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HCPSS / POLICIES

Policy 4040 – Fixed Assets

“The purpose of this policy is to ensure that the Board’s fixed assets are acquired, safeguarded, controlled, disposed of, and accounted for in accordance with state and federal regulations, auditor requirements, and applicable accounting pronouncements. This policy also addresses the following issues related to fixed assets:

  • General provisions about the property management system used to account for and control these assets

  • Ownership of the Board’s fixed assets

  • Assignment of responsibility and accountability for fixed assets

  • Capitalization thresholds for fixed assets.”

Policy Document

Implementation Procedures

I. Policy Value Statement

As a part of its obligation to publicly account for the resources dedicated to the education of students of the Howard County Public School System (HCPSS), the Board of Education of Howard County (Board) is responsible for compiling and reporting information on the system’s fixed assets to the county government and other entities as part of its annual financial statements. These assets, the tangible items that typically have significant value, include property, facilities, and other assets that make up and enhance the physical environments for HCPSS employees and students.

In addition to traditionally recognized fixed assets, the HCPSS acknowledges the importance of lease and subscription-based assets, which may not be currently tracked similarly to other fixed assets. These include, but are not limited to, leased equipment and software subscriptions. Therefore, the HCPSS must establish and maintain control over all such assets, including the development of systems and procedures to identify, record, and monitor with applicable accounting standards and reporting requirements.

II. Purpose

The purpose of this policy is to ensure that the Board’s fixed assets are acquired, safeguarded, controlled, disposed of, and accounted for in accordance with state and federal regulations, auditor requirements, and applicable accounting pronouncements. This policy also addresses the following issues related to fixed assets:

  • General provisions about the property management system used to account for and control these assets

  • Ownership of the Board’s fixed assets

  • Assignment of responsibility and accountability for fixed assets

  • Capitalization thresholds for fixed assets.

III. Standards

  1. The HCPSS Fixed Asset Management Database will track and monitor the movement of all fixed assets from one location to another to ensure accountability of fixed assets.

  2. All newly acquired or leased fixed assets are to be marked upon receipt and acceptance and labeled to identify the asset as HCPSS property.

  3. All fixed assets will be disposed of in accordance with Policy 4080 Disposition of Property.

  4. The principal/account manager/designee of each school or location will at least annually conduct a review of the fixed assets located in their school or location.

  5. The Office of Accounting will coordinate a physical inventory of Board assets every three (3) years.

  6. The Office of Accounting will coordinate a review of fixed assets at least annually. This review is incorporated into the annual audit scope performed by the system’s independent auditors.

  7. The Office of Accounting will produce and distribute annual fixed asset reports.

  8. Information on the fixed assets of the school system will be incorporated into the annual audited financial statements and the Annual Comprehensive Financial Report (ACFR) provided to the Superintendent and the Board.

IV. Responsibilities

  1. The Office of Accounting will maintain the Fixed Asset Management Database.

  2. The Chief Financial Officer will comply with the regulations and procedures of this policy.

  3. The Chief Financial Officer has overall responsibility for the Fixed Asset Management Database.

  4. The principal/account manager/designee will ensure their schools/programs compliance with this policy and its procedures.

V. Delegation of Authority

The Superintendent is authorized to develop appropriate procedures for the implementation of this policy within the limits set forth by this policy.

VI. Definitions

Within the context of this policy, the following definitions apply:

  1. Fixed Assets – A resource that meets all the following criteria:

    1. Is tangible in nature

    2. Has an extended useful life of at least one year

    3. Is not a repair part or supply item

    4. Has an acquisition cost of $5,000 or more.

    Items meeting the fixed asset criteria are classified by major categories, such as:

    1. Land

    2. Buildings

    3. Improvements to sites and facilities

    4. Furniture and fixtures

    5. Machinery and equipment

    6. Construction-in-progress

    7. Vehicles.

  2. Fixed Asset Management Database – A system of procedures to account for and report on the acquisition, depreciation, transfer, and disposal of all fixed assets.

  3. HCPSS Employee – An individual who is a permanent or temporary employee of the HCPSS whose compensation is paid in whole or part by the Board, including but not limited to, school-based administrators, teachers, substitute teachers, paraeducators, and other school-based and Central Office Support staff.

  4. Leased Asset – A leased asset is a physical or intangible item that HCPSS obtains the right to use through a contractual lease agreement, rather than purchasing it outright. The lease gives HCPSS the legal right to use the asset for a specified period, twelve (12) months or more, in exchange for regular payments to the lessor.

  5. Subscription Asset – A right-to-use arrangement obtained through a subscription agreement, typically involving access to software, digital services, or other non-tangible resources for a defined period, twelve (12) months or more. Unlike traditional asset ownership, subscription assets grant the subscribing entity access to services or technology without transferring ownership. These assets are governed by agreements that specify terms of use, duration, and payment obligations.

VII. Reference

A. Legal

  • Md. Ann. Code, Education Article, § 4-115

B. Board Policies

C. Relevant Data Sources

D. Other

  • Government Accounting Standards Board Statement 34, Basic Financial Statements for State and Local Governments

  • Government Accounting Standards Board Statement 87, Leases

  • Government Accounting Standards Board Statement 96, Subscription-Based Information Technology Arrangements (SBITAs)

  • Fixed Asset Transfer/Disposal Form (FIN-Form 240)

VIII. History

ADOPTED: November 26, 2002

REVIEWED: December 13, 2024

MODIFIED:

  • October 2, 2018

  • May 19, 2026

REVISED: May 12, 2011

EFFECTIVE: May 19, 2026

Policy History Key

  • Adopted-Original date the Board took action to approve a policy
  • Reviewed-The date the status of a policy was assessed by the Superintendent’s Standing Policy Group
  • Modified-The date the Board took action to alter a policy that based on the recommendation of the Superintendent/designee did not require a comprehensive examination
  • Revised-The date the Board took action on a that policy based on the recommendation of the Superintendent/designee needed a comprehensive examination
  • Effective-The date a policy is implemented throughout the HCPSS, typically July 1 following Board action.