FD 350-1 - Asset Management
Transcription
FD 350-1 - Asset Management
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FINANCIAL DIRECTIVE 350-1 In Effect: 2014-10-20 Last Review: 2014-10-20 Due for Review: 2016-10-20 Asset Management PROGRAM Internal Services ALIGNMENT OFFICE(S) OF Corporate Services Sector PRIMARY INTEREST ONLINE @ http://infonet/cds/cds/350-1-fd-eng.pdf http://infonet/cds/cds/350-1-fd-fra.pdf http://www.csc-scc.gc.ca/acts-and-regulations/350-1-fd-eng.shtml http://www.csc-scc.gc.ca/lois-et-reglements/350-1-fd-fra.shtml Financial Administration Act AUTHORITIES Treasury Board Policy on Management of Materiel CSC’s Financial Signing Authority Delegation Instrument PURPOSE APPLICATION To ensure appropriate management and safeguarding of movable assets and to set out specific procedures for certain asset and commodity classes Applies to Correctional Service of Canada (CSC) staff responsible for and/or involved in the management of movable assets and inventories Does not apply to intangible assets, intellectual property, the management of records and information, or the management of seized or confiscated property CONTENTS SECTIONS 1 – 11 12 – 19 16 17 – 19 Responsibilities Governance Asset Review Boards Asset Classes Page 1 of 31 FD 350-1 Asset Management 20 – 31 Asset Verifications 24 – 28 Periodic Asset Verifications 29 – 31 Annual Asset Verifications 32 – 39 Inventories 35 Inventory Classes 36 – 39 40 2014-10-20 Inventory Not To Be Counted Enquiries Annex A Cross-References and Definitions Annex B Asset Review Board Annex C Asset Survey Board Annex D Disposal Review Board Annex E Life Cycle Management Annex F Attractive Items RESPONSIBILITIES 1. The National Comptroller will ensure: a. a physical verification of assets is conducted at minimum once annually b. assets are used for their intended purpose and are safeguarded c. institutions, sites, or operational units appoint an Asset Coordinator to oversee their asset management activities d. the regional year-end certifications on assets are reviewed and approved on a national level. 2. Regional Comptrollers will: a. ensure that a regional physical count is conducted within the prescribed timelines Page 2 of 31 FD 350-1 Asset Management 2014-10-20 b. sign off and report the results of the year-end certification on assets to the Director, Financial Accountability and Reports, within the prescribed timelines c. ensure that the appropriate documentation of the work done to support the certification signature is retained. 3. The Director General, Security Branch, will: a. oversee development of site-specific security plans for facilities, warehouses, and storage, when necessary b. provide support to departmental investigations into losses or theft of assets c. interface with other government agencies for security of controlled assets. 4. National Headquarters (NHQ) Financial Accountability and Reports Directorate will: a. ensure that all capital assets are accurately recorded in the Public Accounts through their accurate recording in the Integrated Financial and Materiel Management System b. support the asset management function by validating capital asset classification and amortization periods c. selectively observe the physical verification activity and verify compliance with cut-off dates d. conduct random verifications/test counts of assets e. review findings and the Certification of Inventory Count to confirm that the physical inventory is accurate f. verify if any receipts, issues, or transfers were completed during the stocktaking. 5. The Director, Contracting and Materiel Services, will: a. act as the departmental functional authority responsible for all matters pertaining to assets governed by this directive b. ensure central agencies policies and directives are communicated to employees c. initiate and support the annual physical asset verification process and recommend sampling methodologies to test verification results d. make recommendations for improvements to the asset and inventory management processes and procedures e. oversee the National Manager, Asset Management. Page 3 of 31 FD 350-1 Asset Management 2014-10-20 6. Regional Managers, Contracting and Materiel Services, will: a. oversee a regional governance structure made up of three Asset Review Boards b. provide regional subject-matter expertise and liaise with the Director, Contracting and Materiel Services, for all matters dealing with asset and inventory management c. work with Asset Coordinators to establish a schedule for stocktaking (will vary depending on the nature of the assets), ensuring that verifications are conducted at minimum once annually d. monitor policy compliance within their region. 7. The National Manager, Asset Management, will: a. provide guidance and oversight for asset management and physical verifications b. work closely with Asset Coordinators to validate and verify asset acquisition data and invoices c. ensure that the Asset Coordinator’s role at NHQ is performed. 8. Budget managers will: a. consult the appropriate Offices of Primary Interest (OPI) when planning acquisitions b. plan and justify acquisitions as part of life cycle management, pursuant to Annex E c. be accountable for sound stewardship of public funds entrusted to them and be responsible for analyzing the risks of not implementing appropriate controls d. ensure that assets assigned to their staff are protected and safeguarded e. ensure that assets, including those purchased by an acquisition card under their delegated authority, are properly recorded in the Integrated Financial and Materiel Management System, when applicable f. report any loss or damage to assets in a timely manner and share any relevant information about circumstances leading up to the loss or damage, to the appropriate authorities g. actively participate in periodic and annual verifications of assets. 9. Asset Coordinators will: a. ensure that all capital assets and attractive items within their area of responsibility are identified, tagged, documented, recorded, and that any change in status or location is updated in the Integrated Financial and Materiel Management System Page 4 of 31 FD 350-1 Asset Management 2014-10-20 b. oversee periodic and annual verifications of assets within their area of responsibility c. advise budget managers on matters dealing with assets, inventories, and verifications d. participate as members of the Asset Review Boards, as appropriate. 10. Custodians will: a. be responsible and accountable for assets used by them while employed at CSC b. ensure that appropriate storage, warehouse space, or facility is available c. ensure that inventories and assets are protected and reasonable measures are taken to safeguard investments d. report any changes of the asset’s physical location, loss or damage in a timely manner and share any relevant information about circumstances leading up to the loss or damage to the budget manager and the appropriate authorities e. ensure, if applicable, a signed Authority for Removal of Materiel from Premises (CSC/SCC 1026) and Loan of Crown Assets to Employees (CSC/SCC 1216) forms are kept on file to record all activities related to the removal of any item, asset, or materiel from any premises f. ensure to notify and/or return the asset(s) to the Regional Asset Coordinator, whichever is feasible, upon employee departure, suspension of duties, or regional transfer pursuant to CSC departure procedures, including completion of the Departure Clearance for Employee/ Contractor and Other (CSC/SCC 0816) form. 11. Stock takers will: a. complete asset counts and reconciliations, as required b. produce reports, as required. GOVERNANCE 12. CSC will promote value for money and sound stewardship in the management of assets. This will be achieved through: a. strategic and integrated decision-making and management processes to optimize the use of assets b. a risk-based and complexity-based approach to these processes, systems, capacity, resourcing, oversight, and reporting to promote the attainment of program outcomes Page 5 of 31 FD 350-1 Asset Management 2014-10-20 c. a life cycle management approach reflecting direct and indirect costs of assets to ensure affordability, cost effectiveness, and performance d. consideration of asset performance and utilization in retention and disposal decisions in support of program delivery e. delegations of authority based on need, capacity, and an effective regime of accountabilities and responsibilities f. efficient and effective business process management and accurate and reliable information for managing performance and assigning costs. 13. This directive applies to all assets and inventories managed by CSC, specifically: a. capital assets [with an acquisition value over $10,000 (excluding taxes)], as outlined in the Financial Directive FOps-DIR-2014-333 – Accounting for Capital Assets b. attractive items, as defined in Annex F c. all departmental inventories. 14. This directive excludes funding and accounting treatment of capital asset transactions, which is governed by the Financial Directive FOps 2014-333 – Accounting for Capital Assets. 15. CORCAN will follow the policies and procedures outlined in this directive, unless specific CORCAN Governing Principles are in existence. Asset Review Boards 16. The following three review boards oversee asset management. a. The Asset Review Board considers, reviews, and approves adjustments to asset holdings in its area of responsibility for amounts up to and including $25,000, as outlined in Annex B. b. The Asset Survey Board considers, reviews, and approves adjustments to asset holdings in its area of responsibility for amounts greater than $25,000, as outlined in Annex C. c. The Disposal Review Board reviews and approves any proposed disposal of assets for its site or region, as outlined in Annex D. Asset Classes 17. Departmental OPIs will work closely with the departmental functional authority to establish an acceptable verification and stocktaking process and methodology for each asset class type. NHQ Financial Accountability and Reports Directorate will provide guidance on applicable sampling models or approaches. Page 6 of 31 FD 350-1 Asset Management 2014-10-20 18. Asset classes and their dedicated OPIs: a. information technology hardware, and audio and video equipment (other than security) – the Chief Information Officer b. fleet vehicles – the Director General, Technical Services and Facilities Branch c. land and buildings – the Director General, Technical Services and Facilities Branch d. audio and video security surveillance equipment – the Director General, Security Branch e. consumables, including food services – the Director General, Technical Services and Facilities Branch f. health related equipment – the Director General, Health Services Branch. 19. For their respective asset class, each OPI will: a. implement an appropriate control mechanism to plan for, identify, and manage these assets b. ensure that investment planning for acquisitions is assured and that sustainable development strategies are in place c. appoint an Asset Coordinator that will: i. manage and record assets in the relevant Integrated Financial and Materiel Management System ii. clearly establish, articulate, and communicate a risk-based asset verification and inventory control strategy to be applied consistently across CSC iii. lead periodic and annual verifications of assets and certify departmental holdings at a minimum once annually iv. request disposal of assets through the applicable programs (e.g. Computers for Schools Program) and report to senior management annually on disposal strategies. ASSET VERIFICATIONS 20. CSC is supportive of the use of various stocktaking approaches and methodologies. 21. Verifications are conducted periodically and annually, based on risk analysis. 22. Consult the CMS-INST-2014-005 – Physical Asset Verification Instructions for procedures for planning and conducting periodic and annual physical asset verifications, including risk analysis and scheduling. Page 7 of 31 FD 350-1 Asset Management 2014-10-20 23. Different types of stocktaking: a. Cycle – This methodology counts a small, predetermined set of goods and materials frequently on a recurring schedule throughout the year in order to reduce or eliminate inventory errors (e.g. medical supplies are counted at the end and beginning of shifts). Custodians must ensure that proper and complete documentation is available to support results or findings. b. Wall-to-wall – This methodology has Asset Coordinators oversee a physical count of all holdings at the location under a budget manager’s control. The results or findings are certified by the Asset Coordinator and an independent party (e.g. Finance). c. Random (sampling) – This methodology, depending on the nature of the inventory (size, location, investment, risk, etc.), is used when an Asset Coordinator proposes to use a sampling of records to determine if the records are accurate and complete. If an Asset Coordinator proposes this methodology for an upcoming stocktaking, the departmental functional authority and Finance must be consulted. Once results are available and conclusions have been reached based on the sampling model, the inventory will be certified by the Asset Coordinator and an independent party (e.g. Finance). However if error rates exceed an acceptable threshold indicating that the records may not be accurate, a complete wall-to-wall inventory verification will be required to be undertaken. d. Hybrid – This methodology uses both wall-to-wall and random (sampling) approaches. For instance, a region, institution, or site may opt to conduct a random verification of a sampling of its assets valued between $1,000 and $9,999.99, but a wall-to-wall verification of all its capital assets and attractive items. In this example, the sample size of non-capital assets for the random verification must be sufficiently large so that a conclusion can be reached about the records of all these assets in the database. The approach and methodology used must be documented along with the results. e. Investigative – This methodology is a fact-finding exercise and is neither scheduled nor planned. It is undertaken to address specific concerns raised by a custodian or an internal or external authority. Only the staff authorized by their lead OPI will be involved. Prior consultation with the departmental functional authority is required, and the results of the verification process will dictate what follows. Periodic Asset Verifications 24. Periodic asset verifications can be conducted at any time when budget managers perceive a need to reconcile their own assets inventory records and/or if the departmental functional authority sees a need to do so. Page 8 of 31 FD 350-1 Asset Management 2014-10-20 25. Verification findings will: a. confirm accuracy of records b. identify new assets found c. report missing, lost or stolen assets. 26. In the event of missing assets, the Asset Coordinator will approach the Asset Review Board or Asset Survey Board (depending on the value) prior to taking any further action. 27. Once the verification is complete and all corrective measures have been taken, data updates to the Integrated Financial and Materiel Management System will be required. 28. Supporting documentation of the verification must be kept on file within the area of responsibility and, if required, be provided upon request. Annual Asset Verifications 29. The departmental functional authority will initiate the annual verification of assets recorded in the Integrated Financial and Materiel Management System via a call letter for assets on hand on March 31st of every year so that current reports can be submitted to NHQ Financial Accountability and Reports Directorate within the prescribed deadlines and pursuant to the CMS-INST-2014-005 – Physical Asset Verification Instructions. 30. The different stocktaking methodologies approved for the annual asset verification are: a. wall-to-wall verification b. random (sampling) verification c. hybrid verification. 31. The updated and final regional year-end certifications on assets are signed by the Regional Comptrollers, and the Director, Financial Operations for NHQ, and submitted to the Director, Financial Accountability and Reports, within the prescribed deadlines and pursuant to the CMSINST-2014-005 – Physical Asset Verification Instructions. The National Comptroller will review and provide approval at a national level. The final approved consolidated year-end certification on assets is submitted to the departmental Chief Financial Officer for submission to the Commissioner. A copy of the results must be forwarded to the Director General, Security Branch. INVENTORIES 32. There are two types of inventories at CSC: a. those that are publicly funded, where CSC is the owner Page 9 of 31 FD 350-1 Asset Management 2014-10-20 b. those that are created using non-public funds, thereby managed outside the direct control of CSC (e.g. inmate canteens). 33. Although CSC is not accountable for non-publicly funded inventories or stock, it will maintain complete and accurate records of all inventories. 34. Departmental OPIs will work closely with the departmental functional authority to establish an acceptable verification and stocktaking process and methodology for each inventory class. NHQ Financial Accountability and Reports Directorate will provide guidance on applicable sampling models or approaches. Inventory Classes 35. Inventory classes and their dedicated OPIs: a. Building materiel – Technical Services Branch: includes items of materiel used for maintenance of institutions. Physical counts are to be conducted pursuant to Technical Services Branch procedures. b. Commissary canteen items – Technical Services Branch: includes all approved canteen items purchased by CSC with public funds or by the inmates’ canteen for resale to inmates through the canteen operations. Physical counts are to be conducted pursuant to CD 890 – Inmate Owned Canteens. c. Consumable materiel – Technical Services Branch: includes all materiel that is to be consumed in a future year directly or indirectly in the delivery of program outputs, for which no records are maintained after final issue to end user (e.g. builder's supplies, printing and stationery, hygiene items, non-hazardous cleaning supplies, petroleum, oil and lubricant). Note 1: includes items stored in bulk by Institutional Services for which the inmates or CSC officers are considered end users. Note 2: consumable inventory materiel only requires a stocktaking accuracy of 95%, due to the nature of the items, the risk of loss, the transaction volume, and the relationship between the efforts required to control those items versus the benefits achieved by such a control. d. Custodial items held by stores – Contracting and Materiel Services Directorate: includes all items, temporarily stored by Materiel Management, for which budget managers are responsible. Physical counts are to be conducted pursuant to Contracting and Materiel Services Directorate procedures. e. Food - Technical Services Branch: physical counts of food are to be conducted pursuant to SOP 880-1 – Food Services – Central Feeding and SOP 880-2 – Food Services – Small Group Meal Preparation. Page 10 of 31 FD 350-1 Asset Management 2014-10-20 f. Hazardous materiel – Technical Services Branch: includes any materiel which is flammable, corrosive, oxidizing agent, explosive, toxic or radioactive. Physical counts are to be conducted pursuant to Technical Services Branch procedures. g. Industry equipment – Technical Services Branch: includes items of materiel that are only consumable through depreciation or wear and tear, and although they may be fixed or positioned in prescribed places, they do not lose their identity or become integral parts of other equipment or installations. Items in this category are normally susceptible to ongoing maintenance. They include all industry and vocational shop controllable items. Physical counts are to be conducted pursuant to the CORCAN Financial Procedures Manual. h. Institutional linen, supplies and related items – Technical Services Branch: includes items such as basic institutional clothing and linen, occupational clothing (e.g. smocks, aprons, and food service clothing for employees and inmates), uniforms, and supplies. Physical counts are to be conducted pursuant to Technical Services Branch procedures. i. National Depot items – Contracting and Materiel Services Directorate: includes all items warehoused on a national basis at the National Depot, such as clothing, bedding, linen and uniforms. Physical counts are to be conducted pursuant to Contracting and Materiel Services Directorate procedures. j. Narcotics and drugs – Health Services Branch: includes non-controlled (non-prescribed) and controlled (prescribed) medications. Physical counts are to be conducted pursuant to the Regional Pharmacy Services – Operations and Standards Manual. k. Raw material: includes material used in the primary production or manufacturing of a good. Physical counts are to be conducted pursuant to the CORCAN Financial Procedures Manual. l. Vehicles, construction, and other equipment – Technical Services Branch: includes all motorized vehicles, and may include non-motorized vehicles, designed for use with a motorized vehicle. Physical counts are to be conducted pursuant to ISD 335 – Fleet Management. Inventory Not To Be Counted 36. A limited group of inventory is not to be counted in order to: a. remove low value (and high volume consumption) inventory items from the inventory list b. reduce work load during year-end inventory counts c. reduce administration time without impacting the financial or costing information required for decision making. Page 11 of 31 FD 350-1 Asset Management 2014-10-20 37. The purchase of all supplies that are considered to be of insignificant value (e.g. office supplies that are in a secure area) are to be expensed in the year in which they are purchased and therefore should not be considered as inventory items. 38. In stock items that are not part of the inventory should be clearly labeled so that when the inventory count is done, they are readily identifiable. 39. When unsure if the inventory item should be counted, the appropriate OPI and/or Asset Coordinator are to be consulted. ENQUIRIES 40. Contracting and Materiel Services National Headquarters Email: [email protected] Assistant Commissioner, Corporate Services Original Signed by: Liette Dumas-Sluyter Page 12 of 31 FD 350-1 Asset Management 2014-10-20 ANNEX A CROSS-REFERENCES AND DEFINITIONS CROSS-REFERENCES CD 300 – Real Property CD 320 – Facilities Maintenance Management ISD 335 – Fleet Management FD 350 – Contracting and Materiel Management FD 350-3 – Contracting FD 350-4 – Acquisition Cards CD 570 – Security Equipment FD FOps-DIR-2014-333 – Accounting for Capital Assets CSC Security Equipment Manual CSC’s Financial Signing Authorities Delegation Instrument Defence Production Act Federal Real Property and Federal Immovables Act Surplus Crown Assets Act Public Works and Government Services Canada Policy on Green Procurement Receiver General Manual – Chapter 10 – Accounting Entries Treasury Board Accounting Standard 3.1 – Capital Assets Treasury Board Accounting Standard 3.1.1 – Software Treasury Board Accounting Standard 3.4 – Inventories Treasury Board Common Services Policy Treasury Board Directive on Acquisition Cards Treasury Board Directive on Disposal of Surplus Materiel Treasury Board Directive on Losses of Money or Property Treasury Board Operational Security Standard on Physical Security Treasury Board Policy Framework for the Management of Assets and Acquired Services Treasury Board Policy on Accounting for Inventories Treasury Board Policy on Government Security Treasury Board Policy on Investment Planning – Assets and Acquired Services Treasury Board Policy on Management of Information Technology Treasury Board Policy on Management of Materiel Treasury Board Security and Contracting Management Standard DEFINITIONS Acquisition: a transaction that adds materiel property to CSC’s inventory, including by means of a donation, sponsorship or lease. Page 13 of 31 FD 350-1 Asset Management 2014-10-20 Asset performance: a performance measure that addresses the cost of operating and sustaining an asset relative to established standards or targets. Attractive items: items with a unit price of more than $1,000 and less than $10,000 (excluding taxes) that are commonly used in their present or slightly modified form. Normally, such items can be transported by hand, subject to misappropriation and easily converted to personal use. Since they are particularly subject to loss, fraud or theft, a record of these items must be set up for control purposes. Betterments: any modification, conversion, upgrade, addition, or other alteration that enhances or otherwise increases the functionality, efficiency, or capacity of an original asset or one of its components. A betterment can also be an expenditure relating to the alteration or modernization of an asset that appreciably prolong the item's period of usefulness or improve its functionality. Capital assets: for the purpose of this directive, generally include any tangible asset which has been acquired, constructed or developed with the intention of being used on a continuous basis and not intended for sale in the ordinary course of business. Capital assets also include betterments. Departments will treat as a capital asset any asset that, in addition to meeting the above conditions, has a useful life in excess of one year and a per item cost of greater than $10,000, excluding taxes. Certification of Inventory Count: a signed document which supports the Letter of Representation for the annual asset verification. The signed document certifies that the physical counts are in agreement with inventory records. Computers for Schools Program: a national, federal government-led initiative that operates in cooperation with all provinces and territories, the private and volunteer sectors. Program funding recipients collect, repair and refurbish donated surplus computers from public and private sector sources and distribute them to schools, public libraries, not-for-profit learning organizations and Aboriginal communities throughout Canada. Controlled assets: goods specified in the Schedule – Controlled Goods List of the Defence Production Act. Cost minimizing disposal: when the estimated total costs [including direct handling, transportation, warehousing, and costs to the Crown Assets Distribution Directorate (CADD) and Crown Assets Distribution Centres operated by Public Works and Government Services Canada, etc.] of a disposal are likely to exceed the proceeds of sale. Assets with little or no market value may be transferred gratuitously, may be recycled or otherwise disposed of in an environmentally acceptable manner when this is the most cost-effective means of disposal and will withstand public scrutiny. In the majority of these cases, CSC should be creating standing offer agreements via Public Works and Government Services Canada or have arrangements with CAD for the disposal of wood products, metal, paper and cardboard, materials or rags and ammunition shell casings, etc. The cost minimizing disposal option is to be used by exception only. Page 14 of 31 FD 350-1 Asset Management 2014-10-20 Crown asset: any materiel or real property owned or leased by the Government of Canada, including land, buildings, bridges, wharves, monuments, equipment, and vehicles. It does not include work tools, office equipment, and furnishings. Custodian: the possessor of an asset. Disposable: designed for or capable of being thrown away after being used or used up (e.g. batteries and ammunition). Disposal: the removal of assets from a department, whether by transfer of ownership into new hands or through recycling as scrap. Fair market value: the price that would be agreed to in an open and unrestricted market between knowledgeable and willing parties dealing at arm's length that are fully informed and not under any compulsion to transact. Intangible assets: assets that lack physical substance, which include brand names, copyrights, franchises, licences, patents, subscription lists, trademarks, land rights and easements. Inventory: materiel for use held in stock on premises or at storage facilities, including materiel that is undergoing repair or is recorded in the Integrated Financial and Materiel Management System. Inventory control: the control of materiel by means of established materiel accounting and management methods and procedures. Letter of Representation: serves as a written confirmation by management to the Auditor General and to the signatories of the consolidated financial statements of the Government of Canada that management is responsible for the financial information to be included in the audited consolidated financial statements of the Government of Canada contained in the Public Accounts of Canada. It also confirms that management has disclosed all important and relevant information to the external auditor. Life cycle management: the effective and efficient management of assets along the entire continuum from the identification of a requirement to the disposal and replacement of the asset acquired to meet the requirement. The phases of life cycle management include assessing requirements; analyzing options; planning acquisition; acquiring; operating, using, and maintaining; and disposing and replacing. Materiel: all movable assets, excluding money and records, acquired by Her Majesty in right of Canada. Movable assets: assets that are tangible and include a broad range of goods such as equipment (e.g. office, information technology, telecommunications, scientific), furniture and furnishings, and larger goods (e.g. vehicles and ships). Page 15 of 31 FD 350-1 Asset Management 2014-10-20 Reconcile: comparing two sets of data to ensure that they are accurate and are in agreement (e.g. verifying that each asset identified during physical asset verification is correctly listed in the Integrated Financial and Materiel Management System). Write-down: an accounting action in which the net book value of a capital asset is reduced to reflect a permanent decline in the capital asset’s value. When a capital asset is written down, the capital asset remains in the accounting records of the department. Write-off: an accounting action in which a capital asset is removed from the department’s accounting records and is not sold for proceeds or traded in (unlike a write-down). A write-off is normally undertaken when a capital asset is lost or stolen, when there is a long-term expectation that the asset will no longer contribute to the department’s ability to provide goods and services, or when there is a permanent impairment due to theft, fire, destruction or obsolescence that renders the capital asset out of service. Page 16 of 31 FD 350-1 Asset Management 2014-10-20 ANNEX B ASSET REVIEW BOARD MANDATE 1. The Asset Review Board (ARB) provides an independent assessment of losses and other proposed inventory adjustments as part of physical asset verifications. 2. In the case of losses, the ARB will consider the facts or events that led to the loss and make recommendations with respect to corrective measures. 3. When a request for a proposed inventory adjustment is received, the ARB will consider the justification for the proposed adjustment and either approve the request or recommend that further investigation be carried out. 4. The ARB will inform the Regional Chief, Financial Services, or Regional Comptroller of any situation or occurrence that could indicate a systematic national anomaly. MEMBERSHIP 5. Members will make decisions on behalf of the site they represent and will have the necessary delegated authorities to approve or, in the case of institutions, recommend to the budget manager any losses or inventory adjustments of $10,000 or less as outlined in CSC’s Financial Signing Authorities Delegation Instrument, Column 38 – Write-Off of Assets. 6. The site Chief, Finance, will be the Chairperson of the ARB. 7. Members may include: site Chief, Materiel Management Finance Officers Asset Coordinator. REQUIREMENTS 8. The ARB will recommend the write-off of anything less than $10,000 to the budget manager. 9. The ARB will recommend the write-off of anything greater than or equal to $10,000 and less than $25,000 to the Regional Comptroller. 10. Decisions must be forwarded to NHQ Financial Accountability and Reports Directorate for reporting requirements. Page 17 of 31 FD 350-1 Asset Management 2014-10-20 METHOD OF OPERATION 11. In instances where the Chairperson may be perceived as having a conflict of interest with respect to a request presented to the ARB, another regional member will be asked to assume the role of Chairperson. 12. If and when required, the Regional Chief, Financial Services, or designate, will act as the policy advisor to the ARB and provide support and/or interpretations of policies. 13. Secretariat services will be provided to the ARB by the site Chief, Materiel Management. 14. In addition to ad hoc meetings to review asset losses and other proposed inventory adjustments as they arise, members of the ARB will meet at least once a year to review and discuss asset management trends and to consider the results of annual verifications. These annual meetings can be coordinated by teleconference with the Asset Survey Board annual meetings to allow for a more global regional perspective. 15. The ARB will ensure that all decisions are formally recorded and documented. Approved forms will be saved in the national ARB information management folder established by NHQ Contracting and Materiel Services on the departmental shared drive (with restricted access). 16. On occasion, the ARB may be asked by the Asset Survey Board to provide rationale for decisions or to further investigate a particular situation. 17. The ARB members will ensure that when decisions are made, any required adjustments to the financial and asset databases are made as soon as possible. REPORTING PROCESS 18. To initiate a review by the ARB of a loss or other proposed asset adjustment, the following documentation must be submitted to the ARB: a. a completed Asset Recording and Transaction (CSC/SCC 0958) form from the Asset Coordinator providing sufficient details to clearly identify the assets requiring consideration by the ARB b. in the case of asset losses, a detailed narrative of events that resulted in the loss (this information can be provided by the institution or the Asset Coordinator and/or budget manager) c. for other proposed asset adjustments, a justification for the requested change (this information can be provided by the institution or the Asset Coordinator and/or budget manager). 19. The site Chief, Materiel Management, or the Asset Coordinator will verify the information and provide a recommendation to the Chairperson. Page 18 of 31 FD 350-1 Asset Management 2014-10-20 20. The Chairperson will ensure that reasonable prudence and probity are exercised. 21. When the ARB has arrived at a decision and/or recommendation regarding the asset adjustment, the approved Asset Recording and Transaction (CSC/SCC 0958) form will be returned to the budget manager and a copy will be retained in the national folder. 22. The ARB may recommend further investigation by the budget manager to locate assets prior to approval. 23. Special procedures apply to the specific commodities identified below: a. For any loss or theft of controlled assets (weapons and/or personal protective articles), no approval shall be granted unless the ARB has consulted with the Director General, Security Branch, about the situation and received support with respect to the final ARB decision. b. For any theft or write-off of fleet vehicles, no approval shall be granted unless the ARB has consulted with NHQ Support Services and received their support with respect to the final ARB decision. c. For any reported loss or theft of information technology assets, the Chief Information Officer will be formally advised and requested to adjust the Information Management/Information Technology System database to reflect the changes to the departmental holdings. 24. Once CSC’s annual verifications are complete, site ARBs will share the findings and results with the Asset Survey Board for review and final endorsement. The annual Certification of Inventory Count results will be co-signed by the Senior Finance Officer and Regional Manager, Contracting and Materiel Services. Page 19 of 31 FD 350-1 Asset Management 2014-10-20 ANNEX C ASSET SURVEY BOARD MANDATE 1. The Asset Survey Board (ASB) provides an independent assessment of losses of assets and other proposed inventory adjustments presented by the Asset Review Board. 2. In the case of losses, the ASB will consider the facts or events that led to the loss, and make recommendations with respect to corrective measures. 3. When a request for a proposed inventory adjustment is received, the ASB will consider the justification for the proposed adjustment, and either approve the request or recommend that further investigation be carried out. 4. The ASB will inform the Director, Contracting and Materiel Services, of any situation or occurrence that could, in the opinion of the ASB, indicate a systematic anomaly. MEMBERSHIP 5. Members will make decisions on behalf of the region they represent and must have the necessary delegated authorities to approve any losses or inventory adjustments up to $100,000, in accordance with CSC’s Financial Signing Authorities Delegation Instrument, Column 38 – Write-Off of Assets. 6. The Regional Comptroller will be the Chairperson. 7. Members may include: Regional Manager, Contracting and Materiel Services site Chief, Materiel Management Regional Warehouse Supervisor Asset Coordinator. REQUIREMENTS 8. The ASB investigates losses of value greater than or equal to $25,000 and less than $100,000. A copy of the report and recommendations is to be sent to the relevant senior managers in the region. 9. The ASB will recommend write-offs less than $10,000 to the budget manager. Page 20 of 31 FD 350-1 Asset Management 2014-10-20 10. The ASB will recommend write-offs equal to or greater than $10,000 to the Regional Comptroller. 11. Any adjustments over $100,000 require the approval of the National Comptroller. A copy of the report and recommendations is to be sent to the relevant senior managers in the region and the National Comptroller. 12. All decisions must be forwarded to NHQ Financial Accountability and Reports Directorate for reporting requirements. METHOD OF OPERATION 13. In instances where the Chairperson may be perceived as having a conflict of interest with respect to a request presented to the ASB, another regional member will be asked to assume the role of Chairperson. 14. If and when required, the Director, Contracting and Materiel Services, or designate, will act as the policy advisor to the ASB and provide support and/or interpretations of policies. 15. Secretariat services will be provided to the ASB by the Regional Manager, Contracting and Materiel Services. 16. In addition to ad hoc meetings to review asset losses and other proposed inventory adjustments as they arise, members of the ASB will meet at least once a year to review and discuss asset management trends in their region and to consider the results of annual verifications. 17. The ASB will ensure that all decisions are formally recorded and documented. Approved forms will be saved in the national ASB information management folder established by NHQ Contracting and Materiel Services on the departmental shared drive (with restricted access). 18. On occasion, the ASB may be asked by NHQ Contracting and Materiel Services to provide rationale for decisions or to further investigate a particular situation. 19. The ASB members will ensure that when decisions are made, any required adjustments to the financial and asset databases are made as soon as possible. REPORTING PROCESS 20. To initiate a review by the ASB of a loss or other proposed inventory adjustment, the following documentation must be submitted to the ASB: a. a completed Asset Recording and Transaction (CSC/SCC 0958) form from the Asset Coordinator, signed by the Asset Review Board, providing sufficient details to clearly identify the assets requiring consideration by the ASB Page 21 of 31 FD 350-1 Asset Management 2014-10-20 b. in the case of asset losses, a detailed narrative of events that resulted in the loss (this information can be provided by the Asset Review Board or the Asset Coordinator and/or budget manager by memorandum or email to the Chairperson of the ASB) c. for other proposed inventory adjustments, a justification for the requested change (this information can be provided by the Asset Review Board or the Asset Coordinator and/or budget manager by memorandum or email to the Chairperson of the ASB). 21. The Regional Manager, Contracting and Materiel Services, will verify the information and provide a recommendation to the Chairperson. 22. The Chairperson will ensure that reasonable prudence and probity are exercised. 23. When the ASB has arrived at a decision and/or recommendation regarding the asset adjustment, the approved Asset Recording and Transaction (CSC/SCC 0958) form will be returned to the Asset Review Board and a copy will be retained in the national ASB information management folder. 24. At any time, the ASB may recommend further investigation by the budget manager to locate assets prior to approval. 25. Special procedures apply to the specific commodities identified below: a. For any loss or theft of controlled assets (weapons and/or personal protective articles), no approval shall be granted unless the ASB has consulted with the Director General, Security Branch, about the situation and received his/her support with respect to the final ASB decision. b. For any theft or write-off of fleet vehicles, no approval shall be granted unless the ASB has consulted with NHQ Support Services and received their support with respect to the final ASB decision. c. For any reported loss or theft of information technology assets, the Chief Information Officer will be formally advised and requested to adjust the Information Management/Information Technology System database to reflect the changes to the departmental holdings. 26. The ASB will review the annual verifications co-signed by the Senior Financial Officers and Chiefs, Materiel Management. Page 22 of 31 FD 350-1 Asset Management 2014-10-20 ANNEX D DISPOSAL REVIEW BOARD MANDATE 1. The Disposal Review Board (DRB) is responsible for reviewing and challenging proposed disposal strategies and ensuring that departmental policies regarding disposal are respected. The DRB also oversees and manages the Computers for School Program on behalf of CSC. 2. Each Regional Headquarters has the authority to centralize DRBs at the regional level or to delegate the approval authorities to sites. 3. In accordance with CSC’s Financial Signing Authorities Delegation Instrument, regions cannot delegate authority to their sites for disposal of real property or for donations requiring the Minister’s approval. Authority for these disposals is restricted to the positions identified in the Financial Signing Authorities Delegation Instrument. 4. Only assets with an individual replacement value exceeding $100 are required to complete a request for disposal. For assets with an individual replacement value less than $100, they are to be disposed off as if they were scrap. Safe and secure disposal of the product is still required, depending on the nature of the asset. MEMBERSHIP 5. Members will make decisions on behalf of the site they represent and will have the necessary delegated authorities to approve or, in the case of institutions, recommend to the budget manager any disposals. 6. Approval of disposals will be in accordance with CSC’s Financial Signing Authorities Delegation Instrument, Column 29 – Disposal of Assets – Other than Real Property and Cash. Centralized DRBs 7. The Regional Comptroller will be the Chairperson, with the exception of NHQ where it is the Director, Contracting and Materiel Services. 8. Members may include: Regional Manager, Contracting and Materiel Services Regional Warehouse Supervisor. Page 23 of 31 FD 350-1 Asset Management 2014-10-20 Decentralized DRBs 9. The site Chief, Finance, will be the Chairperson. 10. Members will include: site Chief, Materiel Management Asset Coordinator. METHOD OF OPERATION 11. In instances where the Chairperson may be perceived as having a conflict of interest with respect to a request presented to the DRB, another regional member will be asked to assume the role of Chairperson. 12. For site DRBs, the Regional Chief, Financial Services, or designate, will act as the policy advisor to the Board and provide support and/or interpretations of policies. In the case of centralized DRBs, excluding NHQ, the Director, Contracting and Materiel Services, will act as the reference and policy advisor. 13. Secretariat services will be provided to the DRB by a representative from Contracting and Materiel Services. 14. The DRB will only meet when a proposal for disposal action has been received. 15. The DRB will ensure that all decisions are formally recorded and documented. Approved forms will be saved in the national DRB information management folder established by NHQ Contracting and Materiel Services on the departmental shared drive (with restricted access). 16. On occasion, site DRBs may be asked by the Regional Comptroller to provide rationale for decisions or to further investigate a particular situation. 17. The DRB members will ensure that when decisions are made, any required adjustments to the financial and asset databases are made in a timely fashion. REPORTING PROCESS 18. To initiate a review by the DRB, the following documentation must be available to the DRB: completed Asset Recording and Transaction (CSC/SCC 0958) form, Disposal Review Board (Cover Sheet) (CSC/SCC 0577), and Request for Disposal and Return Voucher (CSC/SCC 0578) providing sufficient details to clearly identify the assets requiring consideration by the DRB. Page 24 of 31 FD 350-1 Asset Management 2014-10-20 19. The site Chief, Materiel Management, or the Asset Coordinator will verify the information and provide a recommendation to the Chairperson. 20. The Chairperson will ensure that reasonable prudence and probity are exercised. 21. When the DRB has arrived at a decision and/or recommendation, copies of the approved Asset Recording and Transaction (CSC/SCC 0958) form, Disposal Review Board (Cover Sheet) (CSC/SCC 0577), and Request for Disposal and Return Voucher (CSC/SCC 0578) will be returned to the budget manager, one copy will be retained in the national DRB information management folder and one copy will be forwarded to the Regional Comptroller. The original approved form will be sent to the appropriate disposal entity either in hardcopy or electronically (e.g. Crown Assets Distribution Centre or Computers for Schools Program). 22. Whenever feasible, the DRB will interact closely with CSC’s warehouse operation to secure the assets and coordinate the logistics. 23. For general asset disposal, which includes disposal-for-proceeds, information technology assets destined for the Computers for Schools Program and cost-minimizing disposals, the DRB will review and support the recommended disposition. 24. For the disposal of surplus assets by way of donations and for assets of a controlled nature, special procedures apply: a. the DRB will consider proposals for cost-minimizing donations and review those that require the approval of the Minister b. the DRB will review proposals for the disposal of weapons and other personal protective assets and make recommendations for the consideration of NHQ Support Services and the Director General, Security Branch c. DRB members will review proposed fleet vehicle disposals and make recommendations to NHQ Support Services d. NHQ Support Services shall provide final approval. Page 25 of 31 FD 350-1 Asset Management 2014-10-20 ANNEX E LIFE CYCLE MANAGEMENT INVESTMENT PLANNING AND NEEDS ASSESSMENT 1. The Departmental Investment Plan sets clear expectations with respect to the acquisition of assets and related services. OPIs, identified in the Asset Classes section of this directive, and budget managers are responsible for planning and justifying their acquisitions. As part of the decisionmaking or planning processes, they are required to address the following: a. direction setting: includes strategic priority setting using inputs from key departmental profiles such as corporate and functional risks, environmental scans, security, and contingency plans challenging asset needs and replacement strategies b. investment requirements: by using key departmental corporate and operational information and data to validate the actual requirements for proposed acquisitions and challenging the planned investments against established criteria c. budget allocation: by seeking or dedicating the necessary financial resources to support the planned asset acquisitions d. execution: by developing acquisition and work plans and by monitoring the acquisitions. 2. Environmental factors will be investigated during the planning stage and taken into account during the decision-making process, pursuant to FD 350-3 – Contracting and CMS-INST-2014-001 – Green Procurement Instructions. 3. During the planning phase, the OPIs and budget managers will ensure Asset Coordinators or Warehouse Managers are informed of the planned acquisitions and that they are in a position to receive and record assets on their behalf. ACQUISITION 4. All acquisitions will be carried out according to the responsibilities and procedures set out in FD 350-3 – Contracting and FD 350-4 – Acquisition Cards. 5. Assets can be acquired through: a. acquisition card b. purchase order/contract c. transfer. Page 26 of 31 FD 350-1 Asset Management 2014-10-20 6. Regardless of the method used to acquire the asset, if the purchase is for an attractive item as defined in Annex F, or if the item has an acquisition value of over $1,000 (excluding taxes), the budget manager will retain the following information and documents: a. item description b. serial number (when available) c. receiving documentation (packing slip, signed invoice and/or payment voucher, etc.) d. Asset Recording and Transaction (CSC/SCC 0958) form. 7. If an asset is acquired through a transfer from within CSC, the recipient within CSC must obtain the asset data identified in paragraph 6 of this annex and ensure that the Asset Coordinator is informed of the transfer and provided with copies of the documentation. The request is then submitted to the appropriate Asset Review Board for decision. Once the decision is received, the Asset Coordinator must ensure the asset information is promptly updated in the Integrated Financial and Materiel Management System. NHQ Financial Accountability and Reports Directorate must be informed of the transfer and provided with copies of the documentation so that a verification is completed to ensure accurate data has been recorded. 8. If a capital asset is acquired through an interdepartmental transfer, the departments involved need to consult with each other and with the Receiver General to coordinate the written exchange of information, identify the amounts involved, determine the government-wide coding used and establish the accounting period for processing the required departmental accounting entries. A request must be submitted to the appropriate Asset Review Board for decision. The recipient within CSC must obtain the asset data identified in paragraph 6 of this annex and ensure that the NHQ Financial Accountability and Reports Directorate and the Asset Coordinator are informed of the transfer and are provided with copies of the documentation so that accurate data can be recorded in the Integrated Financial and Materiel Management System. RECORDING OF ASSETS 9. Treasury Board requires departments to retain both quantitative and qualitative information on asset effectiveness. 10. Accurate information on all capital assets and attractive items must be recorded in the Integrated Financial and Materiel Management System. Since the Integrated Financial and Materiel Management System is the sole official departmental record, it is essential that all information within the different asset modules reconcile. Page 27 of 31 FD 350-1 Asset Management 2014-10-20 11. The Asset Coordinator, along with the Regional Warehouse Supervisor or budget manager, is responsible for ensuring that required asset information is captured and entered in the Integrated Financial and Materiel Management System. If required, NHQ Financial Accountability and Reports Directorate will advise the Asset Coordinator of any modifications that are required to be made in the Integrated Financial and Materiel Management System. 12. Assets and attractive items will be recorded using the Asset Recording and Transaction (CSC/SCC 0958) form. All changes to the status of an asset (e.g. loss, theft, loan, transfer, or disposal) will require an update using the same Asset Recording and Transaction (CSC/SCC 0958) form to record the adjustment. 13. Exceptions include, but are not limited to, security electronic spare part inventories, computers, and office furniture and furnishings. These items do not need to be captured in the Integrated Financial and Materiel Management System, unless they have a unit value of $10,000 or greater. 14. When assets are purchased in bulk (e.g. desktops, laptops, printers, projectors, etc.) and the total combined price of the assets exceed $10,000 but each individual asset has a unit price under $10,000, these are not considered capital assets. They are not to be entered into the Integrated Financial and Materiel Management System unless they meet the definition of an attractive item as defined in Annex F. These items will be tracked by the OPI (e.g. laptops will be tracked in the IT Management System). Refer to the Financial Directive FOps-DIR-2014-333 – Accounting for Capital Assets for more information regarding bulk assets and the Decision Tree for determining the status of an asset and funding requirements. LOANS 15. Any loan of a CSC asset to an employee must be authorized by the employee’s budget manager. The budget manager will sign the Authority for Removal of Material from Premises (CSC/SCC 1026) form to record the removal of the asset from premises. 16. Temporary loans of less than 30 calendar days are not required to be recorded. Email authorization from the budget manager to the employee must be kept on file to protect parties in case of loss, theft or damage. 17. Loans of information technology hardware will be coordinated through the local representative of the Chief Information Officer. 18. Loans to a person other than a CSC employee must be recorded using the Loan of Equipment Agreement (CSC/SCC 1217) form and, if applicable, the Loan of Equipment Agreement (Continuation) (CSC/SCC 1217-1) form. Both parties will sign and retain a copy of the completed form(s) for their records. 19. Personal use of a CSC vehicle (loan) is not permitted pursuant to ISD 335 – Fleet Management. Page 28 of 31 FD 350-1 Asset Management 2014-10-20 LOSS OR THEFT 20. In the event of loss or theft of an asset, the budget manager will prepare the necessary documentation for consideration by the appropriate Asset Review Board, as outlined in Annex B and Annex C. 21. The regional or site Security office may be called upon to investigate the events leading up to the loss or theft. DISPOSAL 22. CSC will dispose of surplus assets in accordance with established government processes and in a manner that will stand the test of public scrutiny. 23. Dormant assets are costly to CSC, therefore budget managers will dispose of assets quickly and effectively as soon as they are considered surplus to the program or operation. 24. All disposals will be coordinated through the Disposal Review Board (DRB). The DRB will consider the optimal method for disposal. The options available to the DRB are: a. disposal for proceeds through Crown Assets Distribution Centre b. cost-minimizing disposal options available to CSC (recycling, destruction, scrap, or salvage) c. donations d. disposal through provincial government agreements e. transfers f. trade-ins. 25. For functional surplus information technology and peripherals, disposals will be coordinated by NHQ or Regional Information Technology. Assets will be donated through the Computers for Schools Program. The responsible OPI will ensure that all hard drives are cleansed using Royal Canadian Mounted Police approved software before the assets are donated. 26. For all surplus lands and buildings, disposals will be coordinated by NHQ Technical Services and Facilities Branch who will seek the support of the Canada Lands Company. 27. The disposal or destruction of all surplus weapons and ammunition will be coordinated by the Director General, Security Branch, who will work with the Royal Canadian Mounted Police to effect disposals. Page 29 of 31 FD 350-1 Asset Management 2014-10-20 28. Where possible, CSC will make surplus assets available gratuitously, at book value or at fair market value, to other federal departments or agencies before disposal. 29. In the case of staff change or transfer, any adaptive or ergonomic assets specifically acquired for an employee may be transferred at no cost to the new unit or department. 30. Donations of surplus assets will comply with CSC’s current Financial Signing Authorities Delegation Instrument. Only delegated positions are authorized to approve donations. A cost-minimizing disposal through a donation to recognized charitable organizations in Canada is permitted as long as other options have been considered first. In the event of a donation, all costs associated with the donation (e.g. transportation costs) will be charged to the recipient’s account. CSC must seek legal guidance for donations to ensure that the Crown’s liabilities and further obligations have been discharged. 31. If a surplus non-information technology asset has a trade-in value, the budget manager may propose donation as a disposal mechanism. CSC Contracting and Materiel Services or Public Works and Government Services Canada contracting offices would negotiate the terms of the trade-in. 32. Disposal of hazardous waste requires serious consideration. Several federal, provincial and municipal codes govern such disposals. The departmental functional authority or regional representative must be consulted on all matters of hazardous waste disposals. Page 30 of 31 FD 350-1 Asset Management 2014-10-20 ANNEX F ATTRACTIVE ITEMS 1. Attractive items are items with a unit price of more than $1,000 and less than $10,000 (excluding taxes) that are commonly used in their present or slightly modified form. Normally, they can be transported by hand, subject to misappropriation and easily converted to personal use. Since they are particularly subject to loss, fraud or theft, a record must be set up for control purposes. 2. Attractive items will be recorded using the Asset Recording and Transaction (CSC/SCC 0958) form. All changes to the status of an asset (e.g. loss, theft, loan, transfer, or disposal) will require an update using the same Asset Recording and Transaction (CSC/SCC 0958) form to record the adjustment. 3. Attractive items are referred to as "Expensed Assets" in the Integrated Financial and Materiel Management System (Fixed Asset Module). 4. CSC will record in its Integrated Financial and Materiel Management System certain specific asset categories classified as attractive items, irrespective of price. These asset categories are: a. all weapons, firearms, and security equipment as per CD 570 – Security Equipment and listed in the CSC Security Equipment Manual (excludes disposable items such as ammunition) b. all personal protective assets not meant for public use c. all televisions and other video equipment. 5. Budget managers will consult with the following OPIs when considering acquisitions of assets that could be included in the above-mentioned asset categories: a. weapons and firearms: the OPI is NHQ Correctional Operations and Programs and consultation is required b. personal protective assets (excludes uniforms or general use clothing): the OPI is NHQ Correctional Operations and Programs (or the regional representative) who will determine if the proposed acquisition falls within the "personal protective asset" category c. televisions, and other video equipment (not related to departmental security): the OPI is the Chief Information Officer. 6. Budget managers may consult with their Asset Coordinator at any time when planning asset acquisitions regardless of asset value or category. Page 31 of 31