Our experts harness decades of experience to provide reliable capital equipment inventory and reconciliation services. We specialize in serving the unique needs of healthcare, higher education, research, nonprofits, government entities (city, county, state, and federal), as well as the private sector.
For institutions that have significant organized research and receive outside grants and funding for equipment, an accurate record of equipment and their location can be worth millions of dollars in funding. We sat down with industry expert Andy Campbell to discuss the nuances of capital equipment inventory and how to make it work for you.
Attain Partners (AP): What is Attain Partners’ approach to capital equipment inventory?
Andrew Campbell (AC): At Attain Partners, our Asset Management & Valuation Services practice focuses on the accounting, compliance, and regulatory needs of our clients which may vary concerning the acquisition, capitalization, reporting, and verification of assets and their facilities. At a basic level, we count and record important details about all the moveable assets—but it’s so much more than that. While our starting point is fixed asset data from our client, our experts perform a physical inventory by walking room by room and building by building, to ensure all assets are recorded.
When finished, we take our complete inventory and compare it to the client’s data in a process known as reconciliation. The purpose of the reconciliation is to verify assets and to make note of assets not found (potential retirements or lost assets) and new assets. Our team will affix barcode or RFID tags to new assets to ensure they can be tracked in the future. Our reports are easy to read and provide a really strong foundation for accurate capital equipment depreciation reporting, regulatory reporting, audit, and supporting the institution’s facilities and administrative rates agreement.
Our report and inventory data help the accounting team to easily follow up with department leaders to verify retirements, track down missing assets, and on occasion discover elicit activity or fraud.
AP: Why is it advantageous to hire Attain Partners for this type of work?
AC: We are leaders in capital equipment inventory, and our members have a deep knowledge of and experience with the equipment used in university, research, hospital, and government environments. We help clients overcome the challenges they face, thrive on simple or complex projects, and our team is efficient to meet tight deadlines and reduce the stress and strain a complete inventory often causes an organization. Our knowledge and experience allow our team to work much faster in order to get more done in a shorter time than most client teams. Our attention to detail and professionalism is recognized among our peers, the industries and sectors we serve, and also among auditors.
In addition to being able to complete the inventory efficiently, we customize our approach to meet a client’s needs. For example, a hospital cannot shut down an operating room for us to take inventory. So, when we are planning our project, we proactively schedule off-hour work to minimize impact to the client. Our teams will work in the early morning, late evening, or even a weekend to meet the needs of our most sensitive client departments or schedules.
We also help cities, counties, and other agencies clean up poor fixed asset records and address audit findings relating to assets and irregularities or inability to account for taxpayer funding sources. Small and medium governments are often behind the times due to funding shortfalls, shortage of personnel, turnover, and archaic systems. 10-column paper and Excel spreadsheets have gone the way of the dinosaur in their usefulness in today’s society.
In short, our knowledge of equipment across a wide array of organizations and industries, fixed asset accounting regulations, depreciation reporting, physical inventory and reconciliation, and asset valuation makes Attain Partners the firm of choice to solve a wide range of problems, to remain compliant, and the drive benefit to the bottom line.
AP: Why is a capital equipment inventory essential for organizations?
AC: Great question. Four reasons come to mind why organizations are paying closer attention to their assets. First and foremost, organizations that receive federal funding and reimbursement of F&A costs know that accurate capital asset records and depreciation expense for research activities can be worth 2 to 4 points of the research overhead rate—worth millions of dollars annually. And it all hinges on auditors being able to find the assets and proper computation of depreciation. Regardless of your rate situation, each institution must also consider the consequences of an A-133 finding for assets funded by the federal government. Our team’s focus is on improving the quality and reliability of asset data, reducing the risk of audit findings, and maximizing any available benefit that improves your bottom line and makes the finance team’s life easier.
The second reason relates to ongoing changes to the financial accounting standards and regulations. The consistent evolution of the regulations requires organizations to re-examine their policies, procedures, practices, and financial reporting to determine if any material weaknesses exist. Auditor findings are a red flag that cause major issues for a finance team and an equipment inventory can clean up years of mismanagement. Our experts keep you up to date.
A third motive relates to private sector companies and organizations that find themselves subject to a real or personal property tax bill. They can benefit from a periodic inventory to clean up the fixed asset records and remove (dispose of) the extraneous cost of ghost assets that were retired long ago but not removed from the records, causing a bloated property tax bill. Our team helps reduce your bills.
Sadly, the fourth need for an equipment inventory is often recognized too late. Earlier this year a story was reported from a major institution that discovered many millions of dollars of equipment had been misreported internally and sold by an employee over several years. Besides being highly embarrassing to the organization, the loss of funds can be very significant to an organization’s bottom line. Our inventory services help to keep your team honest.
AP: How does Attain Partners make capital equipment inventory easier and more efficient for higher education, healthcare, nonprofit, and research institutions?
AC: We provide an outsourced, fully staffed, complete inventory of everything they own requiring minimal input from the organization’s personnel. We tailor our approach to meet their access requirements.
Our depth of knowledge of assets allows us to correctly describe the asset, reconcile that inventory to a capital record in the accounting system, and generate depreciation reports and findings to the client that are accurate, complete, and reliable for financial or regulatory reporting.
AP: Walk us through the difference that barcode and RFID tagging can make for an institution.
AC: Over the past decade, the cost of information technology has dropped dramatically, especially for tracking assets. First came embossed metal asset tags. Those were replaced with barcode tags that were faster to scan and verify. And in recent years, RFID tags have become much more cost-effective. RFID stands for radio frequency identification. What this means is the same technology that is used in retail stores to protect merchandise and parcel logistics is also available for equipment inventory and tracking valuable assets.
At the press of a button, the RFID scanner sends out energy that the tag collects. When the RFID tag has enough energy it sends a signal back to the scanner and reports “I’m here.” The really cool benefit is that in a laboratory or a room with a lot of equipment, like a network closet or computer data room, many tags will respond at the same time while being scanned from up to eight feet away. That’s cool and saves a lot of time for future asset inventories.
More sophisticated RFID systems use the RFID tags in concert with the local area wifi network and special ceiling readers that constantly “ping” the area. Critical assets in healthcare can be monitored for precise location in the event of emergency use. Others rely on network RFID to track “walkable” assets in case an employee attempts to remove them from the premise, more of an enhanced security measure.
Though there is an investment to install RFID tags for the first time, organizations will benefit greatly from this transition. Manual inventory gave way to barcode tag inventory, resulting in more accurate work performed by fewer people. This is an important consideration for organizations with limited resources, decentralized purchasing and receiving, or limitations imposed by staff turnover or the recent Covid pandemic. Now RFID technology is allowing this tedious process to be completed faster and cheaper—about a 25–35% reduction in time to take inventory.
Additional benefits exist in research environments. We often see rooms that are dedicated to animal research or experiments that cannot be disturbed. An RFID scanner has the ability to send its energy through a window to read RFID tags that are within range. This minimizes our intrusion on experiments and means we can move more quickly and take less time of our client’s personnel.
With COVID, resources are limited—RFID tags let teams work more efficiently. RFID also allows distancing between our team and the client members, making for a safer environment for everyone.
AP: Can you share a client success story and some of the outcomes Attain Partners helped them achieve?
AC: Our client is a leading hospital and medical research institution in NYC. There, we performed a full inventory of all their research assets, about 20k assets. The results of the inventory allowed the depreciation of the assets to be coded to organized research activity and were used to prepare their F&A proposal to the government. During the audit, the government was able to locate selected items across many departments. Additionally, our inventory directly substantiated several points on the F&A rate agreement which was worth several million dollars annually to the institution. The F&A rate allows the institution to receive funding from the government on federal research projects to cover their investment in equipment, buildings, and infrastructure.
Let’s say the research base at your institution is $50 million, a capital equipment inventory may support anywhere from $1–2 million of F&A reimbursement annually. In our experience, organizations that do not pay close attention to equipment often lose millions of dollars that could have supported their research activities.
Attain Partners helps maximize the benefit to many institutions.
AP: What is your favorite part of working with clients on capital equipment inventory projects?
AC: I love solving problems for my clients and making them successful.
For me and my team, it’s really about helping our clients attain as much as they can from their assets, whether it’s related to regulatory requirements, research reimbursements, or knowing what they have and being able to actually utilize their assets in a much better way.
AP: How can someone learn more information about our approach to capital equipment inventory?
About the Author
Andrew Campbell is a Senior Manager at Attain Partners. He has over 30 years of experience advising clients in fixed asset management and depreciation reporting, building componentization studies, useful life studies, equipment inventory and reconciliation, and asset valuation services.
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