NPMA CPPS Certification exam questions and answers

Property Management The exercise of a retaining or governing influence over the acquisition, use, and disposition of personal property Property Control Variety of Names Property Accounting, Fixed Asset Accounting, Inventory Control, Material, Property Control, Asset Management. Property Management Office PMO Department within an org that is responsible for controlling or managing property Property Manager PMO is headed by Property Manager is responsible for: establishing, guiding, managing, and maintaining an efficient property system, communicating effectively with other departments and functions, and developing and presenting training in property related subjects Property Control System is comprised of Property Management Personnel, processes, and mgmt info. systems (MIS). (Written policies, procedures, operational guidelines, and related records, and MIS that facilitates these functions). If org contracts with the government, property manager must have a working relationship with all sponsor reps Ownership Having legal or rightful title to property either owned by the org or is provided by a sponsor under some kind of agreement (sponsor has ownership). Property is either owned by or provided. Ownership of property allows the owner to make any and all decisions regarding the property It is the property professional job to support the property owner in making and implementing effective decisions regarding the property Duties, responsibilities, and potential penalties should be documented in a formal agreement between the provider and the recipient (contract, grant) Accountability means to posses and have use of the property of another with delegated duties and responsibilities, subject to penalty in case of default. Those accountable do not have legal or rightful title to the property Key elements of property accountability provider, recipient, specific duties and responsibilities, and penalties in case of default Who is accountable to who for property? Contractor is accountable to government. If gov. provides funding to acquire the property, NASA is accountable to government. Transfer of accountability When accountability shifts from one entity to another.... may or may not include physical relocation of assets, but will always include a change in accountability for the property Approvals for giving and accepting orgs both must have appropriate levels of mgmt authority approval, and both contracting officers need to approve Approvals for transfers must be obtain before the transfer occurs, in writing, either within award doc, a letter, or email, and made part of the file for audit trail transfer doc must include date of transfer, the purpose of the transfer, description of property, contract numbers Interdepartmental transfers These occur routinely within orgs, usually result of org changes, shift of work between departments, or excess assets are needed by another department Interdepartmental transfer occurs when property and accountability shift from one org to another confusion results when accountability rests above the department level. This is still sometimes called interdepartment transfer, but it is a transfer of responsibility, not accountability Responsibility means to be answerable for a trust or obligation. Less formal than accountability While accountability includes responsibility Responsibility does not include accountability Key distinction from property professionals standpoint (on accountability and responsibility) is that one is accountable to someone for the property, and is responsible for certain actions such as maintenance or storage Property Control System must incorporate methods of safeguarding physical assets of an org, periodically verify their existence, status and condition of the property, and ensure accuracy of records enable participants in process to comply with internal rules, and fed state and local regs, and provide audit trail Property Records are the foundation of the property control database. An effective, user friendly property system provides a mechanism through which an org can define and plan for its property needs and be able to acquire, manage and dispose of property to meet them in a cost effective and efficient manner primary drivers behind need for property function include fiscal responsibility and stewardship, and investment and resource mgmt, and compliance with org needs and external requirements Property function is responsible for establishing: an infrastructure that will facilitate property mgmt through the entire life cycle of an asset. Includes developing and implementing policies, procedures, guidelines, record keeping system, establish and communicate specific roles and responsibilities of all participants To increase compliance the unit best suited to the task should be made responsible for the performance of steps in the process The level of complexity of the processes is driven by the needs of the org, with steps within each process being determined by the structure of the responsible business unit. Organizational placements and Structure of the property function varies for org to org Most effective org placement of property mgmt is within the financial management or accounting function adequate authority Property must have this to define, implement, and maintain business processes that may touch every level of the org. visibility and management support It is critical that property receives this necessary to ensure its policies, procedures, and guidelines are viewed as value added and important to conducting everyday business Its usually through external compliance requirements and persistent communication about the impact of effective property control that adequate visibility and management support are attained Org Structure within the property function refers to how the staff is organized and how their respective responsibilities are delineated. Org structure within property directly impacts their ability to conduction every business while providing the service and support that property must offer its internal and external customers Characteristics to consider when implementing the structure of a property system Centralized vs decentralized Combo of central with support from decentralized network of property custodians single individual responsibility vs fully staffed property division or department Functional groupings within the department by business process, support to business team, area of specialty, type of property, etc Key factors in deciding which property structure model to use - Type and volume of property managed - Compliance requirements and risk - current levels of compliance vs desired level of compliance -geography of service areas - number of and skill sets of property staff -complexity of business processes and data mgmt systems - financials resources - time available to be dedicated by people who have property responsibility through the org Key participants in property management CFO, Controller, PM, PMO, Directors, Departmental property administrator, prop custodian, asset (end) users, physical inventory group PMO has the responsibility of ensuring an effective property control system is established and maintained. Records is crucial to the entire process. It is through records that the existence of all property under the jurisdiction of the PMO is established and verified. Property records are updated during the entire life cycle of property items according to the record keeping requirements for each type of property and the orgs policies and procedures. Usually necessary to retain all purchase documentation for for the life of the asset Normally, the responsibility will remain with who a department head, manager or custodian. OPP defines who is responisible Acquisition cost includes all costs associated with an item including shipping, taxes, and installation. Determination for what needs to be controlled is determined by business, regulatory and contract agreement needs Two key questions when determining the control population of property What will be controlled, to what level of detail will it be controlled? Compliance refers to satisfactorily following the orgs established policies, procedures and operational guidelines. Level of formality and details of policies, procedures and operational guidelines is dependent on the size and complexity of the org. Potential consequences of non-compliance include Increased serveillance and potentials findings by internal/external auditors -The need to implement and monitor corrective action plans -Increased liability and financial risk -increased insurance costs -damaged credibility with customers -Increased borrowing costs Generating reports is one of the most important and frequently used means by which info about property location, volume, and utilization is communicated. Reports are a tool for verifying and measuring compliance with established standards, identifying trends in system performance, exposing potential areas of concern, and highlighting exceptional levels of compliance. The effects of implementing changes to processes can be understood and evaluated Activity Reports provide info by which the performance of the property function is evaluated. -provide mgmt tools for monitoring the effectiveness of the processes. -early detection of a problem Financial Reports -these may include depreciation reports -quarterly financial activity reports -year end reconciliation reports -inventory reports Compliance reports -specifically required by senior mgmt within the org, or by sponsor -or in response to regulatory requirements (legislative activity) -NOT optional System monitoring reports monitor the behind the scenes database fucntions essential for an online system to work. -include verification of successful periodic data feeds or interfaces with other systems, evaluation of user access to systems and notification of system errors Utilization/Reutilization reports measures how effectively the org is using and re-using its assets Exception reports identifies errors and omissions in data that must be manually monitored and corrected. Loss, Damage and Destruction LDD Reports address specific incidents that must be reported to the legal authorities, risk mgmt and or sponsors Data Summary Reports for Tax Purposes Detailed property records which provide audit-able back-up for depreciation expense, an important component of cost used in reporting federal and state taxes. In addition, aid assessors in determining property taxes based on where assets are located.