UCAR Staff Notes: Delphi Questions

July-August 2004

Delphi Questions

Questions and suggestions from the staff to management may be submitted in confidence to the Delphi Coordinators (Teresa Rivas, left, and Nancy Wade). They should be submitted in written form, preferably via interoffice mail in a sealed envelope marked confidential. They must be signed. Detailed procedures for submitting questions are given in the UCAR Policies and Procedures Manual, section 4-1-2, and on the Delphi Web site. Staff Notes Monthly publishes questions and answers of general interest to staff, and the Delphi Web site has a log of all questions submitted since 1995.

Delphi Question #515 (received May 12): Years ago, UCAR/NCAR had a property manager whose job involved tagging and tracking UCAR equipment from purchase to surplus, from computers to furniture. UCAR/NCAR has grown to the point that one person would be overwhelmed with the same job responsibilities today. Let’s face the facts: equipment purchased by UCAR/NCAR (cell phones, laptops, digital cameras, tools, etc.) is taken offsite to work at home and for (gulp) personal use. The majority of employees will not take advantage of the situation, but here is a worst-case scenario: a person with substantial signature authority who is also the property manager stocks his or her home and is able to both purchase equipment and to make it disappear on a property inventory.

My questions are: Who keeps track of the UCAR/NCAR property? Are there any checks and balances in place to account for improper purchases and equipment inventories?

Response (May 26): Yes, you are correct that the UCAR property administrator would not be able to tag every fixed asset procured through UCAR. In fact, the property administrator does use an electronic database that tracks fixed assets (original acquisition cost greater than or equal to $5,000) from purchase to disposal (including dismantling of the asset). In recognition of the resource limitations of one person—i.e., the UCAR property administrator—each division/program has a designated division property administrator (DPA) who is responsible for tagging fixed assets as they are received as well as other property management duties. We’ve found that centralizing the task of tagging within the division/program provides an appropriate level of control. In addition, this centralization of duties relieves the individual who made the purchase from having to tag the asset. Items such as laptops and some technical/scientific equipment would be considered “sensitive property” (portable property with an original acquisition cost between $1,000 and $5,000), and these items are tracked by the individual divisions/programs. Items such as cell phones, digital cameras, and most tools would be considered portable property (original acquisition cost less than $1,000) and each individual division/program determines if it wants to track these items. The incidence of loss has been minimal with portable items and, therefore, it becomes an issue of cost effectiveness to balance the cost of tracking the items against the cost of replacing the items in the few instances where a loss has occurred.

With respect to requisition authority, most of the DPAs have minimal levels of authority; therefore, they would not be authorized to procure fixed assets since their level of authority is generally less than $5,000. For every program, there is an identified control in place whereby expenditures are reviewed on a monthly basis by the division/program administrative staff. If inappropriate purchases have been made, this control would identify these purchases and the division/program would then follow up with the requisitioner/approver for additional information. The UCAR property administrator’s requisition authority allows for immaterial purchases, mainly office supplies. This immaterial level of authority is intentional to effect a separation of duties, which is key to strong internal controls.

With respect to disposal of fixed assets, items cannot be removed from the property inventory without multiple approvals. The DPA initiates the disposal request, the UCAR property administrator reviews the disposal request, and further approval is subsequently requested from the appropriate source. The final disposal approval could be from the funding agency, the associate vice president of business services or, possibly, other sources depending on the terms and conditions of the agreement under which the asset was procured. UCAR’s property database creates a log record of who created the disposal entry. Access to dispose assets via the database is restricted to specified appropriate individuals. Finally, the supporting documentation for disposal of fixed assets is audited annually by UCAR’s external auditors.

As a final comment, UCAR assets are intended for business use and not personal use. If there is a specific concern regarding the use or disposal of UCAR assets, please report the concern anonymously via the UCAR Ethics website. It is important that UCAR demonstrate sound fiduciary and stewardship responsibilities with respect to property management, and I encourage you to report any concerns.
—Melissa Miller, director Budget and Finance

Follow-up question (received July 9): A while back, I submitted a Delphi question concerning UCAR property. Thank you for your reply, but after thinking about it, I have a follow-up inquiry. My initial concern involved items less than $5,000. Items over the $5,000 threshold have procedures in place to easily track them but the “sensitive property” is most susceptible to abuse. My question is this: are there procedures in place for tracking assets of less than $5,000, the so-called sensitive property? Thanks in advance for your reply.

Response (July 9): Sensitive property is tracked by the individual divisions/programs usually via spreadsheets or whatever mechanism the divisions/programs choose to be the most effective. For the section from the UCAR Property Manual that addresses sensitive property, see www.fin.ucar.edu/property/propmanual/propmanual_sec8. The recordkeeping section is where you’ll find the DPA responsibilities that pertain to this type of UCAR property.

We recognize and acknowledge your concern regarding this type of property. Often, the items are portable and small enough to easily conceal. That is a fact of life, at least, with technology. Everything is getting faster, smaller, and less expensive, which means more and more items will fall under the threshold for UCAR fixed assets and qualify as sensitive property.
We believe our responsibilities with respect to sensitive property are integral to the overall success of UCAR property management and, therefore, we take these responsibilities seriously. As stated in the previous response, if you have reason to believe there is a specific situation we should look into further, please report the concern anonymously via the UCAR Ethics website.
—Melissa Miller

Delphi Question #516 (received June 28): Why are employees allowed to keep the mileage earned through NCAR business trips for their own personal use? With recent budget cuts to the NCAR divisions, shouldn’t the institution consider using these miles to help contain travel costs? While I know some employees consider this a perk for the inconvenience of job-related travel, isn’t that part of their regular job for which they are already being compensated?

Response (July 9): UCAR employees are allowed to retain frequent flyer miles for personal use for many reasons, including:

The federal government allows its employees to retain frequent-flyer miles for personal use (section 1116 in the National Defense Authorization Act for Fiscal Year 2002). Universities also generally allow their staff to retain frequent-flyer miles for personal use.
Attempting to track frequent-flyer miles (e.g., sorting out business versus personal travel, miles received due to credit card purchases, etc.) would create an administrative nightmare that would result in costing more than is saved.
Most traveling staff are exempt by job status and, therefore, are not compensated when they are continually required to travel on weekends or evenings (personal time) to events and meetings.

Divisions can contain travel costs by making sure that all trips are absolutely necessary and that travelers follow travel guidelines and reasonable economies—for example, not renting a car unless it is absolutely necessary, searching for hotel bargains, etc.
—Shelley Richards-Craig, general accounting manager Budget and Finance

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