06/30/1976-FISCAL AUDITS - Laserfiche WebLink

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Page 10 Property and Equipment The Massachusetts system of accounting makes no provision for accounting for fixed assets. However, there is no prohibition against maintaining fixed assets on the books of account. The Municipia7 Finance Officers Association of the United States recommends that all expenditures for fixed assets should be capitalized and that detailed records of municipialities investments in fixed assets be maintained and that an inventory of property be taken at least once ayear and checked against these detailed records. While it is not the practice of local governmental units to record depreciation on fixed assets there is an increasing trend in the number of governmental grants which allow depreciation as a reimbursable cost. I suggest that the town give some consideration to establishing a fixed asset group of accounts. This would necessitate an appraisal of all town owned property and considerable record keeping but the advantages of maintaining financial controls over town property and the possibilities of recovering additional costs on future grants may make it worth— while. Purchasing Procedures At the present time purchase orders are required for major purchases only. The highway department is using a purchase order system for all purchases however small. I suggest that purchase orders be required for all purchases by the town. This would help to control spending making each department head directly responsible for all purchases by the department. Major purchases should continue to require the approval of the board of selectmen.