(A) Capital assets. Assets that have a useful life of at least two years and have a cost greater than $5,000. Assets that are not capitalized (items less than $5,000) will be expensed in the year of acquisition.
(1) Exceptions.
(a) Office equipment that is customed to fit the needs of a particular office will be capitalized as a portion of the cost of the building or area in which they are located. All other office supplies and equipment will be capitalized if it meets the specific requirements for capitalization; and
(b) Inexhaustible assets, such as land, improvements, artwork, statues, and the like, will be reported at cost.
(B) Classifications. The following items are considered capital assets:
(1) Land. Consists of all lots, parcels, rights-of-way, easements, parks, law enforcement and emergency services facilities and acreage owned by the county. This includes all bodies of water and natural vegetation growing on the properties. The records of each unit must include a description of land owned by the unit, its location, amount of acreage, its acquisition date, and purchase price (if no purchase price, then appraisal value may be used);
(2) Infrastructure. Includes long-lived assets normally stationary in nature. The account for the cost of infrastructure must reflect the location and brief description identifying each road, streetlight, traffic signals, bridge, tunnel, drainage system, stormwater system, dam or lighting system owned by the unit;
(3) Buildings. Includes all structures erected by the county for purposes of conducting business, providing service, or facilitating work to the citizens of the county. This includes fixtures, systems, specifically designed equipment, porches, balconies, canopies, flagpoles, stairwells, fire escapes, patios, decks, and other attachments adding value to the building. The account for buildings must reflect the location of each building and the purchase price or construction cost and the cost of the improvement. If the building is a gift, then the account must reflect the appraised value at the time of acquisition;
(4) Improvements other than buildings. The account must reflect acquisition value of permanent improvements (not buildings), added to land such as fences, landscaping, parking areas, sprinkler systems, driveways, retaining walls, sidewalks, gutters, etc.;
(5) Machinery and equipment. This includes, but is not limited to, furniture, appliances, construction equipment, maintenance equipment, computers, data processing equipment, desks, safes, cabinets, books, cell phones, valued at purchase cost;
(6) Construction in progress. The cost of a project not completed is identified as "construction work in progress," and once construction is complete it must be inventoried with the assigned asset account; and
(7) Works of art and historical treasures. These items will be recorded at historical cost.
(C) Valuation (threshold). The county must maintain a complete list of capital assets owned which reflects their acquisition value until the items are retired, disposed of, sold, or traded in. Capital assets are valued based on historical valuation or the estimated historical cost "going price" at the time of acquisition, or consumer price index calculation.
(D) Infrastructure assets. All fixed assets will be valued at the unit or system level. If these costs exceed $5,000, they will be capitalized. Any expense related to the cost of making the asset operational may be included in this cost including the following:
(1) Legal and title fees, closing costs;
(2) Appraisal and negotiation fees, surveying fees;
(3) Damage payments;
(4) Land preparation costs, demolition costs;
(5) Architecture, engineering, and accounting fees;
(6) Insurance premiums during construction; and
(7) Transportation charges.
(a) Capital assets are to be recorded at actual cost, that includes all expenses to make the asset fully operational. If no cost is available, replacement cost, or historical cost index may be used.
(b) Fixed assets will be capitalized when they exceed the sum of $5,000.
(c) Donated or contributed assets should be recorded at their fair market value on the date donated.
(E) Physical inventory. All capital assets will be inventoried every year, including a physical inventory of anything valued over $250 to be added to the asset ledger for insurance purposes. A physical inventory will be the responsibility of the department head to account for all capital assets at year-end, as well as inventory items that are tracked and inventoried. The physical inventory will include the following items: asset description, year of acquisition, method of acquisition, funding source, cost or estimate cost and salvage value. This information will be housed in the county's reporting system.
(1) Responsibility of department heads and the Putnam County Auditor's Office are codified in division (I) of this section. It is the responsibility of the department heads to act as or to designate a steward for each piece of property. The steward will become the focal point for questions regarding the availability, condition, and usage of the asset, as well as the contact during the physical inventory process. This includes recording the receipt of the asset and arranging for repairs and maintenance.
(F) Depreciation methods. The county will be depreciating capital assets by using the straight-line method.
(1) Salvage value will be determined on an asset-by-asset basis. Depreciation will be calculated at year-end. Land is not depreciated according to general accepted accounting principles.
(2) Straight-line depreciation. All assets accounted for under the Capital Asset Policy will be depreciated using the straight-line method of depreciation. A gain or loss on disposal will be recorded. Following is a list of the most common useful lives:
(a) Vehicles - five years.
(b) Office equipment - five years.
(c) Office furniture - 20 years.
(d) Heavy equipment - ten years.
(e) Buildings - 50 years.
(f) Building components (HVAC systems, roofing) - 20 years.
(g) Leasehold improvements - useful life of asset or lease term (whichever is shorter).
(h) Land improvements - 20 years.
(i) Outdoor equipment - 15 years.
(j) Grounds equipment - (mowers, tractors, attachments) - 15 years.
(k) Computer hardware - three years.
(l) Computer software - five years.
(G) Capital asset acquisition and obsolescence. Any newly acquired capital assets with a value of $5,000 or more, as well as other miscellaneous acquisitions not defined as capital assets but valued at $250 or more for insurance purposes, are to be reported on the asset program prescribed by the Putnam County Auditor's office. Each department will have access to the program to add assets throughout the year.
(H) Capital asset disposition and transfer. Property should not be transferred, turned in for auction, or disposed of without approval from the department head and the Putnam County, Indiana, Board of Commissioners. A capital asset notification form should be sent to the County Auditor's office in all cases. The form may be used for transfer (change in location, account, department, or building) or disposal (retirement) of property. If approved, each department head responsible for detailing the disposition or transfer on the assets program.
(I) Responsibilities for inventory and reporting of capital assets.
(1) Responsibilities of county departments.
(a) Department heads are the stewards for each piece of property utilized by their department. The steward will be the focal point for questions for availability, condition, and usage of the asset.
(b) The steward shall be designated as the person to record the receipt of the asset, to examine the asset to make sure no damage was incurred during shipment, and to make sure the asset was received in working order. The steward is also responsible for arranging the necessary preventative maintenance and any needed repairs to keep the asset in working condition. The steward also ensures that the asset is used for the purpose for which it was acquired and that there is no personal or unauthorized use. The steward is responsible for reporting any loss, theft, or damage to the assets.
(c) Departments are to maintain inventories of all capital assets, including: a) those that are capitalized and reported on the county's capital asset inventory; and b) controllable assets with an acquisition cost of $4,999 or less and which are tracked and inventoried.
(d) Department heads are to report newly acquired assets, retired assets, transferred assets, and assets in use that previously were not included in the county's asset inventory to the Putnam County Auditor's Office. Department heads are required to use the Auditor's Office prescribed forms and to meet with the Auditor's Office, or its designee, if necessary, for the proper preparation of the capital asset reports.
(e) Department heads must abide by all Auditor Office deadlines for the reporting. Typically, asset reporting is to be completed by the first Friday of the first full week in January each year.
(f) Assets below the capitalization threshold but considered sensitive may include, but are not limited to, weapons, radios, computers, chain saws, small motor equipment and power tools. These minor but sensitive items shall be inventoried and controlled at the department level by the head of the operating department. Stated inventory shall be conducted annually. The County Auditor's office is to receive a copy of the inventory and/or updated inventories for minor but sensitive items.
(g) Department heads are responsible for ensuring that acquisitions of capital assets follow all policies, statutes, and regulations, including proper advertising, use of proper budgetary codes and accounting forms, and all required appropriation approvals.
(h) The Putnam County Commissioners and the Auditor's Office may conduct spot checks of the asset inventory and condition on an "as needed" basis.
(2) Responsibilities of the County Auditor's Office. The Putnam County Auditor's Office is responsible for ensuring that accounting for capital assets is being exercised by establishing a capital asset inventory that is updated annually for additions, retirements, transfers, and items retroactively added. The Auditor's Office is responsible for securing a fixed asset advisor for the county, if deemed necessary, and for the financial reporting of the capital assets, including depreciation expense and assets included in the inventory but not depreciated.
(Ord. 2023-07-03-2, passed 7-3-2023)