Header:
TEXAS ADMINISTRATIVE CODE
TITLE 34. PUBLIC FINANCE
PART 1. COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 5. FUNDS MANAGEMENT (FISCAL AFFAIRS)
SUBCHAPTER O. UNIFORM STATEWIDE ACCOUNTING SYSTEM
Date:
08/31/2009
Document:
34 TAC § 5.200 (2011)
§ 5.200. State Property Accounting System
(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Annual physical inventory--The physical inventory that a state agency must conduct once each year in accordance with this section.
(2) Betterment of personal property--An improvement of personal property that materially increases its serviceability or useful life, or both.
(3) Capital asset--A possession of the state that has an estimated useful life of more than one year.
(4) Capital lease--A lease of personal property under which the lessee substantially assumes the risks and benefits of ownership as specified under generally accepted accounting principles.
(5) Capitalized asset--A capital asset that has a value equal to or greater than the capitalization threshold established for that asset type.
(6) Charitable organization--The term has the meaning assigned by Civil Practice and Remedies Code, § 84.003.
(7) Comptroller--The comptroller of public accounts for the State of Texas.
(8) Computer equipment--The equipment includes computer, telecommunications devices and systems, automated information systems, and peripheral devices and hardware that are necessary to the efficient installation and operation of that equipment, but does not include computer software.
(9) Controlled asset--A possession of the state that a state agency has determined must be secured and tracked because of the nature of the possession. The term does not include a capitalized asset, real property, an improvement to real property, or infrastructure.
(10) Fiduciary fund--A fund held by a state agency as trustee of the fund. The term includes pension funds and non-expendable trust funds.
(11) Include--A term of enlargement and not of limitation or exclusive enumeration. The use of the term does not create a presumption that components not expressed are excluded.
(12) May not--A prohibition. The term does not mean "might not" or its equivalents.
(13) Personal property--A capital asset not classified as real property.
(14) Proprietary fund--A self-supporting fund whose resources are generated through user charges. The term includes enterprise and internal service funds.
(15) Replacement of personal property--A replacement of an internal or external part of personal property that allows it to complete its normal useful life.
(16) Salvage personal property--Personal property that no longer serves its original purpose because it is depleted, worn out, damaged, consumed, outdated, or obsolete. The term does not include personal property that has a remaining useful life.
(17) State agency--A state governmental entity that manages, administers, or controls personal property.
(18) State employee--An officer or employee of a state agency.
(19) State property accounting system--The fixed asset component of the uniform statewide accounting system.
(20) Supplemental physical inventories--The optional physical inventories that a state agency conducts in addition to the required annual physical inventory.
(21) Surplus personal property--Personal property in the possession of a state agency that is not currently needed by the agency and is not required for the agency's foreseeable needs. The term does not include salvage personal property.
(22) Trust property--Property not owned by the state that a state agency temporarily holds on behalf of the owner and is not used in agency operations.
(b) Exemptions.
(1) Equipment and supplies purchased through programs, contracts, or grants with the Department of State Health Services.
(A) An item of equipment or a supply is exempt from the requirements of subsections (c) - (q) of this section if it is: (i) used to promote and maintain public health; (ii) is purchased by or for a qualified entity; and (iii) is purchased through a program, contract, or grant with the Department of State Health Services.
(B) The exemption ends if the item or supply is returned to the Department of State Health Services upon the termination of the applicable program, contract, or grant. When the exemption ends, the formerly exempt equipment or supply must be reported to the state property accounting system in accordance with the comptroller's requirements.
(C) A state agency that purchases an exempt item of equipment or a supply shall develop and maintain internal control procedures for keeping a complete and accurate inventory of the items exempt under subparagraph (A) of this paragraph.
(D) In this paragraph, "qualified entity" includes an individual, a corporation, a local unit of government, and a state agency.
(2) The Department of Assistive and Rehabilitative Services.
(A) A material, tool, book, or other necessary apparatus provided to a client by the Department of Assistive and Rehabilitative Services is exempt from subsections (c) - (q) of this section.
(B) The Department of Assistive and Rehabilitative Services shall develop and maintain internal control procedures for keeping a complete and accurate inventory of the items that are exempt under subparagraph (A) of this paragraph.
(C) The state auditor may request to review an inventory required by subparagraph (B) of this paragraph at any time.
(D) An item that no longer qualifies for an exemption under subparagraph (A) of this paragraph must be added to the state property accounting system.
(3) Items provided to clients of state agencies.
(A) The comptroller may exempt from the reporting requirements of this section a material, tool, book, or other necessary apparatus if the item is provided to a client by a qualifying state agency.
(B) The appropriate state agency shall develop and maintain internal control procedures for keeping a complete and accurate inventory of the items that are exempt under subparagraph (A) of this paragraph.
(C) The state auditor may request to review an inventory required by subparagraph (B) of this paragraph at any time.
(D) An item that no longer qualifies for an exemption under subparagraph (A) of this paragraph must be added to the state property accounting system.
(c) Certification of internal state agencies and reporting state agencies.
(1) General requirement. A state agency must be certified as an internal state agency or a reporting state agency.
(2) Initial certification. A state agency that has not been certified before the effective date of this section must properly complete and submit to the comptroller the form required by the comptroller. The agency must specify on the form whether the agency wants certification as an internal state agency or a reporting state agency. The comptroller shall review the form and consider the agency's ability to comply with this section before certifying the agency.
(3) State agency requests for changes in certification.
(A) A reporting state agency may change its certification to an internal state agency by: (i) properly completing the form required by the comptroller; and (ii) obtaining the comptroller's approval of the change.
(B) An internal state agency may change its certification to a reporting state agency by: (i) properly completing the form required by the comptroller; and (ii) obtaining the comptroller's approval of the change.
(C) When considering whether to approve or disapprove a state agency's request for a certification change, the comptroller shall: (i) consider the agency's history of complying or not complying with this section's requirements for the agency's current certification; and (ii) determine the agency's capability to comply with this section's requirements for the agency's requested certification.
(D) This subparagraph applies if the comptroller receives a state agency's request for a certification change not later than the 30th day before the start of the next fiscal year. If the comptroller approves the change, then the change is effective on the later of: (i) the first day of the fiscal year following the fiscal year during which the comptroller approves the change; or (ii) the date the state property accounting system receives a full and accurate reporting from the agency of its property balances as of the end of the fiscal year during which the comptroller approves the change.
(E) This subparagraph applies if the comptroller receives a state agency's request for a certification change during the last 29 days of a fiscal year. If the comptroller approves the change, then the change is effective on the later of: (i) the first day of the second fiscal year following the fiscal year during which the comptroller receives the request; or (ii) the date the state property accounting system receives a full and accurate reporting from the agency of its property balances as of the end of the fiscal year following the fiscal year in which the comptroller receives the request.
(4) Certification changes initiated by the comptroller.
(A) The comptroller may change a state agency's certification from a reporting state agency to an internal state agency or vice versa anytime the comptroller determines the change is needed.
(B) If the comptroller changes a state agency's certification under subparagraph (A) of this paragraph, then the change is effective on the date specified by the comptroller.
(5) Criteria for certification as an internal state agency. A state agency may be an internal state agency only if:
(A) the agency determines that it will use the state property accounting system as its own property accounting system; and
(B) the agency agrees to maintain a perpetual inventory.
(6) Criteria for certification as a reporting state agency.
(A) A state agency is a reporting state agency if it: (i) is not exempt from this section; and (ii) is not an internal state agency.
(B) A reporting state agency shall modify its property accounting system to comply with the comptroller's reporting requirements, as periodically amended.
(C) A reporting state agency shall demonstrate to the comptroller's satisfaction that the agency has disaster recovery capability.
(d) Physical inventories.
(1) Frequency and timing of physical inventories.
(A) Except as provided by subsection (m) of this section, a state agency shall conduct an annual physical inventory of the personal property and trust property in the agency's possession. The agency may choose the date of the inventory.
(B) The comptroller encourages a state agency to conduct each year one or more supplemental physical inventories of the personal property and trust property in the agency's possession.
(2) Requirements for annual physical inventories.
(A) When a state agency conducts an annual physical inventory of the personal property and trust property in the agency's possession, the agency shall: (i) ensure that each property item is still within the agency's possession; (ii) determine whether the person who has custody of each property item as indicated on the agency's records still has custody of the item; and (iii) determine the condition of each property item.
(B) A state agency may use any method for conducting an annual physical inventory that is acceptable to the comptroller.
(C) If the results of a state agency's annual physical inventory vary from the records on the state property accounting system, then the agency shall immediately report the discrepancies to the comptroller through the system. The report must provide a reason for each discrepancy.
(3) Reports to the comptroller about annual physical inventories.
(A) The head of a state agency shall send a report to the comptroller about the agency's annual physical inventory.
(B) The report must contain: (i) a copy of the results of the inventory; and (ii) a signed statement that:
(I) provides the date the inventory was conducted;
(II) identifies the individual who the comptroller may contact for information about the inventory;
(III) describes the methods used to conduct the inventory;
(IV) summarizes the values received from the inventory; and
(V) contains the other information required by the comptroller.
(C) Deadline for reports. The head of a state agency shall ensure that the comptroller receives a copy of the results of the agency's inventory and the signed statement not later than the earliest of: (i) the 45th day after the date the inventory is conducted; or (ii) the 20th day after the end of the fiscal year for which the inventory is conducted.
(4) Requirements for supplemental physical inventories.
(A) A state agency may use any method for conducting a supplemental physical inventory that is acceptable to the comptroller. Statistical sampling and dollar unit sampling techniques are acceptable if they are properly used and comply with the comptroller's requirements.
(B) A state agency shall maintain in its records the results of each supplemental physical inventory.
(C) If the results of a state agency's supplemental physical inventory vary from the records on the state property accounting system, then the agency should consider the immediate conducting of an annual physical inventory.
(5) Loaned personal property. Personal property that a state agency has loaned to another state agency is the responsibility of the lending state agency for the purpose of this subsection.
(6) Transferred personal property. Personal property that a state agency has transferred to another state agency is the responsibility of the transferring state agency until the transfer has been completed in accordance with the comptroller's requirements.
(7) Missing, stolen, salvage, or surplus personal property. A state agency must include in a physical inventory the agency's missing, stolen, salvage, or surplus personal property until it has been deleted from the state property accounting system in accordance with this section.
(e) Records and reporting.
(1) Internal state agencies.
(A) An internal state agency shall maintain a perpetual inventory. The agency shall record personal property and trust property on the state property accounting system at the time of acquisition. The information must be recorded in accordance with the comptroller's requirements.
(B) The comptroller shall maintain an internal agency's property records on the state property accounting system.
(2) Reporting state agencies.
(A) A reporting state agency shall report information to the state property accounting system in accordance with the comptroller's schedules, procedures, and classification system. The comptroller may require a reporting state agency to submit information at any time. The comptroller shall notify reporting state agencies in writing about the required frequency of the agencies' reports.
(B) A reporting state agency shall maintain its property records in the manner and format required by this section and the comptroller. The agency shall ensure that its property accounting system is always capable of providing the information required by the state property accounting system.
(3) Group and unit tracking of personal property.
(A) A state agency shall track personal property on a unit basis.
(B) Possessions of the state other than personal property may be tracked on a group basis only if the requirements of subparagraphs (C) and (D) of this paragraph are satisfied.
(C) A state agency may track possessions of the state on a group basis only if all the possessions in the group: (i) have the same characteristics; (ii) have the same purchase and in-service dates; (iii) have the same class code; (iv) are visually identifiable as logically belonging to the group; and (v) may be depreciated using the same methods.
(D) Notwithstanding anything in this paragraph, possessions of the state that are purchased with debt financing by the Texas Public Finance Authority may be tracked on a group basis only if all the possessions in the group are included in the same lease supplement.
(4) Missing, stolen, damaged, or destroyed personal property.
(A) Upon receiving a report about stolen, damaged, or destroyed personal property from a head of agency under subsection (f)(1)(C) or (D) of this section or from a property manager under subsection (g)(2)(B) or (C) of this section, the comptroller shall forward necessary records about the property to the attorney general.
(B) The attorney general may investigate and take appropriate legal action to recover the value of stolen, damaged, or destroyed personal property. The attorney general shall determine the value of the property to be recovered based on the market value of the property and the degree of responsibility of the person who was entrusted with the property.
(C) A state agency shall delete missing personal property from the state property accounting system before two annual physical inventories have been conducted or two calendar years have elapsed since it was determined to be missing.
(D) A state agency may delete missing, stolen, damaged, or destroyed personal property from the state property accounting system only in accordance with the comptroller's procedures.
(f) Responsibilities of heads of state agencies.
(1) Care, custody, and control of personal property.
(A) The head of a state agency is responsible for the custody and care of personal property and trust property in the agency's possession. This responsibility does not end when a property manager is designated.
(B) The head of a state agency is responsible for ensuring that the agency maintains adequate inventory controls on personal property and trust property. Upon request, the state auditor may advise and make recommendations to the agency about those controls.
(C) If the head of a state agency has reasonable cause to believe that the agency's personal property or trust property is missing, damaged, or destroyed because of a state employee's negligence, then the head of the agency shall file a report with the comptroller and the attorney general. (i) A report to the comptroller must be made immediately and by entering the appropriate disposal code into the state property accounting system. (ii) A report to the attorney general must include the appropriate form. The form must be transmitted to the attorney general by facsimile. The report must be made not later than the fifth working day after reasonable cause for the belief arises.
(D) If the head of a state agency has reasonable cause to believe that the agency's personal property or trust property has been stolen, then the head of agency shall inform the comptroller, the attorney general, and law enforcement personnel. (i) A report to the comptroller must be made immediately and by entering the appropriate disposal code into the state property accounting system. (ii) A report to the attorney general must include the appropriate form. The form must be transmitted to the attorney general by facsimile. The report must be made not later than the fifth working day after reasonable cause for the belief arises. (iii) A report to law enforcement personnel must be made not later than the 48th hour after reasonable cause for the belief arises.
(2) Designation, supervision, and training of property managers.
(A) The head of a state agency shall: (i) designate a property manager for the agency; (ii) inform the comptroller of the designation by properly completing and submitting the form required by the comptroller; and (iii) ensure that the property manager receives training about this section and the state property accounting system.
(B) The head of a state agency may designate more than one property manager for the agency only if the comptroller approves.
(C) The head of a state agency may designate one or more alternate property managers for the agency. The head of agency shall inform the comptroller of the designation by properly completing and submitting the form required by the comptroller.
(D) If a state agency's property manager or alternate property manager changes, then the head of the agency shall inform the comptroller of the change by properly completing and submitting the form required by the comptroller.
(E) The head of a state agency shall ensure that the property manager for the agency properly carries out the property manager's duties as required by this section.
(3) Providing receipts. The head of a state agency shall provide the receipt required by subsection (g)(4) of this section if the head of agency is entrusted with personal property or trust property.
(4) Use of personal property or trust property. The head of a state agency may use personal property and trust property only for state purposes.
(5) Change in the head of a state agency.
(A) When the head of a state agency changes, the outgoing head of agency shall complete the form required by the comptroller and deliver the form to the incoming head of agency.
(B) After verifying and signing the form, the incoming head of agency shall send copies of the form to the comptroller.
(6) Liability. The head of a state agency is financially liable for the loss sustained by the state if the head of agency is entrusted with personal property or trust property and:
(A) the property disappears because the head of agency fails to exercise reasonable care for its safekeeping;
(B) the property deteriorates because the head of agency fails to exercise reasonable care to maintain and service it; or
(C) the property is damaged or destroyed because of the head of agency's negligent or intentional wrongful act.
(g) Responsibilities of property managers.
(1) Determining the responsibilities of alternate property managers. The property manager of a state agency shall determine the responsibilities of the agency's alternate property managers. The property manager shall ensure that the alternate property managers properly fulfill their responsibilities.
(2) Custody of personal property and trust property.
(A) The property manager of a state agency is the custodian of all personal property and trust property possessed by the agency.
(B) If a property manager has reasonable cause to believe that personal property or trust property is missing, damaged, or destroyed because of a state employee's negligence, then the property manager shall inform the comptroller and the attorney general. A report to the comptroller must be made in the form and manner required by the comptroller. (i) A report to the comptroller must be made immediately and by entering the appropriate disposal code into the state property accounting system. (ii) A report to the attorney general must include the appropriate form. The form must be transmitted to the attorney general by facsimile. The report must be made not later than the fifth working day after reasonable cause for the belief arises.
(C) If a property manager has reasonable cause to believe that the agency's personal property or trust property has been stolen, then the property manager shall inform the comptroller, the attorney general, and law enforcement personnel. (i) A report to the comptroller must be made immediately and by entering the appropriate disposal code into the state property accounting system. (ii) A report to the attorney general must include the appropriate form. The form must be transmitted to the attorney general by facsimile. The report must be made not later than the fifth working day after reasonable cause for the belief arises. (iii) A report to law enforcement personnel must be made not later than the 48th hour after reasonable cause for the belief arises.
(3) Maintaining records. The property manager of a state agency shall maintain the records required by the comptroller and this section.
(4) Entrusting personal property or trust property to other persons.
(A) A property manager may not entrust personal property or trust property to a person unless the person provides a signed, written, and dated receipt to the property manager.
(B) The receipt must contain a statement similar to the following. "I understand that I am financially liable to the state for the disappearance of the personal property or trust property if I fail to exercise reasonable care for its safekeeping; the deterioration of the property if I fail to exercise reasonable care to maintain and service it; and the damage or destruction of the property if it occurs because of my negligent or intentional wrongful act."
(C) A property manager may not entrust personal property or trust property to a person if the property manager knows or reasonably should know that the person will use the property for other than state purposes.
(5) Use of personal property and trust property. A property manager may use personal property and trust property only for state purposes.
(6) Changes in property managers.
(A) When a property manager changes, the outgoing property manager shall complete the form required by the comptroller and deliver the form to the incoming property manager.
(B) After verifying and signing the form, the incoming property manager shall send copies of the form to the comptroller.
(7) Liability. A property manager is financially liable for the loss sustained by the state if the property manager is entrusted with personal property or trust property and:
(A) the property disappears because the property manager fails to exercise reasonable care for its safekeeping;
(B) the property deteriorates because the property manager fails to exercise reasonable care to maintain and service it; or
(C) the property is damaged or destroyed because of the property manager's negligent or intentional wrongful act.
(h) Responsibilities of state employees.
(1) Providing receipts. A state employee shall provide the receipt required by subsection (g)(4) of this section if the employee is entrusted with personal property or trust property.
(2) Use of personal property and trust property. A state employee may use personal property only for state purposes.
(3) Liability. A state employee is financially liable for the loss sustained by the state if the employee is entrusted with personal property or trust property and:
(A) the property disappears because the employee fails to exercise reasonable care for its safekeeping;
(B) the property deteriorates because the employee fails to exercise reasonable care to maintain and service it; or
(C) the property is damaged or destroyed because of the employee's negligent or intentional wrongful act.
(i) Valuation of personal property.
(1) General provision. This subsection governs the valuation of personal property as reported to the state property accounting system.
(2) Newly acquired personal property. The value of newly acquired personal property must be equal to the sum of:
(A) the cost of the property; and
(B) the costs required to place the property into service.
(3) Donated personal property.
(A) The value of personal property acquired through donation must be equal to its fair market value on the date of donation.
(B) The fair market value of donated personal property must be determined through a reasonable market study.
(C) A state agency that conducts a market study shall fully document the methods used to conduct the study. The agency shall keep the documentation in the agency's records in accordance with the comptroller's requirements. The agency shall send a copy of the documentation to the state property accounting system.
(4) Personal property manufactured by the state. The value of personal property manufactured by the state must be equal to the total cost of labor and materials. Overhead costs may be included in the value if the manufacturing state agency determines it would be cost-effective.
(5) Betterments and replacements of personal property.
(A) A state agency shall determine the value of a betterment or replacement of personal property: (i) immediately following the completion of the betterment or replacement; or (ii) at the agency's earliest opportunity as deemed appropriate by the agency and the comptroller.
(B) The value of a betterment of personal property must be expensed unless the betterment increases the value or useful life of the property by a material amount. If a betterment is not expensed, then the value of the property must be increased on the state property accounting system in accordance with the comptroller's requirements.
(C) The value of a replacement of personal property is equal to the cost of the replacement less the original cost of the part being replaced. The value of the replacement must be expensed unless the replacement materially increases the value or estimated useful life of the property. If a replacement is not expensed, then the value of the property must be increased on the state property accounting system in accordance with the comptroller's requirements.
(D) If a state agency is required to increase the value of personal property on the state property accounting system because of a betterment or replacement, then the agency shall keep documentation in its records that supports the amount of the increase. The agency shall make the documentation available for inspection upon request. The agency may destroy the documentation only in accordance with the comptroller's requirements.
(6) Debt-financed personal property.
(A) In this paragraph, the total principal of debt-financed personal property is equal to the purchase price of the property plus the applicable service charge imposed by the Texas Public Finance Authority.
(B) The acquisition cost of debt-financed personal property other than manufactured items must reflect the total principal of the property and the costs required to place the property into service.
(C) The acquisition cost of debt-financed personal property that has been manufactured should be equal to the total cost of acquiring the property plus the cost of placing the property into service. This includes the principal, interest, finance charges, costs of issuance, and administrative fees.
(7) Leased personal property.
(A) Personal property that a state agency has leased under a capital lease must be valued in accordance with this paragraph.
(B) Subject to subparagraph (C) of this paragraph, the cost of leased personal property is equal to the present value of the minimum lease payments plus the cost of placing the property into service. The cost of the property does not include any costs not paid by the agency.
(C) The cost of leased personal property may not exceed the property's fair market value.
(8) Trade-ins. If a state agency is authorized to trade personal property for other personal property, then the agency must report the trade to the state property accounting system in accordance with the comptroller's requirements.
(9) Condition of personal property. When a state agency reports surplus or salvage personal property to the state property accounting system, the agency must include the condition of the property in the report. The agency should use the categories adopted by the comptroller when reporting the condition of personal property.
(10) Previously depreciated personal property. If a state agency obtains ownership of personal property that was previously purchased with federal funds and depreciated for federal reporting purposes, then the agency shall value the property at its original cost. The previous depreciation has no effect on the value of the personal property for the purposes of the state property accounting system.
(j) Accounting practices.
(1) Depreciation of personal property.
(A) The depreciable personal property of proprietary and fiduciary funds must be depreciated in accordance with generally accepted accounting principles.
(B) An internal state agency shall depreciate personal property that is a general fixed asset by using the straight-line method. The depreciation must be recorded on the state property accounting system on a memorandum basis unless generally accepted accounting principles require depreciation. Regardless of how the depreciation is recorded, it shall be recorded at the end of each fiscal year unless the comptroller specifies otherwise.
(C) The amount that personal property depreciates over a fiscal year by using the straight-line method is equal to the difference between the property's acquisition cost and its salvage value; divided by the estimated useful life of the property expressed in months.
(D) A state agency shall use the state property accounting system's default value for the estimated useful life of personal property unless the agency documents a different value based on the agency's experience. This subparagraph applies only when a state agency is calculating depreciation for the purpose of recording it on the state property accounting system.
(2) Transfer of personal property between funds.
(A) If a state agency transfers personal property from a proprietary fund to a governmental fund, then a new cost basis must be established for the property in the governmental fund. The new cost basis must be based on the acquisition cost of the property as recorded in the proprietary fund less any accumulated depreciation earned on the property. There is no requirement for the agency to modify the estimated useful life of the property.
(B) If a state agency transfers personal property from a governmental fund to a proprietary or fiduciary fund, then the acquisition cost of the property must be recorded in the proprietary or fiduciary fund. The acquisition cost as recorded in the proprietary or fiduciary fund must be equal to the acquisition cost as recorded in the governmental fund. The estimated useful life of the property must be adjusted to reflect the best estimate of useful life available to the proprietary or fiduciary fund.
(C) If a state agency transfers personal property from a governmental fund to another governmental fund, then the acquisition cost of the property as recorded in the new fund must be the same as the cost recorded in the old fund.
(3) Reporting and reconciliation of personal property inventory balances.
(A) A state agency shall: (i) report to the state property accounting system general ledger information using generally accepted accounting principles; (ii) track beginning balances at the beginning of each year; and (iii) report additions, deletions, and adjustments in personal property throughout the year so that year end balances can be determined.
(B) An internal state agency should reconcile its general ledger balances for personal property to the supporting financial detail in the state property accounting system. The agency should accomplish the reconciliation on a monthly basis at the month-end closing. All adjustments made during the reconciliation should be supported and documented. The agency may destroy the documentation only in accordance with the comptroller's requirements.
(C) A reporting state agency should reconcile its corresponding balances to the detail reported to the state property accounting system on a quarterly basis. Adjustments should be entered not later than the 20th day after the end of the quarter. All adjustments should be supported and documented. The agency may destroy the documentation only in accordance with the comptroller's requirements.
(k) Maintaining records.
(1) Forms. A state agency shall use the forms prescribed by the comptroller when taking any action authorized or required by this section. The comptroller may adopt and modify forms as the comptroller deems necessary.
(2) Loans of personal property.
(A) A state agency may loan personal property to another state agency only if the head of the agency lending the property provides written authorization for the lending. The head of the agency to which the property is lent must execute a written receipt.
(B) A state agency that loans personal property to another state agency shall document the loan as required by the comptroller.
(C) A state agency that loans personal property to another state agency does not suspend or eliminate its responsibilities toward the property under this section and applicable law.
(3) Transfers of personal property.
(A) A state agency that transfers personal property to another state agency shall comply with the procedures and requirements adopted by the comptroller.
(B) A state agency that receives personal property from another state agency shall comply with the procedures and requirements adopted by the comptroller.
(C) Personal property that is transferred from one state agency to another is in the possession of the transferring agency until the receiving agency properly enters its receipt of the property in the state property accounting system.
(D) A state agency may not transfer property purchased through the master lease financing program administered by the Texas Public Finance Authority unless the authority provides advance approval of the transfer in accordance with the authority's requirements.
(4) Surplus and salvage personal property.
(A) A state agency shall comply with applicable law and rules when transferring, selling, or disposing of its surplus or salvage personal property.
(B) When a state agency determines that it possesses surplus or salvage personal property, the agency shall notify the state property accounting system in accordance with the comptroller's requirements.
(C) The notification provided under subparagraph (B) of this paragraph constitutes official notice to the Texas Facilities Commission that the surplus or salvage personal property is available for sale or other disposition.
(D) A state agency may delete surplus or salvage personal property from the state property accounting system in accordance with the comptroller's procedures.
(E) Surplus personal property that has not been reported to the state property accounting system must be added to the system before the property may be deleted from the system.
(F) Salvage personal property shall be removed from the state property accounting system in accordance with the comptroller's requirements.
(G) Each house of the legislature is exempt from the surplus property provisions of Government Code, Chapter 2175, if the rules and regulations of the administration committee of the house has adopted a system for disposing of the property. An agency in the legislative branch shall dispose of its surplus or salvage property under a disposition system established by that agency.
(H) Subparagraphs (A) - (F) of this paragraph do not apply to products and by-products of research, forestry, agriculture, livestock, and industrial enterprises that exceed the quantity required for consumption by the producing state agency if the agency has a continuing and adequate system of marketing research and sales. The deletion of those products and by-products from the state property accounting system must comply with the comptroller's requirements.
(I) State eleemosynary institutions are exempt from the provisions of Government Code, Chapter 2175, that relate to the disposition of surplus or salvage property except as provided by other law.
(J) Government Code, Chapter 2175, does not apply to the disposition of certain recyclable materials, including paper, cardboard, aluminum cans, plastics, glass, one-use pallets, used tires, used oil, and scrap metal, where the disposition is not in the best interests of the state or economically feasible.
(K) Institutions or agencies of higher education are exempt from the provisions of Government Code, Chapter 2175, that relate to the disposition of surplus or salvage property: (i) where the governing board of each university system, institution, or agency of higher education establishes written procedures for the disposition of surplus or salvage property of the system, institution or agency; and (ii) where the procedures allow for the direct transfer of materials or equipment that can be used for instructional purposes to a public school or school district, or an assistance organization designated by the school district, in accordance with other law.
(L) Government Code, Chapter 2175, does not apply to the disposition of surplus computer equipment: (i) by the Secretary of State, who shall give preference to transferring the property to counties for the purpose of improving voter registration technology and complying with Election Code, § 18.063; (ii) by a state agency involved in the areas of health, human services, or education, who shall give preference to transfer the property to a public school, school district, or assistance organization specified by the school district, or; (iii) the Office of Court Administration, who shall give preference to transferring the equipment to a local or state governmental entity in the judicial branch of local or state government.
(l) Inventory control.
(1) Marking of personal property. A state agency shall permanently mark each item of personal property in the agency's possession as property of the State of Texas. The marking is permanent for the purpose of this paragraph if the marking can be removed only through considerable or intentional means. The marking shall be highly visible so that conducting a physical inventory is facilitated.
(2) Property inventory numbers.
(A) A state agency shall assign a unique property inventory number to each item of personal property that is tracked on a unit basis. The number shall be printed on a label. The label shall be attached to the item in a highly visible location so that conducting a physical inventory is facilitated.
(B) A property inventory number may not be reused, even if property has been deleted from the state property accounting system.
(3) Responsibility for securing and tracking personal property. A state agency is responsible for ensuring that its personal property and trust property are tracked and secured in the manner that is most likely to prevent damage to and the theft, loss, or misuse of the property.
(4) Locating personal property. A state agency must know where all of its personal property and trust property is located at all times.
(m) Abolished state agencies.
(1) Application of this subsection. This subsection applies to an abolished state agency only to the extent this section is consistent with the law that abolishes the agency.
(2) Responsibilities of the head of an abolished state agency.
(A) The head of an abolished state agency shall: (i) conduct a complete and accurate physical inventory of the agency's possessions in accordance with the comptroller's requirements; (ii) furnish a copy of the inventory to the Texas Facilities Commission not later than the effective date of the abolition; and (iii) transfer all personal property of the agency to the Texas Facilities Commission in accordance with the comptroller's requirements.
(B) The physical inventory required by subparagraph (A)(i) of this paragraph is in addition to the annual physical inventory required by subsection (d) of this section.
(3) Responsibilities of the Texas Facilities Commission. The Texas Facilities Commission shall care for the personal property transferred to the commission under paragraph (2) of this subsection until the commission distributes or sells the property in accordance with applicable law.
(n) Real property.
(1) Using the state property accounting system to track real property. A state agency may use the state property accounting system to track real property if the agency:
(A) establishes its own coding and accounting structures; and
(B) complies with the comptroller's requirements.
(2) Submitting information to the General Land Office. A state agency may not use the state property accounting system to track real property instead of submitting information about the property to the General Land Office.
(o) Access to the state property accounting system. An individual may have access to the state property accounting system only in accordance with the procedures and security limitations prescribed by the comptroller.
(p) Consequences of violating this section. The comptroller may refuse to draw warrants or initiate electronic funds transfers on behalf of a state agency that fails to comply with this section.
(q) Conflict with federal laws or regulations. If a federal law or regulation conflicts with this section, then the law or regulation prevails over this section to the extent necessary to avoid the conflict.
(r) Disposal of computer equipment by charitable organizations.
(1) Application of this subsection. This subsection applies to computer equipment purchased by a charitable organization for $ 500 or more with funds received from the state through appropriation by the Texas Legislature or by grant or by other means.
(2) General requirements. Except as provided by paragraphs (3) and (4) of this subsection, a charitable organization that purchases computer equipment with funds received from the state may not dispose of or discard the computer equipment before the fourth anniversary of the date the charitable organization purchased that equipment.
(3) Exceptions. This subsection does not prohibit:
(A) the sale or trade of computer equipment; or
(B) the disposal of equipment that is not operational.
(4) Donations to other charitable organizations. A charitable organization may dispose of computer equipment purchased with state funds within the four-year period after the date of purchase by donating the equipment to another charitable organization.
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