Setting the Record Straight On Property Management

Recent media reports about financial management issues at Los Alamos National Laboratory have included references to Berkeley Lab's property inventory and control system. Some have implied that the Laboratory's $2.56 million in unaccounted-for property in FY02 ($500,000 of which has been subsequently reacquired) is an indication of mismanagement or illegal activity. Here are the facts. The news reports have either ignored or minimized the context for that number and the very fact that the Lab's property management system is rated "outstanding" by unbiased measures.

The facts on Property Management at Berkeley Lab:

• Berkeley Lab received an "outstanding" rating from the Department of Energy in FY00 and FY02, based on an inventory accountability rate above 99.5%. That's the highest rating a lab can receive, and is comparable to ratings for excellence in the equipment industry.
  
  
• During FY02, Berkeley Lab was able to account for 99.5% of equipment ($5,000 and above) and 99.2% sensitive property. The nationally published American Society for Testing and Materials commercial inventory standard (ASTM E-2221) is 98%. Every year following Berkeley Lab's inventory, an additional statistical sample is pulled for validation, with DOE participation. Each year the inventory validation has supported the corresponding inventory results. In fact, for the last three years, Berkeley Lab has achieved well above the 98% ASTM inventory standard. Only in FY00 did the Lab fall below 99% at 98.9%.
  
  
• Berkeley Lab's total property value in FY02 was $528.3 million, based on a wall-to-wall inventory. The $2.56 million "value" of property that could not be verified during the inventory was calculated on the basis of original acquisition cost, as required by the DOE, and not on net depreciation value.
  
  
• It is erroneous and misleading to characterize the $2.56 million as lost or stolen property. Especially at a facility like Berkeley Lab, so many of the items listed are 10, 20, even 30 years old. They had an acquisition value when purchased, but they might be worth nothing today. Most of the items on the list were probably thrown out, modified for other uses, cannibalized for parts, misplaced, loaned off-site or moved to another location. Many are later found and reacquired. So far in FY2003, the Laboratory has reacquired almost $500,000 worth of assets retired in FY2002.
  
  
• Of the 213 items on the FY02 list from the wall-to-wall inventory, 111 are over 10 years old. In a scientific facility like this, that usually means they're worthless. Computers have an even shorter shelf life.
  
  
• The true value of the unverified items is unknown, but far below the acquisition costs. The lab doesn't devalue equipment like profit-making companies do. The only items the Lab depreciates in value are those over $25,000 in the inventory. Only 18 of the 213 unverified items in the inventory were over $25,000 when purchased. Their purchase price of $1,272,565 has depreciated to a real value of only $210,000.
  

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