Graham County raises capital-asset threshold to $5,000 to align with state guidance

Graham County supervisors voted Tuesday to raise the county's threshold for capitalizing machinery and equipment from $2,500 to $5,000, a step County Manager Welker said brings the county into alignment with guidance from the Uniform Accounting Manual published by the Arizona Auditor General.

"With the way inflation and everything else has ran over the last few years, it makes sense to us and it is what the auditor general's office recommends. So we'd like to come into conformity with that," Manager Welker said during the meeting, explaining that moving the threshold would remove a number of smaller items from capital tracking and simplify staff processes.

Welker told supervisors that the change affects capitalization only and not procurement controls: "Every single purchase goes through finance through the purchase order process and invoice process. So, no matter what, everything has to be approved by finance before it's purchased." He added that the board still must approve items over $5,000 through either the regular budget process or a separate board action for unbudgeted expenditures.

Under the new threshold, items costing between $2,500 and $5,000 will no longer be recorded as capital assets requiring long-term tracking and depreciation. Welker said known capital requirements will still be budgeted and brought to the board as part of the budget process. The board approved the change by voice vote.

County staff will update accounting practices and internal controls to reflect the new threshold and continue to route purchases through finance for review.