The office of Inventory Control at The University of New Mexico (UNM) coordinates the tracking and capitalization of University and Government equipment purchased by individual departments at UNM.
Inventory Control collects information on the purchased equipment items that meet certain criterion, and distributes and collects annual equipment inventories from each UNM department. Follow up is performed if there is a lack of proper documentation, and random audits are also performed by the Inventory Control department. The following information is an update on current inventory.
Acquisition of property
All required equipment information is captured in the University’s accounting system upon purchase and receipt of the item. UNM Property Management and Control Policy 7710 states that capital equipment is defined by the following three criteria: The cost is greater than $5,000, the property is moveable, and the property has a useful life of more than one year.
Capitalized equipment is recorded on UNM's financial statements and is depreciated over the assigned useful life for the equipment. Also inventoried is computer related items such as laptops, desktop workstations, and tablets. These items are inventoried property regardless of cost. In most cases the cost of a computer related item is less than $5,000, in which case it is not capitalized and is not depreciated.
Internal reviews, audits and various external audits
The UNM Internal Audit Department will perform “periodic internal reviews and audits.” Each fiscal year, the University’s Internal Audit Department develops the annual Audit Plan and presents it to the Audit and Compliance Committee for its review and approval. This Audit Plan is primarily based on a University-wide risk assessment. Risk assessment methodology is listed on their website.
In addition to any audit that the Internal Audit department may include in their annual audit plan regarding equipment inventories, the Inventory Control staff will randomly select items included on a departmental inventory and request verification of the existence of the item, via submission of a photo of the item and a photo of the asset tag affixed to the item. In addition, equipment and the required annual inventories are always a part of the annual external financial statement audit, and the University’s Property System is subject to review by our federal cognizant agency for the federally funded awards.
Inception-to-date equipment as of June 2018
As of June 2018, the University has a total of 52,810 pieces of equipment across the various campuses; 40,636 of the items are computer related items, including servers, desktops, laptops and tablets. The total value of the 52,810 pieces of tracked equipment is $273,151,501 of which $231,252,919 pieces of equipment are carried on the University’s balance sheet as an asset and depreciated over the life of the asset.
The University’s fiscal year ends on June 30. For the past three fiscal years — including the current fiscal year — the University has averaged 496 capitalized additions per fiscal year to its equipment inventory at an average total annualized cost of $12,790,414. The University has averaged 4,256 non-capitalized additions per fiscal year to its equipment inventory at an average total annualized cost of $4,594,593.
For the past three fiscal years — including the current fiscal year — the University has averaged 2,138 capitalized disposals per fiscal year from its equipment inventory. This is approximately $13,335,088 per fiscal year that has been removed from the University’s balance sheet. The University has averaged 2,702 non-capitalized deletions per fiscal year to its equipment inventory. There are a variety of reasons for equipment disposal, two of which are Departmental Adjustments and Theft.
Asset update: Calendar years 2016 and 2017, departmental adjustments and theft
A department may request removal of a piece of equipment from its inventory during any given month or upon submission of the annual required departmental inventory. The request from a department to delete an item of equipment during the inventory cycle can be for a variety of reasons. During the time frame of January 2016 to December 2017 the University disposed of 807 pieces of equipment that were acquired between 1978 and 2016 that were either department requested adjustments or theft. Of these 807 equipment items, 711 items were department adjustments, meaning the equipment was:
- Destroyed or disposed of due to obsolescence, too costly to repair, returned to the funding agency, returned to the vendor, traded-in, transferred to University Hospital, or could not be located after an exhaustive search which typically will occur for very old equipment, or;
- Sent to surplus property, but lack documentation to meet the criteria for surplus.
The initial cost associated with this equipment was approximately $2.7 million; the net book value of the capitalized equipment, original cost less depreciation, is approximately $84,000. These items included, but were not limited to, furniture and computers; 72 (10 percent) of these items were purchased before the year 2K, 106 (15 percent) items were purchased between 2000-2004, 269 (37 percent) items were purchased between 2005-2009, 239 (34 percent) items were purchased between 2010-2014, and 25 (4 percent) items were purchased between 2015-2017.
The remaining 96 items were identified as theft. Of these 96 items, 89 items have an associated police report. Initial cost associated with this property was approximately $72,000; the net book value of the capitalized equipment — original cost less depreciation — is approximately $19,000.
From time to time regulations will change which will allow for adjustments to what is required to be maintained on inventories. Effective Spring 2018, the University is no longer required to keep old assets that were capitalized under a previous $1,000 threshold on inventory listings until they have been disposed. Prior to this change, these capital asset inventory items had to remain on departmental inventories until they met the institution’s disposal criteria. The University has begun the removal of these assets in FY18 and will continue this process into the new fiscal year.
For more information on Inventory Control visit their website inventory.unm.edu.
UNM Property Management and Control Policy 7710:
UNM Taking University Property Off Campus 7730: