Property Inventories

Date: Fri, 11 Sep 1998 07:22:23 -0400
To: "AO - All Administrative Officers"<distribution
From: "Nancy J. Hill" <njhill
Subject: Property Inventories
Cc: "Nancy J Hill, Chief, Mgmt Support Section, Reston, VA "<njhill,
        "AP - Accountable Property Officers"<distribution,
        "PC - Property Clerks"<distribution

FYI - the question was raised to Cathy Hill this week, about removing
depreciated equipment from the property database.  The fact is, it cannot
be removed.  Please read the following message from the Chief, Property
Management in OPS.


Date: Wed, 09 Sep 1998 12:45:34 -0400
To: "Hill, Nancy J" <njhill
From: Melissa Courtney <mcourtne
Subject: Property Inventories

Nancy:  I appreciate the opportunity to address this issue, since the
question of removing depreciated equipment from the property database is
one that comes up quite frequently.  

First, the inability of the Property Management Branch to take the
requested action (that is, delete equipment based on the fair market,
depreciated value), has nothing to do with the magnitude of the
depreciation computation task.  As a matter of fact, the Fixed Assets
Subsystem of the FFS automatically computes depreciation and fair market
value, based on the in-service date and expected useful life of the various
equipment categories of the property in the database.  

The problem lies with higher-level regulations which state that a
capitalized item of Government-owned property will be carried on the books
as an asset of the Government AT ITS ORIGINAL ACQUISITION COST, and for the
FULL LIFE OF THE ITEM.  

When the Office of Acquisition and Property Management at DOI first began
to discuss the possibility of raising the capitalization threshold to $5000
(from the $300 level that was in place until that time), my office, along
with property offices from several other bureaus, proposed an alternative
approach:  that items would be removed from the property system and general
ledger once their fair market value dropped below whatever capitalization
threshold was in place at that time, OR, that items be removed from the
property system once they were FULLY depreciated.  

Neither of our alternative approaches were approved by DOI; as I remember,
GAO regulations were cited as the basis for the ruling regarding "original
acquisition cost" and the "full useful life" of the item.  We had
originally proposed this several years before, and had also failed in that
attempt, and I have discussed this with the appropriate people at DOI as
recently as a year or so ago, and got the same response.

The best advice I can give to anyone trying to manage old equipment is to
report the equipment as worn-out or obsolete as soon as that's the case
(using a "Certificate of Unserviceable Property, form DI-103A), BEFORE the
equipment gets lost due to the fact that no one is using it because it's
worn-out or unserviceable. 

The only advice I can give to anyone who's already lost old equipment is to
report the missing item(s) on a Report of Survey (form DI-103), providing
an explanation of how the loss occurred, and submit the completed form to
my office for survey board action.  

I hope this information is helpful to anyone involved in this matter, but
I'd be glad to discuss it further if someone still has some unresolved
concerns about it.  I'm sorry I can't provide better guidance than this,
but there's only so much we can succeed at changing when it comes to higher
level regulations.  Thanks for your understanding.
Melissa Courtney
Property Management Officer
mcourtne@usgs.gov
(703) 648-7322