ADMINISTRATIVE PROCEDURE

Capital Equipment Acquisition: Purchase

Equipment Acquired Through a Purchase by the University of Minnesota

The classification of an equipment item ordered by the University of Minnesota must meet all of the following criteria to be considered a capital equipment asset:

  1. The cost of the equipment must be $5,000 or greater
  2. The University must have title or ownership rights of the equipment
  3. The equipment must have a useful life of 1 year or greater

The cost of the equipment is the invoice amount of the equipment item, plus any associated make-ready costs.

If the equipment does not meet the criteria above, then the equipment item is classified as non-capital equipment.

A capital equipment asset must be ordered with a purchase order that follows Administrative Policy: Documenting Financial/Accounting Transactions for All Non-sponsored and Sponsored Transactions and its associated appendix: Transaction Justification/Documentation Standards for All Non-sponsored and Sponsored Transactions.

Purchase - Capital Equipment

  1. The department or principal investigator identifies the need for an equipment item. If an existing capital equipment asset is to be traded-in on the new equipment item, then the department must first follow the equipment disposal Administrative Procedure: Equipment Disposal - Trade-in.
  2. The department properly classifies the equipment item to be ordered as a capital equipment asset. If the proper classification of the equipment item is unclear to the department, then the department must contact Inventory Services for assistance at controller@umn.edu.
  3. The department orders from the supplier the equipment item in accordance with Administrative Policy: Purchasing Goods and Services and its associated Administrative Procedure: Purchasing Goods and Services.
  4. The department receiver physically receives the equipment item from the supplier.
  5. The department receiver completes form UM 1681: Capital Equipment Asset Receipt Form. The department receiver must compare the packing slip with the equipment item and reconcile any differences before completing form UM 1681.
  6. The department receiver submits the completed form UM 1681 and a copy of the packing slip to the procurement specialist.
  7. The voucher preparer receives the equipment item from the supplier.
  8. The procurement specialist receives and reviews the completed form UM 1681 and a copy of the packing slip. If the completed form UM 1681 contains all of the required data elements, then the procurement specialist records in PeopleSoft Financials the receipt of the equipment item and forwards to the voucher preparer both the completed form UM 1681 and a copy of the packing slip. If the completed form UM 1681 does not contain all of the required data elements, then the procurement specialist returns it to the department receiver to obtain the missing data element(s).
  9. The voucher preparer receives the completed form UM 1681 and a copy of the packing slip.
  10. The voucher preparer creates a voucher to pay the invoice for the equipment item.
  11. The voucher preparer places the invoice, a scanned copy of the completed form UM 1681 and a scanned copy of the packing slip into the document imaging system.
  12. Inventory Services reviews the voucher transaction in PeopleSoft Asset Management and matches it with the associated documents in document imaging system.
  13. Inventory Services assigns a University ID number to the equipment item and records it in PeopleSoft Asset Management as a capital equipment asset.
  14. Inventory Services travels to the department to verify the information on the completed form UM 1675 and to affix a bar-coded University ID number tag to the capital equipment asset.

Purchase - Non-capital Equipment

  1. The department or principal investigator identifies the need for an equipment item.
  2. The department properly classifies the equipment item to be ordered as non-capital equipment. If the proper classification of the equipment item is unclear to the department, then the department must contact Inventory Services for assistance at controller@umn.edu.
  3. The department orders from the supplier the equipment item in accordance with Administrative Policy: Purchasing Goods and Services and its associated Administrative Procedure: Purchasing Goods and Services.
  4. The department receiver physically receives the equipment item from the supplier.
  5. The department receiver records the receipt of the equipment item in PeopleSoft Financials.
  6. The voucher preparer receives the invoice for the equipment item from the supplier.
  7. The voucher preparer creates a voucher to pay the invoice for the equipment item.
  8. The department manages the non-capital equipment according to the policies and procedures of the department's Resource Responsibility Center (RRC).

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