006.09.1 R1-19-11-243. Marketing and Redistribution
AR ADC 006.09.1 R1-19-11-243Arkansas Administrative Code
Ark. Admin. Code 006.09.1 R1-19-11-243
006.09.1 R1-19-11-243. Marketing and Redistribution
PLEASE NOTE: Also see ACA§ 19-4-1503.
Purpose
The Marketing and Redistribution Section (M&R) is a section of the Department of Finance and Administration-Office of State Procurement (DFA-OSP). The Section is responsible for the proper disposal and sale of equipment, property and other tangibles that are determined to be surplus to the needs of the various State agencies. The Department of Finance and Administration-Office of Accounting (DFA-OA) is responsible for transfer of equipment, property and other tangibles where no moneys are involved (such as inter-agency transfers). Equipment is offered for sale by the competitive bid method on site as well as an on-line auction site at www.arstatesurplus.com.
Authority (ACA 19-11-242)
The State Procurement Director shall promulgate regulations governing:
The sale, lease or disposal of surplus equipment by public auction, competitive sealed bidding or other appropriate method designated by regulation, and no employee of DFA, or member of their immediate family shall be entitled to purchase any such equipment and transfer of excess equipment within the State.
Regulations
The State Procurement Director is authorized by ACA 19-11-243 to adopt regulations regarding the allocation of proceeds from the sale, lease, or disposal of property and other tangibles. The regulations may be found on the DFA-OSP web site at http:www.arkansas.gov/dfa/purchasing/mr/m_r_regs.doc.
Proceeds From Sale
Proceeds from the sale, transfer or rental of property by the State Procurement Director (M&R) shall be accounted for as follows:
The purchasers, transferees and lessees of property available shall transmit to the OSP the agreed sale price, service charge or rental fee.
The OSP shall deposit the full amount of proceeds received in the State Treasury in the manner as provided by law.
Proceeds from the sale or transfer of property deposited in the State Treasury shall be classified as non-revenue receipts and be credited to the Property Sale Holding Fund therein created on the books of the Treasurer of State as a trust fund. (ACA§ 25-8-106)
Funds deposited in the Property Sale Holding Fund may be expended only by the selling or transferring agency under procedures established by the Chief Fiscal Officer of the State and appropriations provided by the General Assembly. (ACA 19-11-255)
Funds deposited in the Property Sale Holding Fund from the sale of property purchased from agency cash funds may be refunded to the agency cash fund from which the original expenditure was made by the issuance of a warrant under procedures established by the Chief Fiscal Officer of the State and the Auditor of the State to be payable from appropriations provided by the General Assembly for disposition of the proceeds. (ACA 25-8-106)
INSURANCE PROCEEDS
Personal Property Other Than Vehicles
The proceeds received from an insurance policy for loss of personal property due to fire, storm or other causes (excluding stolen property) owned by an agency must be processed through M&R. This is done through the use of a Certificate of Property Disposal (CPD). The agency must keep a copy of the completed CPD for an audit trail.
Pursuant to ACA 19-11-243 and R1:19-11-243 (B), a standard fee of 25% will be assessed for administrative, property and record maintenance unless other arrangements are approved by the Marketing and Redistribution Manager.
When insurance proceeds are received for the reimbursement of a loss of personal property, the proceeds should be deposited into the Treasury using the agency's normal process for recording cash receipts. The proceeds should be recorded as Insurance Settlement/Restitution in GL 6092000000. If the asset is to be replaced, the agency should request an increase in appropriation from DFA-OA-FM for the purchase of the replacement.
If in the current year an agency has been reimbursed for the loss and the property has been replaced, the increase in appropriation is accomplished with a refund to expenditure by the DFA-OA. The agency must provide proof of the deposit and a copy of the invoice that replaced the property in order to have the appropriation restored. If the agency is reimbursed for a prior year loss, the agency should request an increase in appropriation from DFA-OA-FM. The agency must provide proof of the deposit and a copy of the invoice that replaced the property in order to have the appropriation restored.
Refer to P1-19-4-2004 for sample journal entries to record insurance proceeds/restitution.
Refer to R2-19-4-2004 for guidance related to lost/stolen property.
Vehicles
The insurance claim and moneys must be processed through M&R when damage occurs that results in a total loss of the vehicle. Once an agency loses a vehicle they cannot replace it until they receive the insurance proceeds. The moneys cannot be given to the agency until M&R has deposited the insurance proceeds into the MMV fund. This is done monthly when M&R processes the “Letters of Transmittal.” M&R sends a report to DFA-OA, requesting funds and appropriation to be transferred. A “special” letter of transmittal for insurance proceeds on totaled vehicles only can be done by M&R. Doing a “special” letter of transmittal for totaled vehicles helps the agency replace the vehicle quicker.
PLEASE NOTE: In those cases where proceeds are received on the loss of a vehicle purchased with “agency” funds, the funds are first deposited to the MMV Fund, and then a refund to the paying agency (that purchased the vehicle) would be reimbursed by the MMV Fund.
Real Property
When insurance proceeds are received for the reimbursement of a loss of real property (for example, buildings or infrastructure), the proceeds should be deposited into the Treasury using the agency's normal process for recording cash receipts. The proceeds should be recorded as Insurance Settlement/Restitution in GL 6092000000. Prior to retiring the related asset the agency should contact M&R to obtain a Certificate of Property Disposal... When a loss has occurred on any real property, the agency must provide the details about the loss to the agency's assigned CAFR liaison. The liaison will then assist in determining the effect on the State-wide financial statements.
Allocation of Proceeds From Sale or Disposal of Surplus Equipment
Using agency - The allocation of proceeds from the sale, lease or disposal of surplus equipment, less appropriate fees, will be made and deposited monthly to the using agency which had possession of the equipment.
Fee schedule - The OSP will develop a fee schedule to defray the costs of the equipment management program. The fee schedule will set forth various charges for services rendered. Proceeds from the sale of property may be used by the using agency only to purchase items from the Sub-classifications of M&O, Commitment items 02, 11 and 12 (Operating Expense, Capital Outlay, and Data Processing). Commitment items 09 Conference Fees and Travel and 10 Professional Fees and Travel may not be paid for with M&R Proceeds.
Disbursement of Revenues
Funds generated from the sale of agency surplus computer and electronic equipment to State employees, public schools or by other sales shall be allocated as follows:
If the sale of surplus computer or electronic equipment is made within the agency-Sixty percent (60%) of the proceeds shall be returned to the owning agency;
Fifteen percent (15%) of the proceeds shall be deposited with MR;
Twenty-five (25%) of the proceeds shall be deposited in the Computer and Electronic Recycling Fund established by ACA 25-34-108.
If the sale of surplus computer or electronic equipment is outside the agency and conducted by M&R-Fifty percent (50%) of the proceeds shall be returned to the owning agency;
Twenty-five percent (25%) of the proceeds shall be deposited with MR;
Twenty-five percent (25%) of the proceeds shall be deposited in the Computer and Electronic Recycling Fund established by ACA 25-34-108.
Procedure For Revenue Disbursement
Agencies that establish a policy for selling surplus computer and electronic equipment to either their employees or to Arkansas Public Schools will use the following procedure for revenue disbursement:
The agency will create a customer receipt for the sales price and calculate sales tax. Record the receipt in the cash journal as a customer payment.
Request a fund transfer through DFA-OA from the receipting agency's fund to: M&R, cost center 383333, Fund MPH0000 - 15 % of the sales price. Arkansas Department of Environmental Quality, cost center 451346, Fund MER0100 - 25% of the sales price.
The sales tax will be paid when DFA-OA does their (owning agency's) monthly billing for Sales & Use Tax.
Sales Made Through M&R on Behalf of the Agency
M&R will create a customer receipt to record sales price and sales tax.
Record the receipt as a customer payment in the cash journal.
Request fund transfer through DFA-OA from: M&R, cost center 383333, Fund MPH0000 to the agency's fund and cost center - 50% of the sales price. Arkansas Department of Environmental Quality, cost center 451346, Fund MER0100 - 25% of the sales price.
The sales tax due will be included in the DFA monthly report of Sales & Use Tax.
To record all revenue from sale of surplus property except for equipment sold through M&R on behalf of the agencies, the agency will debit their cash account and credit account number 4048003000, Sale of Surplus Property, in their proper fund using their cost center.
An Agency Purchases an Item at M&R
M&R records the sale in AASIS and issues an invoice.
The invoice is sent to the accounts payable section and is paid like any other vendor invoice.
The general ledger code used will depend on what item is purchased, ex. office supplies, equipment, etc.
An agency turns in items to M&R. M&R will keep records of what items belongs to each agency. When an item is sold, M&R records the sales and notes the original State agency.
At the end of the month, M&R totals all sales by each State agency, deducts M&R's fees and arrives at the amount to be returned to the agency.
M&R compiles two lists of funds to be returned to State agencies, one for Treasury fund agencies and the other for cash fund agencies. The Treasury fund list is processed by DFA-OA with funds and appropriation being returned to the agencies. The cash fund list is processed by the DFA-Office of Administrative Services with warrants being returned to the agencies.
M&R finally prepares a memo stating the total amount of their monthly fees, and this amount is transferred from their holding fund to their operating fund.
Surplus Disposal Form (SDF)
M&R requires a “Surplus Disposal” Form (SDF) to be completed to schedule the pickup and delivery of State surplus items. This is a web-based form that is accessible by all State agencies and institutions of higher education at http://www.arkansas.gov/eforms/index.php.
After completed on-line by the agency, the SDF is submitted electronically to M&R. The SDF will be reviewed, and the agency will be notified either by e-mail or telephone of the date and time the delivery or pickup will take place.
Two copies of the SDF form must accompany the surplus item. One copy will be signed by a representative of M&R and kept by the agency, and one will be kept by M&R. This signed document verifies that M&R has made property pick up.
Procedure Description
This web-based form allows a State agency to create a list of items to be disposed of per M&R instructions. Using this form, an agency may request one of the following actions: delivery, pickup or request a move. Upon completion this form automatically notifies M&R of the agency's request. Each agency person accessing and completing the SDF must have prior authorization through M&R.
Upon receipt of the completed SDF the agency asset manager must complete transaction ABAVN (Scrapping) to delete the asset from the agency's fixed asset inventory. Transaction ABAVN must be done in the same month the SDF is received from M&R.
Transaction AS02, “Change Asset Master Record,” must be completed to change the status of the asset from on hand to transferred to M&R.
The above-mentioned transactions will only be completed if the status of the asset on the completed SDF is marked “REC” for received. Assets marked with “DNR,” did not receive, should not be deleted from the agency's inventory. Assets must be removed within the month the SDF is received.
The agency must keep a copy of the completed SDF for an audit trail.
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 006.09.1 R1-19-11-243, AR ADC 006.09.1 R1-19-11-243
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