3 Things NonProfit Organizations Need to Do Immediately to Strengthen the Equipment Management Process

Challenges in equipment management

Many nonprofit organizations are getting ready to conduct the inventory audit of their equipment and supplies. These were purchased with grant funding over the years and they need to be accounted for and audited, according to the Code of Federal Regulations (See 45 C.F.R. Part 74.33-35 or 45 C.F.R. Part 92.33(b)).

For example, the Designation Renewal System (DRS) from the Department of Health and Human Services has moved from indefinite project periods to definite project periods of five years (60 months) for all Head Start grantees. The grantees need to put together the required inventory reports to submit to the Administration for Children and Families (ACF) so they can be eligible for re competing for grants.

To produce these inventory reports, the grantee organization need to perform at least the following 3 equipment management activities:

  1. Provide an up to date inventory list of assets, what they are and where they are (in which building, offices, etc.).
  2. Prove that they have audited the assets based on industry accepted standards.
  3. Account for all the equipment and supplies purchased with each grant and funding source.

As it turns out, producing these inventory reports is more challenging than expected. Most nonprofit organizations don’t have a clearly defined equipment management process. They have been relying on the Finance team do the tracking of assets. But the Finance team is mostly concerned about recording the fixed assets (capitalized assets with cost above certain threshold). The Finance team usually doesn’t track where these assets go or how they are used. Many consumable assets (purchased at the cost below the fixed asset threshold) are not tracked at all.

So producing these inventory reports will require the organizations to comb through all the available records of these assets, identify where they are, verify and validate them, and find the cost information. Not an easy tasks. It’s not unusual that a nonprofit organization spends 3 months of one full time project manager’s time to put together that report! Think about the tangible cost of human capital, and moreover, the hidden costs in diminished productivity and equipment losses.

To prevent these costs, nonprofit organizations need to build a repeatable and scalable equipment management process. They can start with 3 things:

  1. Designate a senior executive as an owner of the equipment management process
  2. Evaluate their system for managing assets, both fixed and consumable assets, to see if it is sufficient to support their equipment management process.
  3. Set up routine inventory audit plans – who will conduct these audits and what methodologies to use for these audits

At E-ISG Asset Intelligence, we help non profit organizations to put in place the system and processes to manage their grant funded equipment. If you would like to find out more about the eQuip! solution, you call 1-866-845-2416, ext. 2 to speak with one of our asset management experts.


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