Definition
Capital asset defined for this policy is any nonexpendable personal property having a useful life of more than one year and costs $5,000 or more. Applicable property costing less than $ 5,000 shall be managed in accordance with the College’s policy IV:04:02-Sensitive Minor Equipment Control. The following list includes some of the costs that should be capitalized in the appropriate asset account:
- The original bargained acquisition price.
- Freight, insurance, handling, storage, and other costs related to acquiring the asset.
- Cost of installation, including site preparation, assembling, and installing.
- Cost of trial runs and other tests required before the asset can be put into full operation.
- Cost of reconditioning equipment acquired in a used state.
Grant Funded Property
Property purchased with grant funds will be managed according to the property management standards of the grant-making body or federal rules, whichever is applicable.
Responsibility
It is the responsibility of the budgetary unit head to control and monitor the assets located within their area. All employees should be made aware of the importance of the safekeeping of institutional property. The policies and procedures described in this document are to be considered minimum controls for capital assets. Additional controls should be implemented by the departments if considered necessary.
Purchases
All purchases shall be made in accordance with the College’s policy IV:02:01-Purchasing Procedures and Tennessee Board of Regents’ policy 4-02-10-00 - Purchasing Policies and Procedures.
Receipt of Property
The department receiving the property is responsible for documenting the receipt of all items purchased and authorizing payment.
Classification of Purchases
Representatives of the Business Office will confer with the requisitioner to resolve any questionable classifications of purchases in order to provide for proper recording of the expenditure.
Recording and Tagging Capital Assets
The asset information is entered into the Fixed Asset Module upon payment. Each capital asset will be assigned an inventory number and tagged by the Business Office staff. The tag will remain on the item until such time as the item is no longer located at an official college location.
Deleting Equipment Inventory Items
Generally, items will be deleted from the capital assets inventory list for the following reasons:
- Traded in
- Lost or stolen
- Transfer to other institutions and schools within the TBR system
- Transfer to other state agencies
- Sale to eligible political subdivisions of the state and other governmental entities
- Public auction, publicly advertised and held
- Sale under sealed bids, publicly advertised, opened, and recorded
- Negotiated contract for sale, at arm’s length; but only in those instances in which the availability of the property is recurring or repetitive in character, such as marketable waste products
- Donations to a public school or public school system
- Item destroyed by an appropriate method because it was determined not to be usable by the institution and has little or no salvage or other economic value.
All disposals of items using methods 3 through 10 must be approved by the Vice President for Business and Finance or the Assistant Vice President for Business and Finance. This approval will serve as the authorization for the Business Office to record the removal of the item, after final disposition, from the capital asset inventory list and the general ledger. For item number 2, the appropriately completed property loss report submitted to the TBR will serve as authorization to remove the item from the inventory list and the general ledger.
See TBR Policy 4:02:20:00 – Disposal of Surplus Personal Property for specific details related to the disposal of surplus personal property.
Donated Personal Property
All donations of personal property should be accepted in accordance with the College’s and Tennessee Board of Regents’ policy concerning gifts to the institution. Unless otherwise designated as prescribed by the TBR’s policy 4:01:04:00, only the President is authorized to accept gifts to the College. Donated items should be coordinated with the Foundation. The value to use in recording the gift-in-kind should generally be the lower of the fair market value on the date of the gift or the reasonable value of the gift-in-kind to the institution. The value to be used in recording the gift-in-kind must be determined by the department receiving the use of the item and approved by the President or his designee before being submitted to the Business Office. All donated capital assets must be tagged and inventoried.
Surplus Property
The Vice President for Business and Finance and/or the Assistant Vice President for Business and Finance is designated the authority for the disposal of surplus property. The Director of Facilities is also authorized to coordinate the disposal of surplus property.
When a department determines that the capital asset is no longer needed in their area, a Surplus Property Form should be completed on the VSCC plant operations web page requesting items be removed from the department or division.
Upon removal of the item, the Plant Operations Department completes the Dynamic Form which is forwarded to the Surplus Property Admin for proper disposal. Upon disposal, the Dynamic Form is forwarded to the Business Office. Upon receiving the completed form, appropriate accounting entries will be made by the Business Office to remove the item from the department’s inventory listing and to designate such items as surplus property. The property will be disposed of as provided by TBR Policy 4:02:20:00.
Physical Inventory
A physical inventory of all capital assets is to be completed at least annually. An inventory listing is to be distributed to the custodians. Each item listed is to be located; tag number and description should be verified. All changes in location, condition code, custodian, etc….should be indicated on the inventory listing. The inventory lists are then approved by the Department Head and returned to the Business Office. The Business Office may, at its discretion, physically audit selected items.
Movement of Property
During the year, when items are moved between rooms or areas of the college, a relocation form (Equipment Checkout and Move Form), available at the Business Office web page must be completed so that inventory records can be properly updated. This will help eliminate location differences during the physical inventory. Also, any item, whether tagged or not, that is removed from VSCC or off-campus official locations must be recorded in the form. In the event of any personal use or any unauthorized removal from the official location of the property, TCA sections 8-19-501 concerning shortages of state money or the unauthorized removal of state property would apply.
Employee-Owned Items
The College will assume no responsibility for employee-owned items. Such items must be removed when the employee ceases to be employed by the College.
Personal Use
Personal use of college property is prohibited.
Reconciliation
The general ledger control accounts for capital assets must be reconciled with the fixed asset system at least annually before the accounting records for the fiscal year are closed.
TBR Source: New Guideline approved at Presidents Meeting, August 17, 2010. Revised at Presidents Meeting, February 4, 2014; Revised at Presidents Meeting, August 19, 2014; Revised at Presidents Meeting, May 19, 2015.
VSCC Source: July 5, 1989, October 14, 1991, April 26, 1994, December 30, 2002, President; January 28, 2009, President's Cabinet, April 26, 2010, President’s Cabinet; July 6, 2015, President’s Cabinet. President’s Cabinet, April 19, 2021. President's Cabinet, May 14, 2025.
