Guest Blog by RDML Keith Taylor, Assistant Commandant for Resources (CG-8)
My discussion with you today is about personal property (in the federal government, personal property includes vessels, aircraft, small boats, electronics, vehicles and general purpose property such as fork-lifts, computers, cranes, etc.). As keepers of the Coast Guard's assets and the public trust, it is imperative from an accountability and financial statement audit compliance perspective that property custodians perform periodic physical inventories. This is one of the most basic requirements of asset management. As many of you have experienced, we conduct these inventories each and every year in September. Unfortunately, DHS CFO audits have highlighted deficiencies in our ability to perform these periodic inventories to the degree necessary to fully account for our assets and meet the federal accounting standards required under law. To give you a sense of the magnitude of this, at the end of fiscal year (FY) 2008, the Coast Guard’s financial balance sheet line item for General Property, Plant, and Equipment (PP&E) totaled approximately $8.5 billion. The personal property subset of PP&E represented approximately $3.5 billion of this line item alone. By and large, the vast majority of the dollar value of the Coast Guard’s personal property (about 95%) lies in vessels, boats and aircraft.
To improve our property accountability, a team from CG-8 has been working across the Coast Guard to gain an understanding of the issues related to the inventory of small boats, aircraft and cutters. Through this effort, we have produced new physical inventory procedures designed to ensure proper valuation, completeness and existence of our personal property in accordance with generally accepted accounting standards. What does this mean? Valuation simply means that we know what our property is worth. Completeness and existence means that every piece of capitalized personal property in your hangar, at your dock or in your office is accounted for in the property system. And, it also means that every piece of property the accounting system lists at your unit is actually there. To accomplish this, we have conducted site visits at multiple CG units, and are piloting a District-wide inventory this month to test these new procedures. I will release an ALCOAST prior to the September annual CG-wide capitalized personal property physical inventory that outlines these new procedures. Draft procedures are currently available through the CG portal which is discussed in more detail below.
What will be different with this year’s inventory from years past is the level of monitoring and oversight to ensure 100% completion and correctness by all units. From 01-11 September, Coast Guard capitalized personal property will be inventoried using the new physical inventory procedures. The inventory effort will involve each unit’s Accountable Property Officer, Property Custodians, and a dedicated Count Team. This inventory will be followed by additional inventories in December, 2009 and March, 2010 for verification and review purposes and to correct any errors identified in the previous inventories. I fully anticipate that each of these subsequent inventories will become much easier as we all gain a level of comfort with the new procedures and our property records are 'cleaned up.' CG-85 has established a user site on the CG Portal that will contain the inventory procedures, job aids, frequently asked questions (FAQs) and an e-mail link to help desk support for additional information. The site can be found by going to the "Search Places" section of the CG Portal and typing in "2009 Capitalized Property Physical Inventory".
While this is not a new requirement, we are definitely changing the way we do business - we are improving the way we conduct our annual property inventory and are implementing checks and balances to ensure we correct the errors you see in the field year after year. The upcoming ALCOAST will have a link to the physical inventory procedures and more information regarding the September inventory. Together, we can improve this process as a whole and provide better accountability for our capital assets.
