The purpose of this section
is to present guidelines for State departments and agencies
in establishing and maintaining control over equipment
and providing the detail for a suggested accounting system.
Although individual agencies are authorized to establish
different systems to meet their specific needs, it is
expected that all agencies will meet the basic standard
OBJECTIVES AND STANDARDS
The fundamental objectives of
a system of equipment control are to provide a safeguard
against loss and to facilitate effective utilization.
No attempt has been made to design a single equipment
control system to meet the needs of all agencies. Certain
administrative agencies will require a very simple system,
since their equipment is primarily of an office type.
Other agencies will require more complex systems which
will yield detailed information as to equipment utilization,
repair costs and standby equipment. Sometimes, a combination
of systems may best serve the needs of an agency, depending
upon the types of equipment is use. Certain fundamental
standards, however, are applicable to all systems:
a. All items of equipment to
be brought under control should be identified by a serial
number affixed to each item.
b. Equipment control
records should be maintained for each item of equipment
identified by a serial number.
c. Periodic physical
inventories should be taken of all items of equipment
placed under serial number control.
d. Some form of equipment
utilization controls should be maintained for significant
items, whether they are in the form of daily usage records
or simple periodic observations.
e. No item of equipment
should be permitted to leave the premises without a
pass signed by the proper authority.
f. The location unit
supervisor should be administratively responsible for
the equipment assigned to the unit. The equipment assigned
should not be permanently transferred without written
approval of this individual.
Agency - Denotes the
unit level of government at which the control of equipment
is to be maintained. This may be a department, hospital,
institution, university, college, board, commission or
other administrative unit.
Location Unit - Denotes
the level within an agency at which the responsibility
for equipment is to be established. The number and size
of the location units depends on the size and type of
the agency. No location unit should cover more than one
general physical area. The determination of each unit
may be based on a functional responsibility within a physical
area, such as a storeroom located within a warehouse.
Equipment - Includes
items of machinery, vehicles and apparatus which may be
used repeatedly without any material impairment of physical
condition and which have a probable life of more than
two years. Not included are fixed building equipment such
as heating, ventilating, plumbing and electrical items.
While the distinction between
equipment and supplies is basically one of durability,
minor items such as those listed below, are considered
Generally, all equipment purchased
must be placed under control. However, different levels
of equipment control can be established. For the larger,
more cumbersome equipment, such as desks and file cabinets,
the item should be identified with a tag showing that
it belongs to the facility. The records should show the
total number of items in particular areas of responsibility.
For the more sensitive items, such as those susceptible
to theft, tags with individual serial numbers should be
affixed to the equipment and detailed records should be
Small Surgical instruments
Flasks, retorts and other ordinary glass apparatus for laboratory use
Axes, hoes, rakes, saws, shears, shovels, hand tools
Staplers, pencil sharpeners and other minor items of office equipment
Dishes, tableware and kitchen utensils.
Unit of Accountability
- An item of equipment may be small, integrated item,
such as a notebook computer or it may be a complex aggregation
of components, such as a fire engine with accessory equipment.
RESPONSIBILITY FOR SYSTEM OPERATION
Each agency head is responsible for the maintenance of
its equipment control system. Procedures to be applied
in discharging this responsibility follow:
Custodian of Equipment
- A qualified employee should be appointed as property
manager. This person shall maintain the required central
equipment control records, and shall exercise supervision
over the system to assure that the central records accurately
reflect the physical inventories at the location units.
Assignment of Equipment
- When equipment is assigned to be used in the operation
of the agency, the supervisor of the location unit where
the equipment is assigned becomes administratively responsible
for the equipment. Transfer of responsibility from the
property manager to the supervisor at the location unit
will be accomplished by means of a written receipt for
It will be the responsibility
of the supervisor of each location unit to: cooperate
with the property manager in carrying out his duties;
ensure the proper use and maintenance of the equipment
by employees under his supervision; promptly report any
loss or misuse of equipment, or any equipment which requires
repairs or which creates a hazardous working condition;
be responsible for the assignment of equipment within
his area; and identify and report any surplus or underutilized
Inventory of Equipment
- The property manager or a designated representative
who is not responsible for custody of equipment, should
take an annual inventory of all equipment assigned to
each location unit. These inventories may be scheduled
on a rotation basis.
Transfer of Responsibility
- When the employee who is held accountable for an agency's
property is transferred from one location to another or
terminates service with any agency, the following procedures
a. A physical inventory
should be taken by the property manager, or his designated
representative, of all property charged to the location
unit. This inventory should be checked against the equipment
b. If the equipment records
and the physical inventory do not agree, the differences
should be reconciled and adjustment documents submitted
so that the records will reflect the quantity and location
of the property.
c. If differences are
not reconcilable, the final decision as to the action
to be taken will be made by the agency head.
VALUATION OF EQUIPMENT
A dollar value should be given
to each item of equipment. Such values are useful in the
identification of a particular item or group of items
and in establishing financial accountability. Generally,
values should be recorded at cost. Cost is defined to
included purchase prices (less discounts), freight or
other cartage charges and installation costs. These elements
can be secured from purchase vouchers and contracts. The
cost of equipment constructed by an agency should include
the applicable direct labor, materials and overhead. Equipment
donated to the agency, such as Federal surplus equipment,
should be priced at fair market value.
When an agency initially established
the equipment inventory system, it may not be possible
to obtain costs for all items of equipment. This would
occur in those instances where such costs cannot readily
be found or where equipment has been acquired without
charge through surplus property disposal procedures. In
these cases, a fair market value as of the date of recordation
should be placed on each item.
The control of the system may
be established at various levels. For example, a department
may find it practicable to maintain the system at the
department level. In those departments which operate institutions
or district offices, it may be more suitable to maintain
the records at the lower level. For some departments the
most desirable method may be initially to establish the
control at the lower level, and at a future time consolidate
at the department level.
Equipment control records should
be located in the finance or business office of an agency.
An excessive number of location units increases effort
by requiring more transfers to be recorded and more records
to be maintained. There is also an increased possibility
of errors. Therefore, a minimal number of location units
should be established. These location units might be established
at the bureau level or at sub-units within a bureau. The
small size of some agencies might dictate that the entire
equipment control system be at a single location under
the control of the property manager. Each location unit
in an agency should be assigned a control number, beginning
with the number one.
OPERATION OF SYSTEM
A central inventory of all equipment
items of the agency is maintained by the property manager.
The equipment items controlled by this central file are
segregated by type and within type according to the location
unit to which they are assigned. Since only one series
of identification numbers is used, the property manager
will also maintain a register to control the assignment
of these numbers. In addition, all items assigned to a
location unit are listed on a record of physical inventory
of equipment, a copy of which is kept on file in the locating
unit. The transfer, addition and disposal of equipment
is controlled by the property manager. The suggested procedures
to be followed to make the system operational are detailed
in the succeeding paragraphs.
An initial inventory of equipment
must be taken to commence the installation of an equipment
control system. (If lack of manpower precludes the immediate
taking of an inventory, the system should nevertheless
be installed immediately for new equipment purchases.
A complete inventory should be taken systematically within
each location unit as time permits.)
IDENTIFICATION OF EQUIPMENT
After the necessary data has
been accumulated, the property manager should visit each
location to attach an identification number to each item.
The identification number should be entered on the Inventory
by the property manager who, at the same time, should
check the data previously entered.
a. Method of Attaching
Identification Numbers: In general, the identification
number should be attached to the item so that it can
be inventoried without moving the item. Equipment of
the same or similar type should have the number attached
to the same general location. This will facilitate the
taking of later physical inventories. Caution should
be taken to ensure that the number is not attached to
a part of the item that can be easily detached.
b. Types of Identification
Systems: The best method for the identification of equipment
is to affix a number of each item. For this purpose
a sequence of numbers is established. Several types
of identification labels may be used. The type which
can be attached easiest to the majority of items is
commonly known as a decal. When decals are used they
should be press-numbered. Some types of equipment, however,
are not suitable for the attachment of decals. For these
items another type of identification label should be
substituted. The other types available are: metal tags
with precoated adhesive on the back, metal tags affixed
with rivets or nails, stenciled numbers, or die-stamped
numbers. It is recommended that the decal be used wherever
c. "Register of
Equipment Identification Numbers": The sequence
of identification numbers available for use by an agency
is controlled by a register. This register is maintained
in control number sequence and should contain a brief
description of the item controlled. This register, besides
serving as a numeric listing of all numbers, also aids
in verifying that all equipment has been placed under
ASSIGNING RESPONSIBILITY FOR EQUIPMENT
The fixing of responsibility
is a key element in an effective system of equipment control.
This is initially accomplished by providing a listing
of all equipment assigned to a particular location unit.
This record is to be signed by the employee of the location
unit who has been given the responsibility for the equipment
assigned to the unit. Since this signature constitutes
a receipt for the equipment, the unit employee should
be satisfied with the accuracy of the record before signing.
Subsequently, equipment responsibility
is re-established when annual physical inventories are
taken under the supervision of the property manager and
this inventory is reconciled with the central equipment
TRANSFER, ADDITION AND DISPOSAL OF EQUIPMENT
As the needs of each location
unit change, new equipment may be acquired, obsolete equipment
may be disposed of, or equipment may be permanently transferred
between location unit. A record of such changes must be
kept if the controls initially established are to be properly
maintained. All equipment transfers, additions and disposals,
therefore, must be documented.
The procedure for completing
each type of transaction is described below:
a. Method of Transferring
Equipment: Whenever an item of equipment is to be permanently
transferred between location units, notification is
sent to the property manager. The inventory should be
updated to reflect the change.
Whenever an equipment item is temporarily transferred
between location units, a simple method of keeping track
of such transfers should be devised.
b. Method of Acquiring New
Equipment: Communication should be established between
the property manager and the purchasing unit for the
purpose of informing the property manager when new acquisitions
of equipment are made. At this time, all the data necessary
should be furnished to the property manager. The property
manager should add all new items to the inventory.
c. Method of Disposing
of Equipment: When equipment is to be disposed of, the
property manager should update the inventory to reflect
If equipment is lost or stolen it should be written
off and items in excess of $250 reported to OSC (see
Section 7.0200 of this Manual). The circumstances concerning
the loss or theft, and the measures taken to recover
the missing equipment, should be documented and retained
for audit purposes.
It is the responsibility of
agency managers to safeguard equipment from loss or misuses.
Guidelines addressing equipment security should be incorporated
in agency public safety or building security manuals and
should include provisions for:
- limiting and controlling access to buildings;
- controlling keys to facilities, including an agency-wide
key control policy and supporting key issuance records;
- conducting periodic building security surveys;
- employing special precautions such as lockdown pads to secure valuable equipment which is also portable,
such as microcomputers and typewriters;
- controlling equipment on loan, by utilizing passes
signed by the proper authority. Location unit managers
should also maintain records of equipment on loan.
ANNUAL PHYSICAL INVENTORIES
Annually, the property manager,
or his designated representative should take a physical
inventory of the equipment assigned to each location.
These inventories should be scheduled on a rotation basis
with the inventory being taken at each location unit once
during a twelve-month period. The inventory should be
The inventory for each location
unit is reconciled by the property manager with the prior
physical Inventory of equipment. All material difference
should be reconciled.
A record of lost or unaccounted
for items should be submitted by the property manager
to the agency head for approval to remove such items from
the equipment records. Those items which are authorized
by the agency head to be removed from the records should
be entered by the property manager.
One of the most significant
aspects of the equipment control system is equipment utilization.
It is the responsibility of the property manager and the
responsible individuals at the several location units
to (1) keep control over stand-by equipment; (2) ensure
the continuing need for such stand-by equipment; (3) detect
underutilized equipment; and (4) make arrangements for
the disposal of any equipment which exceeds foreseeable
Certain departments will find
it necessary to maintain continuing records of equipment
utilization. (The design of such a system is not within
the scope of this section.) As a minimum, however, all
agencies should make a periodic review of unutilized and
underutilized equipment to determine the extent to which
such equipment should be reported as surplus. These reviews
should not be limited to the equipment items placed under
control, but should cover all equipment belonging to the
agency, including office and classroom furniture. Property
managers should assist in such reviews by developing lists
of (1) unused stand-by equipment based upon location unit
notations on the several equipment records, and (2) apparent
underutilized equipment based upon physical observations
during annual inventory-taking and other visits. The results
of such periodic appraisals should be documented.