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Contents

About This FAM

Responsible Agency: Office of the Comptroller General
Issued: Aug 2009
Last Updated: Aug 2009

Attachments

Approval Announcements

1. Introduction

Under subsection 12 (2)(c)(ii) of the Financial Administration Act (FAA), the Comptroller General is required to establish and maintain systems and procedures to control public property. Public property, according to the FAA, is comprised of both personal and real property. This policy focuses on personal property, both tangible and intangible assets (except for inventories for consumption or use.)

Under the direction of Financial Administration Manual (FAM) 1102, it is the responsibility of the Director of Finance, or equivalent (DFA) to (FAM 1102 3.3):

  1. adopt internal control systems and methods prescribed by the Comptroller General; and
  2. monitor inventories and other asset control systems.

In doing so, both the Comptroller General and DFA ensure that Government of the Northwest Territories (GNWT) assets are properly controlled.

The basis of effective asset control begins the moment an asset is received. The first and most important step of effective asset control is ensuring that physical record of the asset has been accounted for and properly entered in the asset tracking system as required. Without this first step in asset control, proper monitoring and control of assets cannot occur.

It is important to have information about the total stock of property (tangible and intangible) for which the Government has stewardship responsibility. In order to do so, the Government uses the System for Accountability and Management (SAM) as an electronic solution to the management of government owned tangible capital assets and controllable assets.

To ensure proper control over GNWT assets, custodians are appointed over property. These custodians of property are GNWT staff having custody or control of GNWT property items.

Controllable Assets

Controllable tangible assets (CTA) are public property, similar to TCA’s except that they are valued less than $50,000. The threshold floor for controllable tangible assets is $500. Some of this property includes moveable assets with life expectancies of more than one year, but are attractive targets for theft and/or are readily convertible to cash. In other cases, improvements to real property that typically is not readily moveable, but valued under $50,000 and above $500 would be classified as a CTA.

Unlike tangible capital assets over $50,000, which are amortized over the useful life of the asset, CTA’s are expensed in the year of acquisition. See FAM 2201.

Intangible Assets

The FAA requires the Comptroller General to control all public property (see FAA section (12)(2)(c)(ii)). Public property includes, "all personal and real property that belongs to the Government, not including public money." Personal property is defined as, "any asset, whether tangible or intangible, that is not real estate." Thus, the Comptroller General is required by the FAA to control personal property, which includes intangible assets. Intangible assets are assets such as:

  • databases;
  • franchises;
  • concessions;
  • licenses;
  • patents;
  • trade-marks;
  • copyright; andresearch.

Refer to Appendix A for an exhaustive list of intangible assets.

Equipment on Loan

On occasion, it is deemed necessary that GNWT property is loaned to various other agencies or individuals to carry out certain tasks. It is necessary for the GNWT to have control over GNWT equipment that leaves the owner’s premises. Guidance on this topic may be found in the following directives.

Donations and Gifts

A donation or gift is a voluntary transfer of property for which the donor expects and receives nothing of value in return. A donated asset should be treated in accordance to the asset category which it occupied upon receipt. For example, if a donated asset is a capital asset, it should be treated as any tangible capital asset. (see also FAM 2004, Donations, Gifts, Bequests).

2. Definitions

“Controllable asset”

means an identifiable non-financial item that:

  • has a useful economic life extending beyond an accounting period,
  • is not consumable except through normal wear and tear;
  • does not lose its identity or become an integral part of an item except where the item increases the number, value, original specifications or life expectancy of an existing item owned or operated by the Government;
  • is for use in operations and not for resale;
  • possesses physical substance unlike intangible assets such as patents and goodwill;
  • is procured, issued and replaced on a basis of departmental acquisition programs (for example, computer equipment, furniture, vehicles and outboard motors);
  • has an acquisition cost of: $500 or more per item and is of an insurable nature i.e., susceptible to loss or theft;
  • does not exceed the threshold value of $50,000 (which would cause it to be classified as a tangible capital asset) (See Appendix B);
  • has future economic benefits associated with it that are likely to be received; and,
  • does not include either inventory held for consumption or use or resale.1
"Intangible assets" means special rights, privileges, or competitive advantages that provide future benefits to the Government. Such assets lack physical substance and include items such as certain deferred charges, patents, copyrights, trademarks, and mineral rights.2

 

1 Adapted from PS 3150.04

2 Adapted from CICA, s. v. “intangible assets.”

3. Policy

Departments shall account for and report all controllable assets and intangible assets regardless of their condition or state in accordance with the following directives until disposal or write-off. In doing so, departments will ensure the efficient, effective and ethical use of all GNWT resources.

 

4. Directives

4.1

Assets meeting the definition of controllable assets, which includes those assets identified in Appendix B must be accounted for and recorded in the System for Accountability and Management (SAM). with the following detailed information for each asset type:

  1. Description and unit identification, including serial number and any inventory tag number;
  2. Acquisition/replacement cost;
  3. Acquisition date;
  4. Method of acquisition (for example, purchased, self constructed, donated, or leased);
  5. Geographical location; and,
  6. Custodian or contact.
4.2

Departments must designate a specific coordinator to monitor and administer over their controllable assets (including for boards and agencies, where applicable) and who will ensure the following principles are followed:

  1. controllable assets are authorized and expensed to the proper accounting records and in accordance to established procedures and guidelines
  2. custodial responsibility of controllable asset records is assigned;
  3. timely and accurate records are maintained;
  4. duties are segregated so that custodians of assets do not also keep records and authorize their acquisition or disposal;
  5. losses are reported to management on a timely basis (see FAM 4101);
  6. the maintenance of assets is properly planned;
4.3 Where controllable assets are acquired through special purpose funds (i.e., Vote 4/5 arrangements), those assets shall be recorded in the SAM for the duration of the period that the GNWT has beneficial ownership or responsibility/control over those assets.
4.4 All controllable assets must be controlled for under the supervision of a designated custodian. The custodian will have custody and control of the designated GNWT property
4.5 The custodian must delegate control over record keeping of the asset to another GNWT employee who does not have custody or control of the relevant GNWT property.
4.6 For inventory control purposes the designated record keeper shall conduct an annual review of all attractive assets under the control of the custodian and submit a report citing all relevant losses in accordance with FAM 4101.
4.7 Disposal of any controllable asset must be in conducted in accordance with FAM 2305.
4.8

Equipment on Loan

The proper expenditure authority must approve the loan of any GNWT equipment.
4.9

GNWT equipment shall not be loaned for personal reasons. Loan permission shall only be granted in order to conduct GNWT business. Loan approval is only be granted if the proper expenditure authority is convinced that the removal of such equipment will not:

  1. interfere with the normal operation of the department;
  2. cause unreasonable wear and tear on the equipment;
  3. cause expense to be incurred by the department; and
  4. provide for profit-making activities.
4.10

The individual who has been authorized to use GNWT equipment on loan must sign a form prepared by the owner department indicating the following:

  1. Name (either personal of company);
  2. Contact information;
  3. Description of the equipment on loan;
  4. GNWT tracking identification on asset (if applicable);
  5. Location of the asset;
  6. Expected date in which the asset will be returned;
  7. Signed consent stating that the lessee has read and understood that they will be responsible for theft or other cause and/or any damage to the equipment. The responsible party will provide due care and security for the loaned equipment until it is returned to the owner department.

The physical location of equipment on loan shall not be altered without written notification identifying:

  1. the current location of the asset;
  2. the revised location of the asset – including a detailed description
  3. the reason for the change of location;
  4. the revised explanation of where the asset may be found;
4.11

Donations and Gifts

All donations and gifts shall be considered GNWT property, thereby requiring them to be controlled and monitored as with any other controllable asset, intangible asset or tangible capital asset.
 

5. Guidelines

5.1 Controllable Asset managers should also be familiar with the FAM 2201 series of directives on TCAs.
5.2 All attractive assets should be physically verified at least annually, either by cyclical or periodic counts. If, as a result of physical verification, significant differences from the accounting records are determined, such differences should be investigated and a report (including corrective action and/or recommendations) provided to the Director of Finance or equivalent of the department.
5.4 When declaring the “condition” of an asset the custodian is responsible for assigning a value to the present state of the asset, be it “excellent,” “fair,” or “poor.”
5.5 The information generated from property records required in this manual will be used to determine the total value of all property owned by or in the custody of each department. The establishment of accurate records and reporting is necessary to ensure that GNWT assets are adequately accounted for in accordance with generally accepted accounting principles (GAAP).
 

6 . Authorities and References

7 . Consequences from Failure to Comply

Failure to comply with policies and directives of the Financial Administration Manual may result in actions under Part X of the Financial Administration Act. The Government of the Northwest Territories may seek legal remedy in the Territorial Courts.