10.9 - Equipment Standards Policy
The University may occasionally purchase equipment that will be used exclusively on a program funded by a Federal agency. In addition to the general property and equipment policies of the University, equipment and furniture charged to Federal awards will be subject to certain additional policies as described below.
For purposes of Federal award accounting and administration, "equipment" shall include all assets with a useful life of more than one year and a per-unit acquisition cost equal to the lesser of $5,000 or the capitalization threshold utilized by the University. The following policies shall apply regarding equipment purchased and charged to federal awards:
Title
Title to equipment acquired under a Federal award will vest upon acquisition in the University. Unless a statute specifically authorizes the Federal agency to vest title in the University without further responsibility to the Federal Government, and the Federal agency elects to do so, the title must be a conditional title. Title must vest in the University subject to the following conditions:
- Use the equipment for the authorized purposes of the project during the period of performance, or until the property is no longer needed for the purposes of the project.
- The University will not encumber the property without approval of the Federal awarding agency or pass-through entity.
- Use and dispose of the property in accordance with the policies below.
Management Requirements
Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements:
- Property records will be maintained that include the following:
- a description of the property,
- a serial number or other identification number,
- the source of funding for the property (including the FAIN),
- who holds title,
- the acquisition date,
- and cost of the property,
- percentage of Federal participation in the project costs for the Federal award under which the property was acquired,
- the location, use and condition of the property,
- any ultimate disposition data including the date of disposal and sale price of the property.
- A physical inventory of the property will be taken, and the results reconciled with the property records at least once every two years.
- A control system will be in effect to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated.
- Maintenance procedures will be in effect to keep the property in good condition.
- Proper sales procedures will be in effect to ensure the highest possible return.
- Adequate insurance coverage will be maintained with respect to equipment and furniture charged to Federal awards.
- When title to the equipment remains vested with the Federal awarding agency, The University will submit an annual inventory listing of federally-owned property in its custody to the Federal awarding agency.
Use of Equipment
Equipment must be used by the University in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by the Federal award, and the University must not encumber the property without prior approval of the Federal awarding agency.
When no longer needed for the original program or project, the equipment may be used in other activities supported by the Federal awarding agency, in the following order of priority:
- Activities under a Federal award from the Federal awarding agency which funded the original program or project, then
- Activities under Federal awards from other Federal awarding agencies. This includes consolidated equipment for information technology systems.
During the time that equipment is used on the project or program for which it was acquired, the University must also make equipment available for use on other projects or programs currently or previously supported by the Federal Government, provided that such use will not interfere with the work on the projects or program for which it was originally acquired. First preference for other use must be given to other programs or projects supported by Federal awarding agency that financed the equipment and second preference must be given to programs or projects under Federal awards from other Federal awarding agencies. Use for non-federally-funded programs or projects is also permissible. User fees should be considered if appropriate.
The University must not use equipment acquired with the Federal award to provide services for a fee that is less than private companies charge for equivalent services unless specifically authorized by Federal statute for as long as the Federal Government retains an interest in the equipment.
When acquiring replacement equipment, the University may use the equipment to be replaced as a trade-in or sell the property and use the proceeds to offset the cost of the replacement property.
When title to the equipment is vested in the Federal awarding agency, upon completion of the Federal award or when the equipment is no longer needed, the University must report the property to the Federal awarding agency for further Federal agency utilization.
Disposition
When title to the equipment is vested in the University, and the equipment is no longer needed for the original project or program or for other activities currently or previously supported by a Federal awarding agency, disposition instructions will be requested from the Federal awarding agency if required by the terms and conditions of the Federal award.
Disposition of the equipment will be made as follows, in accordance with Federal awarding agency disposition instructions:
- Items of equipment with a current per unit fair market value of $5,000 or less may be retained, sold, or otherwise disposed of with no further obligation to the Federal awarding agency.
- Items of equipment with a current per-unit fair-market value in excess of $5,000 may be retained or sold. The Federal awarding agency is entitled to an amount calculated by multiplying the current market value or proceeds from sale by the Federal awarding agency's percentage of participation in the cost of the original purchase. If the equipment is sold, the Federal awarding agency may permit The University to deduct and retain from the Federal share $500 or ten percent of the proceeds, whichever is less, for its selling and handling expenses.
When title to the equipment is vested in the Federal awarding agency, upon completion of the Federal award or when the equipment is no longer needed, the University must report the property to the Federal awarding agency for further Federal agency utilization. If the Federal awarding agency has no further need for the property, it must declare the property excess and report it for disposal to the appropriate Federal disposal authority, unless the Federal awarding agency has statutory authority to dispose of the property by alternative methods. The Federal awarding agency must issue appropriate instructions.