SRC is in the fifth year of an anticipated five-year period to verify the existence of tangible assets. This review includes validation of the status of active tangible assets as well as those withdrawn from active use to identify differences between physical life and depreciable life. Once this is...
SRC is in the fifth year of an anticipated five-year period to verify the existence of tangible assets. This review includes validation of the status of active tangible assets as well as those withdrawn from active use to identify differences between physical life and depreciable life. Once this is complete SRC will update our policies and procedures to incorporate the process of periodically analyzing and reviewing our useful life matrix to determine whether useful lives are valid or if adjustments are required. SRC provides additional training to employees responsible for capital.
SRC’s policy states that residual value will be recognized consistent with FAR 31.205-11 which states, “for tangible personal property, only estimated residual values that exceed ten percent of the capitalized cost of the asset need be used in establishing depreciable costs”. SRC’s capital asset policy and Disclosure Statement do not set a standard ten percent residual value. SRC demonstrated that there have been no instances of salvage value of any amount recovered at tangible asset disposition. SRC agrees the system defaults to zero percent salvage value but disagrees this is indicative of a deficiency as the system provides for the flexibility to adjust the salvage value to the appropriate amount, as applicable.
Remaining outstanding corrective action, which entails reviews of our policies and procedures will take place by September 30, 2026.
Contact Person Responsible for Corrective Action: Lisa Kennedy, Director, Corporate Controller
Completion Date: All corrective action will be implemented by September 30, 2026.