Maximus, Inc. · NYSE:MMS

Maximus — Strategic Asset Management Webinar (March 2022)

48 slides from Maximus's conference presentation, Mar 29, 2022

1. Slide 1: Higher Education Consulting Services

   Higher Education Consulting Services The Importance of Accurate Building Componentization and Space/Fixed/Moveable Equipment Inventories in Support of Your Institution’s Financial Reporting Information Kevin J. McHugh Vice President March 29, 2022 1 | Maximus: Higher Education Services Copyright © M

2. Slide 2: Agenda

    Overview  Driving Forces for Asset Management & Financial Reporting Agenda  Implementing a Moveable Equipment Inventory – “Considerations”  Building Componentization Overview  Questions 2 | Maximus: Higher Education Services Copyright © Maximus 2022

3. Slide 3: Overview

   OVERVIEW

4. Slide 4: Overview

   Overview  Implementing a Fixed Asset Inventory solution is vital for Colleges and University’s for many reasons. Proper accounting of assets can save time & money, reduce theft, improve planning and budgeting, eliminate “unrecorded retirements”, and help an institution after an unfortunate catastro

5. Slide 5: Driving Forces for Asset Management & Financial Reporting

   DRIVING FORCES FOR ASSET MANAGEMENT & FINANCIAL REPORTING for PUBLIC & PRIVATE INSTITUTIONS of HIGHER EDUCATION

6. Slide 6: GASB Financial Reporting Requirements

   GASB Financial Reporting Requirements  Asset Management Financial Reporting Requirements for the Governmental Accounting Standards Board (GASB) GASB No. 35 – Basic Financial Statements and Management Discussion and Analysis for Public Colleges & Universities Capital Assets Include:  Land & Easemen

7. Slide 7: GASB Financial Reporting Requirements

   GASB Financial Reporting Requirements GASB No. 42 – Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries  This Statement establishes accounting and financial reporting standards for impairment of capital assets. A capital asset is considered impaired when

8. Slide 8: GASB Financial Reporting Requirements

   GASB Financial Reporting Requirements Forthcoming Changes/New Standards: 1. Re-write of GASB 34/35 2. Public/Private Partnerships (P-3’s) 3. Capital Assets Project 4. Service Concessions/Public – Private Partnerships 5. Infrastructure Reporting 8 | Maximus: Higher Education Services Copyright © Maxi

9. Slide 9: FASB Financial Reporting Requirements

   FASB Financial Reporting Requirements  In August of 2016, FASB issued a Standard intended to simplify and improve how Not-for-Profit organizations classify assets, as well as the information presented in the Financial Statements and notes about its Liquidity, Financial Performance and Cash Flows, a

10. Slide 10: FASB Financial Reporting Requirements

    FASB Financial Reporting Requirements  FASB 93: Recognition of Depreciation by Not-for-Profit Organizations This Statement requires all Not-for-Profit organizations to recognize the cost of using up long-lived tangible assets in general purpose external financial statements. 10 | Maximus: Higher Ed

11. Slide 11: OMB Uniform Guidance Financial Reporting

    OMB Uniform Guidance Financial Reporting Direct & Indirect Facilities & Administrative (F&A) Costs:  200.414 – Indirect F&A Costs  200.436 – Depreciation  200.443 – Gains and Losses on Disposition of Depreciable Assets  200.448 – Intellectual Property  200.449 – Interest 11 | Maximus: Higher Ed

12. Slide 12: OMB Uniform Guidance Financial Reporting

    OMB Uniform Guidance Financial Reporting Property Standards:  200.310 – Insurance Coverage  200.311 – Real Property  200.312 – Federally Owned and Exempt Property  200.313 – Equipment  200.315 – Intangible Property 12 | Maximus: Higher Education Services Copyright © Maximus 2022

13. Slide 13: OMB Uniform Guidance Financial Reporting

    OMB Uniform Guidance Financial Reporting Appendix III to Part 200 – Indirect (F&A) Costs Identification and Assignment, and Rate Depreciation for Institutions of Higher Education (IHEs): A. General B. Identification and Assignment of Indirect (F&A) Costs C. Determination and Application of Indirect

14. Slide 14: Implementing a Moveable Equipment Inventory – Considerations

    IMPLEMENTING A MOVEABLE EQUIPMENT INVENTORY – “CONSIDERATIONS”

15. Slide 15: Moveable Equipment Overview

    Moveable Equipment Overview The goal of this presentation section is to offer you suggestions for the Implementation and Perpetuation of a successful fixed asset management inventory, including:  Physical Inventory Process  Asset Tagging/Scanning  Historical Cost/Depreciation Reporting  Asset Li

16. Slide 16: Overview of Fixed Asset Life Cycle

    Overview of Fixed Asset Life Cycle Planning Planning Budgeting Budgeting Funding Funding Procurement Procurement • Bonds • Bonds • GL •Accounts GL Accounts • Federal Funding • Federal Funding • Invoice Cost Cost • Invoice Details Details • Donations • Donations Placed Into Capitalization Tag New Ass

17. Slide 17: Physical Inventory Technology

    Physical Inventory TECHNOLOGY Old Process New Process

18. Slide 18: The Physical Inventory Process

    The Physical Inventory Process 1. Establish a Capitalization Threshold It is vital to establish the threshold for assets to be included in the inventory records. This policy should only represent “Capitalized Assets”, not “Expensed Assets”. Most institutions are in the $3,000 to $5,000 range for the

19. Slide 19: The Physical Inventory Process

    The Physical Inventory Process 2. Document Your Inventory Process & Procedures By establishing this information will serve as a tool for what assets are to be included, provide consistency and will also serve as policy that can sustain Internal/Independent/Federal/State audit review. This effort sho

20. Slide 20: The Physical Inventory Process

    The Physical Inventory Process 3. Involve All Departments  Knowledge of a forthcoming inventory and the importance of departmental “stewardship” of assets assigned to each department is of paramount importance.  Accessibility to all rooms and having up to date floor plans, will allow for ease of t

21. Slide 21: The Physical Inventory Process

    The Physical Inventory Process  4. Identify Data Fields to be Collected in the Inventory Process 21 | Maximus: Higher Education Services Copyright © Maximus 2022

22. Slide 22: The Physical Inventory Process

    The Physical Inventory Process 5. Implement an Asset Inventory Solution - Own It! There are many different software packages for fixed asset management solutions in the marketplace. At a minimum, you should be considering these key factors: Ability to support the baseline inventory with scanners A

23. Slide 23: The Physical Inventory Process

    The Physical Inventory Process 6. Implement an Asset Inventory Solution: Outsourcing As an alternative, often due to financial/budget constraints, some institutions are considering professional outsourcing solutions by contracting with consulting firms to oversee their Property Management Department

24. Slide 24: The Physical Inventory Process

    The Physical Inventory Process 7. Select Your Asset Tags There are several considerations when it comes to assets tags:  Barcode/Numeric  RFID  Foil/Polyester  Tamper Evident  Destructible Vinyl 24 | Maximus: Higher Education Services Copyright © Maximus 2022

25. Slide 25: The Physical Inventory Process

    The Physical Inventory Process 8. Barcode Scanners  Barcode scanners provide increased efficiency, effectiveness and accuracy in the asset inventory process;  This hardware should be selected to meet the needs of your institution;  There are many devices available such as traditional barcode scan

26. Slide 26: The Physical Inventory Process

    The Physical Inventory Process 9. Barcode Scanners Choose the hardware that is effective for your institution based upon:  Conditions under which the inventories are performed (Labs, Hospital, etc.);  Number of assets to be inventoried annually;  Type of Asset Tags to be Scanned (traditional Barc

27. Slide 27: Moveable Equipment Inventory Reporting Support

    Moveable Equipment Inventory Reporting Support  The importance of a Current Equipment Inventory  Supports accurate financial and regulatory compliance reporting;  Collects location data and asset information to support cognizant agency audits and departmental usage;  Enables tracking for assets

28. Slide 28: Moveable Equipment Inventory Reporting Support

    Moveable Equipment Inventory Reporting Support  The following reports supports Capital Asset & F&A Reimbursement Reporting Requirements:  Property Accounting Summary for Financial Reporting Purposes (total, net of Federal Funds)  Property Accounting Detail for Financial Reporting Purposes (total,

29. Slide 29: Moveable Equipment Inventory Reporting Support

    Moveable Equipment Inventory Reporting Support  Reports MUST include the following for each identified asset:  Campus Location Code  Building Number  Room Number  Floor Number  Department Number  Asset Tag Number (if you are applying “new” tags, be sure to record the “old” tag number)  Asset

30. Slide 30: Moveable Equipment Inventory Reporting Support

    Moveable Equipment Inventory Reporting Support  Reports MUST include the following for each identified asset:  Model Number  Manufacturer’s Name  Serial Number  Date of Acquisition  Historical Cost/Estimated Original Cost  Depreciation  Life Assignment  Fund Code  Status (active/inactive)

31. Slide 31: Moveable Equipment Inventory Reporting Support

    Moveable Equipment Inventory Reporting Support  The following valuation definitions and related terms are applicable, in accordance with GAAP:  Historical Cost – the actual cost of the property to the present owner the cost as of the date the property was first constructed, or originally installed

32. Slide 32: Moveable Equipment Inventory Reporting Terms and Definitions

    Moveable Equipment Inventory Reporting Terms and Definitions  The following definitions and related terms are in accordance with GAAP: Annual Depreciation – the portion of the assets’ accumulated depreciation allocated to the current fiscal year Net Book Value – Historical Cost less any Accumulat

33. Slide 33: Moveable Equipment Terms and Definitions (Cont.)

    Moveable Equipment Terms and Definitions (Cont.) Accumulated Depreciation – is based upon the asset’s cost, acquisition date and its estimated life utilizing straight-line depreciation. Estimated lives are to be based upon the “Institutions Experience”, unless your institution reports through/up to

34. Slide 34: Perpetuation: Life After Inventory!!

    Moveable Equipment Inventory Reporting Support  Perpetuation: Life After Inventory!! 34 | Maximus: Higher Education Services Copyright © Maximus 2022

35. Slide 35: Moveable Equipment Inventory – Next Steps

    Moveable Equipment Inventory – Next Steps Once all of the assets have been identified and entered into the database, and the baseline inventory has been completed, a regular process for verifying the inventory must be established in an effort to maintain the integrity and auditability of your instit

36. Slide 36: Building Componentization - An Overview

    BUILDING COMPONENTIZATION - AN OVERVIEW

37. Slide 37: Building Componentization

    Building Componentization  We covered the Importance of Regulatory DRIVING FORCES, Inventory Methodology, Financial Reporting Requirements, now OUR FINAL SECTION – “Building Componentization!” 37 | Maximus: Higher Education Services Copyright © Maximus 2022

38. Slide 38: Building Componentization – Lifing Requirements

    BUILDING COMPONENTIZATION – LIFING REQUIREMENTS  Asset Lifing – Research institutions are required to report their asset lives based upon “Institutional Experience”, unless your institution is reporting through an “Affiliated Medical Center/Hospital” for which, the American Hospital Association (AH

39. Slide 39: Building Componentization – Lifing Considerations

    BUILDING COMPONENTIZATION – LIFING CONSIDERATIONS Applying Useful Lives, based upon “Institutional Experience” , in accordance with OMB’s Uniform Guidance, to a Componentization Study, Enables Proper Cost Recovery for the F&A Rate Proposal and Faster Recovery of Invested Capital, Improving the Insti

40. Slide 40: Building Componentization – Cost Reporting & Lifing Considerations

    BUILDING COMPONENTIZATION – COST REPORTING & LIFING CONSIDERATIONS  Historical Cost - as of the “Date of Acquisition”  Fair Market Value - as of the “Date of Donation”  Asset Lifing – Research Institutions – “Institutional Experience”  Asset Lifing – Research Institutions with Affiliated MC’s –

41. Slide 41: Real Property Asset Classifications

    REAL PROPERTY ASSET CLASSIFICATIONS 1. Land – Non-depreciable asset, segregate from buildings 2. Buildings – Depreciable assets; include all buildings that meet your Capitalization Threshold and used in the operations of your Institution 2. Infrastructure – If you are a GASB institution, in a campus

42. Slide 42: Building Componentization Study Overview

    BUILDING COMPONENTIZATION STUDY OVERVIEW Donated Buildings - Must be reported at the Fair Market Value as of the Date of Donation Componentization - Typically Research Institutions “Componentize” their buildings utilized in Organized Research into the three OMB defined major components identified as

43. Slide 43: Building Componentization Study – Pre Planning Considerations

    BUILDING COMPONENTIZATION STUDY – PRE PLANNING CONSIDERATIONS Renovations/Improvements – it is important to track these construction related activities by date of activity and in conformance with your Institutions Capitalization Policy. Collaboration between your Facilities/Construction groups and A

44. Slide 44: Building Componentization – The Details

    BUILDING COMPONENTIZATION – THE DETAILS  Approach  Determine the Research Buildings to be Included  Identify Building Components  Review current Policies and Procedures in place for the Buildings Asset Classification  Determine availability of Historical Cost Information  Identify “Federal Con

45. Slide 45: Building Componentization – The Details

    BUILDING COMPONENTIZATION – THE DETAILS  Building Components  Building Shell – The exterior walls, excavation within the building footprint, foundation, floors, roof structural system and decking of the buildings.  Electrical and Lighting System – All telecommunication and alarm wiring, lighting

46. Slide 46: Building Componentization – The Details

    BUILDING COMPONENTIZATION – THE DETAILS  Building Components (cont.)  Heating, Ventilation and Air Conditioning System (“HVAC”) – Includes chillers, condensers, exhaust fans, coil units, heating strips, and chilled /heating water supply and return piping  Interior Finish – All walls, partitions,

47. Slide 47: Building Componentization – The Details

    BUILDING COMPONENTIZATION – THE DETAILS  Once these Building Components have been identified, they are required to “roll-up” into the three OMB defined major classifications, identified as follows:  Building Shell  Building Services  Fixed Equipment 47 | Maximus: Higher Education Services Copyri

48. Slide 48: Questions??

    QUESTIONS?? Kevin J. McHugh Vice President Maximus Higher Education Consulting E-mail: kevinjmchugh@maximus.com Mobile: (215) 514-4553 48 | Maximus: Higher Education Services Copyright © Maximus 2022

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