Standard Physical Resource Control Procedure

• No.22 Zhang Lihong（Molly）

 01 Definition of physical control

02 Purpose of physical control

CONTENT 03 Physical control responsibility

04 Physical control procedures

05 Interview reflection
Part 1 Definition
Part 1

Definition

The Standard Physical Control Procedure outlines

methods for acquiring, disposing and maintaining control
of physical resources to provide reporting assistance and
ensure proper internal controls.
Part 2 Purpose
 Part 2
To ensure that the College’s physical resources are acquired,
01 safeguarded, inventoried, disposed of, and accounted for
properly.

To provide basic material conditions and economic guarantee

02 for the healthy development of school-running undertakings.
Purpose
To ensure value for money in acquiring physical resources and
03 to maximize residual value in the disposal of same, where
applicable.

To protect the University from any conflict of interest, either

potential or real, which may arise between University
04 departments, services, centers, offices, etc. in the acquisition or
disposal of physical resources.
Part 3 Physical control
responsibility
Part 3
Department Managers

Responsible and accountable for furniture,

equipment, machinery, and any other capital assets
in their departments

Maintain some type of control over capital assets

Part 3
The Accounting Manager

Responsible for ensuring that a

register of Capital Equipment
owned is maintained
Part 3
Head of Department,
Research Centre Director

Assist and evaluate any

department’s capital asset
control procedures.
Part 3
The Finance Office

Responsible for providing advice and

assistance on the most appropriate way to
maintain the resource register.

Responsible for the maintenance and the recording

of transactions.
Part 4 Physical control
procedure
Part 4
Procuring
1

Disposing 5 2 Acquiring

4 3
Transferring Registering
 Procuring

01 An asset is most often entered into the accounting system

when the invoice for the physical resource is entered into the
accounts payable or purchasing module of the system.

02 The physical resource management department should

examine the application plan according to the existing
resource stock, avoid duplication and waste, and make
overall arrangements for the comprehensive financial
situation of the financial department.
 Procuring
For major physical resource investment projects,
03
independent intermediaries or professionals are invited to
conduct feasibility study and evaluation, and collective
decision-making and approval are carried out to ensure that
investment decisions are scientific and reasonable.

04 After the approval of the budget, it should be strictly

implemented. In the process of budget execution, if it is
necessary to adjust the budget due to force majeure, the
examination and approval procedures shall be strictly
handled in accordance with the relevant provisions.
Physical resource procurement
 Acquiring

Purchased Donated
resource resource
The principles of Where a department
openness, transparency, receives an asset as a gift
and value for money or donation, they should
shall be applied by way get a formal acceptance
of seeking quotations agreement and also agree
and tenders as an appropriate valuation
appropriate in for the asset for the
accordance with purposes of the asset
register.
University Policy.
Registering

Most of the information needed to set up the asset for

depreciation is available at the time the invoice is entered

Information entered at this stage include; acquisition

date, placed-in-service date, description, asset type, cost
basis, depreciable basis etc.

Some information will flow automatically based on the

asset type selected based on the relationships that need to
be defined in the system.
Transferring

Sometimes a physical resource is transferred to another

subsidiary, reporting entity, or department within the
company.

These inter-company and intra-company transfers may

result in changes that impact the resource’s depreciable
basis, depreciation, or other resource data.

This needs to be reflected accurately in the physical

resource management system.
Transfer of Physical Resource between Departments
 Disposing

When a fixed asset is, no longer in use, becomes obsolete, is beyond repair,
the asset is typically disposed.
When an asset is taken out of service, depreciation cannot be charged on it.
There are multiple types of disposals, such as abandonments, sales, and
trade-ins.
Any difference between the book value, and realized value, is reported as a
gain or loss.
Each department / central services unit assets should not be sold or
disposed of without the authorization of the head of the department / unit /
research project
DISPOSAL OF CAPITAL ASSETS FORM
Part 5 Interview reflection
 Interview Questions：

1. How many departments are involved in the physical

resource management? What are they?
2. What are the procedures or process of physical resource
control in DLSUD?
 Interviewee’s Answer

1.How many departments are involved in the physical resource management?

What are they?
Deodoro E. Abiog’s answer: There are six departments involved in the
physical resource management. They are Buildings and facilities
maintenance office, Environmental Resource Management Center,
Information and Communications Technology Center, Finance office,
Materials Management & Ancillary Services Office, and General Services
Office.
In China
Standing Committee
of the Party

Principal's
Office

Vice Vice Vice

principal principal principal

State-owned Laboratory
Assets Procurement Internal User
and Infrastructure Finance
Management and Bidding Control Department
Equipment Section Department
Office Office Office Managers
Department
 Interview’s Answer
2. What are the procedures or process of physical resource control in
DLSUD?
Deodoro E. Abiog’s answer: 1)Bidding and canvassing. We have a bidding committee
for big items with 250 thousand or above such as the construction of the building.
Before signing the contract, the proposal and plan should be submitted. Canvassing is
for the small items with 250 thousand or below. As for this, we don’t have to go into
bidding. We just ask the suppliers for proposal how much it is, so we can look at and
compare the price and quality of the item. 2) Second is budget planning. 3)Policies of
physical resource management.4)Other procedures such as registering, transferring
and disposing.
In China
Budget Physical resource budget
Physical resource making procedure
procurement making
procedure
Procurement
Physical resource payment Check upon delivery
payment procedure procedure
Check and
delivery Self-built resource
Physical resource
acceptance procedure
Daily use procedure
Daily use
Physical resource Physical resource
Maintenance checking procedure
Inventory and
procedure disposal
Physical resource
Physical resource lease Lease and disposal procedure
and lend procedure lend
 Physical resource budget making procedure
Budget making group Leaders of institution School leaders Relevant leader Document

Begin Basic data of

school
School Budget budget
data collection
verify verify
Collect and sort School
out the data and budget
submit the draft making draft
budget
verify verify Deliberation

School budget plan

transmission

End
 Physical resource procurement management procedure
User Department Lab Manager Principal's Office Party Committee Procurement and Bidding Office
Begin

Apply for
resource
acquisition
less than 1 million Examine,
yuan per unit approve

1 million to 2 million examine,

examine,
yuan per unit approve
approve
examine,
Over 2 million examine, approve
examine,
yuan per unit approve
approve Prepare to procure
according to different
procurement methods

End
 Physical resource check and delivery procedure
User Department State-owned Assets Infrastructure Section Output document
Management Office
Begin
Completion of Receipt and
Acceptance of User physical Acceptance
Departments resource sheet
pass Not pass Signature for
acceptance by the
Acceptance and Return, leader in charge
signatures by exchange or
purchasing and claim as Bills accounts
resource stipulated in the
management for low-value
contract consumables
personnel

Accounting Procedures handled by Account entry

resource Management Personnel Bills accounts
Entering physical for physical
Managers register daily resource resources
accounts and reconcile with the management system
SAD every year.
 Physical resource maintenance procedure
User Department Director of Director of Principal’s office Party Committee Document
Departments Equipment
Department
Begin
Maintenance
Submit Daily Audit
Maintenance application
maintenance application
Application form
Making
Overhaul Plan
less than 1 million yuan Audit Audit Maintenance
per unit application application plan
1 million to 2 million Audit Audit Audit
yuan per unit application application application
Over 2 million yuan per Audit Audit Audit
application Audit
unit application application application
Daily Maintenance
and Overhaul
Maintenance Contract,
acceptance and
registration Receipt ,etc.
End
 Physical resource inventory procedure
User Department State-owned Assets Principal’s Party Committee Ministry of Treasury Planning
Management office Education Department Finance
Office Department
Begin
examine,
Establishment of approve
Asset Inventory
Group
Making resource Make an
inventory inventory plan

Fill in the checklist

less than 1 examine,
Loss Amount approve Put on file
of resource million yuan
1 million to 2 examine, Put on file
deliberation deliberation approve
million yuan
examine,
Over 2 million yuan deliberation deliberation deliberation approve
Change
management Financial
platform data transaction
End
 Physical resource disposal procedure
User Department State-owned Assets Principal’s Party Ministry Treasury Resource Planning
Management office Committee of Department management Finance
Office Education center Department
Begin
Apply for On-the-spot
disposal and fill physical inspection
in form and acceptance
less than 100 verify
thousand yuan

100 thousand deliberation verify

to 1 million

1 to 5 million deliberation deliberation verify

Over 5 million deliberation
deliberation
deliberation verify disposal Financial
Withdrawal in
the resource transaction
Management
Platform

End