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SPA Process User’s Guide

SPA Process User’s Guide – Chapter 2 – General Policies

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Overview

This chapter outlines an agency’s responsibility for reporting and maintaining capital asset information in the State Property Accounting (SPA) system and contains policies adopted by the Comptroller’s office to ensure consistency in the reporting of capital assets by state agencies.

Comptroller’s Authority

Texas Government Code Annotated Section 403.271–403.

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Request for Agency Reporting Status

Policy

Every agency must request and obtain certification as either an internal agency or a reporting agency in SPA. The request is made using the Certification of Request for Agency Reporting Status form (73-284). The Comptroller’s office reserves the right to request any and all property information from an agency at any time.

Agencies that are granted reporting agency status by the Comptroller’s office must maintain a complete and accurate inventory of all property. The State Auditor’s Office (SAO) may request a review of these documents at any time.

Internal agencies of SPA must enter their property online at the time of acquisition and maintain their information perpetually.

Reporting agencies must report their property information on a quarterly basis via batch transactions in the format prescribed by the Comptroller’s office and must, under certain circumstances, enter data online to the SPA system. For more information, see Appendix G (login required).

When to Use Form 73-284

An agency must complete and submit form 73-284 to the Comptroller’s office once the agency determines that it will:

Note: Agencies who are granted certain exemptions by law must check the appropriate box provided on the form.

The Comptroller’s office reviews each request for reporting status individually, evaluates the agency’s capability to comply with the rules and reporting requirements and decides which reporting status is best for the agency.

The agency head receives written notification if Comptroller’s office grants reporting status. If the requested reporting status is denied, the written notification indicates the reason for denial.

Change in Reporting Status

If an agency wishes to request a change in reporting status, a written request for the change, along with a reason for the change, must be submitted with form 73-284 to the Comptroller’s office. The Comptroller’s office advises that a change in reporting status should not be initiated during AFR time.

The Comptroller’s office may change an agency’s reporting status at any time with cause. The change will take effect immediately or at the time prescribed by the Comptroller’s office.

Change from Reporting to Internal

The Comptroller’s office notifies the agency in writing if their request is approved or disapproved. If approved, the SPA analyst completes the USAS Security section’s USAS Central Profile Action Request form. Copies of the form and screen prints are placed in the agency’s file.

Change from Internal to Reporting

Agencies wishing to change from internal to reporting status must complete and submit form 73-284 at least 30 days before the testing of batch files.

The agency’s SPA analyst coordinates the testing of batch files with the SPA programmers and the System Information Output (SIO) group on behalf of the agency. Test files should be labeled and submitted to SPA after the SPA analyst has coordinated with the SPA programmers. The programmers will process the submitted file in the test region and produce exception reports.

After each test, a Transaction Exceptions Report (SPA00200) is faxed to the agency. This report lists all transactions that failed.

Approval or disapproval of the change in reporting status is contingent upon the results of the test files. To be granted reporting status, the agency must be able to upload data into SPA using the required layout (see Appendix G (login required) for an example of the required layouts). If approved, the SPA analyst will:

Copies of the form and screen prints are placed in the agency’s file.

How to Complete the Certification of Request for Agency Reporting Status Form (73-284)

Action:

  1. Write the name of the agency requesting reporting status or exemption on the Name of Agency/Institution line.
  2. Write the agency number assigned by the Comptroller’s office on the Agency Number line. The agency number must be listed in the USAS Agency Profile (DØ2) screen.
  3. Check the box that corresponds to the reporting status being requested. Check only one box:

    Internal

    Check this box if the agency will be using SPA as its internal reporting system.

    Reporting

    Check this box if the agency will continue to use its own property accounting system. The agency must modify its system to meet the Comptroller’s office reporting requirements and must receive approval from the Comptroller’s office to become a reporting agency.

    Exemption

    Check this box to claim exemption from SPA. To claim exemption, the agency must meet the established inventory requirements as described in state statute.

  4. Sign on the Signature of Agency/Institution Head or Designee line. This line may only be completed by your agency or institution’s head or a designee.
  5. Write the date the form is completed and mail the form to:
    Comptroller of Public Accounts
    LBJ State Office Building
    SPA section
    111 E. 17th Street
    Austin, TX 78774

Form 73-284

For an interactive version of this form, please see the Property Accounting Forms page.

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Agency Head, Property Manager and Employee Responsibilities

Policy

Agency Head Responsibilities

The responsibility for the custody and care of state agency property lies with the agency head. The agency head should ensure that the agency maintains adequate internal control procedures. At the request of an agency, the SAO can review and evaluate an agency’s internal control procedures.

Each agency head must designate a property manager and then complete the Notice of Agency Head and Designation of Property Manager form (73-286) to inform the Comptroller’s office of the designee. With Comptroller’s office approval, the agency head may designate more than one property manager. The agency head is still responsible for agency property and for ensuring that the property manager carries out the duties prescribed by Comptroller’s office rules.

The agency head must ensure that the procedures for accountability and safeguarding of the agency’s property are distributed. All agency procedures must comply with Comptroller’s office rules and requirements.

The agency head must provide the property manager or alternate property manager with copies of the rules, procedures and other appropriate documentation for managing the agency’s property as formulated by the Comptroller’s office. The agency head must ensure that each property manager or alternate property manager receives training in the rules, policies, procedures and system operation of the SPA system as administered by the Comptroller’s office.

To ensure continual care of property and to assign specific liability for property, a new agency head should have a physical inventory conducted on all personal property belonging to the state agency or institution of higher education.

When the property manager of an agency or institution of higher education is changed, a physical inventory is not required.

Property Manager Responsibilities

A state agency’s property manager is the custodian of all property in the possession of the agency and is responsible for maintaining the required records. Property managers have update capabilities for all SPA system information for their specific agency.

Alternate Property Manager Responsibilities

The agency head must designate alternate property managers, if any are needed. Responsibilities of a state agency’s alternate property managers are determined by the agency’s property manager.

Employee Responsibilities

It is each state employee’s responsibility to use property only for state purposes and to exercise reasonable care for its safekeeping.

A property manager may entrust property to a person only when the person provides a signed and dated receipt to the property manager. The receipt must include a detailed list of the property entrusted to the individual, along with a statement similar to this:

“I understand that I am under financial liability for loss or damage to this (these) item(s) if the loss or damage results from my negligence, intentional act or failure to exercise reasonable care to safeguard, maintain and service it (them).”

Signature______________________________________________ Date_______________________

When to Use Form (73-286)

How to Complete the Notice of Agency Head and Designation of Property Manager Form (73-286)

Action

  1. Write the name of the agency on the Name of Agency/Institution line. The agency name must be listed in the USAS Agency Profile (DØ2).
  2. Write the agency number on the Agency Number line.
  3. Write the name of the incoming agency or institution head on the Name of Incoming Agency/Institution Head line.
  4. Write the title of the agency or institution head on the Title line.
  5. Write the agency or institution address on the Street Address line.
  6. Write the city, state and ZIP code of the agency or institution on the City-State-Zip Code line.
  7. Write the agency or institution head’s phone and fax numbers, including area codes, on the Phone Number/Fax Number line.
  8. The agency/institution head must sign on the Agency/Institution Head or Designee line.
  9. Write the date the form is completed/signed on the Date line.
  10. Write the name of the property manager on the Name of Property Manager line.
  11. Write the title of the property manager on the Title line.
  12. Write the property manager’s phone and fax numbers, including area codes, on the Phone Number/Fax Number line.
  13. The agency or institution’s property manager must sign on the Property Manager line.
  14. Write the date the form is signed by the property manager on the Date line.
  15. Write the name of the alternate property manager, if any, on the Name of Alternate Property Manager line.
  16. Write the title of the alternate property manager on the Title line.
  17. Write the alternate property manager’s phone and fax numbers, including area codes, on the Phone Number/Fax Number line.
  18. The agency or institution’s alternate property manager, if any, must sign on the Alternate Property Manager line.
  19. Write the date the form is signed by the alternate property manager on the Date line.
  20. Write the name of the outgoing agency head on the Name of Outgoing Agency/Institution Head line.
  21. The outgoing agency head must sign on the Outgoing Agency/Institution Head line.
  22. The agency must submit a completed copy of Notice of Agency Head and Designation of Property Manager form (73-286) to:

    Comptroller of Public Accounts
    LBJ State Office Building
    SPA section
    111 E. 17th Street
    Austin, TX 78774

    AND

    State Auditor’s Office (SAO)
    Robert E. Johnson, Sr. Building
    1501 N. Congress Avenue
    Suite 4.224
    Austin, TX 78701

Form 73-286

For an interactive version of this form, please see the Property Accounting Forms page.

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Governing and Dependent Agencies

Under certain circumstances, a state agency may ask another state agency to handle their SPA functions under an interagency contract. The agency contracting for this business support service is called the “dependent agency.” The agency that will provide the service is called the “governing agency.”

When the contract is prepared, the dependent agency sends an email to their SPA analyst requesting that the designated agency be set up as their governing agency. The SPA analyst notifies both the dependent and governing agencies by email when this has occurred. A governing agency is granted access to their dependent agency’s records on SPA, which allows them to perform all SPA functions for the dependent agency.

A governing agency can view their dependent agencies by accessing the Governing Agencies (PAGOVT) screen on the SPA main menu and then following the procedures in Chapter 5 of this guide.

The governing agency’s access to the dependent agency’s records in no way impacts ownership of the assets. The dependent agency continues to be responsible for their capital assets and reports all capitalized assets on their annual financial report (AFR).

The dependent agency should notify their SPA analyst to remove a governing agency once the contract is completed or terminated.

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Sunset or Abolished Agencies

Policy

The head of a sunset or abolished state agency must have a complete and accurate physical inventory of the agency’s assets according to Comptroller’s office requirements. The agency head must provide the Texas Facilities Commission (TFC) and the Comptroller’s office with certification that the agency’s property is available for transfer to the TFC or, if specified in legislation, a designated state agency.

If TFC is designated, then all property possessed by a sunset or abolished state agency shall be transferred and placed under the care of the TFC until TFC distributes or sells the property according to applicable laws.

Any property that is missing as of that date shall be given the appropriate disposal method.

The transfer of property must be processed according to SPA procedures as outlined in Chapter 7.

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Agency Training

Policy

SPA system training is conducted by the Comptroller’s office. Each agency must ensure that their employees are properly trained and knowledgeable in the accounting for and care of the agency’s personal property as well as in the operation and policies of SPA.

The Comptroller’s office establishes a training schedule including dates and times. The training schedule is posted on the SPA newscreen and SPA website.

If an individual is unable to attend training, the Comptroller’s office should be notified at least 48 hours before the class to allow time to fill the vacant slot.

The agency head must ensure that property personnel have received training in the rules, policies, procedures and system operation of SPA as administered by the Comptroller’s office.

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Tagging of Property

Policy

All property capitalized or designated as a “controlled” asset must be marked or tagged as property owned by the agency with the exception of real property.

Marking is considered acceptable when it can be removed only through considerable or intentional means.

Each item of property, capitalized or controlled, must be assigned a unique property inventory number. Agencies may not reuse a previously-assigned property number.

Agencies may choose to track property using appropriate labeling methods as long as they meet guidelines established by the Comptroller’s office in consultation with the SAO. Property number labels must be highly visible and easily accessible during the annual inventory.

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Securing of Property

Policy

Each agency is responsible for ensuring that property is tracked and secured in a manner that is most likely to prevent theft, loss, damage or misuse. The agency must take all necessary precautions to ensure that property is secured.

Agencies must know at all times where all property under their control is located, should have a method for locating any inventory item on-site or off-site and should be able to locate a given item upon request.

Each agency should diligently ensure building security at all times. Individuals in charge of security must notify the property manager of any violations or changes to security that could expose personal property to misuse or theft.

Property that is checked out to an employee must be used for state purposes only. The agency itself bears responsibility for stewardship and care of the property at all times.

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Missing or Stolen Property

Each agency should ensure that an employee entrusted with property exercises, at a minimum, reasonable care for its safekeeping. Reasonable care means that steps have been taken to ensure:

Missing or Damaged Property – Employee Negligence

If the property manager or agency head has reasonable cause to believe that any property in the agency’s possession has been lost, destroyed or damaged through the negligence of any state official or employee, the head of the agency or property manager must report the loss, destruction or damage to the comptroller and the Office of the Attorney General (OAG) within 72 hours of discovery.

Missing or Damaged Property – No Employee Negligence

Agencies may establish their own policies for situations where property may become missing, destroyed or damaged and they have determined there was no employee negligence.

Stolen Property

If the head or property manager of a state agency has reasonable cause to believe that any property in the agency’s possession has been stolen, the head of the agency or property manager must report the theft to the Comptroller’s office, the OAG and the appropriate law enforcement agency. Stolen property should be reported to the appropriate law enforcement agency within 48 hours of realizing the property has been stolen and within 72 hours to the OAG.

The Attorney General

The OAG may investigate a report received for negligence or theft. If the investigation reveals that a property loss occurred through the negligence of a state official or employee, the OAG makes a written demand on the official or employee for reimbursement of the loss. If the demand is refused or disregarded, the OAG may take legal action to recover the value of the property, as that office deems necessary.

The OAG determines the value to be recovered based on the market value of the property and the degree of responsibility of the person who was entrusted with the property.

Reporting Missing or Stolen Property to SPA

For all property maintained on SPA that is found to be missing or stolen, agencies must immediately assign an appropriate disposal code that provides electronic notification to the Comptroller’s office.

When to Use Form (74-194)

The Missing, Damaged or Stolen Property Report form (74-194) must be completed upon determination that the agency’s property is missing, damaged or stolen.

If the property is stolen, missing or damaged due to employee negligence, the head of the agency must report the occurrence to the OAG. The agency must fax (or send by interagency mail if agency is located in Austin) a copy of the Missing, Damaged or Stolen Property Report form (74-194) and a copy of the police report (if applicable) to the OAG.

The agency must retain documentation of the items and circumstances for review by the OAG. The retention period is specified in the Records Retention section of this chapter.

When property becomes missing or damaged, and the agency has determined there was no employee negligence, form 74-194 should be retained on file.

How to Complete the Missing Damaged or Stolen Property Report Form (74-194)

Action

  1. Write the name of the agency on the Name of Agency/Institution line.
  2. Write the agency number on the Agency Number line. The agency number must be listed in the USAS Agency Profile (DØ2).
  3. Write the place the loss occurred on the Place of Occurrence line, also include the city and county on the City and County lines.
  4. Write the name of police agency on Police Agency Notified line.
  5. Write the police report number on the Police Report Number line.
  6. Write the disposal method used in SPA on Disposal Code line.
  7. Write the estimated value on Estimated Value at Date of Loss line.
  8. In boxes provided, write the serial number, purchase date, purchase value, state property number, component number, description and location for each missing item.
  9. Write the name of the employee that the property was entrusted to on the Person(s) Responsible For Asset(s) line.
  10. Write the property manager on the Property Manager Name line.
  11. Write the property manager’s phone number on the line provided.
  12. Check the appropriate box indicating whether or not there was negligence.
  13. Sign your name on the Signature of Agency/Institution Head or Designee line.
  14. Write the date you completed this form on the Date line.

Form 74-194

For an interactive version of this form, please see the Property Accounting Forms page.

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Certification of Physical Inventory

Policy

Each state agency shall conduct an annual physical inventory of the trust, capitalized and controlled personal property (excluding libraries and historical arts and treasures) in the agency’s possession at a time of its own choosing during the fiscal year. The physical inventory must be completed by Aug. 31 each fiscal year. The agency head or designee must forward the Certification of Physical Inventory Conducted by Agency form (73-283)PDF to the Comptroller’s office no later than the earliest of either:

Each agency must use accepted practices (such as physical count, bar code scan, etc.) to conduct its annual inventory and must ensure that:

Note: Each agency reporting to SPA via batch may choose to maintain the property location, responsible party and condition in its local asset management system.

An agency must assign an individual(s) to conduct the physical inventory who is/are not assigned as the responsible person(s) for the property being inventoried.

Any discrepancies in property information detected during the physical inventory must be corrected in the SPA system immediately.

The disposal method must be updated in the SPA system immediately for any property found to be “disposed” or “missing” during the physical inventory. Property identified as “missing” during the annual physical inventory must be recorded in the SPA system with an effective date equal to the date the annual physical inventory was conducted. For more information, see Missing or Stolen Property.

Each agency must maintain inventory records on file for the required records retention period.

In addition to the required annual physical inventory, agencies are encouraged to conduct more frequent supplemental physical inventories to ensure the accuracy of reported personal property information. Periodic inventories may use statistical sampling, dollar sampling techniques or other acceptable methods on a regularly scheduled basis.

Procedure

  1. Retrieve the CERT_PHYINV report (see Daily Generation of SPA Ad Hoc Reports (FPP N.009) (login required).
  2. Conduct the physical inventory.
  3. Update SPA as needed to accurately reflect required property data and status.
  4. Complete inventory and necessary updates by Aug. 31.
  5. Submit Form 73-283 by Sept. 20.

Requirements and Deadlines

Requirement Deadline
Complete Annual Physical Inventory Aug. 31
Submit Certification of Physical Inventory Conducted by Agency form (73-283)PDF Sept. 20

How to Complete Form 73-283

Action

  1. Write the name of the agency on the Name of Agency line.
  2. Write the agency number on the Agency Number line. The number must be listed in the USAS Agency Profile (DØ2).
  3. Write the date and fiscal year the inventory was taken on the Date(s) Physical Inventory Was Conducted line.
  4. Describe the method used to conduct the inventory on the Method Used to Conduct the Inventory line.
  5. Write the name(s) and telephone number(s) of the people who conducted the inventory on the Contact Person(s) Responsible for Conducting the Inventory line.
  6. Write the date changes were made to the SPA system as a result of the physical inventory on the Date line of the certification statement.
  7. Have the appropriate official sign on the Signature of Agency Head or Designee line
  8. Write the date the form was completed on the Date line.

Submission of Required Form

Print and sign the completed Certification of Physical Inventory Conducted by Agency form (73-283)PDF. Please forward a scanned image of the completed and signed form to either:

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Inventory Verification Methods

Policy

The following inventory methods do not represent all acceptable practices for conducting physical inventories. They are meant to be guidelines to help agencies develop of their own annual physical inventory plans. Other methods may be used as long as they follow SPA policies and procedures.

Property inventories should be conducted by individuals (verifiers) who are not responsible for the property being inventoried nor for accounting for it on a day-to-day basis.

The annual requirement to determine the condition of each property item may be performed during this process.

Independent Manual Method

This annual physical inventory method should be conducted by one or more verifiers. They should work independently and report their findings either directly to the agency property manager or indirectly through individual departments, divisions, sections or unit heads. The annual requirement to determine the condition of each property item may be performed during this process.

Each verifier should have a unique list of the property items to be inventoried. Each verifier and person responsible for the property signs and dates the list to certify the accuracy and completeness of the inventory. The property lists are unique and do not require double verification by a second verifier. The combined lists used by verifiers must represent all of the agency’s property.

Tandem Manual Method

This annual physical inventory method should be conducted by two or more verifiers. Verifiers work in tandem so that the same property number is being physically observed by both individuals either at the same time or independently of each other. They report their findings either directly to the agency’s property manager or through the their departments, divisions, sections or unit heads.

Each verifier and person responsible for the property must sign and date the property lists to certify the accuracy and completeness of the inventory. The combined lists of property used by the verifiers must represent all of the agency’s property.

Bar Code or Optical Scanning Method

This annual physical inventory method should be conducted by one or more verifiers. The electronic verification method should allow for a scanning device to record date, time, location, operator identifier and manually keyed input. The annual requirement to determine the condition of each property item may be performed during this process.

Each verifier and person responsible for the property signs the electronic verification process report to certify the accuracy and completeness of the electronic verification.

Summary

It is preferable that two or more persons conduct an agency’s annual physical inventory; however, agency resources and logistics may dictate using only one person. Agency discretion prevails in these circumstances. Each agency should develop a physical inventory plan that minimizes the risk of misreporting assets and reasonably ensures that all trust, capitalized and controlled assets are located no less than once annually. Compensating controls should be developed to ensure these objectives are met.

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Condition of Asset

Definitions

These categories of condition apply:

New New or excellent condition.
Good Somewhat used or reconditioned property that, while still in usable condition, is slightly shopworn, soiled or otherwise precluded from being considered “new.” (The condition of the property does not impair the utility of the property.)
Fair Property that is soiled, shopworn, rusted, deteriorated or damaged to the extent that utility is slightly impaired; or reconditioned property that has been repaired or renovated but has since deteriorated and which needs or may need additional repair or renovation in the near future.
Poor Property so badly broken, soiled, rusted, mildewed, deteriorated or damaged that its utility is seriously impaired; or property that has been repaired or renovated but has since seriously deteriorated due to factors such as major wear and tear, corrosion or exposure to weather.

Policy

Agencies should use the definitions above to determine the item’'s condition and indicate the condition of the asset in the applicable field in SPA:

Valid Values

N New or Excellent
G Good (Default)
F Fair
P Poor

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SPA Fiscal Year-End Reconciliation and Certification of Fiscal Balances

Policy and Contacts

Per Government Code, Section 403.271, each state agency (and university choosing to report to SPA) is responsible for ensuring that its fiscal year-end capitalized asset balance(s) reflected in SPA are accurate and materially correct. The balance(s) must reflect the agency’s financial position when reported in the annual financial report (AFR), Capital Asset Note (Note 2). Agencies and universities certify SPA fiscal balances and Note 2 using the Capital Asset Note Submission System (CANSS) Web application.

State agencies and universities reporting to SPA via batch are required to annually reconcile SPA capital asset balances and activity with their internal asset management system.

If the agency or university has multiple fund types, the agency or university is required to reconcile proprietary fund types at the fund level.

For questions, contact:

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Requirements and Deadlines by Type of Agency

Type of Agency Reconcile SPA Capital Asset Balances/Activity to Internal Asset Management System Complete SPA Fiscal Year-End Checklist Complete External/Internal Transfers by Sept. 20 Complete SPA/CANSS Reconciliation Checklist Submit Note 2 in CANSS Documentation for Verified Reconciling Items Emailed to SPA Analyst Deadline to Certify SPA Fiscal Balances and Capital Asset Note 2 in CANSS
State Agency
Internal SPA User – AFR Simplified Reporting No YES YES YES YES YES Sept. 28
Internal SPA User – AFR Full Reporting No YES YES YES YES YES Oct. 20
Reporting to SPA via Batch – AFR Full Reporting YES YES YES YES YES YES Oct. 20
University
Internal SPA User – AFR Full Reporting No YES YES YES YES YES Oct. 20
Reporting to SPA via Batch – AFR Full Reporting YES YES YES YES YES YES Oct. 20
Exempt University – AFR Full Reporting No No No No YES No Oct. 20
Consolidated University System
Internal SPA User – AFR Full Reporting No YES YES YES YES YES Oct. 20
Reporting to SPA via Batch – AFR Full Reporting YES YES YES YES YES YES Nov. 1
Exempt Consolidated University System – AFR Full Reporting No No No No YES No Nov. 1

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SPA Fiscal Year-End Instructions

Note: If any entries are made in SPA during the two-month period when both the current fiscal year and the prior fiscal year allow transactions, ensure that the correct effective date is assigned. Entering assets in the wrong fiscal year will cause errors in your capitalized asset balances. See SPA Fiscal Year-End Close Process (FPP N.008) for valid effective dates.

Automated SPA ad hoc report distribution includes all reports needed for reconciliation. See Daily Generation of SPA Ad Hoc Reports (FPP N.009) (login required) for the full report list and retrieval instructions.

All state agencies as well as universities choosing to report to SPA must:

  1. Retrieve the DM19_MISSING report. All items listed on this report have reached or exceeded the two-year time limit to recover missing property and must be removed from disposal method (DM) 19. All assets listed must be assigned a permanent disposition code (DM 17 or 18) or must be removed from missing status if the asset has been recovered.
  2. Retrieve the DM02_XFER report to identify Transfers-Out from your agency not processed as received by the receiving agency. As the transferor agency, you are accountable for making sure transfers are complete. Any transfer not completed by the receiving agency continues to be reflected in the sending agency’s balances. Contact the receiving agency property manager if necessary to complete the transfer.
  3. Access the SPA Receive Transfers (PARXER) screen to verify that all pending transfers in have been processed. Process any pending transfers in. If there are any pending transfers in that need to be cancelled or corrected, contact the sending agency property manager.

    Note: All transfers between external/exempt universities and internal or reporting SPA agencies/universities must be completed in SPA by Sept. 20 to allow simplified agencies to meet their reporting deadline. See External/Internal Property Transfers for more information.

  4. Retrieve the DM05_OFFWEB report. This report is a listing of all assets currently in DM 05 (advertise surplus). The assets listed were advertised for 12 calendar days and removed from the Comptroller’s Surplus Property website. All assets listed must be moved out of DM 05 by updating the disposal method to the appropriate hard disposal method or removing the DM 05. See Disposal Method 05 for more information.
  5. Property listed in SPA must accurately reflect the agency’s capital asset balances as of Aug. 31, 20CY. Retrieve the CAAB101D and CAAB201D reports. The CAAB201D is for agencies using SPA to calculate depreciation/amortization. Verify that all capitalized property is accurately reflected on the reports as follows:
    • All disposals have been entered in SPA for property that was sold, salvaged, lost or stolen. Enter in SPA any disposal made but not recorded for the current fiscal year.
    • All assets, including those financed by payables, reported at fiscal year-end in the AFR Capital Asset Note 2 have also been reported in SPA. Enter in SPA any capital property not yet reported for the current fiscal year.
    • All construction in progress (CIP) projects completed in the current fiscal year must be closed out and reclassed to the newly completed asset. First dispose the completed CIP asset with a DM 24 and then add the new reclassed asset to SPA via the Add Property (PAPADD) screen using acquisition method 04. The amount of completed CIP must equal the amount reclassed to new assets so that the RECLASS CIP column on the CAAB101S and CAAB201S nets to zero. For more information, see Lesson 5: Construction in Progress in the SPA Video Tutorials.
  6. Retrieve the CAAB101S and the CAAB201S reports. These reports reflect SPA balances in Note 2 format. Verify that the reports accurately reflect the agency’s capital asset balances as of Aug. 31, 20CY.

Upon completion of all SPA fiscal year-end steps, continue on to the SPA/CANSS reconciliation checklist.

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SPA/CANSS Reconciliation Checklist

State agencies and universities reporting to SPA are required to disclose the summary of changes for capital assets in Note 2:

For detailed instructions on preparing the Capital Asset Note, see Capital Assets and NOTE 2 — Capital Assets in the Reporting Requirements website.

  1. Agencies should include these categories in the Capital Asset Note, if applicable.
    Category Description
    1 Land and Land Improvements
    2 Buildings and Building Improvements
    3 Infrastructure (Depreciable)
    4 Furniture and Equipment
    5 Vehicles, Boats and Aircraft
    6 Construction in Progress
    7 Infrastructure (Non-depreciable)
    8 Other Capital Assets (Historical Arts and Treasures, Leasehold Improvements, Libraries)
    9 Facilities and Other Improvements
    A (11) Land Use Rights (Intangible)
    B (12) Computer Software (Intangible)
    C (13) Other Capital Intangible Assets
  2. Retrieve the SPA CAAB101S and CAAB201S reports. The CAAB201S is for agencies using SPA to calculate depreciation/amortization.
  3. Verify that beginning balances on the CAAB101S and CAAB201S reports match the beginning balances in CANSS. The beginning balances in CANSS are the official beginning balances (prior year ending balances) and cannot be changed.
  4. Input capital asset balances in CANSS. Ensure all columns of Note 2 match all columns on the CAAB101S and CAAB201S (if applicable) reports as follows:
    • Ending balances on Note 2 must match the ending balances on the CAAB101S and CAAB201S reports.
    • Adjustment/Restatement amounts must match.
    • Reclass CIP and Completed CIP amounts must match and the column must net to zero (0).
    • Transfers In columns must match.
    • Transfers Out columns must match.
    • Additions columns must match.
    • Deletions columns must match.
    • If the agency is using SPA depreciation, all columns for the CAAB201S report must match depreciation/amortization entered in CANSS. If local depreciation is used, the agency’s internal system depreciation is used instead of the CAAB201S. Transfer depreciation must match even if local depreciation is used.

      Note:

      • Notify your SPA analyst if you have a variance between SPA and CANSS that you need assistance to resolve. Email property-level detail explaining the variance(s). Your analyst will work with you to make necessary corrections or approve the variances as reconciling items that cannot be corrected in SPA.
      • Notify your FRS analyst if you have a variance between CANSS and USAS that you need assistance to resolve.
  5. Certify in CANSS that CANSS and SPA are reconciled.

Upon CANSS certification, SPA staff will close the current fiscal year accounting period. CANSS and SPA will be closed globally on Oct. 20 per SPA Fiscal Year-End Close Process (FPP N.008). Contact your SPA analyst to open SPA for any changes after the deadline.

Note: The agency’s current fiscal year ending SPA balances can be changed until the accounting period is closed in SPA.

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Debt-Financed Property

Definition

Property financed with debt instruments such as commercial paper, general obligation bonds or revenue bonds.

Policy

All property acquired using any form of debt-financing must be reported to SPA in the required debt-finance-related data fields.

The financed amount of debt-financed assets must be based on the total principal. This includes the purchase price of the asset plus any applicable service fee charged by the Texas Public Finance Authority.

The acquisition cost of debt-financed assets, other than manufactured assets, must reflect the total principal plus all associated costs required to place the asset into service. The acquisition cost of manufactured assets should be based on the total cost of acquiring the asset and placing it into service. This includes principal, interest (if constructed or produced for an enterprise fund) and financing charges. The financing charge includes the cost of issuance and the cost of administrative fees.

If specified by bond covenant, agencies may be required to obtain insurance coverage for the replacement cost of any equipment purchased with revenue bonds. At the agency’s request, the Texas Public Finance Authority will provide guidance in estimating the replacement cost for insurance purposes.

The AMOUNT FINANCED field shows the principal amount of the financing agreement and should change only when the financing or the debt instruments being used to acquire the property are refinanced or restructured.

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Loan of Property

Policy

Agencies loaning property to other state agencies or entities do not absolve themselves from the responsibility of ensuring stewardship of the property or the reporting requirements for the property. Reporting of the property must continue as though the loaning agency still has possession of the property. The loaning agency also maintains documentation on the provisions of the loan. All loaned property must be reported in the physical inventory of the loaning agency.

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Transfer of Property

Policy

Agencies must follow Comptroller’s office rules and procedures regarding the accounting for and transferring of personal property between agencies, with or without reimbursement.

The property continues to be reported by the transferring agency until the receiving agency completes the transfer in SPA.

It is the responsibility of the transferring agency to ensure that the receiving agency acknowledges receipt of the property in the SPA system. The transferring agency should also maintain documentation to show the property was transferred to another agency. The suggested form on the following page can be used at the time of physical transfer. The suggested SPA Property Transfer Receipt form can be used at the time of physical transfer, but this is not a required form.

The historical value of a property received in transfer cannot be altered. Therefore, value increases and decreases to the historical cost of the transferred component are not permitted. Value can be added to a property received in transfer by adding a new component to the property.

Once receipt of a property in pending transfer is processed by the receiving agency (i.e. the transfer is complete), the successfully transferred property cannot be disposed in SPA as entered in error (DM27). If the property was successfully transferred in error, contact your SPA analyst for assistance.

When property has been purchased through the master lease financing program which has not been paid off, the Texas Public Finance Authority must approve any transfer in advance. The transfer must be done in a manner prescribed by that agency.

For more information on how to transfer property, see Transferring Property.

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Sale of Capital Assets to State Employees, Retired Peace Officers and Elected or Appointed Officers

A capital asset may be sold to an employee of a state agency or institute of higher education under the following circumstances:

Note: Disposal method 14 should be used for these types of transactions.

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Surplus Property

Surplus property is any personal property which is in excess of the needs of any state agency and which is not required for its foreseeable need. Surplus property may be new or used but must have additional useful life.

Surplus property must first be made available to eligible entities such as other Texas state agencies, political subdivisions and assistance organizations before it can be offered to the general public. For a description of political subdivisions and assistance organizations, see the Texas Facilities Commission’s (TFC) Certificate of Acquisition form.

Policy

State agencies not exempted from the general provisions for surplus and salvage property (Texas Government Code Annotated Section 2175) must follow the TFC and Comptroller’s office policies and procedures for transfer, sale or disposal of surplus property. When applicable, agencies must adhere to the federal guidelines and regulations for disposal of surplus property.

Note: SPA advertises the property for 12 calendar days to account for weekends and meet the 10 business day policy requirement. 

Agencies officially notify the TFC and the Comptroller’s office (using disposal method 05 in SPA) when surplus property is available for sale or other disposition (see Chapter 6 for more information about disposal method 05). Property with this disposal method is advertised on the TFC Surplus Property website for 12 calendar days beginning on the advertisement date indicated by the agency. During these 12 days, a state agency has a priority option-to-buy property with disposal method 05 over any other entity.

Note: Although state agencies have priority to buy items advertised on the website during the 12-day period, bids from political subdivisions or assistance organizations may be submitted for consideration during these 12 days. These bids must remain pending until the entire 12-day period has passed.

The agency advertising the surplus property determines the selling price and the first state agency, political subdivision* or assistance organization* agreeing to the price is entitled to the property. Once sold, the transfer is coordinated directly by the agency that owned the surplus property.

* During the initial 12-day advertising period, a state agency has a priority option-to-buy over political subdivisions or assistance organizations. However, these entities may submit a pending bid for consideration. Political subdivisions or assistance organizations must be on the TFC Approved Assistance Organizations list.

If the property is not acquired, the agency must change the disposal method 05 in SPA to another disposal method and indicate the next course of action to be taken by TFC (TFC storefront, live auction or Internet auction). This should be done immediately after the advertisement period. The agency may also choose to advertise the property again on the TFC website.

However, if the property is data processing equipment, all state agencies must transfer all data processing equipment to a school district, open enrollment charter school or the Texas Department of Criminal Justice. The agency transferring the data processing equipment may not collect a fee or other reimbursement for the transfer. Data processing equipment cannot be sold to the general public.

Note: Statute allows political subdivisions to send data processing equipment to the Texas Department of Criminal Justice.

The TFC may authorize a state agency to dispose of surplus or salvage property (bypassing the procedures above) if the agency demonstrates that it can dispose of the property in another way that saves the state money. For example, if the property is not acquired by an eligible entity, TFC may authorize the agency to sell the property by competitive bid, auction or direct sale to the public, including a sale using an Internet auction site. TFC determines which method of sale shall be used depending on what is most economically advantageous to the state under the circumstances.

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Exemptions From SPA and/or the General Provisions for Surplus and Salvage Property

By law, some property is exempted from being reported to SPA or the general provisions for surplus and salvage property.

Exemptions

Exemptions for the Texas Department of Health are here stated:

The department: Under the following authority, “the department” refers to the Texas Department of Health.

Texas Health & Safety Code Annotated Section 12.053 (Vernon Supplemental 1997) reads:

“All equipment and supplies which are purchased through a program, contract or grant with the department by or for qualified entities, including but not limited to individuals, corporations, local units of government and other state agencies and that are used to promote and maintain public health are exempt from the statewide personal property accounting system administered by the comptroller of public accounts described in Subchapter L, Chapter 403, Texas Government Code. The qualified entities shall maintain complete equipment and supply records. The department may request the return of any usable equipment or supplies purchased with funds provided by the department upon the termination of the program, contract or grant.”

When a program, contract or grant is terminated, the Department of State Health Services may request the return of any usable equipment or supplies purchased with funds provided by the Department. All of this property must be returned. Upon receipt, the Department of State Health Services transfers the property into its possession and begins reporting possession of the property to the comptroller.

Exemptions for the Texas Rehabilitation Commission are here stated:

Texas Human Resources Code Annotated Section 111.002 (5)(J) (Vernon Supplemental 1997) reads, in part:

“(5)…The commission may engage in or contract for activities, including but not limited to…

(J) providing other equipment, supplies, services or goods that can reasonably be expected to benefit a handicapped individual in terms of employment in a gainful occupation or achievement of maximum personal independence.”

Texas Human Resources Code Annotated Section 91.023 (Vernon Supplemental 1997) reads:

“The commission may furnish materials, tools, books and other necessary apparatus and assistance for use in rehabilitating blind and visually handicapped persons.”

Effective Sept. 1, 2004, the Texas Rehabilitation Commission was closed and merged into the Department of Assistive and Rehabilitative Services (DARS). This exemption also transferred to the DARS agency.

Exemptions for the Secretary of State are here stated:

Texas Government Code Annotated Section 2175.305 reads:

“This chapter does not apply to the disposition of surplus computer equipment by the secretary of state. The secretary of state shall give preferenced to transferring the property to counties for the purpose of improving voter registration technology and complying with Section 18.063, Election Code.”

Exemptions for Eleemosynary Institutions are here stated:

Texas Government Code Annotated Section 2175.302 reads:

“Except as provided by Section 2175.126(b), this chapter does not apply to the disposition of surplus or salvage property by a state eleemosynary institution.”

Exemptions for Institutions of Higher Education are here stated:

Texas Government Code Annotated Section 2175.304(a) reads:

“This chapter does not apply to the disposition of surplus or salvage property of a university system or of an institution or agency of higher education except as provided by this section.”

Exemptions for Legislature are here stated:

Texas Government Code Annotated Section 2175.301 reads:

“This chapter does not apply to the disposition of surplus property by either house of the legislature under a disposition system provided by rules of the administration committee of each house.”

Exemptions for Texas Veterans Commission are here stated:

Texas Government Code Annotated Section 434.106 reads:

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Trade-Ins

Trade-in: one asset is acquired by the exchange of another asset. See Chapter 1 for the accounting treatment of exchanges of similar or dissimilar assets.

Policy

A state agency may offer surplus or salvage property as a trade-in on new property of the same general type if the exchange is in the best interest of the state.

The vendor must be selected through competitive bidding and the equipment must be listed as a separate item on the invitation for bid, request for proposal or request for offer.

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Cannibalization or Disposal of Salvage Property

Salvage: property which through use, time or accident becomes depleted, worn out, damaged or obsolete and can no longer serve the purpose for which is was originally intended. Salvage property can be cannibalized or disposed of using the guidelines in the “Policy” section below.

Cannibalization: the authorized removal of components from one item of property for installation on another item of property to meet a specific requirement and/or to return an item to service.

Policy

Any salvage property can be sold (at a local sale for scrap) or destroyed by the agency. However, if the salvage property is a capitalized or controlled property item on SPA, the agency must first request a Delegation of Authority form and sale number from the State Surplus division of the TFC before it can be sold. Authorization granted to cannibalize or dispose of salvage property should be documented. See the Property Destruction form, which can be modified or used by agencies.

The decision to allow cannibalization is determined by the agency and can be delegated to the property manager, custodian, user, technical experts or other management levels. There should be a formal agency cannibalization policy that requires the custodian/management authority to submit a written request to cannibalize a property item and to send the remains of the property to a holding area for scrap or destruction. Agencies/property managers should not allow cannibalized items to be reported as surplus to the TFC.

Suggested form to use at time of cannibalization/disposal of salvage property — not a required form.

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Impairment of Capital Assets

Report in SPA impairment amounts determined to be significant. For more information on identification of impairments and testing the asset for significance, see Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries (FPP G.002). The Update Property (PAPUPD), Update Fund Value (PAUVAL) and Disposal of Property (PADLET) screens are used to record impaired asset information in SPA.

  1. Report the asset as impaired on the Update Property (PAPUPD) screen:

    Field Name Required Entry
    IMPAIRMENT INDICATOR Y
    IMPAIRMENT AMOUNT Decimal 11,2
    IMPAIRMENT DATE MM/DD/YYYY
  2. Reduce the value of the asset on the Update Fund Value (PAUVAL) screen by the impairment amount. The AMT OF CHANGE is the impairment amount and will reduce the asset balance. The EFFECTIVE DATE reported in the PAUVAL screen must be the same as the date reported as the IMPAIRMENT DATE in the PAPUPD screen.

    Field Name Required Entry
    A/D D
    AMT OF CHANGE Decimal 11,2
    EFFECTIVE DATE MM/DD/YYYY
  3. If the net impairment loss results in an amount greater than or equal to the net book value of the asset, dispose of the asset on the Disposal of Property (PADLET) screen. The DISPOSAL DATE reported in the PADLET screen must be the same as the date reported as the IMPAIRMENT DATE in the PAPUPD screen.

    Field Name Required Entry
    DISPOSAL METHOD 28 – Damaged by Nature
    30 – Damaged by Other
    DISPOSAL DATE MM/DD/YYYY

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Records Retention

Policy

The Texas State Records Retention Schedule requires agencies to maintain property records for the life of the asset and for a period not less than three fiscal years after the disposal of property. Property records should include any payment-related source documentation (i.e. invoices, payment vouchers, receipts, etc.) necessary to substantiate the value of the asset.

When applicable, agencies must adhere to the federal rules and regulations for retention of records for property purchased with federal grants or funds. Where federal guidelines and state guidelines apply, the greater required time period for records retention applies.

If a state agency fails to keep the records, the Comptroller’s office may refuse to draw warrants or initiate electronic funds transfers on behalf of the agency.