Kansas Department of Administration

01-a-021 - Capital Outlay Policy Raising Capitalization Threshold to $5,000 and Policy for Safeguarding Assets (June 21, 2001) (Supersedes 00-a-021, Supplements 01-a-018) (Supplemented by 02-a-017)

Posted on October 21, 2021 at 12:49 PM by Kansas Department of Administration

INFORMATIONAL CIRCULAR NO. 01-A-021 (Supersedes 00-a-021, Supplements 01-a-018 )
DATE: June 21, 2001
SUBJECT: Capital Outlay Policy Raising Capitalization Threshold to $5,000 and Policy for Safeguarding Assets
EFFECTIVE DATE: July 1, 2001
A & R CONTACT: Bill Perry (785) 296-7217 (bill.perry@da.state.ks.us)
Gary Bond (785) 296-2287 (gary.bond@da.state.ks.us)
APPROVAL: Approved by Dale Brunton
SUMMARY: Raise the capitalization threshold to $5,000 for inventory purposes and establish requirement for agencies to establish a policy for safeguarding assets.


Effective with fiscal year 2002 business, the capital outlay/inventory items will be defined as any item with a useful life expectancy of one year or more and costing $5,000 or more. These items must be coded to the sub-object 4XX0 series. Items purchased in fiscal year 2002 and costing between $500-$4,999.99 will be considered as "non-inventory capital outlay."

Agencies have the option of coding items costing between $500-$4,999.99 to either sub-object 4XX0 or 4XX9. If coded to 4XX9 these items will not appear on the Capital Outlay Report (DAFR8460). If your agency wishes to use this report as a tool to track items with a unit cost between $500 and $4,999.99 for internal purposes, you may do so by coding the items to 4XX0.

Only those items with a useful life expectancy of one year or more and costing $5,000 or more are to be (1) maintained on the agency's inventory listing that is used by the Division of Accounts and Reports during the periodic physical inventory inspections and (2) included in the inventory summary totals submitted annually to the Division of Accounts and Reports.

The capitalization policy for buildings and building improvements (sub-objects 4200 and 4209) remains as stated in Informational Circular 01-A-018.

Although the threshold for reporting capital outlay/inventory items has been raised, agency managers are reminded that they continue to be responsible for safeguarding all assets for which they are responsible. In order to make employees aware of this responsibility, and also to ensure that there is one person in each agency responsible for the tracking of agency assets, all agencies should establish a policy for the safeguarding of state assets. Each agency should also appoint a property management officer to serve as the lead person within the agency for all asset management issues. As the Division of Accounts and Reports conducts the periodic agency reviews of inventory, we will be verifying that the agency has such a policy in place. The policy on the safeguarding of assets should address the topics listed on the attachment to this informational circular.

When submitting encumbered items for DA-118 transactions for fiscal year 2001, agencies should continue to use the current capital outlay coding policy to record these items in STARS.

Items under $5,000 may be deleted from the agency inventory listing immediately and should not be included in the FY 2001 summary totals provided to the Division of Accounts and Reports. Items that appear on your Capital Outlay Report (DAFR8460) in amounts less than $5,000 for the remainder of FY 2001 should be disregarded and not added to the agency inventory listing used by the Division of Accounts and Reports during the periodic physical inventory inspections.

These revisions will be updated in the Uniform Expenditure Classification of Expenditure Sub-object Codes filing (P.P.M. No 7,002) on the Division of Accounts and Reports web site (www.da.ks.gov/ar/ppm/ppm01001.htm) in the future.

DB:JR

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