I have been asked by six different emergency management systems to examine why their equipment management processes have failed and to make recommendations for change. In all cases it has boiled down to five reasons. Here's what I found out. The good news was that all five reasons have solutions.
Failure # 1: Using Spreadsheets
Nearly all spreadsheets contain errors, which is to be expected with information entered without effective controls. Whether it is because of incorrect background equipment data or a wrong formula, there's little doubt that information you pull from the spreadsheet, such as location information, maintenance data, or usage data, is likely to be inaccurate. Spreadsheets allow for several different types of errors to occur, thereby making it difficult to ensure precision. Additionally, several people within one county department will often access, manage and edit the same spreadsheet, which can compound the likelihood of errors.
Not only does access by more than one person cause potential for additional errors, but it also removes the ability to maintain an audit trail and overall security. With spreadsheets, you are unable to track actions made by users. Besides the probability of being error prone and lacking security, spreadsheets are also:
- Unable to accommodate 'parent/child' relationships, making it difficult to accurately track and manage these important hierarchical dependencies.
- Ineffective in meeting historical reporting and forecasting environments, because of the complexity required by these reports and the inability to rely on the data.
- Unable to export information directly into government forms, requiring them to be filled out manually and risking incorrect transcription.
Using an equipment system geared for emergency management can eliminate many of the errors that the use of spreadsheets causes. For example, maintenance formulas and asset lives can be defaulted for each site, based on any defined equipment category, which will help remove calculation errors. Processing maintenance in a equipment system, rather than spreadsheets, is faster and easier. It can be completed with just one click of a button. An equipment system will also provide the structure to link 'parent/child' assets, set up security for all users, and offer the ability to run standard and customizable reports.
Failure #2: Not completing a proper physical audit
The credibility of an organization's data (the existence of equipment and its home location) will be in question if it cannot be verified. Verifying what an organization owns and the whereabouts is essential for credibility and complying with DHS Audits, especially if equipment is funded under a federal grant. A physical audit is also an effective equipment management procedure that can help ensure that equipment is insured at the correct level, maintenance is accurately budgeted for and unexpected 'write-offs' are avoided.
Physical audits are essential to clean up the variances between what is being financially accounted for on the equipment list and what is actually present. The potential risks of not conducting a physical audit include:
- Inaccurate physical verification of assets can render the asset list unreliable
- Cost of equipment use could be allocated to the wrong company/cost center/department/division
- DHS Audit Failure to account for funded equipment
- Missing equipment (potential theft problem) could go undetected
- The audit trail of transferred equipment can be lost
- Equipment could be under or over insured
- Exposure to accounting audit write-up
An organization can avoid these risks by implementing formal physical audit policies and procedures along with a supported asset tracking system which will help control and manage the Equipment register. Barcode tracking technology can help reduce the time and money spent managing assets, making proper physical audits quick and simple to carry out.
Failure #3: Unauthorized changes are occurring
There are two ways in which unauthorized changes can occur and cause problems. The first is unauthorized access to the system and the second is not having the correct procedure in place for changes to equipment events.
Security of data is critical to compliance for corporate governance regulations including FAR and DHS Property Requirements. In order to avoid unauthorized changes occurring in your organization's Equipment list, security should be defined at user level to ensure that confidential information can be viewed only by those who need to see it. Individual or group access rights should be designated according to an organization's specific requirements. This cannot take place with spreadsheets so a specialist system is essential for this security.
A well planned transfer and disposal process plays a key role in effective equipment management. An automated procedure that allows multi-user approval can help streamline processes and afford time and costs savings while ensuring the accuracy and accountability of the asset register. Using a specialist system with event request authorization functionality allows users to create a transfer or disposal request which is then sent to a pre-determined supervisor for approval, thereby allowing organizations to ensure all changes made to the equipment list are authorized.
Failure #4: Non adherence to compliance issues
When receiving federal grants for purchase of equipment, these grants come with rules governing the use of funds. These grants are subject to audit by those who are providing the funds. Non compliance at the best, can lead to headaches for the agency, for the grant administrator, and for the equipment manager.At the worst, non compliance can lead to legal action, reach back audits (where the funds allocated are requested to be refunded) and at the very worst, prison. Honestly, I have not heard of anyone in the emergency management community having to face trial, but there have been UASI regions subject to reach back because of improper grant compliance.
If your organization does not properly adhere to compliance issues you may:
- Have an audit failure by Dept. Of Homeland Security
- Affect the ability of the organization to receive additional dollars
- Be subject to forfeiture of grant money
A specialist Equipment management system can easily track all compliance issues regarding guidelines for federal dollars. The system must be able to categorize the equipment based on FEMA's authorized equipment list proving to the auditor that the equipment is on that list. Tracking equipment by grant year and type allows the equipment manager the ability to demonstrate that money allocated for that equipment has been effectively deployed.
Instant access to a comprehensive audit trail can significantly reduce financial reporting errors and provide further control over general accounting activities.
Failure #5: Poor reporting or lack of reporting
Composing reports and forecasts can be a lengthy, arduous and costly process that is often subject to human error if conducted by hand. Bad reporting can affect organizations by:
- Misinforming management of information that is critical to business decisions
- Causing non-adherence with compliance issues, resulting in the consequences mentioned above
In order to avoid unreliable reports for your equipment, it is best to use a reporting tool in a specialist equipment system. Typical reports available in specialist systems that will help your organization include:
- A Equipment balance sheet. This report consolidates starting points and ending points of the month and shows all of the month's activities.
- Events. The reports shows all transfers, disposals, relifes, and revaluations that have occurred in the given time period.
- Audit history.
- Spare equipment that is not assigned to any one individual. This equipment can be used instead of purchased.
Don't disregard the importance of equipment management. Each of the five failures above can cause costly and sometimes legal penalties. The best way to avoid failing is to implement a specialist equipment management system and standard processes and procedures for your organization to follow. With the proper rules and tools, equipment management can be fast and simple.
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