1) Are responsibilities for initiating, evaluating, and approving capital expenditures, leases, and maintenance or repair projects adequately segregated from those for project accounting, property records, and general ledger functions?
2) Are responsibilities for initiating capital asset transactions adequately segregated from those for final approval, or committing government resources?
3) Are responsibilities for the project accounting and property records functions adequately segregated from those for the general ledger function?
4) Are responsibilities for the project accounting and property records functions adequately segregated from those for the custodial function?
5) Are responsibilities for the periodic physical inventories of capital assets assigned to responsible officials having no custodial or record keeping responsibilities?
6) If EDP is used, is the principle of segregation of duties maintained within processing activities?
B) PROCEDURAL CONTROLS
1) Do authorization procedures and controls include the following?
a) Identification of those individuals authorized to initiate capital asset transactions and clear definition of their authority?
b) Guidelines with respect to key consideration, such as prices to be paid, acceptable vendors and terms, asset quality standards, and the provision of grants or bonds (if any) financing the expenditures?
c) Preparation of a separate capital projects budget?
2) Do executive- or legislative-approval procedures include the following?
a) Required written executive or legislative approval for all significant capital asset projects or acquisitions?
b) Procedures for authorizing, approving, and documenting sales or other dispositions of capital assets?
c) Procedures for approving decisions regarding financing alternatives and accounting principles, practices, and methods?
d) Procedures for obtaining grantor approval, if required, for the use of grant funds for capital asset acquisitions?
e) Subjecting grant-funded acquisitions to the same controls as internally funded acquisitions?
f) Requiring supplemental authorizations, including, if appropriate, those of the grantor agency, for expenditures in excess of originally approved amounts?
3) Do project accounting procedures and controls include the following?
a) Engaging a qualified employee or independent firm to inspect and monitor technically complex projects?
b) Establishing and maintaining project cost records for capital expenditure and repair projects?
c) Reporting procedures for in-progress and completed projects?
d) Procedures to identify completed projects, so timely transfers to the appropriate account can be made?
e) Review of the accounting distribution to ensure proper allocation of charges to capital asset and expenditure projects?
f) If construction work is performed by contractors, procedures to provide for and maintain control over construction projects and progress billings?
g) Exercising the right to audit contractor records during project performance?
h) Audits of contractor compliance with Equal Employment Opportunity (EEO), Davis-Bacon (Act), and other regulations and contract terms, in addition to costs?
4) Do asset accountability procedures and controls include the following?
a) Detail property records for all significant self-constructed, donated, purchased, or leased assets?
b) Accountability for each asset?
c) Periodic inventory of documents evidencing property rights (ie; deeds, leases, etc.)?
d) Physical safeguards over assets?
e) Ensuring purchased materials and services for capital expenditure and repair projects are subjected to the same levels of controls as exist for all other purchases (receiving, approval, checking, etc.)?
f) Periodically comparing detail property records with existing assets?
g) Investigating differences between records and physical counts and adjusting the records to reflect shortages?
h) Ensuring capital assets are adequately insured?
i) Subjecting lease transactions to control procedures similar to those required for other capital expenditures?
j) Properly identifying equipment by numbered tags or other means of positive identification?
k) Carrying fully depreciated assets in the accounting records as a means of providing accounting control?
l) Monitoring the appropriate disposition of property acquired with grant funds?
5) Do general ledger procedures include the following?
a) Periodic reconciliation of the detail property records with the general ledger control accounts?
b) Accounting records, controls, and procedures to:
c) Distinguish between capital-projects fund expenditures and operating budget expenditures?
d) Identify operating budget expenditures to be capitalized as capital assets?
e) Distinguish between capital and operating leases?
f) Govern depreciation methods and practices?
g) When costs are charged against federal grants, depreciation policies or methods of computing allowances in accordance with standards outlined in OMB circulars or grantor agency regulations?
h) When costs are not charged against federal grants, depreciation charged to grants should be adjusted accordingly?
i) Are the accounting records adjusted promptly (both the asset and related allowance for depreciation) when items of plant and equipment are retired, sold, or transferred?