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TITLE 34PUBLIC FINANCE
PART 1COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 5FUNDS MANAGEMENT (FISCAL AFFAIRS)
SUBCHAPTER OUNIFORM STATEWIDE ACCOUNTING SYSTEM
RULE §5.200State Property Accounting System

  (2) Newly acquired state property. The value of newly acquired state 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 state property.

    (A) The value of state property acquired through donation must be equal to its fair market value on the date of donation.

    (B) The fair market value of donated state 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 maintain the documentation concerning the market study in accordance with the comptroller's requirements.

  (4) State property constructed by the state. The value of state property constructed by the state must be equal to the total cost of labor and materials in accordance with the comptroller's requirements.

  (5) Betterments and replacements of state property.

    (A) A state agency shall determine the value of a betterment or replacement of state 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 state 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, the value of the property must be increased on the SPA system in accordance with the comptroller's requirements.

    (C) The value of a replacement of state 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, the value of the property must be increased on the SPA system in accordance with the comptroller's requirements.

    (D) If a state agency is required to increase the value of state property on the SPA system because of a betterment or replacement, the agency shall maintain documentation that supports the amount of the increase in accordance with the comptroller's requirements.

  (6) Debt-financed state property.

    (A) In this paragraph, the total principal of debt-financed state 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 state property other than constructed 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 state property that has been constructed should be equal to the total cost of acquiring the property plus the cost of placing the property into service, which includes the principal, interest, finance charges, costs of issuance, and administrative fees.

  (7) Leased state property.

    (A) State 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 state 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 state property may not exceed the property's fair market value.

  (8) Trade-ins. If a state agency is authorized to trade state property for other personal property, the agency must report the trade to the SPA system in accordance with the comptroller's requirements.

(g) Accounting practices.

  (1) Depreciation of state property.

    (A) The depreciable state property of proprietary and fiduciary funds must be depreciated in accordance with generally accepted accounting principles.

    (B) Depreciation is calculated and reported on the SPA system. Agencies that calculate depreciation locally must report the depreciation expense at the end of the fiscal year in accordance with the comptroller's schedules and procedures.

    (C) The amount that state property depreciates over a fiscal year is determined using the straight-line method, which is the historical cost of the property less the residual value of the property, divided by the useful life of the property expressed in months.

    (D) A state agency shall use the SPA system's default value for the estimated useful life of state property unless the agency documents a different value based on the agency's experience.

  (2) Transfer of state property between funds. If a state agency transfers state property to another fund, the acquisition cost of the property plus the associated accumulated depreciation as recorded in the new fund must be the same as the cost and the associated accumulated depreciation recorded in the old fund.

  (3) Reporting and reconciliation of state property inventory balances.

    (A) A state agency shall report additions, deletions, and adjustments in state property throughout the fiscal year in accordance with the comptroller's requirements.

    (B) An internal state agency must reconcile the accounting balances in USAS to the supporting financial detail on the SPA system. All adjustments made during the reconciliation must be documented and maintained in accordance with the comptroller's requirements.

    (C) A reporting state agency must reconcile the accounting balances in USAS and the agency's local property accounting system to the supporting financial detail on the SPA system. All adjustments made during the reconciliation must be documented and maintained in accordance with the comptroller's requirements.

(h) 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 state property possessed by the agency. For personal property, the number shall be printed on a label which shall be attached to the item in a highly visible location.

    (B) A property inventory number may not be reused, even if the appropriate disposal code for the property has been entered into the SPA system.

  (3) Responsibility for securing and tracking personal property. A state agency is responsible for ensuring that its personal property is 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 state property.

    (A) A state agency must know where all of its state property is located at all times.

    (B) An internal state agency must maintain current location information on the SPA system.

    (C) A reporting state agency must maintain current location information on the agency's local property accounting system.

(i) Annual physical inventory.

  (1) Timing of annual physical inventory. Except as provided in paragraph (2) of this subsection, a state agency shall conduct an annual physical inventory of the capitalized and controlled personal property in the agency's possession each fiscal year in accordance with the comptroller's schedules and procedures. The agency may choose the date of the inventory.

  (2) Exemptions.

    (A) Except as provided in subparagraph (B) of this paragraph, an agency's annual physical inventory is not required to contain an inventory of library books, library reference materials, e-books, software, antiques, artifacts, rare publications, historical books, historical treasures, or historical manuscripts in the agency's possession.

    (B) Every fifth fiscal year, beginning in fiscal year 2025, an agency's annual physical inventory must contain an inventory of antiques, artifacts, rare publications, historical books, historical treasures, and historical manuscripts in the agency's possession, in accordance with the comptroller's schedules and procedures.

  (3) Certification. The head of a state agency must certify completion of the agency's annual physical inventory in accordance with the comptroller's schedules and procedures.

  (4) Updating information. If the results of a state agency's annual physical inventory vary from the information on the SPA system, the agency shall immediately update the information on the SPA system. An agency must maintain documentation in accordance with the comptroller's requirements.

(j) Entrusting personal property to other agency officials or employees.

  (1) Required receipt. A state agency may not entrust personal property in its possession to an agency official or employee, other than the agency's property manager, unless the official or employee provides to the agency's property manager a signed, written, and dated receipt, which includes the statement described in paragraph (2) of this subsection.

  (2) Statement. The receipts required under paragraph (1) of this subsection and subsection (k)(1) of this section 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 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."

  (3) Use for other than state purposes. A head of a state agency or property manager may not entrust personal property to a person if the head of the state agency or property manager knows or reasonably should know that the person will use the property for other than state purposes.

(k) Loaning personal property to another state agency.

  (1) Written authorization. A state agency may not loan personal property to another state agency unless the head of the agency lending the property provides written authorization for lending the property and the head of the agency to which the property is lent executes a written receipt, which includes the statement described in subsection (j)(2) of this section.

  (2) Document the loan. A state agency that loans personal property to another state agency shall document the loan as required by the comptroller.

  (3) Agency responsibility. 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.

(l) Transferring state property.

  (1) Comptroller requirements. A state agency that transfers state property to another state agency or receives state property from another state agency shall comply with the comptroller's requirements.

  (2) Agency responsibility. State property that is in pending transfer status 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.

  (3) Master lease financing program. 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) University system or institution of higher education. A university system or institution of higher education is subject to the requirements of this subsection.

(m) Lost, destroyed, or damaged personal property.

  (1) Comptroller requirements. A state agency must enter the appropriate disposal code for lost, destroyed, or damaged personal property into the SPA system in accordance with the comptroller's requirements.

  (2) Physical inventory. A state agency must include in the agency's annual physical inventory the agency's lost, destroyed, or damaged personal property until the appropriate disposal code for the property has been entered into the SPA system in accordance with the comptroller's requirements.

  (3) Reporting. If the head of a state agency or property manager has reasonable cause to believe that any property in the agency's possession has been lost, destroyed, or damaged through the negligence of any state official or employee, the head of the agency or property manager shall report the loss, destruction, or damage to:

    (A) the comptroller immediately by entering the appropriate disposal code into the SPA system; and

Cont'd...

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