ASSESSMENT OF FIXED ASSET MANAGEMENT IN CASE OF DILLA UNIVERSITY MAIN CAMPUS

MBA Thesis

By: SHITU DESALEGN

INFOLINK UNVERSITY COLLEGE, HAWASSA CAMPUS

JUNE 2023
 • Assets management is a key discipline in a modern economy:
organizations manages their assets to maintain the standard
of living after retirement, to buy property later, or because a
sovereign wealth fund does not want to lose the assets for the
future public use
• Alongside, asset management is a widely accepted industry
practice through which capital assets are inventoried,
Background of the monitored, and managed over time to ensure the longevity
and sustained viability of the assets as components of an
Study effectively functioning system
• Fixed asset management is affected by an entity ‘s board of
directors, management and other personnel designed to
provide reasonable assurance regarding the achievement of
objectives of the organization in three fundamental categories
effectiveness and efficiency of operations, reliability of
financial reporting and compliance with applicable laws and
regulations
 Therefore, fixed asset management is very important to
understand the analyzing and properly utilized Fixed
Assets effects long term sustainability of the firms
which may affect liquidity and solvency and
profitability positions of the company

Hence, the study would generally aim to assess fixed

Statement of the asset management and practice in Dilla University
Main campusto answer that the sectors were acquired
Problem and managed their fixed assets based on planned,
economical and modern utilizations

Therefore, this study was focus on to assess fixed Asset

management in Dilla University Main campus, with a
view to evaluate the practices and current status of
fixed Asset management in Dilla University Main
campus, and finally come up with possible solutions
 What is the practices of fixed assets recorded in Dilla
University Main campus?

What is the current status of Asset management in Dilla

University Main campus?

Research
Questions
What is the performance of Dilla University Main campus
on the arranging and depreciation of fixed assets?

What are the delay of fixed asset management in Dilla

University Main campus?
 • General objective of study was to assess
Objectives of the
study fixed Asset management in Dilla University
Main campus.
 To assess the practices of fixed assets recorded in Dilla
University Main campus

To evaluate the current status of Asset management in Dilla

University Main campus
Specific
Objectives of the
study To evaluate the practices and performance of fixed asset
management in Dilla University Main campus on the
arranging and depreciation of fixed assets management

To explore the hinder of fixed asset management

performance in Dilla University Main campus
 Research design provides the basic direction
for carrying out a research project to obtain
answer to research questions

The study was conducted to assess fixed

Research Asset management in Dilla University Main
campus
Design

So the researcher was use descriptive

research design pointing to deliver a correct
and valid demonstration of variables that are
applicable to the research question.
 • There are two methods that provide in the research
method such as Quantitative and Qualitative, where
one of them is not better than the others, all of this
Research depends on how the researcher want to do a research
approach of study
• This studywas use mixed research approach that is
both quantitative and qualitative research approach
 Primary data are those information obtained from
the original source while secondary data are those
obtained as second hand data like from books and
any other sources which is not original

Source of Data To achieve the objectives of this study, the

primary data was collected through
Collection questionnaires and interviews

Secondary sources of data was gathered from different

sources like references books, internet, different thesis,
dissertation and projects, literatures, articles and other
academic papers, and others related sources
 To gather the quantitative and qualitative data, this study
were employed both the primary and secondary data
collection techniques

Data Collection Primary data was collected by using questionnaires

Techniques

The study was used both published and unpublished

secondary data Collection Techniques like references
books, internet, different thesis, dissertation and projects,
literatures, articles and other academic papers, and others
related sources
 Based on the information found from Dilla University Main
campus, there are a total of 152 employees are working in
related to fixed asset management, which includes
procurement and property administration directorate, finance
directorate, disposal committee, general staff, and audit
directorate

Sampling
All of them were taken as a target population
Population and for the purpose of this study. In other ways, a
sampling population census was used to make the
research
techniques

Therefore, for questionnaire 152 participants who are

working in related to fixed asset management, which
includes procurement service, finance and accounting,
disposal committee, general staff, and auditing staff were
involved in the study
 For the understanding and fruitful achievement of
the data collected from primary and secondary
methods, diverse data sources was recorded,
edited, organized, analyzed, interpreted, and
presented with the research questions

This was done by using mixed data analysis

method both qualitative and quantitative analysis
Method of Data and data was collected from questionnaires
analysis analyzed and offered using descriptive statistical
tools by using SPSS Version

Therefore; in this study for analyzing data

descriptive statistics was used the data
collected from Dilla university Main campus
 Reliability is the degree to which the
measure of a construct is consistent
or dependable

Reliability Test There are many ways of estimating

reliability one of which is internal
consistency reliability

Reliability Statistics

Cronbach's Alpha N of Items

In this study Cronbache alpha model
was used to measure the overall
.798 31 reliability of the data obtained from a
questionnaire
 Validity refers to the extent to which a
measure adequately represents the
underlying construct that it is supposed to
measure

An insight that was obtained from the pilot

survey of the 10 employee was analyzed and
Validity Test used to make adjustments on the
questionnaire items

Reliability of the questionnaire items was

determined using the test-retest method in
which the same respondents was requested to
provide information for the second time
 RESULTS AND DISCUSSIONS

Demographic Characteristics of the

Respondents

• This section describes the frequency distribution of

respondents’ personal or demographic
characteristics
• Demographic characteristics described by using
table, bar charts, pie charts and histograms
 • According to table 4.1 above the Gender of respondent out of 152
Genders of the sample population 95 males and 57 are female from above table the
majority participated in the study are male
Respondents
Gender

Frequency Percent Valid Percent Cumulative

Percent

Valid Male 95 62.5 62.5 62.5

Female 57 37.5 37.5 100.0

Total 152 100.0 100.0

 Age of the Respondents
• Age of the respondent’s shows that 39.474 % of the Dilla
university employees are between the age 31-40 and the other
26.316% are between 20-30 Years
• However, the least 9.86% of the employees are at the age of 51
years and above
• In other words, most of the employees are belonging in the
productive age group whose summation percentage is more than
80%
Educational status of the From the findings majority, 40.132% of the
respondents indicated that they had Degree level of
Respondents education, 30.921% of the respondents had Diploma,
23.026 % of the respondents had Masters and above,
5.92% of the respondents had Certificate

These findings implied that most of

the respondents were qualified to
understand the nature of the study
problem

This demonstrated that most of the

organization employees were qualified
professionals with technical knowledge and
skills on the study problem
Work Experience of the
Respondents • The study determined the working experience
held by the respondents in order to ascertain the
extent to which their responses could be relied
upon to make conclusions on the study problem
using their working experience
• In regarding to year of service, majority of the
Dilla university employees have relatively longer
existence in the university, whereas 26.97% of the
respondents have an experience 11-15 years
• It can be therefore noted that most respondents
have been working for more than 6 years which is
a significant length for an employee to understand
the university fixed asset management practice
Evaluation in Capitalizing
and Recording as a Fixed Table 4.2 shows the degree of agreement by the
respondents to the statement once an item is
Asset capitalized; it is recorded as a part of a fixed
assets inventory

Once an item is capitalized, it is recorded as a part of a fixed assets

inventory
This shows that the university have had a
Frequen Percent Valid Cumul problem on the fixed asset management as well
cy Percent ative as recording
Percent

Donated furniture and equipment that fall within

Valid Strongly 21 13.8 13.8 13.8
the university capitalization threshold are
Agree
capitalized at their fair value and depreciated the
Agree 35 23.0 23.0 36.8
same way as furniture and equipment that are
purchased by the organization, according to the
Neutral 84 55.3 55.3 92.1 rules and regulation of the ministry of finance
Disagree 12 7.9 7.9 100.0
and GAAP

Total 152 100.0 100.0

 The fixed asset management ITEM ONE -Based on the data the university store management personnel’s
after acquisition didn’t properly follow the required procedure when the raw materials released
from the store. This implies that the university has had a problem on the
controlling of release draw materials.

Statement Yes No ITEM TWO This implies that there is the information materials issuances didn’t
Do you think the fixed asset receiving, issuing, 61. 38.8 reconciled to general ledger control accounts.
accounting and storing responsibilities properly 2% %
segregated?
ITEM THREE This implies that the university didn’t perform the inventory
Are materials released from storerooms only on the 47. 52.6 records reconciled with physical count at a regular interval
basis of requisitions which are approved by a 4% %
responsible official of the department?

Are the materials issuances reconciled to general ledger 40. 59.9 ITEM FOUR This implies that the physical count of the university didn’t concern
control accounts at reasonable intervals? 1% % all the inventory items.

Are inventory records reconciled with physical count at 44. 55.9

a regular interval? 1% % ITEM FIVE This implies that the inventory physical count of the university didn’t
Are all classes of fixed asset items physically counted? 42. 57.2 have proper procedure, the efficiency is depends on the assigned person
experience.
8% %

Does your university have a manual which can provide 41. 58.6
a proper procedure for making fixed asset physical 4% % ITEM SIX This implies that the inventory controlling performance exposed the
count? inventories for the theft.

Does management review the reconciliation of physical 37. 62.3

fixed asset counts to the fixed asset records? 7% %
 Maintenance and
Safeguarding of Plant Assets
Generally, the above table result shows that
asset maintenance and repair is not done on
time and the maintenance value is no longer
Statement Never Rarely Some Unusua Alway as well as there was no clear requirement
lly s that maintenance based. Asset maintenance
Repairing and 0.0% 59.2% 28.9% 11.8% 0.0% was not done in the study area well. Which is
maintaining of asset
declaim the performance of the university
activity.
are done soon

Establishment 8.6% 60.5% 25.0% 5.9% 0.0%

strategies to keeping
assets in use as long
as possible

by maintenance is 17.1% 62.5% 20.4% 0.0% 0.0%

maximize assets life
Brady, (2001) described regular
maintenance may also help to preserve
cycle of institution's an asset’s value. As well as Samoa Audit
standard needs Office, 2012) stated that level of
maintenance required for an asset, and
Asset Maintenance 0.0% 24.3% 67.8% 7.9% 0.0% the performance expected of it, should
and Repaired by be clearly established.
Requirements
 Fixed Asset Recording
Statement Strongly Disagree Neutral Agree Strongly
Disagree Agree
There are proper follow- 18.4% 58.6% 23.0% 0.0% 0.0%
up for the physical
However, there is no in
condition of acquired
properties
proper follow-up for the
Review the property tax 0.0% 7.2% 24.3% 46.1% 22.4% physical condition of
records acquired properties
Dilla University Main 0.0% 0.0% 0.0% 70.4% 29.6% during recording. This
campus established a
may hinder the
personal issue items
register
university performance
Asset information is 0.0% 0.0% 0.0% 65.1% 34.9%
and its suitability
correctly recorded development.
Record improvements 0.0% 0.0% 11.2% 56.6% 32.2%
made to any of the fixed
assets

Recorded all fixed assets 0.0% 6.6% 10.5% 53.3% 29.6%

on the asset register
 Asset Management Software The above table 4.4 with
Application regarding to item-‘‘Using
advanced software system to
enhance fixed asset
management

Statement Stron Disagr Neutr Agr Stron

Beside of this, the majority
gly ee al ee gly
57% of respondents were
Disagr Agree
ee
disagree on the university
Established an integrated
software asset register
Using advanced 15.1% 63.8% 21.1 0.0 0.0%
software system to % %
enhance fixed asset
management That means the university is
not integrated software asset
Established an 16.4% 57.9% 25.7 0.0 0.0%
register
integrated software % %
asset register
 Asset management policy Concerning on asset management
policy of the University, 54.6% of
respondents were disagree on the
University monitored compliance with
policies and legislation
Statement Strongl Disagr Neutr Agre Strongl
y ee al e y
Disagre Agree
e

With the item-‘‘Fixed Asset policy of

Monitored compliance 19.7% 54.6% 25.7% 0.0 0.0% Dilla University Main campus are
with policies
legislation
and %
review’’ shows that 57.2% of
respondents were dis agree
Fixed Asset policy of 19.7% 57.2% 23.0% 0.0 0.0%
Dilla University Main %
campus are review

Fixed asset policies of 18.4% 54.6% 27.0% 0.0 0.0%

Dilla University Main %
campus cope up with This implies that the University is not
modern fixed asset review asset policy
management
 Long Term Asset Management
Funding • Beside of this, 57.9% of respondents
were agreeing by financing asset for
repair and replacement through
financial assistance
Statement Strong Disagr Neutr Agr Strongl
ly ee al ee y Agree • Finally, with the item of ‘‘Setting the
Disagr
ee cost and funds for the long term to
Funding a dedicated reserve 0.0% 6.6% 9.9% 52.6 30.9% replace unneeded assets to new assets
from current revenues for %
long term asset • Generally, the above table result
Financing asset for repair 0.0% 0.0% 10.5 57.9 31.6%
and replacement through % %
shows that the university is good in
financial assistance Long term funding to asset
Setting the cost and funds 0.0% 0.0% 0.0% 65.8 34.2%
for the long term to replace %
management and all area above the
unneeded assets to new average
assets
 Depreciated Asset The above table indicated that the
university is dispose its depreciated
Management fixed asset properly in the right time
shows that 63.8 % and 28.9%
respondents were agree and strongly
agree respectively

Statement Stron Disa Neut Agr Stron

gly gree ral ee gly
Concerning to the item-‘‘The University
Disag Agre calculate annually depreciation expense
ree e on its fixed assets” shows that 32.9% of
respondent were responded strongly agree
The university is 0.0% 0.0% 7.2 63. 28.9 and 67.1% of respondents were agree on
dispose its % 8% % the fact
depreciated fixed
asset properly in the
right time
The university 0.0% 0.0% 0.0 67. 32.9
calculate annually % 1% % Generally, the above table result shows
that asset Management and Depreciated
depreciation expense was done properly in the university
on its fixed assets
 Globally fixed asset management industry has
finally returned to a growth to achieve the
goal of the specific organization

Fixed assets management is an important

accounting process that seeks to track fixed
Summary assets for the purpose of financial accounting,
preventing maintenance and theft deterrence

The main objective of the study was to assess

fixed Asset management in Dilla University
Main campus
 The University do not monitored compliance with policies and
Fixed Asset policy of University do not reviewed

The University do not use advanced software system and do not

Established an integrated software asset register

Properties are not maintenance and repair on time and have

particular requirement for maintenance

Conclusion
Disposal is not done according to procedures in place and on
time

Employee has not enough knowledge about the policy and

procedures of Fixed Asset management and are not familiar with
the principles of asset management

Lack of proper follow-up for the physical condition of

acquired properties
 • As the results obtained from respondents, Dilla
University Main campus has a repair and
Conclusion maintenance department with insufficient
safeguarding to protect fixed assets from theft
and fire
 Dilla University Main campus should be concerned and budgetary
considerations for each University branch asset management

The University should be use software, and standards which are used
to manage different types of assets

Recommendations The University should be developing world wide standard policy and
asset management Strategy link to University Plan

The University should be develop asset replacement standards for

each asset type or subtype, depending on the size and complexity of
service delivery, and operational requirements

The fixed asset management plan is so weak and needs essential

improvement
 • Dilla University Main campus should be
organization, develop an asset management policy
including fundamental principles about the
management of its assets from design to disposal,
including its vision, beliefs, values and commitments
Recommendations to asset management at a high level
• The management body of Dilla University should
have to give proper emphasis to the fixed asset
management function and store house management
by establishing systematic ways of expediting and
follow up the fixed asset management process and
should monitor the performance
 The property administration directorate should work hard
in controlling fixed assets by gathering information to
identify inventory fixed assets, counterchecking those
recorded assets from the registration book, and updating
the registry Internal control over fixed assets

To improve the performance of internal auditing in the

protection of fixed assets from illegal procedures in each
Recommendations phase of the fixed asset life cycle, adequate training, and
development program and adequate staffing of human
power should practice in the University

Plan assets other than land have a limited economic life;

consequently, the cost of plan assets of the University
must be allocated as depreciation expense to the
accounting period receiving benefit from their use