Equipment Acquisition And Management
PURPOSE
The purpose of this statement is to provide guidance that Colleges/Schools/Departments/Units should follow in accounting for equipment purchased from a sponsored award.
Effective July 1, 1996 the following constitutes equipment and supplies.
Equipment – nonexpendable, tangible, personal property having a useful life of more than one year AND an acquisition costs of $5,000 or greater. This threshold is consistent with the definition of equipment referenced in OMB circulars A-21 and A-110, University Accounting Procedures, and UNC-GA. For contracts and grants awarded prior to July 1, 1996 the threshold for equipment was $500 or more.
Note that equipment can further be categorized as either general purpose or special purpose equipment.
Supplies – expendable property having a useful life of one year or less or an acquisition cost of less than $5000.
Equipment Fabrication – when multiple items which could be classified as supplies (some having an acquisition costs of $ 5,000 or <) are purchased to create/fabricate an integrated unit of equipment having a total value of $5,000 or more. In these instances, the individual purchase should be budgeted and accounted for as equipment. Fabrication does not include the replacement or upgrading of existing equipment or components and these cost items are to be budgeted and charged as supplies.
Note that if an award does include the fabrication of equipment, the College/School/Unit is responsible for requesting a change from the standard equipment code to one for fabrication.
GENERAL GUIDELINES/APPLICABLE POLICIES
A. Acquisition Guidelines
1. University Purchasing Procedures:
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The Principal Investigator and/or assigned personnel assisting in the acquisition of the equipment must adhere to University purchasing procedures (See Purchasing Policies & Procedures).
2. Screening Prior to Purchase:
The Office of Management and Budget (OMB) Circular A-110, Subpart C Section 44 requires equipment screening in an effort to avoid purchasing unnecessary items. This screening must be undertaken prior to issuing a purchase requisition for the equipment. The university has established the following guidelines for equipment screening:
The Principal Investigator is required to screen on a University-wide basis for availability of equipment costing $25,000 or more. The Equipment Screening form (Form EPS1) should be completed and forwarded to the University Property Management Office. Upon receipt of the signed EPS1 form from property management, the requisition can be entered into Banner, the completed ESPI form must be attached to the purchase requisition to confirm compliance for audit purposes.
Additional screening requirements may be necessary for specific agencies. Please see award documentation for more detail.
B. Government –Furnished Property (Equipment)
This category includes:
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Equipment acquired under Federal contracts that are governed in accordance with FAR 45.5, Government Property and
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Property furnished by the Federal government to the University/Principal Investigator.
Equipment transferred to the University and governed according to FAR 45.5 must be recorded in the Capital Assets Management System. A copy of correspondence related to the transfer of government property to the campus is to be forwarded to the Office of Contracts and Grants.
In most cases title to Federally owned property that is used by the University during the award period vests with the Government. Title and disposition of government property is to be administered in accordance with FAR 52.245-5 Alternate I. Disposition and final title vestment instructions are provided by the Office of Sponsored Programs.
3. Inventory Control:
The Principal Investigator and the appropriate support personnel are responsible for maintaining and updating records of equipment accountable under each award.
4. Disposal of Equipment:
Equipment purchased under a contract or grant may provide for title to vest with the University. The conditions or agreement cited in the award document must be reviewed to determine if the Government does or does not intend to retain title. For projects in which title to equipment vests with the University, normal University regulations related to trade, transfer or disposition must be followed.
For sponsored awards that provide for the title to remain with the Government, prior written approval must be received from the appropriate funding agency prior to the trade, transfer or disposition of equipment.
Note: OMB Circular A-110 allows the Federal government to transfer and otherwise provide disposition instructions on all items of equipment. The equipment shall be appropriately identified in the award or otherwise made known to the recipient. Disposition instructions will be issued by the sponsoring agency within 120 days of receipt of a final equipment inventory.
5. Equipment Not in Approved Proposal/Budget
Formal approval is normally required from agencies (occasionally delegated to the Office of Contracts and Grant) prior to purchasing equipment if not listed in the approved proposal/budget. The Principal Investigator may want to compile a list of all anticipated equipment for a one-time approval in order to reduce the paper work and time involved in approving each piece of equipment separately.
6. Office of Naval Research (ONR)
Complete DD Form 1419 for equipment purchased from sponsored awards administered under the cognizance of ONR. Contact the Office of Sponsored Programs for Form 1419 and instructions for completing.
Revised July 1, 2009
