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The University has a significant investment in equipment, representing long-term commitments to fulfill its mission. The University owns and controls all equipment purchased with University funds, unless otherwise stipulated by the funding source. Custody and use of all assets is the responsibility of the various colleges and departments.
Safeguarding the University’s capital equipment assets is a priority for each custodial department and those individuals responsible for those assets. Vigilance must be maintained to ensure that the risk that equipment assets are not lost, stolen or vandalized is managed. Assumption of security and complacency regarding possible risk are the two most significant factors leading to asset loss.
Accounting Services administers capital equipment assets through the centralized accounting and reporting procedures.
Equipment purchases must meet all of the following requirements to be considered a capital equipment asset.
- The cost of the equipment must be $5,000 or greater.
- The University must have title or ownership rights of the equipment
- The equipment must have a useful life of one year or greater.
Any equipment purchase that does not meet all of the above criteria must be recorded to the non-capital equipment expense accounts.
Equipment upgrade expenses must meet all of the following requirements to be considered a capital equipment upgrade:
- The expense must be $5,000 or greater.
- The expense must increase the productivity or capacity of equipment beyond its original intent.
- The expense must extend the useful life by one year or greater.
Any equipment expense that does not meet all of the above criteria must be recorded as repairs and maintenance.
Administration of capital equipment assets
- Departments must receive approval before a sale, transfer or donation of University capital equipment assets to an entity external to the University is conducted.
- Capital equipment assets must be fully depreciated to be donated.
- Units must dispose of all equipment in a manner consistent with agency funding guidelines and public law, as well as the University’s interests.
- For technology assets, proper media sanitization as defined in the Media Sanitization Standard should be performed prior to any sale, transfer or donation of capital equipment assets.
- Whenever possible, capital equipment assets within the University must be re-used or reassigned for another University purpose when the original project or need for which it was acquired has been completed, unless otherwise restricted by the funding source.
- Off-campus use of University capital equipment assets will be permitted only when it is for a business related purpose contributing to the University's mission.
- Departments should internally track non-capital equipment t when being used off campus. Accounting Services need not be notified.
- Units must retain capital equipment donated to the University for a minimum of three years from the “in service date” prior to disposal.
- Departments must cover the loss and undocumented disposals of capital equipment assets with net book depreciable value from their departmental equipment assets carryforward.
Equipment purchased with sponsored projects
Purchases of capital equipment by departments using sponsored funds are subject to approval of the sponsoring agency.
In all cases where equipment is purchased using sponsored funds in the University general ledger system, the equipment is the property of the University and is subject to all related oversights and procedures.
If a capital equipment asset is purchased with sponsored funds, and the Principal Investigator or fellowship recipient decides to leave the University and wishes to take the item (for example research equipment) with them, they or the external entity must purchase it from the department in adherence with Administrative Procedure: Capital Equipment Disposals: Selling Capital Equipment to External Entities or Employees.
Note: Non-sponsored fellowship accounts may also purchase equipment as long as they do so with approval of the fellowship granting agency and the purchase is an appropriate use of funds per the fellowship.
Reason for Policy
This policy was established to ensure that:
- capital equipment assets are properly acquired and retained by the University:
- the accounting treatment is in compliance with generally accepted accounting principles (GAAP), the Governmental Accounting Standards Board (GASB), and other regulatory agencies; and
- University financial reports are accurate related to asset values, depreciation and categorization.
Asset values are reported on the University financial statements, subject to external examinations and provide the means of allocating costs to accounting periods which are used to establish the University's facilities and administrative (F&A) rate. This policy establishes various requirements to help ensure the accuracy of asset values; that equipment duties are segregated; off-campus use is restricted; and ongoing verification is made.