TitleAsset Tracking and Accounting System Request Date2012-11-30
DepartmentUniversity Business Services
RequestorLaura Humberger Phone406-994-4361
Campuses Bozeman Billings Havre Great Falls FSTS Extension MAES
Cross Depts All departments track minor equipment, and track and report the location of capital assets. Every department on every campus and agency, including Ag Research Centers and Extension offices will benefit from this item.
Proposed Dates Start: August 1 2013 End:  
This proposal is for the purchase of a capital asset accounting and tracking software system. Banner, the current software system in which capital fixed assets are recorded, does not accurately record cost adjustments or depreciation expense for MSUís assets. Errors have occurred and manual corrections are required frequently. The system will function properly, and will enhance stewardship of our assets by adding a radio frequency identification (RFID) system to more accurately and efficiently locate MSUís capital fixed assets, which must be inventoried biannually.
This proposal is in alignment with the objective of Stewardship in MSUís Strategic Plan. This investment will allow the university to more accurately, efficiently and timely record and inventory its capital fixed assets, thus responsibly manage its physical resources. Currently, across all 4 MSU campuses and 3 agencies, the MSU system has in excess of 6,000 capital fixed assets with a total cost in excess of $700 Million. Accurately recording and inventorying the universityís capital assets will ensure the stewardship of assets purchased with state money, federal grant dollars, and funding provided by donors. Certain of the assets we hold are actually federally-titled assets, and to remain in compliance with grant agreements we must accurately account for the location of these assets which have been entrusted to us as well.

Funding Type: One-Time Only Funding Base (3-yr Recurring) Funding
  FY13 FY14 FY15 Base ($) OTO Startup ($)   FTE;
Materials & Supplies       5000  22000     
Contracted Services         15000     
Other Operations       8000  35000     
TOTAL 13000  72000     
Please comment, if necessary, regarding cost and requirements.

Funding for the capital fixed asset accounting software and the RFID and barcode system will consist of one-time funds of $72,000, and recurring costs of $13,000 per year.  On-going costs will include software upgrades and equipment replacements/upgrades.  Such costs include all equipment and tags needed to implement for all campuses.  Bozeman has the bulk of assets, and as such will bear the cost. 


One-time costs of $72,000 include:

  • License $35,000;
  • Implementation/training $15,000;
  • Hardware (tablet PCs, scanners, barcode printer, RFID tags, $22,000)


Recurring base costs of $13,000 include

  • $5,000 annual support and maintenance for the accounting software
  • $3,000 annual support for the RFID/barcode system
  • $3,000 annual set-aside for equipment replacement (scanners, server, etc.),
  • $2,000 for tags and other supplies
Describe the Proposal

The proposal is for the purchase of a software system to accurately record, track and physically verify the existence of the university’s capital fixed assets. 


While Banner provides a capital fixed asset module, which the 4 MSU campuses have been using since implementation, defects and inaccurate financial transaction reporting have occurred. These inaccuracies have required many manual adjustments to ensure accurate financial reporting and required restatement of the University's 2010 financial statements due to a depreciation error. Data entry of new assets into Banner is manual, cumbersome and therefore prone to error.  Reports must be created and/or maintained for financial reporting purposes across the four MSU campuses which manipulate the Banner data to calculate correct balances. A new software system is needed to correct the accounting inaccuracies, to increase the efficiency of data entry, and to improve the reporting process.  


Bi-annual inventories of capital assets are required under the Montana Operations Manual and these inventories are subject to legislative audit each year. This means that MSU’s Property Management staff is required to physically view each capital asset to verify existence at least every two years. This process involves significant and time-intensive coordination between Property Management staff and departmental staff, and often requires a team of people simultaneously hunting for equipment in large classrooms, laboratories, secured areas including server rooms, rooftops, mountain-tops, maintenance rooms, and other areas that are difficult to access. Some of these rooms are clean rooms or sensitive areas, and most locations require coordination with departments, many requiring the staff to be accompanied by researchers or other authorized staff.  Departmental personnel are needed for assistance to point out the asset, because often Property Management staff do not know what the equipment looks like and cannot identify it without assistance (especially with respect to IT and scientific equipment).

In addition to a new fixed asset system, an integrated RFID tagging system will automate and streamline the physical inventory process, thus improving the tracking, recording and stewardship of the university’s fixed assets.

RFID is the use of a wireless system that uses radio-frequency to transfer data from a tag attached to an asset for automatic identification and tracking. The information can be read from several yards away through a handheld device that is then loaded into the server. The RFID tag does not need to be within the line of sight of the reader.  Additionally, RFID tags can be beneficial in areas where barcodes or physical inventories aren't possible or are not preferred, such as clean rooms and restricted-entry research labs.

  • The RFID tag need not be on the surface of the object, as in a traditional inventory tag, and can instead be mounted inside of the item, particularly useful for assets that are constructed by University personnel and that fit in tight spaces (server racks, etc.)
  • The read time is a fraction of a second, and can be done without physically locating a tag in a potentially inaccessible location
  • Large numbers of tags can be read at once rather than one at a time as with barcoding or manual physical inventories


Describe the broader impacts and benefits of this proposal

An RFID system will not only create efficiencies and accuracies for Accounting and Property Management, but will also save researchers and departmental staff time because they will not need to make time for the property management staff visit.  A large number of the capital fixed assets on the Bozeman campus have been purchased with research money and are subject to additional external audits by funding agencies.  Office of Naval Research physically visits campus regularly, and must also physically verify assets’ existence, which is a key component of grant compliance.  An RFID system will allow for more efficient, timely and accurate inventories for assets that are in research laboratories, which are restricted to research personnel, some places that are difficult to access, and for inventories of assets at remote MAES locations throughout the state. 


Compliance with Montana requirements regarding the physical tracking and verification of minor property (items below $5,000) has been noted as an area requiring improvement by the legislative auditor’s office.  This system will facilitate the improvements necessary to comply with all rules and regulations involving capital assets (above $5,000) as well as minor property (below $5,000). 


Because the size of electronic devices is small, and such devices are below $5,000, they are considered minor property and not tracked by the central property management office.  Many fairly expensive pieces of minor equipment are purchased and must be manually tracked as minor property by each individual department—desktop computers, laptop computers, iPads, etc.  This system could be used for minor equipment as well, relieving departments of some of their paperwork headaches.


Implementation Plan

Implementation of the system for currently-owned assets will require the conversion of capital fixed assets from the Banner system into the new software system. It is anticipated that this conversion process will be electronic and can be performed well within the cost estimates discussed above.   Step one will include moving recorded assets onto the new system, and will be accomplished within three months beginning August 2013.  Converting from manual property tags to RFID or barcode tags will taking approximately 2 years to finalize, although new assets, as acquired, will be entered into the new system only. The contractor chosen will be adept at conversion, and we will rely on them for guidance and definitive milestones.

 The Cooley Lab and clean rooms, as well as federally-owned assets, will be prioritized highest for conversion to an RFID/barcode system due to the sensitive nature of the equipment and the risk of noncompliance should we fail to adequately account for a federally-titled item.

Implementation for the RFID system will require vendor assistance, which is included within the cost estimates above.  In addition, permanent staff and student workers will be deployed to perform a portion of the work, which will be paid for with current operating funds.

 If the system is expanded to include minor property as phase II, that will occur over a period of several months, with new assets added first, then existing assets converted over time.  Minor property ncludes items such as laptop computers, cameras, etc.

Assessment Plan

Assessment will occur at regular intervals in conjunction with monthly/bi-monthly accounting reconciliations. For inventories, as occur currently with the manual system in place, assessment will occur throughout the fiscal year to ensure that inventories are on-time, accurate and complete.  The current, manual process will need to be kept up throughout the transition plan, and records compared with those recorded in the new system.  Reconciliation and agreement will be 100% accurate prior to pulling the plug on the old system.


Critical Success Factors:

  • Must reach out to departments to discuss the RFID system to ensure that the radio frequency does not interfere with critical scientific equipment.  For such equipment and that in the immediate vicinity, barcodes will be used instead.
  • Must implement the interface between RFID system and the asset software system.
  • Must train Property Management staff on the use of RFID system.
  • Must produce accurate and timely accounting data for capital assets.


 Key Indicators:

  • Inventories will be timely and accurate, as reviewed by the Property Management supervisor and various external auditors
  • Asset accounting records are timely and accurate, as will be noted through comparison with reports built outside of Banner.  These reports were built to identify errors in Banner, and will be used to identify any possible errors in the new system.  No errors are expected with the new system.
  • Time taken by researchers and departmental staff to assist property management with inventories will decrease because RFID tagging will alleviate the need to physically view many assets.


If assessed objectives are not met in the timeframe outlined what is the plan to sunset this proposal?

Should the capital fixed assets software system and the RFID / barcode asset inventory system implementation fail to meet the needs of the university, fixed asset records in Banner can be re-instated and manual inventories resurrected.

Executive/VP: Terry Leist (