Friday, September 8, 2017

Fixed Asset Inventory Management: Why it matters

Larry Norem and Mike Williams are great people to consult if you’re looking for an obscure location On-Grounds. They can not only tell you where the building is, but also, where to park, which door will require specialized access, and what room number you should look for.

These are things they know because they’ve been to all of those locations, multiple times, because it’s their job to keep track of roughly 20,000 pieces of Capital Equipment (known as “fixed assets”) that are spread out over 400+ buildings (with well over 20,000 rooms) and across 300+ organizations at UVA.

Fixed Asset Accounting is a specialized area within Financial Operations that is responsible for review of capital building projects, capitalization of all fixed assets, and maintaining an accurate inventory of the University’s fixed assets. Fixed Assets, also often referred to as hard or tangible assets (and also intangible assets such as software), are long-term assets property that are used in the day-to-day operations to provide for the educational, athletic and research needs of its students as well as the requirements of its numerous sponsors for specialized research.

Gary Young, Director of Fixed Assets Accounting, said it’s a significant challenge to ensure all of the University’s $4.0B fixed assets are properly capitalized and accounted for in its yearly inventory process.

“Getting everything into the inventory system and maintaining that inventory accurately is demanding and very important,” he said. “Various agencies that sponsor the purchase of equipment in the form of research grants and awards expect our system and internal procedures will protect their investment in equipment at UVA.”

Additionally, Young points out, our negotiated F&A rate is integrally linked with the federally-sponsored research equipment located throughout UVA, which makes the accuracy of that inventory another, perhaps an even more critical aspect of accounting for and safeguarding UVA assets on top of the standard accounting and financial reporting requirements.

And that’s where Norem and Williams come in, quite literally – they arrive in offices and labs across Grounds, with asset tags and barcode scanners.
Barcode tags like this one are used to keep track 
of equipment across Grounds.

When someone buys a piece of equipment, Norem makes sure it’s appropriately tagged and entered into the inventory system that Williams manages. Over the course of a year, Williams will complete an inventory of every fixed asset on Grounds. Although he and Larry play similar roles in the process, there’s a key difference, explains Mike: “Larry knows names, I know numbers. He knows all the researchers, and I know all the room numbers.”

There’s a good reason Norem knows “who’s who:” he’s had to do a lot of detective work over the past seven years he’s done this job. From a regular report showing big purchases by purchase order, he matches those purchases up with invoices. Using the PO description, what the item is and what department purchased it, he then goes in search of the item, to find out who it belongs to.

“We can track down pretty much everything,” he laughs. “When I walk in a lab, people say ‘Oh, what are you looking for today?’ or they will even say ‘I know what you’re looking for and it's right here.’”

Norem says that while he and Williams both have a significant amount of intense record-keeping and generating that they do, his time in the labs makes for a nice balance to the work he does at his desk.

Larry Norem, left, tagging a piece of equipment in
 the lab of Dr. Stuart Berr, right.
Mike Williams scanning equipment in a lab.
“I get to talk to the researchers and ask them what they’re working on when I ask them about the new item they’ve purchased. They love to talk about what they’re doing and some of the stuff is just incredible and fascinating,” he said.

Norem added that he also enjoys meeting new principal investigators at UVA: “I can always tell who I’m going to read about in the Daily Progress or UVA Today by how often I see them,” he said.

“I meet researchers and grad students who are working hard, even over Christmas break. Those are the people I know I’ll see in the news later.”

Norem might only appear in a lab every so often when new equipment is purchased, but Williams’ appearances are much more regular, due to the annual inventory cycle.

“It takes me six-plus months to physically go through all the buildings and scan the asset tags Larry has placed, for the records that we keep,” he said, adding that he’s gotten much faster and more efficient doing this job since he started it 13 years ago.

Those records are used when auditors from various agencies such as the Office of Naval Research come by for spot inventory checks. Most sponsors require yearly reports about equipment that has been purchased on a grant.

Williams says while its Norem’s job to make sure money used for fixed assets has been tagged properly, and it’s his job to make sure the asset purchased doesn’t go missing, and it’s not always an easy job.

“It’s not like anyone sells the stuff on Craigslist,” he laughs. “It’s mostly a case of things getting moved and nobody keeping track of it.”

“It’s important for departments to know where their ‘stuff’ is,” he explained, because it’s more than just trying to find everything every year – it’s a matter of UVA monitoring its resources appropriately.

Williams’ duties often take him to some sensitive areas.

“I don’t touch anything when I’m out in the research areas,” he says. “There are some areas where the experiment might be dangerous to me, or I might be dangerous to it.”

He says he and Norem rely heavily on the guidance of the researchers and the signs on the doors as they do their jobs.

“And I never rest my notepad on a counter,” adds Norem with a smile. “Just in case.”

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