Minnesota Department of Transportation

511 Travel Info

MnDOT Policies

Property Management Procedures

For Property Management Policy #FM019

Effective Date: January 22, 2024

Print Procedures (pdf)

Introduction

This document is the technical companion to the Minnesota Department of Transportation’s (MnDOT’s) Property Management Policy and provides the procedures for property management.

Definitions

Consumable Inventory

Items purchased by an agency and tracked by the agency’s financial system for:

  • Reissue, reuse, or resale which the agency controls as a part of its ongoing operations (such as construction materials, bulk fuel, hardware items, or maintenance parts that are stocked by the agency; or
  • Items purchased and incorporated into or attached to an end-item during production, including raw materials or work-in-progress and finished goods or materials (such as equipment components to be used for a tailor-made truck for a specific purpose). 

Cycle Count

An audit technique that divides the items at the inventory center into multiple counting events so that a complete physical inventory can be conducted and reconciled for the inventory center over the course of a year.

At the end of the year, the entire inventory center will have been inventoried. This is an alternative to conducting a complete physical inventory (wall to wall count) once per year. The key purpose of cycle counting is to identify items in error, thus triggering research, identification, and elimination of the cause of the errors on a timely basis and to maintain accurate financial data. A cycle count must occur on a regular, defined basis (often more frequently for high-value or fast-moving items and less frequently for low-value or slow-moving items).

Inventory

An accounting of the quantity of materials on hand. It may consist of stocked items used to support production (raw materials and work-in-process items), as well as supporting activities (maintenance, repair, and operating supplies) and customer service (finished goods and spare parts).

Materials Management

The function of managing and maintaining a constantly available supply of raw materials, purchased parts, and supplies.

Physical Inventory (Wall-to-Wall)

The act of accounting for, and the accurate verification of, information on file for each piece of state-owned consumable inventory property. A complete physical inventory and verification with the results entered in the SWIFT inventory module documenting the accuracy of 100% of the items maintained in the inventory module of SWIFT must be conducted, at a minimum, annually.  A Cycle Count method may be used in place of the physical inventory. 

Satellite Inventory Unit

Assigned business unit location where the ownership or responsibility of materials from a parent (main) inventory unit are transferred so that materials are accounted for, tracked in the agency’s financial system, and available for consumption.

Sensitive Items

Items that are not considered consumable inventory, real property (land and buildings), or capital assets. Sensitive items are generally for individual use or could be easily sold and are most often subject to pilferage or misuse.

Separation of Duties

An internal control practice designed to reduce the opportunity for errors and to protect employees. Duties are separated so that no one person carries out all phases of a business transaction from beginning to end.

Supplies

Items purchased by an agency and used or assigned immediately or within a reasonable time after they are acquired (such as office supplies, one-time purchases of monitors, mice, keyboards, and nominal peripherals, or instructional materials and supplies that are used up as part of a class or training activity). Note: bulk purchases of monitors, mice, keyboards, and nominal peripherals kept on hand are not considered supplies and must be tracked in inventory.

Surplus Property

Any state-owned property with utility or monetary value including capital assets, sensitive items, commodities, equipment, materials, or supplies, that is obsolete, unused, not needed for a public purpose, or ineffective for current use.

Procedures

Separation of Duties

  • No one employee may be solely responsible for all aspects of the purchase of materials. This includes purchasing, receiving, and adjusting of SWIFT inventory records unless mitigating controls are in place.
  • Payment authorization must remain separate from at least one of the duties of purchasing, receiving, and/or issuing of inventory.
  • For the inventory adjustment process, each district and office must have a person authorized to adjust inventory records.
  • An Inventory Count and Adjustment Form must be completed for all Cycle Counts, even if an adjustment is not made.
    • Each district and office must have a person outside the inventory center responsible for reviewing, signing, and monitoring the Inventory Count and Adjustment Form.
    • The inventory center must research discrepancies and include documentation for the adjustment on the Inventory Count and Adjustment Form.

Misuse of State Property

  • All employees must report the misuse of state property to the Fleet Manager, Agency Inventory Coordinator, Office of Audit, CO/District Human Resources, or the employee’s manager or supervisor, or use the Report Wrongdoing Form. 
  • Employees must report violations of this policy and any significant internal control weaknesses through the designated agency channels and/or other proper authorities within the agency. Thefts, embezzlement, or unlawful use of property must be reported in writing to the Office of the Legislative Auditor, as required by Minnesota Statute §609.456 and MMB’s Statewide Financial and MAPS Procedure 0103-01.1 Code of Conduct.

Sensitive Items

The State, as specified by the State of Minnesota Property Management Policy and User Guide, identifies the following as sensitive items:

  • Computers (desktops, tablets, and laptops) including network servers
  • Portable printers, scanners, projectors
  • Cellular or smart phones and personal digital assistants (PDAs)
  • Software for internal use with an acquisition cost over $5,000 and less than $30,000
  • Cameras, televisions, and other video equipment with an acquisition cost over $500 and less than $5,000
Sensitive Item Tracking
  • The buyer and/or receiver must identify all sensitive items with a state asset property label or engrave the asset number on slick surfaces.
  • Each district and office must have an employee assigned to track and manage sensitive items:
    • Remove all state asset property labels before disposing the property
    • Track and account for sensitive items in the SWIFT asset module, except for IT-related items that are tracked in a separate, approved system or purchased by MNIT Central
    • Conduct a complete physical inventory of sensitive items once every two years, at a minimum

Capital Assets

For purposes of accountability, capital assets include property with costs of $5,000 or more (including applicable sales taxes and other ancillary charges such as installation and shipping fees), has a normal useful life expectancy exceeding two years, and maintains its identity while in use.  Capital assets do not include inventory items or supplies.

Note: Equipment purchased that will become part of the infrastructure road and bridge construction are not tracked separately. For example, road sensors installed beneath the road would not be tagged and set up as a separate asset. These costs would become part of the larger roadway control section asset.

Inventory of Capital Assets and Sensitive Items

The Office of Financial Management will lead all efforts in reporting and tracking capital assets and sensitive items, including required physical inventory.  For direction of asset disposal, physical inventory, or overall tracking, visit http://ihub/financialmanagement/financial-reporting/fixed-assets.html. 

Inventory of Fleet and Equipment Assets

The Office of Maintenance Fleet Equipment Management Section will lead all efforts in reporting, tracking, and disposal of fleet and equipment assets, including required physical inventory. 

Inventory of Supplies

Supplies are not reported or tracked and do not require physical inventory. Note: bulk purchases of mice, keyboards, and nominal peripherals to kept on hand are not considered supplies and must be tracked in inventory.

Consumable Inventory for all Districts and Offices

In addition to the requirements in the State of Minnesota Property Management Policy and User Guide, MnDOT employees must comply with the following requirements.

Accuracy of Records
  • Each district and office with an inventory must assign a person accountable for on-going review of the
    accuracy of the inventory count records for all locations.
  • Each district and office must perform inventory counts by district or office materials management staff or other employees as assigned.
    • Initial all count sheets by the individual(s) performing the inventory or use the Mobile Inventory (for employees only) application while entering the count.
    • Each inventory location must keep a minimum of 95% accuracy per calendar year.
    • Accuracy must be figured using the SWIFT query M_IN_GBL_CC_ACCURACY_SUMMARY.
    • Failure to maintain 95% accuracy must require a complete wall-to-wall inventory.
  • Each district and office must decide which method of inventory counting (per inventory center) to use,
    either cycle counting or an annual wall-to-wall count of all items at each inventory location.
  • Each district and office must complete an Inventory Count and Adjustment Form for all cycle counts for transparency.  Any discrepancy should be noted and corrected on the form.
    • Due to the seasonal usage, manage the following items separately:
      • Herbicides, emulsified asphalt, and bulk metal to ensure the accuracy of the inventory.
      • Bulk fuel must be reconciled quarterly. The Materials Management Section will lead this process.
      • Salt and winter mix and snow/ice chemicals must be reconciled at the end of snow season, prior to the end of the fiscal year.
Bulk Fuel

The Materials Management Section will coordinate a quarterly fuel sync to reconcile the bulk fuel inventory. Each district that has bulk fuel is responsible for bulk fuel reconciliation and accuracy results of each location.

  • Districts
    • Inventory supervisor and assigned employee(s) must participate in quarterly Fuel Syncs.
    • Inventory supervisor and/or assigned employee(s) will attend quarterly pre-sync and post-sync meetings reporting equipment issues and pending SWIFT entries according to Fuel Sync directions.
    • Must have an employee and backup employee assigned to measure fuel quantity in each tank at the correct date and time and record amount of the measurement (inches and gallons), fuel tank(s) monitoring system, and SWIFT inventory from next morning on the Master M5 Reconciliation spreadsheet. Report amounts to the MnDOT Fuel Distribution List.
    • Make SWIFT adjustments based on MMS recommendations and complete Inventory Count and Adjustment Form.
    • Maintain and calibrate fueling equipment if reconciliation is consistently off to ensure proper amount of fuel is recorded.
    • Enter transaction information (receipts) into SWIFT on a routine basis to maintain inventory balance.
    • Switch fuel terminals to manual only when a malfunction prevents fuel dispensing or maintenance is required. Each district and office may have a control process in place that must include the following:
      • Only authorized employees are allowed to bypass automated interface
      • Notification must be made to Fleet Management as soon as possible
      • The unit number, mileage, gallons, type of fuel, and employee ID must be recorded to enable manual entry in the fuel tank monitoring system and SWIFT.
    • Follow EPA Guide “Doing Inventory Control Right for Underground Storage Tanks.”
  • Materials Management Section (MMS)
    • Schedule all fuel syncs and pre-sync and post-sync meetings.
    • Run Inbound Errors Report and transaction errors uploading from Fleet Management System report. 
    • Collect all reported measurements and compile on Master Reconciliation spreadsheet. Make recommended SWIFT, Fleet Management System, and Petro-Vend adjustments. Send spreadsheet to the MnDOT Fuel Distribution List.
  • Fleet Management
    • Attend quarterly pre-sync and post-sync meetings reporting any Fleet Management System errors or location issues.
    • Email Error Report to the MnDOT Fuel Distribution List.
    • Complete Fleet Management System adjustments based on MMS recommendations.
    • Report any location issues or errors to location(s) and MMS. 
    • Ongoing monitoring of fuel transaction processes (see Bulk Fuel Reconciliation Process Model Workflow).
    • Capture project cost data using a fuel terminal or a manual method (as approved).
Vending Machines

Some districts have vending machines containing specialty tools or materials accessible by MnDOT employees to complete their jobs. Vending machines and the items within them are owned by the vendor until items are dispensed.

  • Vending machines from a vendor on the Department of Administration’s industrial supply contract are permissible.
  • District/office(s) must access vendor reports online to establish cost accounting on the purchase orders.
  • District/office(s) must review product usage and trends.
  • District/office(s) must have a blanket purchase order encumbered for at least two months of expected expenses.

Note: The vending machine ordering process is exempt from the SWIFT Punchout process.

Reusable Materials

All normally stocked reusable materials must be in the consumable inventory system (SWIFT). If the item is ordered at least annually, and is in new or near new condition, the item must be tracked in the consumable inventory system (SWIFT). Reusable materials include:

  • Rebuilt vehicle parts
  • Used signs
  • Materials returned to stock
  • Salvage materials
Obsolete materials and supplies

Conduct a review of each inventory periodically to dispose of surplus and obsolete stock. Follow the process in the “Disposal of State Property” section of this policy.

Security
  • Inventory items must be warehoused in secured inventory centers
  • Account for items maintained outside of secured storage
  • Establish procedures to safeguard inventory

Disposal of State Property

Each district and office must follow the procedures outlined in the State of Minnesota Property Management Policy and User Guide for the disposal of state property, including surplus construction materials left by contractors. Employees may not accept or take home any surplus materials or supplies.

Personal Property in the Workplace

A State Employee’s Personal Property Form is available for employees to use to list personal property brought to the workplace. The intent of the form is to protect employees and the State of Minnesota against claims for injury, damage, or loss incurred in connection with the voluntary use of employee-owned property. When an employee separates from the work location, this form serves as proof of ownership.

  • The agency is not responsible for employee-owned property while in the workplace.
  • Employee-owned property relates to items not purchased by the state. MnDOT employees are discouraged from bringing personal items into the workplace valued over $25.00 unless it is a contractual requirement of their position.
  • Employees are responsible for maintaining a list of their employee-owned property in the workplace.
  • When listing this property, the employee should consider items that the employee would want to take with them upon departure from the work location.

The supervisor must send a copy of the form signed by both the employee and the supervisor to the office/district Human Resources to place in the employee personnel file, retain a copy for the supervisor, and provide a copy to the employee.

When the employee leaves state employment or transfers to another state agency, the employee’s supervisor should verify items on the employee-owned property list.