Tracking, accounting, and reporting on fixed assets is critical for any organization. But for government entities, accurately reporting on fixed asset values, depreciation, and disposal isn’t just good practice — it’s required by law under GASB 34. Despite this government regulation, however, many organizations continue to overlook the significance of fixed asset management. Often, it isn’t until receiving a qualified audit opinion — the result of inadequate fixed asset accounting procedures — that organizations begin to see how important it is.
If your school district isn’t already harnessing the power of a dedicated asset management system, you’re likely relying on one of two alternatives to fill the gap:
- Your district’s Enterprise Resource Planning (ERP) Asset Management module
While both spreadsheets and ERPs can be robust tools for managing data and information, neither were designed specifically for asset management — and they’re certainly not equipped to manage the requirements and nuances of school asset management. As a result, you’ll want to keep aware of the concerns and shortcomings associated with using fixed asset spreadsheets for school asset management. In this post, we’ll examine those particular challenges.
The Trouble with Spreadsheets
At AssetWorks, when we speak with prospective k12 customers interested in making the leap to a dedicated school asset management solution, we find that many of them are currently relying on spreadsheets.
Spreadsheet programs like Excel offer a fairly wide variety of features and functionality, and many of them can assist in some of your more general asset management processes. In fact, those of you currently relying on them may even be quite satisfied with their performance.
However, fixed asset spreadsheets are also hosts to many shortcomings, sometimes lurking deep within your spreadsheet’s cells. It often isn’t until someone goes digging (maybe during a routine physical inventory or an audit) that these challenges show themselves. And by then, it may be too late to avoid some pretty drastic repercussions.
Some of the biggest complaints we hear from school districts utilizing spreadsheets include:
- A lack of accountability
1. Spreadsheets are Error-Prone
Let’s start with the cold, hard facts: 90% of spreadsheets contain some kind of formatting error.1
Since they’re human-dependent, that’s not a huge surprise. If your organization is managing assets in spreadsheets, mistakes are bound to happen. And they can be anything from typos and accidental omissions to mathematical errors. Excel is just like any other program – numbers can get lost, and formulas can be over-written. The struggle is real.
Yet ensuring proper stewardship of district assets is a critical part of your responsibility as a school business official – and your district’s fixed asset accounting procedures were put in place to help facilitate that. So what exactly do fixed asset accounting errors mean for your school’s business office and your accounting ledger?
There are several methods for calculating depreciation, including:
- Declining balance
- Sum of the years’ digits
- Units of production
Depending on the category of fixed assets you’re tracking, you may even be using a mixture of these methods. And if you’re using spreadsheets for fixed asset management, you’re probably performing those depreciation calculations manually.
That’s a lot to keep track of in a spreadsheet. The more details and differences associated with each particular asset, the more susceptible your data is to error. Incorrectly depreciating a fixed asset can lead to a loss of funds or a qualified audit opinion.
Furthermore, your fixed asset spreadsheet contains formulas that are dependent on the values in other cells, making it highly susceptible to the good ol’ Domino Effect. Once one error weasels its way into a report, future errors are inevitable.
Betting on error-prone spreadsheets for asset management can also complicate the budgeting process.
If your asset accounting records are incorrect, you don’t know exactly how much money you have or where. This can make allocating funds extremely risky. How can you accurately forecast for next year’s budget when this year’s data isn’t even accurate? Inaccurate data can be extremely costly. And we know that, as a school district, you can’t afford to waste a penny.
2. Spreadsheets are Inconvenient
In case the fallibility of fixed asset spreadsheets hasn’t sent you screaming in the other direction, let’s talk about their second big flaw. (And if you’re using fixed asset spreadsheets, we’re certain you already know this, so we’re just going to say it…)
Spreadsheets are downright inconvenient.
Version Control, Where Are You?
Yep, spreadsheets lack version control – and for school districts, this can be a big problem.
With limited time and resources, many districts don’t have the luxury of appointing one specific person with the role of “Asset Manager.” As a result, asset management job responsibilities are often distributed among multiple people.
But with so many users trying to access and update the same spreadsheets, things get messy pretty quickly. Information can be lost or overwritten, and spreadsheets can’t track down that lost information and who was responsible for it.
Also, Excel doesn’t allow for real-time collaboration. So what happens when audit season approaches, and everyone needs to access and edit one spreadsheet at the same time? Collaborating on a spreadsheet means that multiple people have to send the same document back and forth for updates, further increasing the chance for data errors or loss. Basically this creates the Official Most Stress-Inducing Email Thread of All-Time.
Multiple Hands in Your Asset Management Pie?
Today, many school asset management software systems employ a ‘per user’ pricing strategy. But at AssetWorks, we believe that you should never have to compromise on user-access to be able to afford a great software solution. After all, more users means more touch points. And that leads to more-accurate data – and that’s what it’s all about!
Nearly all of the school districts we work with require multiple users. So AssetMAXX School Asset Management Software is priced by student enrollment. Choose the Unlimited Low-Level User Access option, and AssetWorks encourages you to invite as many users as necessary to access your database! The whole point is to empower your school district, not limit it.
If you’ve ever used a fixed asset spreadsheet, you probably agree with the 92% of Excel users who say it’s too time-consuming.2
As a school district, your resources are extremely limited. That means that your time is equally limited and valuable. Unfortunately, your spreadsheet doesn’t care about that.
Manually entering and updating data in spreadsheets eats up a lot of time, and data entry is just the start. Once that’s done, you’ll spend even more time combining spreadsheets, consolidating data, and – you guessed it! – checking and double-checking for errors.
By automating their inventory process, the Louisiana Property Assistance Agency was able to reduce the time needed to conduct their inventory by 80%.
3. Spreadsheets Lack Accountability
If you’re responsible for any (or all) asset management responsibilities for your school district, you understand accountability. After all, GASB 34 was designed to keep state and local institutions accountable for tax payer funds. In fact, it was formed as a direct response to incidents of corruption and fund mismanagement within government entities.
So, in order to be more accountable, we’re keeping a closer, more watchful eye on our fixed assets… using… solutions that lack accountability?
Take a moment to let that soak in.
The Spreadsheet Whodunnit
With Excel, there’s no way of knowing who interacted last with any specific fixed asset in your database. Without a detailed record of asset ownership, it becomes almost impossible to track down a misplaced asset. And if you have no idea who saw it last, who do you ask about it?
If you’re using Excel for asset management, you also can’t tell who edited your spreadsheets, leaving you no way to decipher who’s made changes to the document and when. How can you be confident about this data when you hand over your records to an auditor or other stakeholders? Remember the Official Most Stress-Inducing Email Thread of All-Time that we talked about earlier? Well, it just got more stressful.
There’s a Better Way
An effective asset management system should record every single interaction with an asset, automatically and instantly. This creates a detailed audit trail that holds everyone accountable.
Now, if you already have your school’s fixed assets under control with a sophisticated asset management system, congratulations! You know how effective asset management processes and procedures can be.
But for those of you still fumbling around in a clunky spreadsheet database, here’s the bottom line (literally and figuratively):
With fixed asset spreadsheets, challenges abound — including errors, inconvenience and a lack of accountability. If left unaddressed, these challenges can lead to bigger issues, like compliance and funding concerns, budgeting issues, and more. And because funds are already limited for most districts, that’s a big, pricey problem.
- Panko, Raymond. “What we Don’t Know About Spreadsheet Errors Today: The Facts, Why we Don’t Believe Them, and What we Need to Do.”
- Survey conducted by ClearPoint Strategy, August 2014.