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Audit: Knox County capital‑asset records generally accurate but disposal, threshold controls need strengthening
Summary
A capital‑assets audit found about 90% accuracy in sampled records but recommended better procurement‑finance coordination, aligning Munis thresholds with policy and a revised disposal form to ensure finance is notified when assets go to surplus.
Harrison Lewis and Nathan Wallace presented the internal audit of Knox County capital assets on Oct. 20. The review sampled 98 assets (excluding the school and sheriff fleets) and found the county’s finance team maintains generally accurate records, with auditors confirming 88 items and explaining that some unconfirmed items were either inactive or legacy items converted into Munis from earlier systems.
Auditors identified one primary finding: controls around how assets are identified as capital assets, added to Munis, and removed at disposal could be strengthened. In some Munis object‑code configurations the capital threshold in the system did not consistently match the written capital‑asset policy; auditors noted examples where Munis units were set at $5,000 while the written policy threshold was $10,000. That mismatch and inconsistent disposal notifications can cause assets to be omitted from the finance list or to remain active in records after disposal.
Recommendations included formalizing a documented process requiring procurement to flag purchases that may meet capitalization criteria, aligning Munis thresholds with the policy, revising the surplus/disposal form to indicate whether an item is a capital asset, and standardizing the annual departmental check‑in to ensure departments return comprehensive lists for verification. Auditors also suggested finance and procurement improve training and written procedures to reduce manual workload and the risk of omission.
Auditors benchmarked thresholds against peer counties and CTAS guidance and recommended reassessing thresholds periodically to reflect economic changes. County finance acknowledged the finding and indicated plans to revise policy and thresholds and to work with procurement and IT to align Munis settings.
Next steps: Internal Audit will follow up on the departmental check‑ins, revised surplus forms and an updated capital‑asset policy; finance will take the policy updates through the normal review and approval process.
