to another. The Fixed Assets Department will also handle items for permanent disposal. Fixed assets items will be disposed in accordance with state law. The campus principal or department director must make the requests for permanent transfer or disposal of fixed assets. The proper forms must be completed and submitted to the Fixed Assets Department. Pick-ups will be handled on a first-come first-serve basis.