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Property, Plant & Equipment (Property – Fixed Assets) BFM/FRA

Property, Plant & Equipment (Property – Fixed Assets) BFM/FRA. Property (Fixed Assets).

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Property, Plant & Equipment (Property – Fixed Assets) BFM/FRA

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  1. Property, Plant & Equipment (Property – Fixed Assets) BFM/FRA

  2. Property (Fixed Assets) Property includes land and buildings, motor vehicles, various types of machinery, information technology equipment, office furniture and equipment, heritage assets, etc., for which UNESCO is responsible, whether acquired by purchase, rental, loan, donation or any other means. Property is recognized as assets when there is a probable flow of benefits to the Organization and are capitalized rather than expensed. The definition for assets are two categories: • Fixed asset (FA) refers to a tangible or physically verifiable assets that meets the following criteria: • the asset has a serviceable life of more than one year; • the value of the asset can be reliably measured and is valued at $ 1,000 or more per unit; • it is under UNESCO’s control. b. Small Attractive Items (SAI) defined as items of an attractive nature and easily removable from the premises because of their size and with a value range of between $ 300 and $1,000 per unit and with a serviceable life of more than one year. SAI are also recorded as fixed assets. List of items qualifying as SAI are in Table 10.1 and is maintained by BFM.

  3. Property (Fixed Assets) FA is recognized at cost at acquisition date and includes purchase price, cost necessary to bring the asset to the location and condition necessary to operate the asset as intended, and are categorised as Asset (GEF & OPF) or Project Assets (PFF). The proper care and security of UNESCO Property is the responsibility of all staff members Custodian: is a staff member to whom assets are loaned for execution of his/her official duties. He/she is accountable and responsible for the proper care and security of the property issued. Custodians are not authorized to transfer assets from themselves to other Custodians. Obsolete, unserviceable or excess assets should always be returned to MSS/OPS/HPU at the headquarters and AO for the entities away from headquarters for storage, re-allocation or disposal accompanied by duly completed forms. He/she must immediately report to the AO any damage or loss to FA under his/her responsibility.

  4. Project Assets Project Assets: These are equipment, motor vehicles, furniture, materials and supplies acquired through extra-budgetary resources and are devoted exclusively to the execution of a project in accordance with donor agreement. All project assets with a value of more than $1,000 or $300 in the case of Small Attractive Items must be maintained in the project inventory register. FA and SAI shall remain the property of UNESCO and shall be recorded in the project inventory register. Only Project Assets, which meet the criteria of FA and SAI, are to be maintained in the FABS AMM. The Project assets are recognized as FA is when the serviceable life is of more then one reporting period, Project assets are deemed to be under UNESCO control only if it can demonstrate that there is six or more positive response check-list below: 1. The act of purchasing the asset was carried out (or resulted from instructions given) by UNESCO; 2. Legal title is in the name of UNESCO; 3. The asset is physically located on premises or locations used by UNESCO; 4. The asset is physically used by staff employed by UNESCO or staff working under UNESCO’s instructions; 5. Can UNESCO decide on an alternative use of the asset; 6. Is it UNESCO that decides to sell or dispose of the asset; 7. If the asset were to be removed or destroyed would UNESCO take the decision to replace it; 8. Does a UNESCO representative regularly inspect the asset to determine its current condition; 9. Is the asset used in achieving the objectives of UNESCO; 10. The asset will be retained by UNESCO at the end of the project.

  5. Project Assets On termination of the project, in the case of funds-in-trust, UNESCO shall, in consultation with the donor decide on the transfer of the official title of such project assets. BFM should be informed in a timely manner after Financial Closure of the project/ programme where the donor has explicitly agreed and has stipulated in the Donor Agreement that UNESCO will retain the ownership of the FA and SAI. The disposal of such FA and SAI shall be in accordance with paragraph 5.2 of Chapter 10.1 (Property) of the Administrative Manual, and all sale proceeds will be transferred to funds as authorized by BFM. Project Officers are responsible for the recording, control and use of extra-budgetary programme project assets in line with the donor agreement.

  6. Specific Responsibilities (a) At Headquarters: (i) Headquarters Property Unit (MSS/OPS/HPU) shall: (a) Ensure recording of all acquired assets (including Project FA and SAI) in the AMM; (b) Be responsible for overall maintenance and updating records of FA and SAI movement in the AMM; (c) Conduct periodic physical inventories of FA and reconcile to the AMM; (d) Certify that due processes have been followed by AOs at headquarters for disposal requests for items less than $50,000.00; (g) Determine the suitability for the disposal request; (h) Reallocate property to Sector, Bureau or Division as needed and update the AMM accordingly; (i) Request MSS/BKI clearance on the compliance with the technical and security standards for the disposal for ICT property;

  7. Specific Responsibilities (a) At Headquarters (con’t): (j) Receive disposal request for items with a value of $50,000.00 and above from headquarters and UNESCO entities away from HQ (FO/Institutes) before submitting to the Contracts Committee (CC); (k) Ensure that the decisions of the CC are implemented; (l) Forward all authorized FA disposal request (Form AM 10-4) to BFM for removal from AMM; (m) Supervise the coordination of physical stocktaking for both Internal and External Auditors; (o) Ensure that all necessary legal clearance from the tax authorities is obtained before the sale of assets.

  8. Specific Responsibilities (ii) Administrative Officers at headquarters: (a) Are responsible for requisitioning NFA or FA only after ascertaining the need and suitability of NFA or FA; (b) Ensure that NFA or FA is used economically and any surpluses are returned to MSS/OPS/HPU; (c) Reports to the Chief of Headquarters Property Unit (MSS/OPS/HPU) forthwith all goods received which does not comply with the specification as ordered; (d) Ensure that all project assets that qualify as FA and SAI are recorded and maintained in the AMM of FABS under their respective project codes. (e) Certify the request and need for disposal request from Custodian, and forward the request with duly authorized forms to MSS/OPS/HPU; (f) Designate a focal point in their respective Sector, Bureau or Division to be responsible for keeping records and request necessary maintenance of all property assigned to his/her Sector, Bureau or Division; (g) Ensure that lost/damaged FA is reported to MSS/OPS/HPU in a timely manner with supporting documentations, reports, declaration and recommendations for submission to the CC (if required).

  9. Specific Responsibilities (b) UNESCO entities away from HQ (FO/Institutes) (i) Directors/Heads of Field Offices/ Institutes: (a) Ensure that an annual physical inventory is carried out and Sign-off the inventory list at the end of the exercise;  (b) Be responsible for overall monitoring, coordination and oversight of the functioning of the asset management system relating to and including the: • Maintenance and repair of assets; • Disposal of assets that are not yet fully depreciated; • Write-off of assets lost or damaged due to force majeure, negligence or other reasons, while ensuring that the interests of UNESCO are fully protected in all cases; • Authorize all disposals with a acquisition value of up $ 50,000.00; • Analyze all planned disposal of $50,000 and above and make appropriate recommendations to the CC. Submission to the CC shall be made through MSS/OPS/HPU.

  10. Specific Responsibilities (ii) AOs Field Offices/ Institutes: (a) Ensuring that assets are distributed to Custodians against receipt of a signature; (b) Be responsible for the initial recording, maintenance and updating of information for all assets in the asset management database AMM of FABS; (c) Ensure that all project assets that qualify as FA and SAI are recorded and maintained in the AMM of FABS under their respective project codes; (d) Be responsible for monitoring movement of its property, supervise periodic stock take and manage queries relating to property management in response to audit observations;   (e) Ensuring that proper procedures are followed when certifying the request and need for the redeployment, retirement or disposal of assets; (f) Ensure that all authorized disposal requests (Form AM 10-4) with a value less than $ 50,000.00 are forwarded to the BFM for removal from AMM;

  11. Specific Responsibilities (ii) AOs Field Offices/ Institutes (con’t): (g) Ensure all planned disposal of $50,000 and above are submitted to the CC through MSS/OPS/HPU; (h) Ensure that lost/damaged FA are reported to Directors/Heads of Field Offices/ Institutes or the CC in a timely manner with supporting documentations, reports, declaration and recommendations for decision on the course of action; (i) Request MSS/BKI clearance regarding compliance with the technical and security standards for the disposal of ICT property; (j) Ensure that all necessary legal clearance from the tax authorities is obtained before the sale of assets.

  12. Procedures and Processes Recording and tracking FA (a) At Headquarters: (i) Bar coding: Bar code labels are an essential part of the asset tracking system. These labels provide a unique number for each asset, allowing easier physical tracking and identification. (ii) UNESCO acquires assets by purchasing or receiving in-kind donations. Irrespective of how an asset becomes the property of UNESCO, it must be registered in AM Module of FABS. MSS/ /OPS/HPU is responsible for the collection of information and updating the appropriate template in SAP for all fixed asset. a. Upon delivery, the designated person will accomplish the following tasks: i) Physical checking of the conformity of the delivered material against the purchase order, or the relevant gift certificate or correspondence; ii) Tagging all received material with a bar code; iii) Deliver the material to the requisitioning staff as specified in the purchase order (AO or Custodian in the Sector). 

  13. Procedures and Processes (a) At Headquarters (con’t): b. At reception of the material the AO/Custodian shall (Form AM 10-2 “Asset Issue/Return Form”): i) Check conformity with the purchase order and conditions of deliveries; ii) Record basic information and update with new barcode concerning the FA in the AM Module of FABS; iii) Validate the appropriate MM SAP and AMM FABS databases; iv) Arrange for the delivery to the designated Custodian; v) Assure that the Asset Issuance Procedures are strictly applied.

  14. Procedures and Processes (a) At Headquarters (con’t): c. Physical inventory (stock take) - MSS/ OPS/HPU: i) Conduct physical verification of fixed assets; ii) Reconcile results of physical verification with contents of fixed asset register; iii) Identify and resolve anomalies and review aged assets past their useful life; iv) Update fixed asset register d. Asset Management Module in FABS The AMM of FABS is used for recording and tracking all UNESCO property. The system also generates all the reports required by UNESCO management in support of documented decision-making. The mandatory reports such as inventory list per Business areas, location, class, book value and age for UNESCO’s FA are also obtained from AMM.

  15. Procedures and Processes (b) Entities away from Headquarters: (i) All MSS/OPS/HPU and AO responsibilities from headquarters are assumed by the AO for Offices away from the Headquarters (ii) Further development of the AMM module in SAP will allow the offices away from headquarters to procure, record, update and maintain the database for their individual fixed assets. BFM will continue to be responsible for the disposal and removal of assets from AMM.

  16. Disposal The need and timing of disposals depend on the needs of the office and the FA’s physical condition. UNESCO employs four modes of disposal (Form AM 10-4 "Asset Disposal Form"): (a) Redeployment to another Sector, Office, Institute or entity; (b) Transfer of ownership to government departments and NGOs for capacity building. This is normally the case when UNESCO hands over responsibilities and activities when phasing-out operations. Transfer of ownership of UNESCO Assets form (Form AM 10-5) has to be dully filled and signed by the parties in order to prevent any liability which may happen in relation to this transfer. (c) Write-off, after loss through force majeure or negligence (the latter case involves administrative action). The term ‘write-off’ is also used when an asset is no longer economic to maintain, due to damage or age, and means ‘scrapping’ when the physical dumping or destruction of the asset is required (Form AM 10-3 "Asset Loss/Damage Declaration Form"). Stolen items will be treated as write-off once the necessary approvals have been obtained. (d) Sale: If sale is not possible due to lack of potential buyers, then approval to write-off the asset is implicit in the authorization to sell.

  17. Disposal Threshold for Disposal of fixed assets: • At Headquarters: i. The AOs of Sectors/Unit certify all disposals which has combined acquisition values adding up to $ 50,000.00. ii. MSS/OPS/HPS to decide and authorize the disposal or reallocation of property. (b) Entities away from Headquarters: The Directors/Heads of Field Offices/ Institutes can authorize all disposals which has combined acquisition values adding up to $ 50,000.00. All disposals with combined acquisition values of $ 50,000.00 and above should be referred to the CC.

  18. Disposal by mode of Sale (a) Sales are made after competitive bidding invited by advertisement. (b) Sale of property is made on a cash basis payable on or before delivery The sale price set should serve in the best interest to the Organization and should be in line with the local market conditions (c) Sale is made by MSS/OPS/HPU to the highest bidder at the Headquarters. For UNESCO Offices away from Headquarters, the role of MSS/OPS/HPU is assumed by the AO of the office (d) Sale of surplus fixed assets to staff members at a fixed price may be authorized by the CC or the Directors/Heads of Field Offices/ Institutes. (e) When the award of a sales contract has been determined, MSS/OPS/HPU or AO for the field office establishes the contract related to transfer of UNESCO Assets (Form AM 10-6). (f) For the sale of property imported under diplomatic exemption or purchased locally free of taxes, MSS/OPS/HPU or AO for the field office obtains the necessary instructions from the French or local authorities regarding the payment of import duties and/or taxes.

  19. Disposal by mode of Sale (g) Prior to final disposal, all insignia and barcodes linking the fixed asset to UNESCO should be removed from the assets in question. All software (other than the operating system) should be removed from computers. Check outon transfer or separation from UNESCO: All Custodians must complete, duly sign and provide Form AM 10-2 to the responsible AO. The AO’s must verify the information and physical condition of the FA before providing all clear to PAYROLL and HRM.

  20. Guidelines Guidelines Administrative Manual Chapter 10.1 Property UNESCO IPSAS Policy Paper 7 on Property Plant & Equipment (PP&E); PP&E Internal Control Paper Forms • Form AM 10-2 “Asset Issue/Return Form” • Form AM 10-3 "Asset Loss/Damage Declaration Form" • Form AM 10-4 "Asset Disposal Form" • Form AM 10-5 “Transfer of Ownership of UNESCO Assets” • Form AM 10-6 “Model Agreement (Related to Transfer of UNESCO Assets)” All procurement forms are available on the intranet, “Forms” database.

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