Creating a fixed asset audit checklist is extremely beneficial for government offices. It provides users with a starting point before they begin what should be a regularly scheduled exercise.
Financial Records Accuracy
Fixed asset audits verify the accuracy of government financial records, which can eliminate costly errors come tax time. Having a clear and accurate picture of the fixed assets in their possession also helps government entities make budgetary decisions based on facts, not guesswork. Subsequently, they can avoid duplicate purchases or find themselves several months down the line without a critical asset.
Audits can also reveal the presence of any ghost assets, or assets that are missing or no longer usable but haven’t been recorded as such in the government office’s records. Ghost assets are, quite literally, money thrown out the window, as their owners continue to pay insurance on them and include them in their tax liabilities.
Another great benefit of having a fixed asset audit checklist is the reduction or even elimination of internal and external fraud. Any organization – government or otherwise – that doesn’t keep up with its fixed assets makes it that much easier for fraud to occur. That deception can take place through theft from an employee or outsider. Or, when IT fixed assets aren’t properly maintained and updated, they become more susceptible to hackers, which can have far-reaching consequences.
Tracking depreciation is an important component of fixed asset management. A fixed asset audit checklist can help government entities stay on top of depreciation and ensure that they’re maintaining accurate records.
Compliance with Governmental Regulations
Speaking of accurate records, state and local government organizations are subject to the regulations established by the Governmental Accounting Standards Board (GASB), specifically the Generally Accepted Accounting Principles (GAAP), which require transparency in financial reporting. Government organizations that follow a fixed asset audit checklist are more likely to maintain consistency between audit and ledger, and therefore follow the GAAP.
This blog provides a thorough overview of the elements government offices should include in their fixed asset audit checklists. For example:
- The details of your fixed assets, including quantity, location, ID number, depreciation, rate, accumulated depreciation, original cost, additions/deletions
- Verification that for purchases as well as the sale of fixed assets, proper authorization has been obtained from the appropriate authorities
- If discrepancies are found upon inspection of physical assets, ensure that books are adjusted
In addition, this checklist provides auditors with a helpful stand-alone self-evaluation tool.
In the long term, any government organization is best served by a fixed asset tracking platform that they can use to outsource the auditing function – and much more. Using a platform enables government offices to focus on other priorities without sacrificing the accuracy of their records. Ultimately, that accuracy reduces the waste of taxpayer dollars. It also saves government employees significant time by eliminating the frustrating exercise of having to hunt down lost fixed assets. A fixed asset tracking platform centralizes all asset data, so the entire lifecycle of every government fixed assets lives in one, easy to access location. Depreciation both simple to calculate and accurate. Users may also create custom reports, set up notifications to remind them of routine equipment maintenance, and can generate work orders when assets require repair.
Asset Panda’s fixed asset tracking platform requires no extensive training to master and is completely customizable. Using our free mobile app, government entities can track their assets any way they want and conduct routine audits – all from the smartphones their employees already carry. To learn more, visit assetpanda.com
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