Episcopal Children’s Services
SRAD18 Tangible Personal Property 
 
Federal and State laws, regulations, and rules require that Early Learning Coalitions (ELCs) and other direct subrecipients (i.e., other contracted entities) of OEL institute proper controls relative to the management and disposition of equipment purchased with federal and state funds. There are four major documents which specify the requirements for property management. These are – 
 45 CFR § 74 - Code of Federal Regulations   
 Section 1002.84(11), Florida Statutes – Complying with Tangible Personal Property 
Requirements  
 Chapter 274, Florida Statutes – Tangible Personal Property Owned by Local Governments 
 Rule 69I-73, Florida Administrative Code – Tangible Personal Property Owned by Local 
Governments 

This revised fiscal guidance provides up-to-date information and specific requirements consistent with applicable federal regulations, Florida Statutes (F.S), and state rules relative to the management, disposition, and utilization of tangible personal property purchased with state and federal funds. Tangible personal properties purchased solely with state funds (e.g., VPK funds) must apply all applicable requirements described under Chapter 274, F.S., and Rule 69I-73, F.A.C. Tangible personal properties purchased solely with federal funds (e.g., SR funds) must apply all applicable requirements provided under 45 CFR § 74, Chapter 274, F.S., and Rule 69I-73, F.A.C. When entities combine funding for the purchase of tangible property, then the more restrictive requirements apply. 
 
ECS is required to inventory all tangible personal property with value or cost of $1,000.00 or more and the normal expected life of one year or more. ECS is also required to conduct this inventory of its property annually. 
OPERATIONAL DEFINITIONS 
Attractive Items: These items are considered assets of low unit cost. ECS are required to maintain adequate property records for property items as prescribed under Chapter 274, F.S. and Rule 69I-73, F.A.C.  ECS also elects to account for “attractive” items (those not meeting the statutory criteria) as well, such as iPads, digital cameras, and so forth with a purchase price of over $400 and less than $1,000. These items are accounted for within our MIP accounting package.  The item and its location are listed and these items will be inventoried every 2 years.  It should be noted that this practice began after OEL’s Program Guidance 240.2 Tangible Personal Property was issued so older items will not be listed in this system.
Custodian: The person or agency entitled to lawful custody of tangible personal property.   
Custodian Delegate: The person acting under the supervision of the custodian to whom the custodian has delegated the custody of property, and from whom the custodian receives custody receipts.    
Disposition: The final status of tangible personal property (e.g., sale, scrap, donation, transfer, etc.) when the coalition or other contracted entity removes it from the inventory. 
Early Learning Coalition (ELC): Created under Section 1002.83, F.S., Early Learning Coalitions are not-for-profit organizations tasked with implementing  early learning programs at the local level including, but not limited to: the School Readiness Program, Child Care Resources and Referral Program (CCR&R), Child Care Executive Partnership (CCEP) Program, and the Voluntary Prekindergarten Education Program. 
Equipment: For record keeping and accountability purposes, equipment is tangible, non-expendable, personal property having a useful life of more than one year and an acquisition cost of $1,000.00 or more per unit, although a lower dollar amount can be established by the coalition/other contracted entity.  
The Office of Early Learning (OEL): The entity responsible for federal and/or state grant program funds received from the U.S. Department of Health and Human Services and appropriated by the State Legislature for the administration of the state’s early childhood development and education programs (i.e., School Readiness Program and the Voluntary Prekindergarten Education Program).  
Grant Purchased Property: An item defined as “equipment” stipulated in 45 C.F.R. § 74.2, defined as “property” in Chapter 274, F.S., and Rule 69I-73, F.A.C., which ECS purchased using state or federal funds provided by the Office of Early Learning. 
Inventory Management: Includes all functions related to the recording, tracking, and safeguarding of equipment. This would include the monitoring of equipment moved to and from various locations. 

Material Service Organizations: Subrecipients or other entities contracted to administer or manage the grant program(s). ELCs may contract with other entities to perform and/or manage portions of the services for the SR and/or the VPK programs (i.e., as a primary service provider or a central agency). This type of organization may have a subrecipient contract relationship with the ELC, and is often called a “material service organization.”   

Pass-through Entity: A pass-through entity is a non-federal entity that provides a federal award to other entities to carry out a federal program. Pass-through entities are also known as recipients/subrecipients. The Office of Early Learning is a subrecipient, and receives grant program funds from the federal awarding agencies. The ELCs are subrecipients of the Office of Early Learning since they receive grant program funds from the Office of Early Learning to perform/manage operations material to the School Readiness and VPK programs. When the ELCs award federal funds for program purposes to other contracted entities to carry out program activities, they will become ELC subrecipients or vendors. 
Recipient: A non-federal entity that expends federal awards received directly from a federal awarding agency to carry out a federal program. 
School Readiness Program (SR): The School Readiness Program, administered by the Office of Early Learning, is part of the state’s early childhood education and development programs. Each ELC’s or other contracted entity’s School Readiness program should provide the elements necessary to prepare at-risk children for school, including health referrals and an appropriate educational program. ECS provide SR services on a full day, full-year, and full-choice basis to the extent possible in order to enable parents to work and become financially self-sufficient. The delivery of SR programs is comprised of private child care providers and school-based sites that public and nonpublic schools operate. 
Subrecipient: A non-federal entity that expends federal awards provided by a pass-through entity to carry out a federal program, but does not include an individual that is a beneficiary of such a program. A subrecipient may also be a recipient of other federal awards directly from a federal awarding agency. 
Threshold for Recording Property: ECS must record in its financial system as property for inventory purposes all property with a value or cost of $1,000.00 or more with a projected useful life of one year or more. Where ECS has a more restrictive threshold, the coalition or other contracted entity will follow that threshold level.   
Title to Equipment: According to federal regulations, title to equipment a subrecipient acquires with HHS funds must vest in the subrecipient. 
Vendor: A dealer, distributor, merchant, or other seller providing goods or services that are required to conduct a federal program. These goods or services may be for an organization’s own use or for the use of beneficiaries of the federal program. 
Voluntary Prekindergarten Education Program (VPK): The Voluntary Prekindergarten Education program is part of the state’s early childhood development and education services delivery model. It provides that every 4-year-old child in Florida is eligible for a free, high quality prekindergarten learning opportunity that shall be voluntary and delivered according to professionally accepted standards. The state designed this program to enhance each child’s ability to make age-appropriate progress in the development of language and cognitive capabilities through education in basic skills. Private Prekindergarten providers and school-based sites operated by public and nonpublic schools comprise the delivery system for the VPK program. General Revenue (GR) fully funds the VPK program. 
STATE GUIDANCE 
Chapter 274, F.S. and Rule 69I-73, F.A.C. provide the minimum standards necessary to adequately control, safeguard, and account for tangible personal property. To reasonably assure compliance with Chapter 274, F.S. and rules of the Chief Financial Officer, the coalition or other contracted entity’s internal controls should include appropriate measures to ensure that all tangible personal property acquisitions are identified, appropriately marked, and accurately recorded in the appropriate records and that annual physical inventories are conducted and reconciled to related property records by persons who do not have asset custody responsibilities. 
MANAGEMENT OF EQUIPMENT 

Recording of Property 
Federal regulations, State statutes, and State rules require each coalition or other contracted entity to maintain adequate records of property in its custody. Each property record entered at the time of the purchase transaction must include the following information – 
 Identification number 
 Description of item or items 
 Physical location (the city, county, address or building name, and room number therein) 
 Name of custodian with assigned responsibility for the item(s) 
 In the case of a property group, the number and description of the component items comprising 
  the group 
 Name, make, or manufacturer, if applicable 
 Year and/or model(s), if applicable 
 Manufacturer’s serial number(s), if any, and if an automobile, vehicle identification number 
   (VIN) and title certificate number, if applicable 
 Date acquired 
 Cost or value at the date of acquisition for the item 
 Method of acquisition and, for purchased items, the voucher and check or warrant number 
 Date the item was last physically inventoried and the condition of the item at that date 
 If disposed of, use or refer to the information prescribed in Rule 69I-73.005, F.A.C. 
 The coalition or contractor may include any other information on the individual property record 
      that it may care to include 
 Percentage of federal participation (e.g., the portion of costs for any item for which the federal 
      grant program(s) paid) 
Identification/Marking of Property 
Within thirty (30) days of receipt, ECS must place a decal or tag on an item of grant-purchased property to identify the property. The decal or tag should contain at least a unique identification number and ELC of North Florida or its predecessor(s). We must record the property tag identification number on the Master Property Inventory Form (Attachment 1). 
Marking of Property 
ECS must permanently mark each property item with the identification number assigned to that item to establish its identity and that the entity that purchased it. The marking must visually display the property identification number of the item. 
Location of Marking 
ECS must mark items of a similar nature in a similar manner to facilitate identification. In determining a marking location, the coalition/other contracted entity must give careful consideration to the intended use of the items; the probability that wear, vandalism, or routine maintenance functions could obliterate the marking; and the appropriateness of the marking method chosen. Additionally, the location of the marking and the marking method chosen must not mar the appearance of the item.   
Inventory of Grant-Purchased Property 
In accordance with Rule 69I-73, F.A.C., ECS is required to conduct a physical inventory of equipment at least once per year as well as whenever there is a change of custodian or change of custodian’s delegate. ECS must provide its updated Master Property Inventory the Early Learning Coalition of North Florida no later than October 1 of each year or within 30 days of a change in custodian or custodian’s delegate. See Attachment 1. During a required inventory, ECS should take the following steps – 
(a) For the inventory of an item physically present and properly described on the Master Property Inventory List:    
•	Physically inspect the item; 
•	Match the property tag identification number and description of the item against the Master Property Inventory List; 
•	Verify the current condition of the item against the condition described on the Master Property Inventory List; and
•	Record the initials of the person taking the inventory next to the item on the Master Property Inventory Form, indicating that the person inventoried the item, and the date performed.  
For the inventory of an item physically present with incorrect or missing information: 
•	If an item’s property tag identification number matches the Master Property Inventory List 
•	but the description of the item does not match, the custodian must investigate and correct the description as appropriate. The custodian should draw a line through the incorrect description, record the correct description immediately above or after the incorrect entry, and follow the steps described in subparagraph (a) above.  
•	If an item’s property tag identification number does not appear on the Master Property Inventory List, the custodian must investigate and correct the inventory as appropriate. The custodian should add the item to the Master Property Inventory List and follow the steps described in subparagraph (a) above. 
•	If an item does not have a decal or tag with a property tag identification number, the custodian must investigate and correct the inventory as appropriate. The custodian should determine whether the item appears on the Master Property Inventory List.  
o	If the item appears on the Master Property Inventory List, determine the identification number of the original property tag, place a replacement tag with the original property tag identification number on the item, and follow the steps described in subparagraph above. 
o	If the item does not appear on the Master Property Inventory List, place a new property tag on the item, add the item to the Master Property Inventory List, and follow the steps described in subparagraph (a) above. 

•	If the manufacturer’s serial number on the item does not match the serial number on the Master Property Inventory List, draw a line through the incorrect serial number, record the correct serial number immediately above or after the incorrect entry, and follow the steps described in subparagraph (a) above. 
(b) For the inventory of an item on the Master Property Inventory List but no longer physically present, draw a line through the entry and make the appropriate notation as follows: 
•	“Transferred”: ECS transferred the item to another location or entity (i.e., another contracted entity, same coalition area). Note the change of location on the Master Property Inventory List and Property Tag Assignment Form (Attachment 1 and Attachment 5).  

•	“Stolen”: Someone stole or may have stolen the item. Note on the Master Property Inventory List the date the item was reported stolen. Attach a copy of a police offense report.  
•	“Lost”: The item is missing and determined lost. Note on the Master Property Inventory List the date the custodian determined the item to be lost.  
•	“Surplus”: The item is surplus and reported on the Surplus Property Form (Attachment 2) along with a signed Surplus Property Affidavit (Attachment 2).  
(c) Enter the date, required certification signatures, and other requested information on the last page of the Master Property Inventory List 
(d) ECS annually submits a copy of the Master Property Inventory List to the ELC no later than October 1 of each year and keeps the original form in the coalition’s or other contracted entity’s files. 

Additional Considerations--

In addition to tangible personal property valued at $1,000.00 or more, ECS maintains a listing of attractive or sensitive items (e.g., laptop computers, tablet computers, iPads, digital cameras) costing more than $400 but less than $1,000.00 . Although state rules do not require ECS to record such items on the Master Property Inventory List, the portability and desirability of such items necessitate additional safeguards related to their control, assignment, and use. The failure to maintain a listing of attractive or sensitive items increases the risk of loss or theft of such items without timely detection by management. 

If the custodian discovers property during an inventory that the coalition or other contracted entity has not included on the inventory forms but that meets the requirements for accounting and control, the custodian must create an inventory form for the item upon location. After appropriate investigation to establish the ownership of the item, the custodian must add it to the property records or, if the custodian cannot reasonably establish ownership, ECS may dispose of the item consistent with Rule 69I-73.005, F.A.C and in the manner provided by law applicable to surplus property, pursuant to Sections 274.05 and 274.06, F.S. The custodian delegate must not personally inventory items for which the custodian delegate is responsible. 

Upon request, ECS must make the master inventory list available for inspection by the Office of Early Learning and the Early Learning Coalition of North Florida to assure compliance with applicable federal and state requirements.  
Maintenance Procedures and Adequate Safeguards of Equipment 
Federal regulations require that the custodian implement adequate maintenance procedures to ensure the equipment is kept in good condition and safeguards to prevent loss, damage, or theft of the property. The Office of Early Learning staff, the ELC or independent contracted auditors/monitors may review support documentation to ensure compliance with this requirement. 
Transferring Property Within the Coalition 
ECS must document the transfer of grant-purchased property from one office to another, or from one location to another within the coalition, by updating the new physical location on the Master Property Inventory List (Attachment 1) and the North Florida Internal Transfer Form (Attachment 3). 

Lost or Stolen Grant-Purchased Property 
Upon completion of a physical inventory or other discovery, the custodian must reconcile inventory records as appropriate. This includes comparing the data listed on the inventory forms with the individual property records. The custodian must investigate noted differences such as location, condition, and custodian and correct as appropriate. Alternatively, the custodian must relocate the item to its assigned location and custodian in the individual property record. Further, the custodian must promptly report to management items not located during the inventory process for thorough investigation. If the investigation determines that someone stole or may have stolen the item, the custodian must update the individual property record at the time of determination and complete the Missing Property Form (Attachment 4), and file a report filed with the appropriate law enforcement agency describing the missing item and circumstances surrounding its disappearance. 
Disposition of Equipment 
If the custodian has no need for the equipment, the custodian must perform the following tasks – 
•	ECS has a disposition guidance in place may follow its guidelines consistent with Sections 274.05, 274.06, and 274.07, F.S. and Rule 69I-73.005, F.A.C.  
•	When ECS legally disposes of equipment in accordance policy or state statutes, ECS must record the following information on the individual property record for each item: (a) date of disposition; (b) authority for disposition (resolution of the governing body properly recorded in the minutes as Section 274.07, F.S., requires); (c) manner of disposition (sold, donated, transferred, cannibalized, scrapped, destroyed, traded); (d) identity of the employee(s) witnessing the disposition, if cannibalized (e.g., the process of dismantling portions or components of a property item to repair, replace, upgrade, or extend the useful life of other property items), scrapped, or destroyed; (e) for items disposed of, a notation identifying any related transactions (e.g., receipt for sale of the item, insurance recovery, trade-in); and (f) for property certified as surplus, reference to documentation evidencing that the coalition or contractor disposed of such property in the manner Section 274.05 or 274.06, F.S., requires. 

Use of Equipment - Priority of Disposition 
When original or replacement tangible personal property acquired under a grant or sub-grant is no longer needed for the original project or program, the custodian must use the tangible personal property in connection with its other federally-sponsored activities, if any, in the following order of priority: 
(1) Programs, projects, or activities the HHS awarding agency sponsors; 
(2) Programs, projects, or activities other HHS awarding agencies sponsor; then 
(3) Programs, projects, or activities other federal agencies sponsor. 

Transfer of Property Records 
ECS must transfer to a disposed property file, upon disposition of the item, the individual property record for each item of which the coalition or other contracted entity lawfully disposes. 
Retention of Records 
Documents relating to the acquisition and disposal of tangible personal property must be retained throughout the life of the property and for a minimum of five (5) years following final disposition. If any litigation, audit or claim remains unresolved at the expiration of the aforementioned periods, then such records must be retained until all outstanding issues have been resolved. 
Responsibilities 
It is the responsibility of ECS to establish and implement policies and procedures for ensuring that all these laws, regulations, and rules are appropriately adhered to. It is the responsibility of ECS staff to be knowledgeable about the federal and state requirements, as well as local policies and procedures, and to ensure that all applicable laws, regulations, rules, policies, and procedures are appropriately implemented. Failure to abide by these federal and state requirements can result in auditing or monitoring exceptions, and it may negatively impact the ability ECS to meet its program goals and objectives.  
History 
Original.—OEL-PI-0039-06 (June 23, 2006). Revised.—OEL-FG-0049-08 (September 24, 2008). Revised – FG 12.04 Tracking Disaster Costs, (August 2012). Revised.—OEL-FG-0004-12 (December 11, 2012). Revised May 15, 2014. Reissued November 26, 2014. 
Attachments 
Attachment 1 – Master Property Inventory Form
Attachment 2 – Surplus Property Form and Surplus Property Affidavit
Attachment 3 – North Florida Internal Transfer Form
Attachment 4 – Missing Property Form 
Attachment 5- Property Tag Assignment Form

SRAD02 ECS Inventory Guidelines for North Florida

Inventoried items are all listed on the Master Inventory Coalition Form.  An “inventoried item” meets the following guidelines and requires a Coalition property tag number: 

•	everything over $1000 (per item)

The Custodian is the person or agency entitled to lawful custody of tangible personal property. This custodian is responsible to ensure all applicable federal and state requirements related to the management of tangible personal property are met. The SVP of Administration and Compliance is the designated custodian for ECS. 
The Custodian Delegate is the person acting under the custodian’s supervision to whom the custodian has delegated property custody, and from whom the custodian receives custody receipts. The custodian delegate shall not personally inventory items for which they are responsible. The Training Manager is the designated Custodian Delegate for ECS. 
All Staff

Prior to purchasing any inventoried item, staff must do the following:

1.	Discuss and gain approval from supervisor.

2.	Follow all purchasing procedures, including prior approval policies.

3.	When completing the purchase order, please also complete the Fixed Asset Form. It is imperative that all sections are thoroughly completed. 

Prior to moving any inventoried item, staff must do the following:

1.	If you are unsure if an item is “inventoried”, please check the master list for North Florida H:\CCRR\Inventory\current inventory (Attachment 1). All applicable information should be completed: 
•	ELC Tag #
•	Other Tag#
•	Property Description (make, model & year)
•	Serial number
•	Condition
•	Grant
•	Title vests in recipient or federal government
•	Percentage of federal participation
•	Funding Source
•	Check or PO (payment)
•	Acquisition date & cost
•	Location address and location site
•	Date last inventoried
•	Initials of person completing the inventory
•	Any applicable comments & information about disposal.
2.	Get approval from their Supervisor (and IT Supervisor if it is computer equipment).

3.	Complete the Internal Transfer Form for North Florida H:\CCRR\Inventory\INTERNAL TRANSFERS (Attachment 3)

4.	Ensure that all sections of the form are completed. 

Staff should not dispose of property. If an item is no longer required or does not function and repairs are not being ordered, please inform the Training Manager and complete the transfer form.  Note: The Training Manager will not be placing work orders and is not responsible for the actual transfer of items. 

If the condition of an item has changed, please notify the Training Manager via email and IT Supervisor if it is computer equipment immediately via Help Desk Ticket.

All electronic property not in use must be stored at ECS Central Office in IT Storage and considered for surplus status, unless an exception has been granted by the supervisor.

If any property becomes “missing”, the Department Supervisor must inform the Training Manager immediately & OEL policy must be followed.  The form can be found at   H:\CCRR\Inventory\MISSING PROPERTY FORM (Attachment 4)

Supervisors 

Please ensure that all employees have a complete understanding of the purchasing procedures, including all forms, such as the Internal Transfer Form, Missing Property Form, Fixed Asset Form, etc.  

When signing a purchase order for everything over $1000 (per item) ensure that the Fixed Asset Form is thoroughly completed.

IT Department

IT Department staff will follow the same guidelines as staff in regards to property transfers and condition changes.

Prior to new or reconditioned Coalition equipment being installed or delivered, the IT Staff will contact the Training Manager to obtain a Coalition tag.

IT Staff will cleanse all items for surplus and prepare it for either pick-up or disposal and document actions on H:\CCRR\Inventory\SURPLUS ITEMS (ATTACHMENT 2) 

The IT Supervisor will determine the condition of equipment on a yearly basis and notify the Training Manager of all changes to the FAS Inventory List and the Master Inventory List.

Coalition-owned equipment may only be used by staff funded at least in part by the Coalition.

Fiscal Department

Once the purchase order and fixed asset form are completed and forwarded to the fiscal department, a copy of the fixed asset form will be forwarded to the Training Manager.

Once the item arrives and all paperwork is processed through the fiscal office, upon request, the fiscal office will provide copies of the purchase order, invoice, bids/quotes, and payment information to the Training Manager.

Staff Accountant

Once paperwork on new items is processed, the Staff Accountant will enter the information from the Fixed Asset Form into FAS.  

On a quarterly basis, the Staff Accountant will forward to the Training Manager the general ledger detail so it can be cross-referenced with the Master Inventory List.

The Staff Accountant and the Training Manager will meet as needed to review the FAS Inventory List for correctness.

Training  Manager

The Training Manager will check the Internal Form regularly and update the Master Inventory List and the FAS Inventory List.

The Training Manager assigns property tags.  North Florida property tags are housed with the Contract Manager.  If there are five or fewer NORTH FLORIDA property tags, the Contract Manager notifies the ELC of NORTH FLORIDA’s Inventory Manager to order additional tags. 

As changes in the Master Inventory Coalition Form occur, the Training Manager will update the inventory spreadsheet, highlight new items, and forward to each Coalition’s Inventory Manager. 

After a new item is purchased, delivered, assigned a property tag, and the Master Inventory Coalition Form is changed, the Training Manager will request the purchase order, invoice, bids/quotes, and payment information from the fiscal department.  Once copies of this information are made – one will be placed in the inventory notebook housed with the Training Manager and one will be sent to the Coalition.