MRG News and Views – Reconciling/Spring Cleaning your Asset Ledger

LedgerwithHand

With spring in the air many people are beginning their annual spring cleaning to thin out all those things that have accumulated over the winter months.  Have you considered doing a little spring cleaning when it comes to your asset ledger?  It is not uncommon for hospital ledgers to contain 60-70 percent more line items than actual assets located in the facility.

How many items on your asset ledger aren’t assets (building upgrades/materials, time for contracted work, installation fees etc.) or are assets that were purchase pre 1970 and you know they are no longer in the facility but are still showing on the books?

Typically when conducting a capital audit, reconciliation is part of the project scope.  This can be extremely challenging if the ledger has not been scrubbed prior to reconciling.  Following are a few tips that accounting departments can do to begin scrubbing their asset ledgers prior to engaging a third party vendor or internally conducting an audit:

  • Be sure to have a process outlined for add/deletes when new equipment comes in and old equipment goes out of the building.
  • Capital asset ledgers may contain more than physical assets. If your ledger includes non-asset line items on them make sure you have built in flags allowing you the ability to scrub the non-assets from the ledger.  This will help identify physical assets on the ledger and minimize time spent reconciling.
  • Identify assets on the ledger that are extremely old and begin making determinations if the asset was removed from service. If it was removed, delete it from the ledger.
  • Do not aggregate multiple descriptors into one field. Keep demographics in separate fields i.e. manufacture, model, description etc. should all be separate columns.  It’s important to have the ability to sort your ledger.
  • Incorporate unique identifiers on capital equipment in the facility that can be cross referenced against the ledger. Most facilities use barcode tags to allow for easier reconciliation in the future.

Maintaining the capital ledger on a regular basis will minimize issues that occur over time as assets enter and exit the facility.  Applying some basic steps can help keep the ledger ‘spring’ clean & accurate.  Eliminating the need to scrub the ledger in preparation for reconciliation also saves time and money incurred by third party auditing firms.

MRG Projects:

  • Audit for OH health system w/ 8 locations totaling more than 5,000 assets inventoried and over $7 Million in appraised value
  • Audit for MI health system totaling more than 2000 assets inventoried and $2 Million in appraised value
  • Multi location audits in TX, KY and OH

MRG Appraisal of the Month:

1qty Conmed Beamer Mate ESU/ABC unit

FMV: $11,000.00

ConmedBeamer

MRG Hospital Fun Facts:

25 hospitals in North America and Europe have visual messages strategically placed near the ceilings in operating rooms. These messages are only visible when read from above, and are part of an on-going study to test the validity of people claiming to have ‘out of body’ experiences