State of Connecticut Office of the State Comptroller MEMORANDUM NO. 2015-05
Letterhead - OSC


MAY 14, 2015


Attention: Chief Administrative and Fiscal Officers, and Business Managers
Subject: New Asset Capitalization Threshold Effective July 1, 2015

In accordance with the Comptroller's independent authority to prescribe and determine "the mode of keeping and rendering all public accounts" under Article Fourth, Section 23 of the Connecticut State Constitution, a new capitalization threshold is established effective July 1, 2015. The capitalization level is being increased from the current $1,000 level to $5,000. This change is prospective and applies to all asset acquisitions and adjustments/improvements placed into service on July 1, 2015 and after.

The State Property Control Manual
establishes policies and procedures for the proper recording, maintenance and control of assets and inventories. The procedures outlined in that manual are unchanged with the single exception of the increase in the capitalization level from $1,000 to $5,000 effective July 1, 2015.

Accordingly, the Form CO-59 Fixed Asset/Property Inventory Report/GAAP Reporting for Fiscal Year 2016 (due on or before October 1, 2016) should contain Fiscal Year 2016 additions based on: 1) all real property acquisitions, and 2) all personal property inclusive of intangible personal property having a cost of $5,000 or more and a useful life in excess of one year. Acquisitions prior to July 1, 2015 should continue to be reported based on the $1,000 threshold.

In light of this change, agencies should revisit the process that was used to establish the required written list of controllable agency property. It is mandatory that each agency maintain a written list of controllable property that has been approved by the agency head or designee.

After July 1, 2015, newly acquired controllable property having a value of less than $5,000 rather than the previous $1,000 threshold must be reviewed to ensure assets are reported correctly based upon the agencies' controllable listing. It is therefore essential that agencies carefully evaluate property acquisition after July 1, 2015 to ensure that proper controls are in place. The change in the capitalization level should be viewed as an opportunity for agencies to review their internal procedure for the safeguarding of all state property.

The capitalization threshold change in no way alters an agency's responsibility to properly control property under its custody. Property is deemed controllable due to its sensitive, portable and theft-prone nature.

The State Property Control Manual remains the guiding policy reference for state agencies with respect to all aspects of asset and inventory management. With the exception of the new dollar capitalization threshold outlined in this memorandum, all of the directives and guidance contained within the State Property Control Manual continue to be applicable.

Please direct questions concerning the State Property Control Manual to the Administrative Services Division, Fiscal Policy Statewide Services Unit at (860) 702-3440. Questions concerning the new capitalization threshold and related financial reporting issues may be directed to John Clark at (860) 702-3350 or Nancy Walsh at (860) 702-3378.


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