Standard Operating Procedures Manual SOPs

Assets Management
“Fixed Assets Inventory Control (Dispose & Surplus
Management)”
Presented to:
Independent Elections Commission (IEC)
Funded and Supported By:
United Nations Development Programme (UNDP)
Kabul- Afghanistan
Date: March 2016/ Hoot 1394
Prepared by: BDO- Jordan & SH

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 Assets
Issue date Hoot–1394/ March 2016 Department
Management

SOP No. Assets Management-03 Revision No. and date NEW

Asset Management
Implemented By Manager and Store Review authority
Keeper

No. of pages 24 Signature/ stamp

Glossary:
 Useful life: The useful life is defined as the period of time over which an asset is expected to
be available for use.
 Warehouse: The place where the goods, equipment and inventories are stored and protected.
 Consumable Material: The goods were it has less value and it’s not required to be recorded
against the transfer request, like (paper, stationery, IP material and etc.).
 Non-consumable Supplies: The goods which have to be recorded and stored, the value is
important to reach in a depreciation period of time.
 Equipment’s: The non-consumable goods that are used in government and non-government
organizations, which will be depreciated over period of time, such as (furniture, carpet,
machinery, computer equipment, electrical equipment, medical equipment, etc.)
 Depreciation: The loss of the nature of the goods caused by normal use in period of time.
 Inventory Records: Consists of all transactions related to the purchase and procurement,
storage and distribution of goods and assets within an organization.
 Inventory: Is the verification of all the relevant goods and items as per the records of
warehouse or store department.
 Store: The goods and assets which will be available in the warehouse.
 Surplus assets: The goods that are available and it will be necessary for the next two months
 Outmoded goods: The goods, which are all functional, but in terms of time period and
technical improvements on technology it is not applicable.
 Wear out goods: The goods and assets that are lost by more usability.
 Defective goods: The goods and equipment that their period of durability is lost within a
minor damage.
 Lost goods: The goods and assets that disappeared in the specified location but the
possibility of theft and robbery do not exist.
 Stolen goods: The goods that has been stolen and it will be available in the context theft

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  Asset Management - The process whereby a large number of supplies of an organization
gathered and maintained in a comprehensive database or assets management system which
may includes but not limited to (staff assets and organization property).
 Stock Inventory Annual Audit - A physical examination of all fixed assets for each
responsible unit within the organization. The audited asset data should reconcile with the
data maintained in the Asset Management System such as: Asset Class / Assets
Specifications/ User Description / Inventory Tag / Serial Number / Physical Location, etc.
 Data Security - The overall process for implementing policies and procedures for the
handling of storage media throughout the Asset Recovery process
 Disposal - The act or process of getting rid of something. A disposal (retirement) is
recorded whenever an item is physically disposed of (by sale, scrapping, etc.).
 Furniture – Items such as desks, conference tables, etc. usually no moving parts to wear out
and there is no real substitute to make the item obsolete, and typically they can be repaired
or refinished if needed.
 Office Equipment – Items within the office environment other than copiers and computers.
 Printing Equipment – Items associated with making books and other publications.
 Radio Equipment – Items associated with radio communications.
 Recycle - To put or pass through a cycle again, as for further treatment. To use again,
especially to run it in the process once again .
 Refurbished - To bring equipment back to specifications and condition that are consistent
with the same characteristics of the original unit
 Telecomm Equipment – Items associated with telecommunications.


Abbreviations
 CEO: Chief Executive Officer
 IEC: Independent Election Commission of Afghanistan
 SOPs: Standard Operating Procedures
 GoIRA: Government of Islamic Republic of Afghanistan
 GPM: General Procurement Manager
 SGM: Stock General Manager
 SK: Stock Keeper
 WF: Workers (Workforce/ Labors)
 ID: Individual Departments


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1. Introduction:
Fixed assets are very important to the daily operations of any organization. Proper
management of this type of property is a key element in any decision making process. Due
to the high cost of fixed assets, it is also important to maintain accurate records and
inventory controls to avoid hidden costs due to mismanagement or lack of precise
information.

2. Objectives:
- To apply transparency and accountability for IEC Assets and Properties;
- To store durable supplies in excess of entities’ current needs.
- To standardize fixed assets inventory control and be reliable source of reporting IEC
assets management.
- Manage stock levels according to historical use and projected needs.
- To pursuant the provisions of Article 10 for recording and documenting the receipt and
transfer of assets, and providing reports of receipts, transfers, and inventories to the
authorities.
- To be responsible for providing safe storage suitable to the types of assets, and keeping
the assets ready for delivery upon request.
- To develop and standardize stock inventory auditing procedures.
- To ensure proper and continuous control over IEC Assets.
3. Scope:
This SOP’s applies to all fixed assets recorded in the IEC Asset Management System within
a proper inventory control as personal property of IEC, which would be a source of control
for preventing (Theft, Stolen, Depreciation and Damages).
4. Key Personal Involved in Fixed Inventory Control
Task Authorized In charge Procedural Indicator
Inventory Form FS.7, FS.16 and Bin
SGM SGM/SK
Management Card,
Individual
Assets Request CEO Form FS.9 “official request”
Departments
Stock General Form FS.5, FS.16, FS.7 &
Assets Distribution CEO
Manger Bin Card
Inventory Database System,
Inventory Records SGM SGM, SK Stock Management Filling
System
Stock Management
Stock Annual Audit
Team/ Assigned
“Stock Inventory CEO Form FS.4 & FS.20
Inventory
Physical Check”
Committee
(Form FS.8)
Inventory Surplus Stock General
CEO (Form FS.4)
Management Manger
(Form M.7)

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4.1. Acronym:
1. CEO (Chief Executive Officer/ DG)
2. General Stock Manager (GSM)
3. Stock Keeper (SK)
4. Individual Departments
5. Inventory Committee (In. Co)
6. Procurement Committee (P. Co)
7. Stock Request Form (F.S.9) Annex #: 1
8. Distribution Record Form (F.S.5) Annex #: 2
9. Delivery Receipt Form (Form M.7) Annex #: 3
10. Staff property stock card (F.S.16) Annex #: 4-5
11. Stock Record Cards (Form F.S.7) Annex #: 6
12. Bin Card Annex #: Annex #: 7
13. Staff Property Record Form Annex #: 8
14. Return of Surplus Supplies (F.S.8) Annex #: 9
15. Stock Inventory Form (F.S.4) = Stock Physical Check Form Annex #: 10
5. Fixed Assets Inventory Control Roles & Responsibilities:
5.1. Stock Management Department at Main Office
- Must maintain the IEC Asset Management System within a proper and organized system
with accurate postings of capital asset transactions.
- Must provide organizational units with inventory tags to affix to assets.
- Must review and approve Asset Acquisition and Asset Disposition forms.
- Must process required asset accounting entries.
- Must prepare annual financial statement data for capital assets.
- Must schedule and perform physical audits of fixed assets at least every once a year, as well
as periodically perform unscheduled audits.
- Must re-audit any assets failing the audit after the 30 day correction period allotted the
organizational unit.
- For surplus equipment must approve / coordinate the final disposition of Department all
surplus assets.

5.2. Units of the Organization both at Provisional (sub-offices) and Main office
- Must assign at least one employee as the Asset (Responsibilities must be Inventory Tracker
with the responsibility of assigned by Unit Head) recording and maintaining accurate asset
records in the IEC Asset Management System.

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- To obtain the role of Asset Inventory Tracker, the selected employee(s) must complete the
Asset Inventory Tracker training class should be provided by IEC Stock Management
Department.
 Must exercise stewardship responsibilities over all assets.
 Must create asset records within the Asset Management System for all fixed assets.
(Creating asset inventory records for all fixed assets)
 Must apply inventory tags to assets immediately upon receipt.
 Must adjust asset assets records within the IEC Asset Management System when
required (i.e. changes to the responsible cost center; changes to the asset location, adding
serial number, etc).
 Must notify Asset Management of any asset ownership (title) changes needed. If
ownership change involves research equipment acquired on a sponsored project, contact
Sponsored Research Services for approval prior to contacting Asset Management.
 Must obtain written approval from Stock Management Department prior to disposing of
an asset.
 Must dispose of assets according to the IEC Asset Disposition Policy.
 Must regularly conduct a physical inventory, verify the existence, condition and location
of all assets subject to audit, and reconcile to the IEC Asset Management System.
 Must make all audit finding corrections within 30 days of notification from Asset
Management.
 Final responsibility for assets subject to audit rests with the head of the organizational
unit.

5.3. Stewardship Responsibilities:

- Organizational units are responsible for stewardship responsibility of all IEC assets under
their control, not just the assets tracked in the IEC Assets Inventory Database System. This
responsibility includes, but is not limited to:
- Basic safeguarding and physical security;
- Complying with IEC assets procedures and record-keeping;
- Maintaining assets in good working condition;
- Using assets safely and properly; and,
- Ensuring that appropriate insurance coverage is in place when required for sponsored project
agreement;

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7. Fixed Assets Invrntory Control Principles
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STEP ACTIONS / OUTCOMES NOTES /
EXCEPTIONS
1. Storage and 1. While the assets physically counted and inspected by
Records of the Inspection Committee, documents transferred and - There is no
Assets submitted to Stock General Manager. specific assets
inventory database
2. All assets are moved to the Stock and located on the system at IEC
appropriate storage locations. Stock
3. The Form M.7 (Delivery Report Form) will be prepared Management
by General Stock Manager with the whole supplies Department.
details (specification of “items name, items description,
quantity, Unit, Unit price, Total price and the Total
amount of supplies delivered to stock of the
organization, plus the Date of supplies receipt, Purchase
order number, Place of supplies offloaded, the Name of
Supplier and a Short statement of the supplies receipt
will be noticed and signed (approved) by both Store
Keeper, General Stock Manager and CEO.
4. The stock management team will record the receipt of
the delivered assets based on signed and approved
documents into a Stock Record Card (FS7) and one
other copy in Bin Card.
2. Supply/ - Applying Stock
1- Through Stock Request Form (FS-9) individual
Assets Request Form
Request departments are required to apply for assets
(FS.9) is
(Individual distribution.
mandatory.
Requests) 2- For filling request form the head of department submit
the request to CEO for approval then forwarded to - Need Identification
Stock Management Department for distribution. should be applied.
3- Individual or staffs are not required to request for
second time assets they already use.
4- Assets 1. Applying the Form F.S 16 for fixed assets will be 1.1. For database
Inventory applied while the supplies (Fixed Assets) issued to the record hear it
Database individuals and/or departments. means (MS
Record Excel, MS,
2. Each employee of the organization will have an assets
Access any other
record or registry for the property they hold and use on
software’s)
their desk and this record form is known as Staff
through which
Property Stock Card (F.S.16). This form will be applied
the Stock
and filled while the assets (supplies) issued the end user/
Management
beneficiary.
Team will have
3. The SK and SGM both will update the stock record record of whole
cards (F.S.7) based on the received supplies recorded on employees of the
M.7 From. organization.

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5- Distribution 1. The distribution will be take place as per the - Exchange of
of Assets department’s forecasts or need (Request Form) that has Assets in
(Issuing of been made on the planning or forecasting stage. The between the
Supplies to formal distribution process is applying the distribution organization
the end user) of supplies by filling the goods/supplies distribution departments will
form (From F.S.5) and the use of this form is mandatory be applicable by
for any types of assets. Stock
2. Each department will place its own orders Management
independently and there is no expectation that these Department.
orders will be coordinated. - The distribution
3. On approval of the Request Form (FS-9) by all the of assets for each
required signatories, SGM will prepare three copies of and every
the Distribution Form (FS-5) which must be formally individual/
departments
approved within the CEO and then communicated back
to the requested departments. should be made
with the whole
4. Each asset will have the (FS-16 form) with the whole specification of
details of assets and assets user and this form is the Assets and
designed to record assets as a property, filled once the the User.
assets procured and stored. While redistributing the
assets to another user, no need to fill new form (FS-16). - Assets or
The description of new user will be filled in the back Equipment
side of the form FS-16. owned by the
IEC shall be
5. Fixed Assets records shall be maintained accurately and identified to
shall include the following information: indicate IEC
a) Description of the equipment/ assets Ownership.
b) Manufacturer’s serial number, model number or
other identification number
c) Source of the equipment, including the purchase
doc number (supplied by IEC or Donated)
d) Acquisition date (or date received)
e) Location and condition of the equipment and the
date of distribution
f) Unit and cost
g) Ultimate disposition data if applicable
h) Assets user/holder specification like name, title,
department (designations)
6. Fixed assets, which are normally included in the Asset
Inventory Database System, include but are not
restricted to: (Vehicles - Computers, printers, facsimile
machines and photocopier - Audio-visual equipment/
Office furniture such as desks and filing cabinets,
Tables, Chair/ Major specialized equipment).
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 7. While distribution of supplies takes place by the Store
Keeper or Stock General Manager, the stock out of any
quantity of supplies which is distributed should be re-
adjusted in the Stock Report Cards (F.S.7) which is
used as a Stock Book and the Bin Card which is made
for each item and hanged on the items’ shelf. These
two forms show the balances of stock-in and stock-out
and these forms filling on the delivery of supplies
(stock-in) and the distribution of supplies (stock-out).
8. The relevant stock cards and reporting database are
updating on daily biases by the Stock Keeper or General
Stock Manager.
9. Ordering from each department should be limited on
quarterly biases, except urgent requests or immediate
purchases.
10. The Distribution Forms (F.S 5) then send to the
Control Department for their approval.
11. The GSM should provide a suitable area at Stock for
inspections and administration, through which the
team could check the contents of the order while they
are distributing supplies.
6- Stock - A physical
1.All fixed assets of the organization require the Office of
Inventory inventory of
Asset Management to schedule and perform physical
Audit/ Stock equipment shall
audits of fixed assets at least once a year, as well as
Physical be taken and the
periodically perform unscheduled audits.
Check results reconciled
2.Organizational Units are responsible for stewardship of with the
IEC assets under their control. equipment
3.The scope of the audits focus on performing a physical records at least
inventory of each fixed asset for which an once a year.
Organizational Unit is responsible, verifying inventory
tags are properly displayed on the asset, the asset is in
the location (building/room) identified on the fixed asset
listing, the asset record includes a manufacturer serial
number and that IEC policies regarding Fixed Assets
are being adhered to.
4.Prior to the audit the Organizational Unit must verify
the location, inventory tag number and serial number for
each asset and submit any needed Asset Acquisition,
Asset Disposition, or Replacement Tag Requests. This
allows time for the Office of Asset Management to
make accounting entry(s) to reflect additional
acquisitions or dispositions and generate requested
replacement tags and bring them along on the day of the

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 audit.
5.Following the audit, the Office of Asset Management
prepares a Draft Audit Report summarizing the audit
results and findings specifically on (Stolen, Damage/
Broken, Depreciated and Surplus Assets).
7- Reconciliation 1. Surplus assets will be managed by Office of Assets - Assets Surplus
of Surplus, Management through filling of official forms (FS.4/ will be managed
Depreciated, FS.7/ M.7/ FS.8). as per Article 89
Stolen and Procurement Law
2. Surplus assets should be re-distributed among the
Damaged of Afghanistan.
Organization Units and records should be updated.
Assets
3. IEC shall report to the Ministry of Finance on the
quantity and description of surplus and depreciated - For stolen, theft
assets and shall recommend, on a confidential basis, the and damage
price that they desire to receive from disposition of such assets the cost
goods. will be charged
4. The report shall be provided to other entities to in the assets user
determine whether any such goods would meet their or assets holder,
needs. Educational entities must be specially notified of if the finding of
surplus computer equipment and the provision of investigation
transport of such equipment by the entity disposing of committees
it. shows the
unconsciousness
5. For stolen, theft or/ and damage assets as per the of the assets user/
decision of CEO an investigation committee will be holder
assigned and will report the CEO.
6. Beside the annual stock inventory audit the Office of
Assets Management should apply and perform a
periodically monitoring and evaluations for the various
fixed assets management processes.
7. A control system shall be in effect to insure adequate
safeguards to prevent loss, damage, or theft of the
equipment. Any loss, damage, or theft of the equipment
shall be investigated and fully documented; if the
equipment was owned by the IEC, the recipient shall
promptly notify to the IEC Stock Management Unit.
8. Adequate maintenance procedures shall be implemented
to keep the equipment in good condition.

8- Selection of a Theoretically, a depreciation method should be selected - An availability of

depreciation that achieves the most realistic reflection of the loss in depreciation
method: economic value of the assets being used or, for cost methods increased
accounting purposes, that allocates a reasonable portion of ambiguity in the
the cost-of an asset to the revenue produced. process of
recording assets
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There are two commonly used depreciation approaches: depreciations.

1- Uniform rate of Straight-line Depreciation:

- Using the straight-line method of depreciation, the cost
or other basis of the asset, less the estimated salvage - The current
value, is divided by the number of years of useful life depreciation
to arrive at an annual depredation charge. methods are
referenced from
- This method is simple to apply and will provide UNDP POPP as
satisfactory results where the useful life and salvage of 04 June 2015
value of an asset can be estimated with some degree of
accuracy. “Straight-line depreciation appears to be a
crude procedure that is unsupported by economic
logic. Never the less, internationally, it is the most
widely used method of allocating the costs of fixed
assets to accounting periods by way of depreciation
charges.
2- Accelerated Depreciation:
- This approach includes the Declining Balance Method,
which produces a more rapid write-off in the early
years of life, followed by smaller charges as an asset
nears its termination. As with all depreciation
methods, this method requires an estimate of the useful
life of the asset.
- An accelerated method of depreciation is often applied
in situations where there is a high rate of technological
change and uncertainty that may render an asset
obsolete long before its physically useful life is
completed. Some assets are subject to rapid
deterioration in the early years and thus become
unusable as second hand units with only scrap value
remaining. Nevertheless, such assets may continue to
function for a considerable period with proper
maintenance.
- This disparity between loss in market value and loss of
utility value makes it desirable to pick up the major
loss in value for these types of assets in the early years
through an accelerated depreciation method. (pg 64.
UNDP POPP as of 04 June, 2015)

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3- Accounting The useful life is defined as the period of time over which - The useful life for
Useful life an asset is expected to be available for use. In determining various categories
the useful life of various items under Furniture and of assets has not
Equipments the following factors have been considered. been established
- The expected usage of the assets by the entity. or developed in
Public Sectors in
- The expected physical wear and tear on the assets. Afghanistan
- Technical obsolescence practices.
- Legal or similar limits on the use of the assets,
such as the expiry of related assets.
- The accounting
The following are the useful lives of various classes of
useful life of
Assets. (pg 65-72). UNDP POPP as of 04 June, 2015)
assets in this Sop
Class Depreciable Life is referenced from
IT & Communication 8 – 20 years UNDP POPP as
Equipment of 04 June 2015.

Heavy Machinery & other 20 years

equipment
Vehicles 12 years
Furniture & Fixtures 15 years

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9. Annexes: Stock Management Official Standard Forms

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 10. References:
- Afghanistan Assets Management Guidelines 1967
- Procurement Law of Afghanistan 2009
- Afghanistan Accounting Manual 2011

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