Overview
The University of Massachusetts (UMass) Lowell did not ensure that all the fixed assets that it purchased were added to its inventory records in a timely manner or that its inventory list was accurate and contained all the information needed to identify assets. As a result, there is a higher-than-acceptable risk of undetected theft or misuse of these fixed assets or that it may not be possible to find some items.
UMass Lowell processes all purchases, including fixed assets, through PeopleSoft, a software-based system. When assets are purchased, they are moved to the Staging Table. This holds them in “suspense” until UMass Lowell’s Property Control staff generates the Staging Table Report and then records each item’s asset identification tag number, location, and other pertinent information. Each asset is then added to PeopleSoft’s asset management module and tracked on UMass Lowell’s inventory list.
Of the 285 assets on the Staging Table Report, 283 were information technology (IT) assets (e.g., computers, tablets, and related accessories), valued at $320,208, that had been purchased during our audit period but not assigned asset identification tag numbers in the inventory system. In addition, UMass Lowell’s inventory list was not updated with new IT purchases weekly. In fact, 210 of the 283 items that were purchased between July 1, 2014 and June 30, 2015 still had not been added to this list as of the end of our audit period.
Additionally, in our review of UMass Lowell’s inventory list, consisting of 13,181 items, we noted that the original costs were not recorded for 133 of them. Finally, in addition to the 283 items from the Staging Table Report that were not on the inventory list, we also found another asset (valued at $20,000) that was on campus and had an asset identification tag but was not on the inventory list.
Authoritative Guidance
According to UMass Lowell’s Internal Control Manual,
Once a week, the Property Coordinator transfers all purchases coded as assets to the PeopleSoft asset management system and will review each asset that was transferred over to ensure that it is actually an asset and was entered correctly. PeopleSoft will queue all new fixed assets that need to be tagged. The Property Coordinator also assigns sequentially numbered tags. . . . All pertinent information for the new asset is recorded.
Although “pertinent information” is undefined in this manual, best practices suggest that each asset’s original cost should be a required field in an asset management system. Additionally, UMass Lowell’s inventory list of fixed assets already includes fields for tag number, cost, location, descriptions, etc., and a majority of the listed items have these fields completed. This information should be consistently recorded for all items.
Reasons for Noncompliance
UMass Lowell personnel did not review a report of the Staging Table weekly to ensure that all assets received are given asset identification tag numbers and recorded in the university’s inventory.
UMass Lowell officials could not explain why some items were not on the inventory list or did not have original acquisition costs recorded, although they suggested that it might have happened because of a conversion of data from a prior inventory management system.
Recommendations
- UMass Lowell should review the Staging Table Report weekly to ensure that assets are properly recorded.
- UMass Lowell should review its fixed asset inventory list and ensure that all required information is present.
- UMass Lowell should determine why information may be missing from PeopleSoft and correct the issue as needed.
Auditee’s Response
Although some exceptions were noted, UMass Lowell properly administers the asset inventory in accordance with policy. . . .
The Staging Table is continually reviewed and asset purchases are posted timely to the Asset Management (AM) System. Assets with missing information remain in ”Staging” although they are identified and recorded in the accounting records. In some instances, all asset information was not collected timely nor complete in order to process from the Staging Table into AM. The assets were however identifiable, but more difficult to track. An escalation process was established to ensure any missing information is obtained from departments and items are cleared from “Staging” on a timely basis. . . .
Property Control continually updates and monitors the AM system and coordinates campus department inventories per policy. During testing, one asset, valued at approximately $20,000, was not located. The asset was assigned to the correct department, but the asset location had changed. This asset was subsequently located by the department and the department location code updated in the AM system and the auditor advised. . . .
Management has reviewed the PeopleSoft AM System and there is no missing asset inventory information. While there is no missing information in the system, a system generated report error omitted the original cost value for 133 non-capital items when provided to the auditor. A correct report which identified the original cost information was provided.
Auditor’s Reply
We found that UMass Lowell did not properly administer its inventory of fixed assets in that it did not ensure that all the fixed assets that it purchased were added to its inventory records in a timely manner or that its inventory list was accurate and contained all the information needed to identify assets. Although UMass Lowell asserts in its response that it continually reviews the Staging Table and asset purchases are posted promptly to the asset management system, there was no documentation to substantiate this assertion. On the contrary, we found that 210 of the 283 IT assets that were purchased between July 1, 2014 and June 30, 2015 still had not been added to its inventory list as of the end of our audit period. Therefore, we again suggest that the Staging Table Report be reviewed weekly to ensure that all asset information is recorded correctly and that items are added to the asset management module.
UMass Lowell asserts in its response that it reviewed PeopleSoft and determined that there was no missing asset inventory information, but that it had provided the Office of the State Auditor (OSA) with an erroneous inventory report that omitted the inventory information in question. We cannot comment on this assertion, since the report in question was provided to OSA by UMass Lowell officials during the audit and represented as an accurate record, and therefore we used it in conducting our audit testing in this area. With its response, UMass Lowell did provide an updated inventory list that included the original costs for the 133 items noted in our report. However, because this inventory list was provided after we completed our fieldwork, we could not verify its accuracy.
Finally, in its response UMass Lowell states that the issue regarding the $20,000 asset that was on campus and had an asset identification tag but was not on the university’s inventory list has been corrected. However, it should be noted that to support this assertion, UMass Lowell provided OSA with documentation for an inventory item valued at approximately $23,000 that was not related to the item noted in the report valued at $20,000.
| Date published: | June 12, 2018 |
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