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Disposal of Surplus Assets Policy

Disposal of Surplus Assets Policy Information

Date Approved: May 15 2023
Effective Date: May 15 2023
Date Reviewed: March 2023
Replaces: May 2018

Purpose

The purpose of this policy is to ensure that Cambrian College (the College) assets are disposed of in an efficient manner and that capital assets are properly accounted for when they are disposed.

Definitions

Asset: Items such as land, building, furniture, equipment, books, artwork, etc. funded from any source.

Capital Asset: Individual items $5,000 and greater (net of taxes and shipping). These items have been recorded in the College’s fixed asset ledger and may have a book value, unless fully depreciated.

Disposal: The transferring of title to another party by way of sale, trade-in or gift and the removal of assets from service due to discontinuance, scrapping or dismantling.

Furniture: Large movable equipment, such as tables and chairs, used to make a house, office, or other space suitable for living or working.

Gain or Loss on Asset: The difference between the net proceeds on disposal, less the asset’s Net Book Value.

Information Technology Equipment “IT”: Items such as computers, laptops, printers, keyboards, mainframe systems, servers and network.

Low Value Assets: Assets with a potential market value of $100 or less.

Managed Asset: Assets that are centrally managed by a College department (i.e. furniture and IT equipment).

Market Value (MV): The amount for which something can be sold on a given market.

Net Book Value (NBV): The original cost of the Capital Asset less accumulated amortization up to and including the period and year of disposal.

Net Proceeds: The proceeds on disposal of the asset, less any costs incurred during the process.

Requisitioner: College employee requesting the disposal.

Surplus: Asset that is no longer needed or required.

Application/ Scope

This policy applies to all College employees and includes the disposal of all College assets regardless of value, funded from any source. This includes furniture, equipment, consumables and other assets.

The disposal of land and buildings is excluded from this policy and will be administered in accordance with applicable Ministry directives.

Policy Statements

Similar to the procurement of assets, disposal of assets must be done in a fair and transparent manner to ensure that no conflicts of interest exist and that the Cambrian College (“College”) maximizes the outcome. In addition, the College desires to redistribute surplus assets internally to avoid unnecessary procurements.

  1. Disposal Preference
    Internal transfer of departmental surplus assets is the preferred method of disposal.
  2. Managed Assets
    Information technology equipment and furniture must be returned to the departments in which they are managed regardless of value, condition, or original account.
  3. Level of Effort
    When a decision is being made regarding the disposal method, all parties must consider level of effort verses asset value.
  4. Determination of estimated market value
    Estimated market value is determined by all parties involved in the disposal of the asset or via public auction.
  5. Sale of Assets to Employees
    No employee or elected official shall be able to purchase a College asset unless sold publicly.
  6. Ethics
    Undocumented removal of College Assets (other than assets disposed of via scrapping, recycling or landfill) is considered to be theft of College property and individuals responsible for such actions will be appropriately disciplined.
  7. Independent Approval
    Asset disposal approvals must be done in accordance with this policy. Starting bids cannot be determined by a person who will potentially purchase the asset.
  8. Removal of Large or High-Risk Assets
    Will ensure that all large or high-risk assets being removed from the premise, have professional movers, insurance and WSIB certificate available to reduce the exposure to the College.
  9. Release of Liability
    All assets externally disposed of must be “as is, where is” and the College shall be released of any liability.
  10. Accounting Proceeds from the Sale of Assets
    All proceeds from the sale of assets will be credited to a general account that matches the original account type (e.g. operating, capital, restricted). Costs incurred to process the sale may be transferred to the department that incurred the costs.
  11. Allocation of Net Proceeds
    Allocation of net proceeds from the sale of an asset refers to the planned use of the proceeds and is approved concurrently with the annual budget by Senior Team.
  12. Procedures
    Requisitioners must refer to the Disposal of Surplus Assets Procedure for the disposal procedures.

Responsibilities and Accountability

Requisitioners

  • Comply with this policy and related procedures when disposing of assets.
  • Provide accurate information and assist in the sale of assets.
  • Safeguard assets that have been approved for disposal until removed from the College.

Approvers

  • Ensure compliance to this policy and related procedure when approving asset disposals.

Financial Services

  • Manage the disposal of assets policy and procedures.
  • Approve the asset disposal and communicate any net book value to Purchasing Services.
  • Ensure appropriate allocation of resources following the sale of the asset.
  • Records retention.

Purchasing Services

  • Manage internal reallocation of Low Value Assets and external sale of assets.
  • Ensure the appropriate approvals have been obtained.
  • Dispose of assets in the best interest of the College and in compliance with this policy, related policies and the Disposal of Surplus Asset Procedures.
  • Ensure the College has been released of any liability resulting from the sale or removal of its assets.

Approvals

Notwithstanding the approvals specified below, all disposals require the approval from the Manager, Budgeting and Reporting before proceeding with the disposal.

Records Retention

All records must be retained in accordance with the College’s Records Retention Policy.

Related Policies / Directives / Laws/ Regulations