Property Management & Accountability
Capital Equipment Standard Procedure
To outline the policies and procedures covering approval, acquisition, reconciliation and recording transactions of capital equipment in order to meet the requirements of the Federal Regulatory agencies, other sponsored guidelines, insurance and auditing organizations. (OMB Circular A-110)
C. Equipment Definition
- General Equipment Definition - Non-expendable tangible personal property including furniture or fixtures with an acquisition cost of $5,000.00 or more per unit and a useful life of two years or more is considered capital equipment, herein after called "equipment", and is subject to the provisions of this Standard Procedure.
- Special Purpose Equipment - means equipment which is used only for research, medical, scientific, or other technical activities. (A-21)
- General Purpose Equipment - means equipment whose use is not limited only to research, medical, scientific or other technical activities. Examples of general purpose equipment include office equipment and furnishings, air conditioning equipment, reproduction and printing equipment, motor vehicles, and automatic data processing equipment. (A-21)
- Government Material - means property which may be incorporated into or attached to an end item to be delivered under a contract or that may be consumed in the performance of a contract. It includes, but is not limited to, raw and processed material, parts, components, assemblies, and small tools and supplies. (FAR 45.301)
- Special Tooling - means all jigs, dies, fixtures, molds, patterns, taps, gauges, other equipment and manufacturing aids, and replacement thereof, which are of such a specialized nature that, without substantial modification or alteration, their use is limited to the development of production of particular supplies or parts thereof, or the performance of particular services. The term includes all components of such items, but does not include consumable property, special test equipment or buildings and/or non-severable structures. (FAR 45.101)
- Government Property – (for Department of Defense (DOD) and NASA): -All property owned by or leased to the Government or acquired by the Government under the terms of a contract. Government property includes both Government Furnished Property (GFP) and contractor acquired property as defined below: (FAR 45.101)
- Government Furnished Property (GFP) - Property in the possession of, or acquired directly by, the government and subsequently delivered or otherwise made available to the University, title rests with the government.
- Contractor Acquired Property (CAP) - Property procured or otherwise provided by the contractor for the performance of a contract, title to which is vested in the government.
- Subcontractor Acquired Property (SAP) - For the purpose of this equipment manual, SAP property means property which is procured or otherwise provided to the University for the performance of a contract, to which title remains with the contractor/agency or Government.
- Capital Equipment - Department of Energy (DOE) - An item of equipment that has sufficient monetary valued individually or as a group to warrant the assignment of a serially-numbered tag or marking to indicate DOE ownership, and an anticipated useful life expectancy of two years or more. An item or group of items costing approximately $5000.00, would as a general rule, be considered of sufficient monetary value for purposes of this definition.
- Property Use - All government property referenced herein is to be used only for its intended purpose and only on specified contracts/subcontracts, unless otherwise authorized.
- Record of Accessory and Auxiliary Equipment - Equipment which is attached to or otherwise a part of an item of capitalized nonexpendable equipment or has been acquired for use in connection with a specific item shall be recorded on the record of the item of capitalized nonexpendable equipment.
- Expiration or Completion of Inventories - The Equipment Accounting Office will initiate a final physical inventory upon notification from the Controller's Office that a grant or contract has expired.
The provision of the property clause in the contract will be reviewed in determining where title shall vest. Should authorization have been received to continue using the property under a succeeding contract/grant, Equipment Accounting's records will be modified to reflect this change. Without such authorization the normal contract closure process will be as follows:
- The Equipment Accounting Office will prepare from its records an inventory listing all Government Property accountable under the contract/grant.
- The contract/grant expense statement located in the Controller's Office will be reviewed for the total dollar figure of all property purchased under the contract/grant. This figure will be reconciled with the total value of the property listed on the inventory with adjustments made if the figures do not agree.
- The inventory will then be sent to the principal investigator or department administrator of the grant/contract for his or her review. Once the P.I. determines that the inventory lists all government property under the contract, he or she will affix his or her signature and return the inventory to the Equipment Accounting Office.
- Once Equipment Accounting is in receipt of the verified inventory and a determination of the property's needs has been made, Equipment Accounting will submit the inventory to the proper agency with the appropriate request (title transfer, disposition instruction, etc.) relating to the property's future status.
In order to adhere to the provisions of the procedure, the following are the various departmental responsibilities:
- Equipment Accounting Office - Equipment Accounting will prepare a record of equipment obtained by various departments of the University; ensure that equipment is properly tagged and identified; periodically validate the record by taking a physical inventory; record equipment transactions; provide a database which complies with Federal regulations and can be used for internal control and risk management; and provide an annual dollar validation of capital equipment for financial purposes. OMB Circular A-110, Attachment N prescribes uniform standards governing the management of property. The OMB Circular A-133 establishes audit requirements and defines responsibilities for implementing and monitoring these federal audit requirements.
- Management Centers - Dean's, department chairs, principal investigators and administrators are responsible for assisting the Equipment Accounting Office in the tagging and identifying of equipment, conducting physical inventories, reporting all equipment transactions, and assisting in reconciling any unaccounted equipment. Listed below are the types of equipment transactions that must be reported for both Federal and non-federal funds:
- Fabricated Equipment - It is the responsibility of the principal investigator, or an administrator in a non-academic unit, to notify the Equipment Accounting Office of all fabricated equipment meeting the following guidelines:
- As costs are incurred, they should be charged to the appropriate expense classifications.
- Once the fabrication is complete, a total dollar value should be assigned to the item. This dollar value along with a description, location and date of completion should then be forwarded to the Equipment Accounting Office.
- The Equipment Accounting Office will make the appropriate adjusting entries to record the fabrication as one single cost and ensure the University property tag is affixed.
- Gifts-in-Kind - It is the responsibility of the department chair or an administrator in a non-academic unit, to notify in writing the Equipment Accounting Office of all equipment donated to the University meeting the above guidelines. This is especially important for risk management (insurance) purposes.
- When notifying the Equipment Accounting Office, information concerning the donation should include a description, manufacturer, model number and serial number, location, fair market value, date acquired and donor.
- The Equipment Accounting Office will record the gift-in-kind and ensure that the University property tag is affixed.
- Government Furnished and/or Excess Government Personal Property - The principal investigator named in a contract/grant is responsible for the care, control and custody of the government furnished property and/or excess government personal property that is acquired. The Office of Equipment Accounting is responsible for establishing uniform property control procedures, maintaining central property records for all government sponsored projects, preparing inventories, and filing required government reports on a timely basis. It is the responsibility of the principal investigator to provide written notification to the Equipment Accounting Office of all government furnished and/or excess government personal property that is acquired:
- The Equipment Accounting Office should be notified of the description, manufacturer, model and serial number, location, cost or estimated fair market value, account number, and date of arrival.
- The Equipment Accounting Office will record each item on loan from the government and ensure the green government property tag is affixed.
- Borrowed Equipment and Property - It is the responsibility of the principal investigator or an administrator in a non-academic unit, to provide written notification to the Equipment Accounting Office of all borrowed equipment from outside sources.
- The Equipment Accounting Office will be notified of the description, manufacturer, model and serial number, location, cost or estimated fair market value, date of arrival and expected date of return.
- The Equipment Accounting Office will record each borrowed item and ensure the University property tag is affixed.
- Equipment Transferred Into the University - It is the responsibility of the department chair, department administrator or dean’s designee to provide written notification to the Equipment Accounting Office of all incoming equipment.
- When notifying the Equipment Accounting Office, physical equipment information concerning the transfer-in should include description, manufacturer, model, serial number, and the future University location of the equipment items. Financial equipment information concerning the transfer-in should include cost or estimated fair market value, project investigator or faculty member transferring in the equipment, date of transfer, the institution from whom we received equipment items, and the funding or grant information that financed the acquisition of the equipment items. Please also indicate whether the grants that may have financed the acquisition of the equipment will be active at the University or if the sponsored projects are inactive.
- The Equipment Accounting Office will record each item and ensure the University property tag is affixed.
- Retired Equipment - The following guidelines apply to equipment that is to be sold, scrapped, salvaged or transferred between departments. Before any item can be removed from the University equipment inventory records, the transaction must have the written approval of the appropriate University officials. The responsibility for the disposition of surplus and excess personal property rests with Procurement and Distribution Services. To that end, the University has established the Excess and Surplus Property Management Program. The only means by which University personal property can be sold to the general public, transferred between departments, cannibalized, salvaged or scrapped is via the program. This includes all equipment either donated or purchased with gift, grant, or contract funds or unrestricted money, where title is vested in the University. Departments declaring equipment surplus should complete a Retirement Requisition Form. The form is available by contacting the Office of Equipment Accounting or referring to Appendix A of this manual. University excess property originally acquired using government funds can not be sold to a department which uses government funds to acquire the property.
OMB Circular A-110, Attachment N includes information on disposition of property under grants and other cooperative agreements.
The authority for the transfer, assignment or sale of personal property is governed by the Resolution of the Board of Trustees adopted September 11, 1990.
- Trade-In of Equipment - It is the responsibility of the principal investigator or an administrator in a non-academic unit, to secure approval from the Equipment Accounting Office before any equipment can be used as a trade-in for another purchase. This is done to ensure that the original funds used to purchase the equipment being used as a trade-in do not prohibit such disposition. Upon approval from the Equipment Accounting Office, a purchase requisition should be forwarded to the Purchasing Department noting the trade-in. The Equipment Accounting Office will make the appropriate adjustments to the inventory records.
- Movement of Equipment
- Off-campus - It is the responsibility of the principal investigator or administrator to provide written notification (via submitting an Equipment Inventory Update form-Appendix B) to the Office of Equipment Accounting whenever items of equipment are moved off campus. The notification should include the University tag number, description, the new location of the equipment, and the expected date of return, if expected return is applicable.
- On Campus - It is the responsibility of the principal investigator or his designee, or an administrator in a non-academic unit to provide written notification (via submitting an Equipment Inventory Update form-Appendix B) to the Office of Equipment Accounting if an item of equipment is being moved from its listed on campus location as recorded in the equipment inventory system. The notification should include the University tag number, description, the new location of the equipment, and the expected date of return, if expected return is applicable.
- Utilization, Storage, Maintenance and Repair - The University will utilize all property received or acquired under contracts and subcontracts only for the purpose of fulfilling the contract requirements. These items will be kept in good condition and it is the responsibility of the University’s departments to provide normal maintenance and repair as required by government regulations. Property will be disposed of only as directed by the sponsor. Property and material subject to deterioration or corrosion, through exposure to air, moisture, or other elements during fabrication, assembly and interim storage periods, shall not be stored in out-door areas.
- Department of Occupational Safety and Environmental Affairs - The Department of Occupational Safety and Environmental Affairs is required to maintain an active inventory of all Ionizing Radiation Producing Equipment (IRPE). Therefore, prior to the purchase, receipt, transfer, disposal and/or installation of any IRPE, the approval of the CWRU Radiation Safety Office must be obtained. Call 368-2906.
- Annual Reporting to DOD AND NASA - Agency regulations require that the DD Form 1662 (DOD Property in the Custody of Contractors) be filed annually for DOD contracts that contain property. The report covers the year ended September 30th and must be submitted to ONR by October 15th of the year being reported.
The NASA Form 1018 must be filed annually for NASA Contracts and Grants for the period ending September 30th and must be submitted to NASA and ONR by October 15th of the year being reported. Negative reports are required for NASA contracts. It is the responsibility of the Office of Equipment Accounting to ensure that the reports are submitted in a timely and accurate manner.
- Capital Equipment Purchase Approval - Purchase requisition approvals are required prior to purchasing capital equipment. Each management center may have different approval criteria based on dollar amount. Please refer to the Purchasing Manual, under the Capital Equipment section, for the required authorized signatures. All requisitions for purchases of capital equipment are reviewed by the Office of Equipment Accounting prior to processing by the Purchasing Department.
- Acquisition of Government Property
- Assumption of Responsibility - The principal investigator shall be responsible for all government property in his possession or control in accordance with the terms of the contract/grant. This includes property provided under such contract/grant which may be in the possession or control of a subcontractor. Sources from which government property may be furnished or acquired are as follows:
- From Agencies of HHS, DOD, NSF, DOE, NASA or Other Contractors Government property may be shipped to the University from government installations or other government contractors. The principle investigator is responsible for such property upon delivery of the property into his custody or control. The sponsor shall furnish the University with necessary documents to accurately reflect the transaction.
- Direct Purchase by the Contractor - Direct purchases by the principal investigator using sponsored funds shall be subject to a determination by the sponsor that the items are allocable to the sponsored program and are reasonably necessary. Ownership rights in such property shall be governed by the sponsored program provisions relating to passage of title.
- Equipment Screening - Campus-wide pre-acquisition screening will be conducted to identify like or substantially similar equipment for purchases of $25,000 or greater using grants and contracts supported with federal funds. If it appears a piece of equipment is like or substantially similar the appropriate department personnel will be contacted to determine the availability for shared use. If shared use is not feasible or the screening procedure fails to identify like or substantially similar equipment, the purchase requisition will be approved by the appropriate authority and the requisition will be processed for purchase.
Each management center has established administrative units which have responsibility for screening such purchases.
E. Retirement of Equipment
The retirement of equipment occurs when an item is disposed, lost, stolen, transferred, destroyed, sold, or obsolete. The Retirement Requisition Form must be completed whenever any of these conditions occur. All of the required signatures must also be obtained before final approval will be granted by the Equipment Accounting Office.
- Disposed or Discarded Equipment - Use when the equipment is no longer useful and is either ready for disposal or disposed of and scrapped.
- Damaged, Destroyed, Missing, Lost, or Stolen - Use Missing or Lost when equipment cannot be located and you are not sure whether the equipment was abandoned or stolen. Use Stolen when an equipment item has been stolen. Use Damaged or Destroyed when an equipment item is unintentionally destroyed and has insurance implications. Please also make sure that you file a report with the Department of Protective Services if an item is Stolen, Damage or Destroyed.
All University departments and individuals responsible for equipment must implement adequate safeguards to prevent loss, damage and theft. Loss of equipment due to theft must be reported to the Case Western Reserve University Security Office. All occurrences of loss, damage or destruction of any property shall be reported to the University Security Office in writing within three days, stating property identification, related contract/subcontract, location time and place of discovery, reason for loss, damage or destruction, a report of investigation results, and action taken to prevent recurrence.
- Information reported should include University tag number, description, manufacturer, model and serial number, date of purchase and purchase price.
- It is the responsibility of the Security Office to forward to the Equipment Accounting Office a copy of each theft report involving equipment.
- The Equipment Accounting Office will make the appropriate adjustments to the inventory.
- Transferred or Donated - Use when an equipment item is donated or transferred outside of the University. The most common occurrence associated with this code is equipment that transfers out with a faculty member leaving the University. As established by the Board of Trustees, current CWRU policy on equipment transfers include the following provisions:
- Because grants and contracts are awarded to the University and not to individual faculty members, all equipment purchased with sponsor funds, unless otherwise specified by the grant or contract, is the property of the University.
- Equipment purchased using grant and contract funds is intended for use in the research and educational programs of the University.
- When a faculty member leaves the University for another academic position, it is expected that equipment which has been purchased will continue to be needed in the ongoing research and/or educational activities of the specific department concerned, and will therefore remain at the University.
- When a faculty member requests that certain specialized equipment be made available for transfer to the new institution, such requests require approval from the department chair and dean. In these cases, the Retirement Requisition Form must be completed.
- An Equipment Retirement Requisition Form must be submitted to the Equipment Accounting Office to document the authorization of the transfer. Approvals must be obtained from the respective administration offices of each management center. Please refer to Appendix A of this manual for the Equipment Retirement Requisition Form.
- Sold - Use if you are selling an equipment item. Contact the Equipment Accounting Office with information on how much sale proceeds were received and to which Speedtype they were deposited.
- Obsolete - Use when the equipment is not in use and is available to be returned to a common internal pool where it will be available for others to use.