The purpose and effect of this rulemaking is to update certain definitions to agree with generally accepted accounting principles, to increase the current thresholds for recording tangible personal property inventory, to add the term “attractive ...

 

DEPARTMENT OF FINANCIAL SERVICES

Division of Accounting and Auditing

RULE NOS.:RULE TITLES:

69I-73.001Definitions.

69I-73.002Threshold for Recording Property.

69I-73.003Recording of Property.

PURPOSE AND EFFECT: The purpose and effect of this rulemaking is to update certain definitions to agree with generally accepted accounting principles, to increase the current thresholds for recording tangible personal property inventory, to add the term “attractive items” and its definition, and to make other necessary updates to the rules.

SUMMARY: The rule amendments update definitions, add the term “attractive items” and its definition, and increase the thresholds for recording tangible personal property inventory.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The Department’s preliminary economic analysis indicated the proposed rules will not result in an adverse impact or regulatory costs in excess of $1 million within five years.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 274.02 FS.

LAW IMPLEMENTED: 274.02 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE,TIME AND PLACE SHOWN BELOW(IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: February 18, 2020, 11:00 a.m.

PLACE: Larson Building, Room 142, 200 East Gaines Street, Tallahassee, Florida 32399

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Ryan Nolan (contact information above)

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69I-73.001 Definitions.

The following terms, as used in Rule Chapter 69I-73, F.A.C., are defined as set forth below:

(1) “Attractive Items” means tangible personal property used in operations that has a cost less than an established capitalization threshold and that requires special attention to ensure legal compliance, protect public safety, and avoid potential liability, or to compensate for a heightened risk of theft.

(2)(1) “Control Accounts” means summary accounts designed to control accountability for individual property records. Unlike individual property records that which establish accountability for particular items of property, control accounts accumulate the total cost or value of the custodian’s property and, through entries to the control accounts documenting acquisitions, transfers and dispositions, provide evidence of the change in that total cost or value over periods of time as well as the total cost or value at any time.

(3)(2) “Cost” means the amount paid to acquire or procure property acquisition or procurement cost (i.e., invoice price plus freight and installation charges less discounts). In determining cost, the value of property exchanged by the custodian in satisfaction of a portion of the purchase price of new property shall not be deducted from the full purchase price regardless of any property “traded in” on the new property.

(4)(3) “Custodian” has the meaning set forth in section 274.01(2), F.S.

(5)(4) “Custodian’s Delegate” means a person acting under the supervision of the custodian to whom the custody of property has been delegated by the custodian and, from whom the custodian receives custody receipts.

(5) “Data Processing Software” has the meaning set forth in section 119.011(6), F.S. Data processing software is not considered to be property within the meaning of these rules.

(6) “Depreciated Cost” means cost less accumulated depreciation.

(6)(7) “Financial System” means the fund accounting process used by the local government for recording cash and other financial resources, expenditures, and other financial uses, together with all related liabilities and residual equities or balances.

(8) “Fiscal Year” means the governmental unit’s fiscal year established pursuant to law.

(9) renumbered to (7). No change.

(8)(10) “Identification Number” means a unique number assigned and affixed to each item of property to identify it as property held by the custodian and to differentiate for the purpose of differentiating one item of property from another.

(9)(11) “Property” has the meaning set forth in section 274.02(1), F.S. Data processing software, as defined in section 119.011(6), F.S., is not considered to be property within the meaning of this rule chapter.

(10)(12) “Unaccounted for Property” means property held by a custodian, subject to the accountability provisions of section 274.03, F.S., that which cannot be physically located by the custodian or custodian’s delegate, and which property has not been otherwise lawfully disposed of.

(11)(13) “Value” means the worth or acquisition fair market value at the date of acquisition acquisitions for donated property.

Rulemaking Authority 274.02 FS. Law Implemented 274.01, 274.02 FS. History–New 3-25-08, Amended ___.

PROPOSED EFFECTIVE DATE:  October 1, 2020

 

69I-73.002 Threshold for Recording Property.

All property with a value or cost of $5,000 $1,000 or more and a projected useful life of 1 year or more shall be recorded in the local government’s financial system as property for inventory purposes. For the purpose of this rule chapter, “cost” is used if the property is purchased and represents the purchase price of the property item; “value” is used if the property is donated and represents the worth or acquisition value of the property item at the date of donation. Attractive items with a value or cost less than $5,000 shall be recorded in the local government’s financial system as property for inventory purposes.

Rulemaking Authority 274.02 FS. Law Implemented 274.02 FS. History–New 3-25-08, Amended ___.

PROPOSED EFFECTIVE DATE:  October 1, 2020

 

69I-73.003 Recording of Property.

(1) Maintenance of Property Records – Governmental units shall maintain adequate records of property in their custody that . The records shall contain, at a minimum, the information required by this rule these rules.

(2) Individual Records Required for Each Property Item – Each item of property shall be accounted for in a separate property record. Related individual items which constitute a single functional system may be designated as a property group. A property group may be accounted for in one record if the component items are separately identified within the record. Examples of property items that may be accounted for as a property group item subject to group accountability include:, but are not limited to, modular furniture, computer components, book sets, and similar association of items. All property group items, the total value or cost of which is equal to or greater than $5,000, $1,000 shall be inventoried under this rule.

(3) Content of Individual Property Records – Each property record shall include the following information unless the information listed below does not exist for the property in the record:

(a) through (e) No change.

(f) Name, make, or manufacturer if applicable.

(g) Year and and/or model(s) if applicable.

(h) Manufacturer’s serial number(s) if any, and if an automobile, vehicle identification number (VIN) and title certificate number if applicable.

(i) If an automobile, the vehicle identification number (VIN) and title certificate number.

(j)(i) Date acquired.

(k)(j) Cost or value at the date of acquisition for the item or the identified component parts thereof.  When the historical cost of the purchased property is not practicably determinable, the estimated historical cost of the item shall be determined by appropriate methods and recorded. Estimated historical costs shall be identified in the record and the basis of determination established in the governmental unit’s public records. The basis of valuation for property items constructed by personnel of the governmental unit shall be the costs of material, direct labor, and overhead costs identifiable to the project. Donated items, including federal surplus tangible personal property, shall be valued at acquisition fair market value at the date of acquisition. Regardless of acquisition method, the cost or value of a property item shall include ancillary charges. necessary to place the asset into its intended location and condition for use. Ancillary charges are costs include expenditures that are directly attributable to placing the asset into its intended location and condition for use asset acquisition, such as freight and transportation charges, installation costs, and professional fees.

(k) through (m) re-designated (l) through (n). No change.

(n) The local government may include any other information on the individual property record that the governmental unit may care to include.

(4) Control Accounts – A governmental unit-wide control account showing the total cost or value of the custodian’s property shall be maintained. A governmental unit may keep additional control accounts for property to the extent deemed necessary for different funds or sub-funds. Control accounts shall not be established by periodically summarizing the costs or values recorded on the individual property records. Rather, Eentries to control accounts shall be derived from documents evidencing transactions affecting the acquisition, transfer, or disposition of property items and shall be posted contemporaneously with entries to the individual property records.

(5) No change.

Rulemaking Authority 274.02 FS. Law Implemented 274.02 FS. History–New 3-25-08, Amended ___.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Ryan Nolan, Division of Accounting and Auditing

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: CFO Jimmy Patronis

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: January 22, 2020

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: January 10, 2020