·         Assigning custodian responsibilities for each asset, asset type, and asset location.

·         Complying with risk managing requirements and using due professional care.

·         Maintaining accurate and reliable account records for assets and inventories, as well as reconciling asset database additions.

·         Conducting an annual physical inventory of all assets. (Should be reported to relevant person or departments).

·         Immediately investigating missing equipment and reporting the disappearance in a timely manner.

Designation of custodians:

 ·         Custodianship involves the responsibility of safeguarding an asset, or a group of assets. Usually, a custodian should be designated for each individual, type or location of asset.

·         The custodian is usually an employee who uses the asset. (Immediate supervisor, director, or employee specifically employed to monitor and safeguard the assets).

·         The custodian’s responsibilities are to endure that the assets are properly maintained, used for their intended purpose, and any information regarding the assets are properly reported. (Acquisitions, transfers, disposals, movements etc).

·         There should usually be a written method to communicate the responsibilities of custodianship for assets owned by or used by the organization.

Monitoring and Verification:

·         Custodianship needs to be monitored on a periodic basis.

Shared Responsibilities:

In large organizations, shared responsibility is common. (Example; pharmacy inventories may be the responsibility of the medical director rather than the business manager).

·         Any inventory variances or changes will have to be explained.

·         Lines of responsibility involving assets and custodianship duties should be regularly reviewed to ensure regular control regardless of organizational structure.

Risk management responsibilities:

·         Ensuring the proper care of assets and equipment. (Making sure they have adequate protection against theft, fire, or anything else that could cause the assets to be damaged or lost).

·         Equipment should be in rooms with locked doors and secured by cable.

·         Highly portable items require additional protection. (Laptops, computers, video recorders and players, audio-visual equipment).

·         Thefts are too be reported to the proper authorities.

·         Adequate maintenance procedures should be developed to keep property in good condition.

·         Control systems should be developed to ensure adequate safeguards against loss, damage or theft of property. Any loss, damage or theft should be investigated and properly reported.

·         Periodic risk assessments should be made to determine if proper precautions have been taken for the protection of assets. Preventative measures should be taken to limit risk where possible.

·         There should be a permanent record created of all asset purchases and minor equipment expenditures.

Risk Management Reports: 

·         Risk management reports are different from asset records. (Example; risk management reports are used to determine reimbursements for losses and include all insured property).

·         Risk management valuation is based on an estimate of replacement cost whereas financing accounting records are based on historical (acquisition) cost.

Segregation of Duties:

·         Applies to safeguarding of assets. (Generally, one person should not control a process from beginning to end). Dividing responsibilities decreases risk.

Segregation of duties for assets includes three functions:

·         Authorization - Includes authorizing purchase, disposal, and transfer of assets. Purchase documents, such as purchase orders. Authorization of adding, transferring or deleting records. 

·         Record Keeping – Includes the entry of purchases in management system. Also includes entry of the acquisition, transfer, and disposal of assets on database.

·         Custody – Entails maintaining physical control of the assets. Includes tagging the assets and performing the physical inventory at the end of the year. Control over assets can be strengthened further by having the physical inventory performed by someone other than the person who has custody of the assets. (Not always practical due to resource constraints).

Investigation of missing or stolen assets:

·         Losses sustained by mysterious disappearances or employee thefts may not necessarily be covered by the insurance contract. This mean that missing assets should be investigated immediately in order to either find them or at least determine the cause of their disappearance. Management should follow up on any matters where a lack of control is identified in the physical inventory process and take corrective action as necessary.

Disposal of Assets:  

                    ·       A number of requirements are needed for the disposal of assets. Disposal of assets should be done in accordance                                with state and federal requirements. 

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