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Movable Property

As an employee of Northwestern, you have a responsibility to safeguard University property entrusted to you.  Part of that responsibility includes adhering to applicable State laws and University policies and procedures related to State movable property.

The State movable property entrusted to you is subject to audit by the University's Internal Audit Office, the Louisiana Property Assistance Agency (LPAA), and the Office of the Legislative Auditor.  Audit Alert 2008-01 seeks to provide the Northwestern community with information that is geared toward:

• Strengthening internal controls related movable property;

• Reducing the level of departmental noncompliance with State laws and University policies and procedures related to State property; and

• Providing a means for departments to self-assess themselves in regards to State property.

Below are recent opportunities for improvement and/or findings cited by the Office of Internal Audit, LPAA, and the Office of the Legislative Auditor.  Departments are encouraged to review the opportunities/findings and make the changes necessary, if any, to become into compliance with the items listed below.

Internal Audit Office

The Office of Internal Audit has completed several departmental movable property audits.  The following opportunities for improvement (listed in no particular order) are provided for departments/employees to review and consider :

Inventory Discrepancies

In general, there were three broad types of discrepancies reported by the Office of Internal Audit. 

Two of the discrepancy types relate to the location of the property, i.e., an unlocated discrepancy and a location discrepancy.     

In the case of an unlocated discrepancy, the department does not know the property's whereabouts.  In order words, the property is missing.

In the case of a location discrepancy, the department knows where the item is located; however, that location is not in accordance with movable property records.  Examples of location discrepancies include the following:

• Several employees relocate offices, taking their computers with them.   In error, the department does not process any paperwork in relation to the relocation. 

• An entire department moves from one building to another. In error, the department does not process any paperwork in relation to the move.

• Several rooms within a department undergo a renovation.  Furniture, computers, and other equipment are temporarily sent to another location.  In error, the department does not process any paperwork in relation to the renovation.

The third type of discrepancy relates to any noted or observed  weaknesses in the internal control system.  While such weaknesses can manifest in a variety of forms, they are most likely related to one of the primary objectives of the internal control system.  The primary objectives an internal control system are as follows (with examples of weaknesses included):

• Compliance with policies and procedures

  • Failure to comply with one or more sections of the University's Movable Property Policies and Procedures Manual

• Accomplishment of objectives and goals

  • Failure to "safeguard the movable assets of the State of Louisiana that under the care, custody and control of this agency (Northwestern)"  [Per the NSU Movable Property Policies and Procedures Manual's Introduction] 

• Reliability and integrity of information

  • A department certifies a movable property item as present during the annual inventory certification when in actuality the item was recovered by the police while executing a search warrant.  The department never reported the item as missing or stolen, and the police had possession of the item during the entire inventory certification process.

• Economical and efficient use of resources

  • A computer was purchased in 2002, but has never been taken out of the original package for use by the department

• Safeguarding of assets

  • Office/building doors are left opened and unattended, exposing movable property to a greater risk of theft or other loss

Opportunities for Improvement

Departments are urged to review the following opportunities for improvement, and take corrective action as deemed appropriate.

Moving Property From One Location to Another

The "Movable Property Transaction Request" form should be used when physically moving property from one location to another. 

• The use of this form is applicable whether the location change involves a building relocation or a room relocation only. 

• See Section II, Part 3.0 of the Movable Property Policies & Procedures Manual for additional information on this subject.

• Contact the Plant Services Office to obtain "Movable Property Transaction Request" forms.

 

Home Use or Temporarily Removing Property From Assigned Location

The "Request for Temporary Removal of State Movable Property" form should be used when taking property (e.g., a laptop) home or from its assigned location.   

• The use of this form is applicable whether the temporary location change involves taking the property home or to another location on campus.

• See Section II, Part 5.0 of the Movable Property Policies & Procedures Manual for additional information on this subject.

• Contact the Plant Services Office to obtain "Request for Temporary Removal of State Movable Property" forms.

 

Loaning Property To Others

State property entrusted to the University, its administrators, employees, volunteers, etc., shall not be loaned out or utilized for activities that are not sponsored or co-sponsored by Northwestern State University. 

Article 7, Section 14 of the Louisiana Constitution indicates that property or things of value of the State shall not be loaned, pledged, or donated to or for any person, association, or corporation, public or private.

• In general, if State property is entrusted (loaned to, signed out by, etc.) to someone other than an administrator, employee or volunteer of the University, this could be a violation of Article 7, Section 14 of the Louisiana Constitution. 

• University movable property, equipment and materials should not be loaned to non-University personnel (e.g., former employees, retirees, etc.) unless the Department has proper written documentation (e.g., a cooperative agreement) in place, which has been reviewed by legal counsel to ensure compliance with Article 7, Section 14 of the Louisiana Constitution. 

  • Such documentation should be maintained during the life of the loan period, and kept on file based on the affected department’s retention schedule, or a minimum of three years.

• State property (tagged or untagged), materials, supplies, equipment, resources, etc., may not be used for private use or personal gain.  

• See Section I, Part 4.0 of the Movable Property Policies & Procedures Manual for additional information on this subject.

 

Dismantling or Otherwise Disposing State Property

Employees do not have the authority to permit or cause State property to be dismantled.   

Property disposed of by sale, transfer to LPAA, scrap, dismantle or loan out to other state agencies requires that the University Property Manager get prior approval from the State Property Control Director.

• See Section II, Part 2.0 of the Movable Property Policies & Procedures Manual for additional information on this subject.

• Contact the Plant Services Office to obtain "Movable Property Transaction Request" forms.

Property Sent Out for Repair

The "Authority to Release Equipment for Repairs" form should be used to release movable property to another department or company for repairs. 

• Departments should ensure that the individual picking up the movable property should sign and date the form in the appropriate spaces.  That signature will serve as your documentation that the property was picked up for repair. 

• Departments should track all outstanding "Authority to Release Equipment for Repairs" forms to ensure that such movable property is returned to the University in a timely manner.

• See Section II, Part 4.0 of the Movable Property Policies & Procedures Manual for additional information on this subject.

• Contact the Plant Services Office to obtain "Authority to Release Equipment for Repairs" forms.

LPAA

• LAC 34:VII:305.B - Property files must be maintained for three years plus the current year.

Office of the Legislative Auditor

Louisiana Revised Statue 39:329 requires the Office of the Legislative Auditor examine the records and property of the University to determine if the (a) provisions of Part XI [Property Control] of Title 39, and (b) regulations of the Commissioner of Administration are complied with.  Specific comment on property control is required and any inaccuracies or noncompliance are to be disclosed.

For the second consecutive year, the Office of the Legislative Audit issued a Statewide audit finding related to movable property (fiscal years 2004-05 and 2005-06).  [Northwestern was included in 2004-05 Statewide audit finding.] 

Components of the Statewide findings were as follows:

Condition

The State of Louisiana reported significant amounts of movable property that could not be located in certain universities, state agencies, a community college, and the technical college system.

Criteria

• Good internal control requires that adequate procedures be in place to ensure that the location of all movable property items is monitored and updated frequently to record the movement of items from one location to another.

• In addition, good internal control should ensure that movable property is properly safeguarded against loss arising from unauthorized use and misappropriation.

• Furthermore, Louisiana Administrative Code Title 34 Part VII Section 313 (A) states, in part, that efforts must be made to locate all movable property for which there are no explanations available for its disappearance.

Cause

(Fiscal Year 2004-2005 for Northwestern)

• Policies related to (a) movable property acquisitions, (b) tracking the movement of property items; and (c) conducting the annual property were not enforced and consistently applied.

• Personnel responsible for safeguarding property items fail to report items received, missing, or moved to other locations in a timely manner.

• Once the annual inventory is taken and items are identified as unlocated, additional extensive searches do not occur. 

  • It is three years before unlocated property is permanently deleted from State movable property records.

Effect

• Failure to adequately monitor, secure, and account for all movable property and locate those items for which there is no explanation available for their disappearance subjects the movable property of the state to increased risk of loss and/or unauthorized use.

• Furthermore, because of the nature of the services provided by the state, the risk exists that sensitive information could be improperly recovered from the missing computers and/or computer-related equipment.

Recommendation

Northwestern

Northwestern should enforce and consistently apply its existing policies and procedures for reporting movable property acquisitions timely, tracking the movement of property items and conducting the annual property inventory.

In addition,  procedures should be strengthened to require more extensive searches for unlocated items and require NSU personnel to immediately respond to the property control officer's requests concerning movable property.

Finally, additional efforts should be devoted to locating movable property reported as unlocated in previous years and comply with all applicable requirements of LPAA.

State of Louisiana

The State of Louisiana should take the necessary measures to strengthen internal control over movable property to ensure that all universities, state agencies, state hospitals, community colleges, and the technical college system ...

• Adequately secure and monitor movable property;

• Conduct accurate physical inventories; and,

• Devote additional efforts toward locating movable property reported as unlocated.

Purpose of LPAA

LPAA was designated by the Commissioner of Administration to:

• Provide for the accountability of the State's movable property;

• Ensure that all state agencies comply with the State Property Control and Fleet Management Regulations;

• Provide a savings and return on state and federal monies through redistribution and sale of surplus property; and,

• Track the utilization of the State's fleet of passenger vehicles.