It is recommended that the City Council:

1.  Adopt the attached policy governing capital assets as an addendum to the City's Financial Management Policy Statements; and

2.  Authorize the incorporation of this policy into the Financial Management Policy Statements, including the making of non-substantive formatting changes and similar modifications or annotations.

This Mayor and Council Communication (M&C) seeks approval of a policy governing capital assets as an addendum to be incorporated into the FMPS.

The attached policy defines and provides the guiding principles with respect to the financial management of capital assets for the City of Fort Worth (City).  The objectives of this policy are to ensure consistent capital asset practices in accordance with Generally Accepted Accounting Principles (GAAP) and applicable regulatory agency requirements and to safeguard against loss, unauthorized use, or misappropriation of assets.  Controls are created to establish, maintain and enforce a sound system of operational procedures in accordance with industry best practices and internal control objectives.  These controls address the decentralized nature of the processes associated with capital assets while also providing standards and minimally  acceptable practices for these activities.

Adoption of the recommended new policy is in alignment with industry best practices, which were studied in connection with the formulation of this policy.  In addition, this policy is intended to address opportunities for improvements such as reduce the amount of assets being recorded.  The new policy will improve internal controls by more clearly outlining and identifying which capital assets are and are not to be capitalized.

This M&C does not request approval of a contract with a business entity.