Physical inventories – hard copy lists mailed to departments by Equipment Inventory, based in a schedule, for tracking inventorial assets. Departments are required to perform a manual count and verify the location/serial number/custodian of each item listed. All departments are required by state and federal regulations to complete a physical inventory on a regular schedule. The Equipment Inventory Office (EIO) coordinates the process for all University of Washington departments.

Benefits to the Department

Your department benefits from completing a physical inventory because it allows you to:

● locate assets in use.

● update equipment movement.

● account for assets lost or previously surplused.

● transfer assets to other departments.

Types of Inventories

A Federal Inventory is the process of locating equipment that was purchased with Federal grant or contract money and for which the sponsor has retained title (ownership). The funding source (for example, Navy) requires the University to track the assets but the assets belong to the Federal government and are not University property. Timely completion is extremely important.

Federal inventories are:

· required annually;

· completed with paperwork prepared and mailed to your department in early January by Equipment Inventory;

· due by February 28th;

· followed by the Federal Audit by the Office of Naval Research.

An Agency Inventory is the process of locating equipment that was purchased with private agency grant or contract money where the sponsor has retained title. In this case, the funding agency (for example, Honeywell) requires the University to track the assets, but the assets belong to the private agency.

Agency inventories are:

· required annually;

· completed with paperwork prepared and mailed to your department in early January by Equipment Inventory;

· due by February 28^th.

A University Inventory (also called "State" inventory) is the process of locating all other assets tracked by the University. The funding can come from the State, a Federal agency or a private agency but the University owns the equipment. This also includes gifts and equipment transferred in from other institutions.

University inventories are:

· completed with paperwork prepared each year on May 1st and mailed to your inventory contact;

· due by August 31^st;

· required once every two years by State regulation.

Note: There are no extensions available on physical inventories. If your department needs more time, you can ask for your inventory paperwork any time after January 1st of the year it is due.

For example: Some of your researchers will be gone during the summer and you know your inventory is due August 31, 2004. You can request your inventory paperwork early any time after January 1, 2004 and turn it in by the due date of August 31, 2004. Otherwise, you will have the standard four months to complete your inventory between May 1st and August 31st.

A Sensitive University Inventory is the process of locating all university assets deemed "sensitive" (weapons). The funding source can be from the state, a federal or private agency with University ownership.

Sensitive University inventories are:

· completed with paperwork prepared each year on May 1st and mailed to your inventory contact by Equipment Inventory;

· due on August 31^st;

· required every year by State regulation.

Note:

· Assets with a blue bar code tag are Hospital property and maintained separately by Hospital Accounting at 206-598-7933.

· Assets with a purple bar code tag are non-inventorial assets, should not be included in your inventory.

Responsibility for Physical Inventories

Inventory paperwork will be sent directly to your department's inventory contact. Because final responsibility rests with your department head, they will be sent a memo indicating which inventories are "due" or "optional".

The individual(s) who perform(s) the physical inventory must have no direct responsibility for the assets. For example:

· An inventory contact is eligible to inventory all equipment except their own, such as their personal computer, because they have direct responsibility for that computer.

· A principle investigator (researcher) is not eligible to inventory lab equipment for which he/she has direct responsibility as this would create a conflict of interest.

Process Overview

Equipment Inventory mails the physical inventory lists with cover letters and instructions to department inventory contacts for processing.
Equipment Inventory sends an informational memo to department heads notifying them of which inventories are due that year.
Departments complete and return all "due" inventories to Equipment Inventory by the scheduled due date.
Departments clear pending assets on "optional" inventories directly in the OASIS system.
Equipment Inventory verifies the proper completion of your inventory and officially records your inventory as "received" in our records for that inventory cycle.
EIO processes any necessary updates, disposals or transfers.
Equipment Inventory sends a follow-up memo and new inventory listing to the inventory contact for each completed inventory.
Departments respond in writing to any concerns highlighted in the follow-up memo.
Equipment Inventory will send you a final inventory listing after processing your requested revisions.

Procedures

● Federal / Agency Inventories

● University Inventories

● Sensitive University Inventories

Forms Required

Federal Titled Equipment Inventory By Asset Number

Provided by Equipment Inventory the first week of January

Agency Titled Equipment Inventory By Asset Number

Provided by Equipment Inventory the first week of January

University Titled Equipment Inventory By Asset Number

Provided by Equipment Inventory the first week of May

Sensitive University Titled Equipment Inventory By Asset Number

Provided by Equipment Inventory the first week of May

Property Activity Request 1024 Form

Common Questions

Do you offer training on the physical inventory process? If so, when?

Yes. EIO offers two training sessions during the University titled inventory cycle (usually one in May and one in July). Federal and Agency titled physical inventory training is offered on an as-needed basis.

How long should I keep my department copy of the physical inventory?

Keep a photocopy for three years. This allows you to check the last inventory if you encounter problems while completing the current year's physical inventory. Equipment Inventory maintains a copy of your inventory for six years.

What do I do if several people work on the inventory?

When this occurs, transfer all information from your working copy (or copies) to the original inventory. Keep the working copies in your department files for at least two years - until after the next inventory is done - and keep a list of names for the assistants with the working copies. The person who coordinates the effort and compiles all the data - usually the inventory contact - can sign each page of the original inventory.

Do I have to do this?

Yes. A physical inventory of Agency and Federal equipment is required yearly by federal regulations. Physical inventories of University equipment are required every two years ("biennially") by state regulation.

Why is this old asset still on my physical inventory?

Government accounting practices include accounting for the depreciation of an asset. However, the "Total Cost" on all assets remains at the purchase price for the entire time that the item is in use by the University. We are accountable to the tax-paying public for all assets and cannot drop them off the system when they have fully depreciated. Assets are only removed from the inventory system when they are properly disposed (link to disposal pages).

What do I do about equipment used at home? And equipment located out of state?

You need to verify equipment used at home or out of area with a written document, such as email or a letter. When the person using the asset sends you a written confirmation, you can mark the asset as "Located". Keep the written verification in your inventory files for audit purposes.

I'm running behind; can I have an extension?

No. There is no such thing as a "due date extension". If your department knows it needs more time to complete the inventory than the standard four months (May 1 to August 31) you can plan ahead and ask for your inventory any time after January 1st. If your inventory will be late for any reason, you need to communicate the delay and reason to Equipment Inventory. We will track this information closely and work with you in any way possible, but any inventory turned in after August 31st is Past Due and may have to be reported to Internal Audit.

What are these odd assets at the end of my physical inventory?

Pending assets are listed at the end of your inventory. These assets start with a "P" and have a number such as "P03118002". This number is a temporary number assigned to a payment for an asset that has not been properly reported to EIO. Any pending asset represents a problem for your department and must be "cleared" immediately. You need to find the asset, tag it, and report the model, serial number, custodian, building and room number, and date received to Equipment Inventory so that we can convert it to “approved” status and remove it from the Pending Aging Report.

Can I fax you the inventory or send it to you electronically?

No. We are required to have signed originals in our office for audit purposes. There are no electronic options available at this time. While faxing can be quick and convenient, one day's time for Campus Mailing Services to deliver the inventory to our office will not have any significant impact.

Rules and Regulations

· FEDERAL:

Federal Acquisition Regulations (FARS) section 45.5, "Management of Government

Property in the Possession of Contractors"

(http://www.arnet.gov/far/loadmainre.html)

● STATE:

State of Washington's Office of Financial Management State Administrative and

Accounting Manual, Chapter 30.45, "Capital Asset Physical Inventory Policy"

(http://www.ofm.wa.gov/policy/30.45.htm) .

● UNIVERSITY:

University of Washington Administrative Policy Statements, Section 61.5, "Phyiscal

Inventories"