Equipment Acquisition and Management
REG 10.05.4
Authority: Vice Chancellor for Finance
and Business
History: First Issued: July 1, 2002. Last Revised: March 3, 2004. Additional
History Information.
Contact Info: Assistant Director, Systems and Compliance, (919) 515-8018,
Office of Contracts
and Grants.
1. Introduction
This statement provides the guidelines that Colleges/Schools/Departments/Units
should follow in accounting for equipment purchased from a sponsored award.
Effective July 1, 1998, the following constitutes equipment and supplies:
Equipment - nonexpendable, tangible, personal property having a useful life
of more than one year AND an acquisition cost of $5000 or greater. This threshold
is consistent with the definitions 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, 1998, the threshold for equipment is $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 acquisition costs of $5000 or <) are purchased to
create/fabricate an integrated unit of equipment having a total value of $5000
or more. In these instances, the individual purchases 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 in
Financials to one reflecting fabrication.
2. General Guidelines
2.1 Acquisition Guidelines:
2.1.1 University Purchasing Procedures:
The Principal Investigator and/or departmental administrative personnel assisting
in the acquisition of equipment must adhere to University purchasing procedures
(see Purchasing Section of this manual).
2.1.2 Screening Requirements 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:
2.1.2a The Principal Investigator is required to screen within his/her
department for availability of equipment costing $5,000 or more and
less than $10,000.
2.1.2b The Principal Investigator is required to screen on a University-wide
basis for availability of equipment costing $10,000 or more. Screening
requests are made to the University Capital Assets Accounting Office
(extension 5-6899) prior to issuing a purchase requisition. A record
of the screening will be retained by the Capital Assets Accounting
Office to confirm compliance for audit purposes.
Additional screening requirements may be necessary for specific agencies.
Please see award documentation for more detail.
2.2 Government-Furnished Property (Equipment):
This category includes:
2.2.1 Equipment acquired under Federal contracts that are governed in accordance
with FAR 45.5, Government Property, and
2.2.2 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 (CAMS). 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 to government
property are provided during the project close-out process.
2.2.3 Inventory Control:
The Principal Investigator and the appropriate administrative personnel in
the Department or College are responsible for maintaining and updating records
of equipment accountable under each project. Equipment purchases should be
reconciled monthly to the expenditure records in Financials.
2.2.4 Disposal of Equipment:
Equipment purchased under a contract or grant may provide for title to vest
with the University. The conditions of 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 (see Purchasing Section of this manual).
For sponsored awards that provide for 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 shall be issued within 120 days of
receipt of a final equipment inventory.
2.2.5 Equipment Not in Approved Proposal/Budget
Formal approval is normally required from the agencies (occasionally delegated
to the Office of Contracts and Grants) 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 paperwork and time involved in approving each piece of
equipment separately.
2.2.6 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 Contracts and Grants for
DD Form 1419, and instructions for completing this.
