Control Over Items That are Not Capitalized Post

“Are we really doing this?” I thought to myself as a Council Member dove into the office supply budgets during a Saturday morning budget workshop. This was a 9-figure budget, but somehow, we were calculating per capita office supply costs by department. By the time he reached the Finance department, it was all about why our office supply costs were ‘too high.’ Explaining check stock and W-2 forms would’ve been a waste of time, so I waited patiently for this part of the hearing to end. 

The Police Chief, not to be outdone, started his own hearing by explaining the per capita cost of his office supplies. He even mentioned that if someone in his department needed a pencil, they had to fill out a form to be approved by Commandant Lassard. Naturally, another Council Member chimes in, “That’s a great idea. Why aren’t all departments doing this?”

I suddenly felt like I had entered an alternate reality where tracking pencils was a budget priority. Later, I asked the FOP President about this ‘innovative’ system. His response? “I don’t fill out that shit, I just walk down the hall to the Credit Union.”

While it’s fun to laugh at the absurdity, there are situations where inventory tracking is crucial, particularly for items that hold value or carry sensitive implications but don’t meet capital asset thresholds.

So here’s the takeaway:

1) Recommendation of GFOA

The Government Finance Officers Association (GFOA) recommends implementing internal controls over all capital-type items—even those not classified as capital assets on financial statements.

2) How to Apply This Best Practice:

Think about areas in your department where special controls are necessary:

· Legal compliance: Contractually bound items, especially those acquired through grants, need careful tracking.P

· Public safety: Weapons, cash for undercover operations, or evidence storage all require tight oversight to prevent risk.

· High-risk assets: Tech like laptops, iPads, or sound equipment are easy to lose or misappropriate.

To reduce the risk of mishandling:

· Track assets at the department level.

· Assign responsibility to a specific person for tracking.

· Maintain and update asset lists within departments, with random Finance audits and annual reporting.

3) Room for Improvement?

As your organization grows, tracking these items can become overwhelming, but technology can help. Tools like EZ Office Inventory or Asset Panda simplify asset tracking and life-cycle management, making the task less daunting and more efficient.

I sound like a broken record regarding tech solutions, but in this case, the efficiency gains far outweigh the cost of hiring additional staff. As AI evolves, I suspect this will get even easier. 

Just don’t start tracking pencils anytime soon.