Property Administration Manual

This document contains Florida Techs procedures regarding the acquisition, maintenance, reporting, and the disposition of capital assets. If you have any questions, please contact the Property Administrator at (321) 674-7288.

Chapter One: Property: The Real Picture

Section 1.1: Key Concepts of Property Management
Section 1.2: Roles and Responsibilities
Section 1.3: Reconciliation

Chapter Two: Acquiring Property

Section 2.1: Purchases to Upgrade Existing Equipment
Section 2.2: Donations to the University
Section 2.3: Fabrications

Chapter Three: Property Arrives at the University

Section 3.1: Receiving Property
Section 3.2: Identification: Tagging/Recording Property (FAS Database)

Chapter Four: Documentation

Section 4.1: Record Keeping
Section 4.2: Required Property Reports

Chapter Five: Physical Inventory

Section 5.1: Physical Inventory

Chapter Six: Caring for Property

Section 6.1: Movement, Utilization, Maintenance and Storage

Chapter Seven: Disposition

Section 7.1: Disposition of Assets

Chapter Eight: Audits

Section 8.1: Property Audits


Chapter One: PropertyThe Real Picture

1.1 Key Concepts of Property Management

Overview

The importance of property management
Property management is a key component in an efficient, professionally administered business. It supports the educational, research and administrative missions of the University.

  • Benefits include:
  • readily identify availability of equipment
  • meet departmental management needs
  • comply with external regulations
  • saves money by reducing waste, redundancy and equipment loss
  • allows the University to have an accurate record of its investment in equipment
  • provides data which enables the University to obtain indirect cost recovery for equipment depreciation
  • allows the University to issue timely and accurate property reports

The core component to efficient property management at the University is the FAS (Fixed Asset Software). It is designed to track property and expenses for capital or sponsor-funded assets accountable to the University.

The FAS database provides a central information resource where property administration & accounts payable can locate a given piece of equipment by searching for a tag number, serial number, PI, purchase or requisition number, etc. FAS is the central, auditable property record for the University. This database provides crucial information for the University relative to the University's capital assets and government or sponsored funded assets. Information from FAS also provides a historical trend of property purchases.

At the University, a capital asset is defined as having all of the following:

  • an acquisition cost of $1500 or more
  • a useful life of more than one year
  • a stand-alone item (not permanently affixed to a structure or building)

Concepts of Managing Capital Equipment

When Equipment arrives at the University
Capital equipment should be properly received, including unpacking and inspecting, if appropriate, to insure that the proper equipment has been sent and is in good condition. Incoming equipment should be promptly tagged with a University tag and any other appropriate identifying markings then recorded into the FAS database as soon as possible.

While the Equipment is at the University
When the equipment is moved, its new location must be recorded into the database. If the equipment needs maintenance, it should be done in accordance with the manufacturer's recommendations. University equipment should be used for work benefiting the University.

When Equipment is no longer Needed
An ongoing task in property management is assessing what equipment is excess and taking steps to reutilize or dispose of that property. In addition, sponsor-funded equipment may have to be handled in accordance with specific sponsor regulations or procedures.

Property Requirements
Property at the University is acquired in a variety of ways, such as a purchase order, a transfer from sponsors, loan or donation, private donors or corporations. The way property is acquired determines how it should be recorded and managed throughout its lifecycle.

Three key questions regarding property:

1. How did the property come to the University?

  • purchase
  • donation
  • loan
  • transfer

 

2. Who funded the acquisition?

  • University funded and owned
  • University owned property, funded by a sponsor
  • government owned property

3. What was the dollar value of the property when acquired?

  • Under $1500, option to tag with a non-numbered University tag
  • Over $1500, always tag and enter information into the FAS database after receipt

1.2 Roles and Responsibilities

Who to Contact

Any property issue:

Property Administration

Disposal of equipment:

Property Administration

Overview

Property management is an important function at the University. Prudent business practices help the University's multi-million dollar investment in capital equipment, meet government and sponsor requirements, and support indirect cost recovery associated with assets at the University.

Role of University Property Administration

Property Administration provides assistance in handling any property management situation and a variety of property related issues that arise from the time a purchase or other method of acquisition is planned for an asset through its disposal. Property Administration provides assistance with many areas of information including:

Acquisitions

research equipment documentation

classifying equipment as expendable or capital

Records and Documentation

transferring equipment from or to another institution

documenting and recording

transferring equipment to other departments within the University

documenting use and verifying the value of donated equipment

 

understanding property regulations

using University's FAS database

reconciling physical inventories of department equipment

reporting on property issues to University management

Disposal

screening prior to disposal of surplus equipment

understanding disposal restrictions

obtaining disposition instructions for sponsor-owned equipment

obtaining disposition instructions for scrap or unusable equipment

Sponsored Projects

documenting appropriate information on sponsor-funded equipment

The University environment benefits when there is a reduction in the amount of excess and duplicative equipment; reuses equipment by transferring equipment to other departments; and recycles equipment.

Role of University Management

The University Officers that are responsible for management of their fund account for equipment are also responsible for ensuring that policies and practices applicable to the work of the University, including instruction, and research are carried out, and that standards, policies and regulations are consistent with sponsor and donor expenditure restrictions. Specific responsibilities include:

ensure implementation of property management policies, processes, and personnel assignments within their department, to enable the meeting of compliance and department business needs;

emphasize importance of appropriate and compliant property management within the university.

1.3 Reconciliation

Who to Contact

Reconciling FAS - Fixed Asset Report:

Property Administration or Accounts Payable

Contract/Grant Equipment Reconciliation:

Property Administration or Office of Sponsored Programs

Physical Inventory Reconciliation:

Property Administration

Overview

Reconciliation is the process of comparing one set of records with another and taking the steps necessary to adjust discrepancies. The two most common types of reconciliation are:

  • physical inventory reconciliation
  • financial reconciliation

Physical Inventory Reconciliation

Physical inventory reconciliation is performed annually/bi-annually. This reconciliation involves reconciling physical inventory reports against the FAS record of capital equipment. The reconciled physical inventory provides a snapshot in time of the inventory conducted for each department. The inventory highlights equipment which may not have been:

  • properly tagged
  • input into FAS
  • properly identified as excess
  • properly identified as located off campus
  • At the conclusion of the inventory, the following can be identified:
  • -assets inventoried in departmental space by location
    -assets added to FAS during the inventory. This includes:
  • untagged assets found
  • tagged assets found but with no record in CAMS
  • assets found which belong to another department
  • assets in FAS which were not located during the inventory

Physical Inventory Reconciliation Procedure

Discrepancy Resolution

Untagged Assets Found and Tagged Assets Found but not Recorded in FAS

Property Administration must verify item added is indeed an asset requiring recording in FAS if an item was added to FAS in error, appropriate corrective measures should be taken information must be collected to ensure completion of the full FAS record

List of Assets Found in a Location which appear to belong to another department

Property Administration must verify to which department the capital asset belongs, and take appropriate corrective measures

List of Assets in FAS Not Located During the Inventory

Each department will be provided a specified period of time during which they must make every effort to locate those items not found by the physical inventory. When items are found:

  • arrangements will be made to inventory the newly located assets

Financial Reconciliation

There is often a discrepancy between the dollar amount stated in FAS, and the Fixed Asset Report. This difference is due to the fact that the Fixed Asset Report takes into consideration the invoice amount and the asset depreciation.


Chapter Two: Acquiring Property

2.1 Purchases to Upgrade Existing Equipment

Trade-Ins

Since the equipment being traded-in is permanently leaving the department, a disposal or transfer form must be completed. The disposition must be approved by the VPFA if the equipment is to be removed from inventory permanently.

Upgrades

An upgrade is defined as a change in an existing piece of equipment which has a minimum cost of $1500, and either extends the useful life of the equipment by two years or significantly adds to the worth of the benefits that the equipment can yield. Significant upgrades must be noted in the FAS database. If an item is repaired and has no new equipment added to it, no new record for these services should be added to the FAS record.

2.2 Donations to the University

Who to Contact

Fair Market Value:

Development

Unable to find Donation Documents:

Development

Recording/Receipt of 'Gift in Kind

Development

Overview

The University is a recipient of property donations from many sources, such as corporations, companies, and individual donors. The appearance of donor documents vary considerably, however, the procedure for processing donations is consistent. It is important to remember that there should be a need or purpose for a donation of equipment. All donations, without exception, are owned by the University. The dollar threshold for entering donated equipment in FAS is $1500 and over.

Procedure for Processing Donations

Property Administrations Role in Donation Documentation
Appropriate acknowledgement of gifts is particularly important. Donations should be processed immediately by development after the donation is received at the University. The tasks listed should be followed:

1.)  Gather all donation documentation and fill out the Donation Transmittal Form. Property Administration will retain a copy of all donation documents as the official record of the University. Departments should forward a legible copy of all donation documents to Property Administration, including:

  • letter of intent to donate
  • Donation value
  • shipping and receiving documents
  • acknowledgement of receipt of property and certification
  • proof of value, i.e.; appraisal
  • any other documentation regarding the donation

2.)  Create a capital asset record, if appropriate, in the FAS database, including tagging the property and the determination of fair market value


3.)  Provide a copy of all donation documents to the Development Office for processing. The Development Office will prepare and send an official University gift/donation receipt to the donor. IRS rules require donors, not the University, to establish the value of items donated for any tax-related purposes.

Policy Regarding Donations

Donations of money for the purpose of Purchasing Equipment

When money is donated to the University, the money is the gift, not the equipment subsequently purchased with the funds. Equipment purchased with donated or gift funds is not donated equipment, and therefore is not subject to any of the procedures in this section. This equipment must be included in the FAS database, if appropriate.

Use and Restrictions

Donations may not be transferred in exchange for money, other property, or services.

Equipment provided as part of a Grant

Equipment provided in conjunction with or as part of a grant is not a donation. A grant has a set of expectations associated with it, and with detail within it whether specific pieces of equipment will be furnished, loaned, or donated. Specific handling of these instances may involve assistance by the Office of Sponsored Programs.

Donations intended for immediate sale

Donations of equipment intended for sale pose significant tax implications for donors. When a donation is given for immediate fund-raising, it must be sold within sixty days. If the donation is retained by the University longer than sixty days, it must be recorded into the FAS database in the same manner as all donated equipment.

New versus Used Equipment Donation

New equipment is defined as not used prior to receipt by the University, and manufactured in the last two years; the donor must also be the manufacturer of the equipment. Equipment is considered used if it is over two years old, even if it is in the original unopened box and donated by the original manufacturer. If you receive a used donation, see development.  

Non-Capital Asset Donations

Property Administration should be notified of any donations of property, regardless of value. Equipment donations with a total value of less than $1500 will not be included in the CAMS database, but still processed with a no-cost entry and tagged with a University identification tag. Appropriate paperwork will be sent to the Development Office.

Disposal of Restricted Donations

Those donations designated as restricted may not be transferred by the university in exchange for money, other property, or services. Most donations are kept until they are scrap. In general, you cannot sell any donated items before the three year IRS retention rule.

2.3 Fabrications

Who to Contact

Acceptance as Capital Equipment:

Property Administration

Overview

A fabrication is usually a one-of-a-kind creation. Fabrications are created by assembling a number of components to produce a piece of equipment that meets unique research specifications. Most fabrications are sponsor-funded and therefore have a number of compliance requirements related to acquiring and tracking individual pieces of equipment in an assembled fabrication.

Tagging and Recording Fabrications

Recording the Fabrication in the FAS database

The initial record of fabricated equipment will be tagged and tracked in the FAS database.

Joint Ownership Issues and Funding

Commingling of Funds

Funding from several different sources is not uncommon when building a fabrication. Ownership and accountability may be an Issue with some agencies if authorization to commingle funds is not approved at the inception of the award. Occasionally it may be necessary to incorporate equipment which is donated to the University into a fabrication.

Government Furnished Material and Property

Government furnished material is property that is furnished to the University by the federal government and for which ownership remains with the federal government. The material may be incorporated into or attached to a fabrication or deliverable end item to be delivered under a contract or which may be consumed or expended in the performance of an agreement. All government furnished property, regardless of value, must be put into the FAS database.


Chapter Three: Property Arrives at the University

3.1 Receiving Property

Who to Contact

Receiving and Acceptance of Equipment

Property Administration

Damaged Sponsor-Owned Equipment

 

Overview

Receiving is the first step in establishing physical accountability for property. The process ensures that the correct equipment is received and is in good working order. Receiving and acceptance of equipment in a timely manner directly impacts warranty periods for assets. In case of damaged goods, it also affects the period during which any liability claims may be processed.

Refer to Receiving Policy on the Property Administration web page.

Procedure for Receiving Property

  • Check each shipment:
  • Was the shipment delivered to the correct destination?
  • Is there external package damage?
  • Does the package contain all necessary documentation, such as a packing list?
  • Is this the exact item described on the purchase order?
  • Was the correct quantity of items shipped?
  • Are all components included?
  • Are all items and components in good condition?
  • Were any items received that were not ordered?

If there is a discrepancy with any of the above items, it must be resolved.

 

All capital equipment items must undergo the receiving process. This process is required not only by Accounts Payable, but by the federal government. The receiving process is done on-line in the Banner system.

3.2 Identification: Tagging/Recording Property in the FAS Database

Who to Contact

Tag Placement on Capital Assets

Property Administration

Assistance with Tag Information

Property Administration / Accounts Payable

Questions on Tag Use

Property Administration / Accounts Payable

Overview

One of the most important tasks assigned to the Property Administration operating unit is identifying newly acquired capital assets or sponsor-funded equipment with the appropriate tags, and recording information about the equipment into the FAS database. FAS is an official University property record system. No other system can be used as a means of officially documenting property for the University.

Why there needs to be an official Campus-wide Record

  • The University needs a single official property record to track:
  • Compliance with required financial reports to sponsor
  • Accurate accounting and budgeting for University equipment
  • Inventory movement, utilization, status and disposition of equipment
  • Property related requirements for contractual agreements
  • Insurance estimates for University coverage
  • Tracking Donations and Surplus

Types of Tags

Tagging and recording of property is the responsibility of Property Administration. There are two basic parts to recording property at the University:

  1. Recording the property into FAS database and identifying the equipment with a tag number. Each asset must have one tag, and each tag number must have one FAS record.
  2. Identifying equipment with a non-inventory tag includes equipment, under $1500, that is tagged with a University tag, but is not entered into the FAS database.

Tagging Property

How proper tagging assists in the Physical Inventory Process

The identification tag placed on each piece of equipment, after the unopened box (s) are received and functional, at department level, thus, allowing easy recognition of the equipment that must be inventoried. Proper tagging is beneficial to the department as it reduces the amount of reconciliation the Property Administration Office has to perform.

Where to physically tag the Property

Tags should be affixed in an easily readable and accessible location. The more accessible the tag, the easier and more efficiently an inventory or verification of an asset can be executed and the less likely a duplicate tag number may be assigned during inventory.

Information to obtain when Inspecting/Tagging Equipment

When tagging new equipment, key information must be obtained for the equipment from the department before it can be entered into the FAS database. The asset details include:

  • Description
  • Model number
  • Serial number
  • Category
  • Manufacturer
  • Condition of asset
  • Department
  • Custodial name
  • In-service date

Identification of Computer Equipment

CPUs, monitors or miscellaneous equipment, may be purchased on the same purchase order as individual line items, and can be over the capital asset threshold. Each item will have its own tag number, and be entered into the FAS database individually.

Software Capitalization

Software is not capitalized unless it is part of an operating system of a computer, where its cost is captured as part of a computer. If you are capturing the cost of software only, (in excess of $1500), treat it as untaggable.

Tagging non-capital Equipment

On occasion, non-capital equipment needs to be tagged.

What to do when Property is Untaggable

Some capital assets are too small or otherwise impossible to tag. This does not eliminate the need to create a FAS record. In cases where items cannot be physically tagged but qualify for recording in the FAS database, print a copy of the FAS record and place the tag on it.  The tag should also be on file with a photo. 

Trade-In/Disposed Equipment

  To process the trade-in:

  • Initiate the Disposal Form for the FAS record of the item being traded-in/disposed. Reference the purchase order, if applicable, and the trade-in/disposed value being applied to the new equipment, if appropriate. Department Head and Vice President signatures are required

Recording Equipment into FAS Database

To be considered a capital asset, the following criteria must be met:

Acquisition cost of $1500 or more

Includes: invoice amount, initial installation, accessory and auxiliary apparatus necessary to make it usable for the purpose for which it is acquired, less trade or trade-in discounts and/or educational allowances.

Excludes: Federal Excise Tax, duty, insurance, freight, maintenance and warranty costs.

 

Have a useful life of more than one year
  • If the item will not have a useful life of more than one year, it is considered expendable material, even if it costs more than $1500.
  • Stand Alone

Tagging and Recording Accessories

Accessories, if easily separated from the main components and having a value of $1500 or more, should be tagged and recorded into the FAS database individually, including their individual cost. If the accessories do not meet the capital threshold, tag the main component, and add the entire acquisition cost to the original file.

Government Furnished Property

Who to Contact

Recording of Government furnished items:

Property Administration

Overview

Government furnished property is government-owned property which is provided directly from the government to the University. Property ownership remains with the federal government.

Recording

The University is required to record the following information on the government furnished material and equipment:

  • Name, description, and national stock number, if applicable
  • Quantity received, or issued
  • Unit price and unit of measure
  • Agreement/contract number or the applicable fund number
  • Location
  • Disposition and date of transaction

Chapter Four: Documentation

4.1 Record Keeping

Who to Contact

Record retention and audit trails:

Property Administration / Accounts Payable

Overview

The FAS database is one of the official University property records. (The Controllers Office uses a fixed asset report as another official property document for the University). A centralized database is the primary source for University Property Administration to provide numerous reports to sponsors, to departments, to insurance agencies for direct cost recovery and other financial reports to central administration units and manage capital property for the University.

A single official property record, in the FAS database, is most efficient because:

  • Ensure consistent, complete record keeping
  • Comply with Sponsors and IRS for financial reporting
  • Allow for accurate accounting and budgeting for the University
  • Track: movement, utilization, status and disposition of equipment
  • Provide information from which to negotiate indirect cost recovery
  • Provide information to analyze depreciation
  • Conduct accurate physical inventories

What Records Must be Retained

The Property Administrator is responsible for organizing and storing paper records related to capital assets and sponsor-owned property, in their operating unit. These are referred to as supporting documents, and are used for reconciliation and audit purposes. A typical file should contain the following:

  • Purchase order or grant information document
  • Approval to purchase, if sponsor required
  • Shipping records
  • Donation form and associated documents, including appraisal

Record Keeping for Government Furnished Property:

In addition to the above, retain the following:

  • Shipping document: Bill of Lading or letter of transfer
  • Department of Defense Form 1149 (for used equipment) or any other government forms provided
  • Disposal Documentation, including:
  • Approval letters from the sponsors
  • Repair, maintenance and calibration records if government owned equipment.

How Long Records Must be Retained

Financial and property records, supporting data, statistical records or any document pertinent to any agreement should be retained for the life of the property.

4.2 Required Property Reports

Who to Contact

Adjustments to Property Reports

Property Administration / Accounts Payable

Request for FAS Reports:

Property Administration / Accounts Payable

Overview

The Property Administrator is responsible for authoring and filing these reports, and will provide information from CAMS to various Financial Affairs Offices.

The Property Administrator provides reports which include:

  1. Physical Inventory Report
  2. Quarterly Summary Report of Capital Equipment, Donations, Transfers, Surplus and Sales
  3. Individual reports including: sponsor-owned equipment, year-end reports, donations, disposals and sales.

Chapter Five: Physical Inventory

5.1 Physical Inventory

Who to Contact

Preparing for Physical Inventory: Property Administration / Accounts Payable
Inventory Reconciliation: Property Administration / Accounts Payable

Overview

The purpose of a Physical Inventory is to verify the existence, current utilization and continued need for capital equipment owned by, donated, furnished to or otherwise accountable to the University, as well as government-owned property. This is a team effort involving the Property Administration operating unit and other campus departments.

 

The University conducts an all-encompassing physical inventory of its capital equipment and government-sponsored property every two years. In addition, inventories may be conducted at the close of a sponsored agreement, or as needed to fulfill property administration responsibilities.

 

It is easier and more efficient for the Property Administration & Accounts Payable if, prior to the inventory, all adjustments are made to FAS and disposals processed. Campus departments will receive advance notice from the Property Administration unit regarding the planned date and scope of the inventory.

Preparation for Inventory

Pre-inventory Preparation for the Inventory

Some of the tasks that should be initiated by the Property Administrator:

  • Tag all unrecorded capital equipment
  • Add new capital assets to FAS
  • Initiate a FAS Disposal Report
  • Identify selected areas that need special attention

Some tasks that should be completed preceding the physical inventory:

  • Identify untagged equipment, and have FAS and purchase order records available
  • Identify assets that belong to other campus departments

Personally-Owned Property

University staff members who have personal property on campus should clearly identify on the equipment that it is not University property, and who owns it. This will make the inventory process easier and eliminate the mistake of the equipment being inventoried.

Off-Campus Information

All equipment that is currently located off-campus must be accounted for in the physical inventory process. To ensure that this equipment is physically verified by a custodian, physical inventory reports should be provided for inventory purposes.

Inventory Day

Each capital assets information will be verified:

  • Location
  • Status
  • Condition
  • Description
  • Manufacturer
  • Model Number
  • Serial Number
  • Year Manufactured

Reporting Inventory Results

Inventory adds and 'deletes' paperwork will be made available during the inventory. This document requires quick response in order to identify items that are not capital, donated, or sponsor-funded equipment, so they can be added or purged in the FAS database.

Typical Reports:

  • Master list of all inventoried assets by Location
  • List of all assets added to FAS during inventory, including:
    • Untagged assets found
    • Tagged assets found but with no record in FAS
  • List of assets found which belong to another department
  • List of assets in FAS not located during the inventory

Inventory Reconciliation

The reconciliation process is the most important part of Property Administrations involvement and may demand a substantial commitment of time, depending on the volume of transactions needing resolution.


Chapter Six: Caring for Property

6.1 Movement, Utilization, Maintenance and Storage

Who to Contact

Movement of Equipment:

Property Administration

Tracking Government Furnished Property:

Property Administration

Overview

Proper care, handling and storage of property is required to ensure maximum use and availability. Equipment that is cared for and maintained properly can result in considerable savings to the University. Sponsor-funded equipment which is excess to departmental needs should be promptly processed for disposal.

Movement

Movement Versus Transfer of Equipment

When property is relocated from one area to another, such as a building change, and title remains with the University, it is defined as movement. If you are changing the accountability of equipment between departments, it is considered movement, whether the asset physically moves or not.

 

A transfer is when property is permanently moved from the University to another entity. The University no longer has title to, ownership of, or accountability for the property, and it will not be returned to the University. Permanent transfers to outside entities are performed via disposal. If the item was originally sponsor-funded or donated, there may be restrictions.

Use of University Equipment Off-Campus

When equipment is used off-campus; 100% of use of equipment must benefit the University or the sponsored project for which the property was acquired. The custodian of this equipment must complete the required property forms to take the equipment off-campus.

Utilization

Any property that is not needed for department use or use on sponsored projects should be reported to Property Administration for reutilization or disposal. For many sponsored projects there are specific restrictions regarding how you may use a piece of property. Government-owned property normally is restricted to use on the project for which it was provided. Property acquired with Federal grant funds and titled to the University may be used on federally sponsored projects other than the acquiring project.

Requirements for Return of Equipment Employee Separation

The Property Administrator should periodically review the issue of principle investigator/custodial separation from the University and the reassignment/transfer of associated capital equipment within the FAS database.

Maintenance

Maintenance is the responsibility of the principle investigator/custodian of the capital equipment. Copies of the service, repair and maintenance records should be kept in a file with copies of the packing slip and invoice for that piece of equipment.

If the equipment was purchased with sponsored funds the funding agency may outline general maintenance requirements in each agreement.

Storage

All equipment should be utilized as we can only take depreciation or indirect cost recovery on items that are usable and in use. As soon as there is the determination of excess equipment, initiate the transfer or disposal process.


Chapter Seven: Disposition

7.1 Disposition of Assets

Who to Contact

Screening for Disposal Eligibility:

Property Administration

Posting Surplus Equipment

Property Administration

Equipment Pick-up:

Property Administration

Surplus Equipment Bill of Sale

Property Administration

Overview

In the world of property management, disposal means a series of actions that lead to final disposition of property. The source of funding for an asset has the direct impact on how it can be disposed. The key to determining disposal restrictions is within the sponsor agreement or donation document. The first step in the disposal process is determining if the item is excess, or, needs to be moved/transferred, and identify the condition of the asset. The second step is to research the disposition restrictions. If there are no restrictions, a disposal or transfer form must be generated for assets in the FAS database.

Determine When Equipment is Excess

Excess equipment is a term that describes a lack of use or benefit a piece of equipment can give to a project or a person. Any excess equipment, should immediately be considered eligible for disposition. If it is sponsor funded, it may have to be made available to another department on campus, or another institution through screening. The goal is to provide an opportunity for maximum utilization of assets. If reutilization is not possible internally, proceed with disposition immediately. The Property Administrator can process the equipment through surplus if there are no restrictions for disposal. The University is liable for all equipment for the life of the asset, including; hazardous, government-owned, donated, etc.

Other Considerations

Disposing Obsolete Assets

If an item is considered obsolete to a department, the Property Administrator should dispose the item using the actual method of disposal (i.e.: scrap, surplus, etc.) and use the following guidelines to identify the asset as obsolete:

  1. The condition of the asset should reflect the true working order.
  2. Determine if the asset has a fair market value.Documenting Disposals After the Fact

Periodically, assets are disposed of without the Property Administrators knowledge. Appropriate documents must be processed as soon as the disposal is discovered. The Property Administrator will use the following procedure to document this type of disposal:

  • Verify the asset is definitely gone
  • Research the circumstances
  • Establish the date of occurrence
  • Document the findings:
  1. Obtain a written statement from the person who is certifying the condition of the disposal.
  2. Keep this document on file with other paperwork on this asset.
  3. Write a statement in the Note field in the FAS database
  • Enter the actual disposal method used in the FAS database.
  • Route disposal request for approval signature, attaching appropriate documents.

Disposition of Computers and Related Peripheral Equipment

In addition to the traditional disposal requirements, the University has to deal with situations that may compromise University databases, security, or licensed software agreements and sensitive and proprietary information that may be stored on computer hardware or other media.

For purposes of resale, all freeware, and all operating system software can be transferred with the machine. Any other software transferred will depend on the particular license agreement. When in doubt, assume that the software may not be transferred and must be permanently removed.

Disposal Methods and When to Use Them

Sale: Requested to be sold through Surplus Property

Scrap: Broken or beyond repair with no reasonable value other than recovery value of the basic raw materials.

Return to Manufacturer: (RMA) Returned to the manufacturer for credit

Cannibalization: Not functioning properly and will be used for replacement or spare parts.

Physical Inventory Adjustment: Contact Property Administration

Non-Capital Disposal Procedure

Part of the decision on how to dispose of equipment is determining if it is a capital asset or not, and also whether there is a FAS record for the asset or not. If no FAS record exists, the Property Administrator must determine if the item is a capital asset.

Capital Asset Threshold

  • University Property: $1500 and greater
  • Government Property: No $$ threshold, all must be recorded
  • Loaned Assets: No $$ threshold, all must be recorded
  • Donated Property: $1500 and greater


Selling through Surplus Property Sales

In general, it is always a good idea to process property for disposal as soon as it is excess. Timely sale of property provides the following benefits:

  • Higher prices (equipment not outdated)
  • Remove excess equipment from storage
  • Less items to inventory and reconcile
  • Contribute to successful property audit

Disposition of Assets Due to Contract/Grant Expiration

Resolution of disposition, according to either grant or contract requirements, is both a departmental and Property Administration responsibility. Partial guidance can usually be found in the agreement property terms and conditions. There may be more than one disposition method per agreement; these may be dependent on future use requirements and restrictions on use.

Loss, Damage or Destruction of Assets

When equipment is lost, damaged or destroyed, regardless of ownership, Property Administration should be notified immediately. Incidents, of loss, damage or destruction of sponsor-owned equipment must be, reported to the sponsoring agency. Determination is based upon a, physical inventory or scan of the area where the equipment was last, used. Best effort by the department to locate the equipment will be used, in cases where loss is not clearly evident.

The damage or destruction of equipment must be reported to the, Property Administrator immediately. A written description outlining the, date of the incident, equipment involved and a description of the damage, or destruction must be submitted to Property Administration.


Chapter Eight: Audits

8.1 Property Audits

Who to Contact

External Property Audit

Property Administration

Overview

The key to an approved property control system and a successful audit is timely and accurate record keeping throughout the year. The University Property Administrator assumes the role of primary liaison for all property related audits.

 

When audits are scheduled, the Property Administrator will give as much advance notice to the department as possible. Each department must be able to locate and identify property as required by the audit, and must be able to provide property related documentation upon request.

External Audits

The purpose of an audit is to determine whether policies and procedures are documented and followed. Successful completion of these audits are critical to ensure continued approval of the Universitys property system.

Property audits examine many areas including:

  • Purchase approvals
  • Procurement
  • Receiving and identification
  • FAS record completeness, accuracy and timeliness
  • Record retention
  • Disposals and excess property
  • Physical inventory
  • Availability and completeness of supporting documents
  • Compliance with procedures

What is the impact of an audit?

The results of a satisfactory property audit mean that new proposals and on-going research can continue unimpeded. Sponsors want assurance that research dollars for equipment are used for the purpose for which they were acquired, are tracked and the equipment is managed properly.

Audit Results

Audit results are provided in written reports. Audit findings and recommendations may affect business processes and require changes in policies and procedures.