Chapter 12 – Equipment and Personal Property of the University
12.1 General 12.2 Definition of Equipment 12.3 Title to Equipment 12.4 Equipment Screening and Purchase 12.5 Equipment Acquisition, Disposition, and Transfer 12.6 Addition of Equipment for Incoming Faculty 12.7 Addition of Federally Titled Equipment 12.8 Title Transfer of University Equipment for Departing Faculty 12.9 Reporting Loss, Theft, or Destruction of Property 12.10 Private Use of Public Property 12.11 Library Books 12.12 Off-Campus Use of Property 12.13 Works of Art 12.14 Equipment Capitalized as Part of Construction Project 12.15 Equipment Inventory Reporting Requirements 12.16 Equipment Tagging 12.17 University Surplus
12.1 General
The University is required to have policies and procedures in place to comply with state and federal property management standards. This chapter describes the general policies and procedures established by the University to comply with those standards and provides guidance to faculty and staff on the various aspects of equipment management. More information concerning specific operating procedures can be found at the following Capital Assets Management website: https://cam.fo.uiowa.edu.
12.2 Definition of Equipment
The Federal Government defines equipment as an item of non-expendable, tangible personal property, having a useful life of more than one year and an acquisition cost which equals or exceeds the lesser of the capitalization level established by the recipient organization for financial statement purposes, or $5,000. Since the University's definition of equipment must conform to the federal government definition, it has established a capitalization level of $5,000 and a useful life of more than one year (including fabricated equipment) for all departments. Purchased and internally developed software have capitalization thresholds of $500,000 as set by the State of Iowa in compliance with updated accounting standards.
For assets that are funded by more than one funding source, the asset will be capitalized and depreciated based on the total cost basis.
Each item of equipment acquired will be assigned a serially numbered University tag. Non-capitalized items (valued at less than the appropriate University threshold) may be identified with an unnumbered tag furnished by Capital Assets Management. These tags will be marked "Property of The University of Iowa." University equipment that is federally titled must also be tagged with a government label that indicates federal ownership and the applicable federal agency.
12.3 Title to Equipment
All equipment purchased or otherwise acquired by the University for the conduct of activities related to its mission is considered University property upon acquisition unless otherwise noted. Specific exceptions to this policy include equipment furnished to the University by the federal government for use on federally sponsored projects, equipment purchased for use on federal contracts, and other equipment loaned or contracted to the University by public or private entities. The University may request the transfer of accountability for federally titled equipment to other federal projects once the original project has been completed or it may request outright title to the equipment if the equipment continues to be utilized for similar activities. The Grant Accounting Office, 118 South Clinton Street, should be contacted for instructions when a department wishes to transfer accountability or request outright title to federally titled equipment.
12.4 Equipment Screening and Purchase
In order to maximize University resources, departments are asked to avoid the purchase of items of scientific equipment that are currently accessible, available, and suitable for sharing. An item of scientific equipment would not be considered suitable for sharing if the nature of the scientific problems being addressed and/or the time schedules indicated in the scope of work under a sponsored project require the dedicated use of the equipment item throughout the life of the project. The University's equipment inventory system contains information on the make, model number, location, and custodian of scientific equipment that may be searched for a needed item of scientific equipment deemed suitable for sharing.
Departments and colleges submitting applications for external project funding that contain equipment requests are asked to certify that, to the best of their knowledge, no comparable piece of equipment is available for use in conducting the proposed project activities. A similar statement appears on equipment requisitions that are forwarded to Purchasing for approval and processing. Departmental and/or collegiate approval of an equipment requisition is deemed evidence that appropriate measures have been taken to assure the purchase is necessary and that the funds for the purchase are appropriate. (The National Aeronautics and Space Administration and the Department of Defense agencies may require that equipment costing in excess of $5,000 go through an agency screening process prior to purchase. Departments acquiring equipment under agreements with these agencies should contact the Grant Accounting Office for instructions.)
All equipment purchased by the University for the conduct of activities related to its mission must follow the procurement policies and procedures outlined in the Purchasing Policy and Procedure Guide.
12.5 Equipment Acquisition, Disposition, and Transfer
Since the University acquires and disposes of equipment on a daily basis, it is necessary to employ standard operating procedures when processing the various types of acquisitions, dispositions, and transfers.
- Acquisition. Equipment acquisitions result from purchases, donations, receipt as federal government-furnished (federally titled) property, receipt as state surplus/excess property, or transfers from another institution associated with an incoming faculty member. Donated equipment values are reported to Capital Assets Management at the same value as the donation gift receipt. If there is not a gift receipt, acquisition value will be determined by the department based on objective justification. Acquisition value is defined as the price that would be paid to acquire an asset with equivalent service potential in an orderly market transaction at the acquisition date. (See also V-12.6 and V-12.7.)
- Disposition. Dispositions of equipment result from declarations as surplus property, trade-ins, cannibalizing for parts, or transfers to another institution associated with a departing faculty member. Surplus property must be transferred to the Surplus Department for appropriate disposition. (See also V-12.8 and V-12.9.)
- Transfer. Transfers of equipment between University departments can occur only when equipment will remain property of the University and the receiving department agrees to use the equipment for University purposes. Transfers of computer-related equipment must follow the Computer Data and Media Disposal Policy.
- Loss. An asset is deemed lost only after a concerted effort has been made to find it. After two inventory cycles have been completed, the asset should be reported as lost to Capital Assets Management, using a disposal form.
The responsibility for providing Capital Assets Management with all required information for individual equipment inventory records lies with the department initiating the acquisition, disposition, or transfer of the equipment item(s). When submitting a requisition, departments must include the tag number(s) of any asset(s) being traded in. Federally titled assets require disposition to be received prior to the asset being valid for trade-in (see V-12.3 above and V-12.13c below). For other types of acquisitions, as well as for dispositions and transfers, Capital Assets Management has designed several forms to record the required information. These forms and the instructions for their completion are available at the following website: http://cam.fo.uiowa.edu/content/forms-and-instructions.
12.6 Addition of Equipment for Incoming Faculty
The responsibility of accounting for the addition of equipment to the University lies with the departmental executive officer of the incoming faculty member's department. The Additions Request form and the detailed instructions for implementing such an addition may be obtained from Capital Assets Management or are available at the following website: https://cam.fo.uiowa.edu/content/forms-and-instructions.
12.7 Addition of Federally Titled Equipment
- By purchase. Items of equipment purchased with federal monies and considered as federally titled assets by the funding agency will be so designated by the Grant Accounting Office.
- Furnished by the federal government. Assets furnished by the federal government or its agencies must be reported to Capital Assets Management by use of the CAM Additions Request Form (https://cam.fo.uiowa.edu/content/forms-and-instructions).
12.8 Title Transfer of University Equipment for Departing Faculty
The responsibility of accounting for the transfer of equipment from the University lies with the departmental executive officer of departing faculty member's department. The Title Transfer of University Equipment form and the detailed instructions for implementing such a transfer may be obtained from Capital Assets Management or are available at the following website: https://cam.fo.uiowa.edu/content/forms-and-instructions.
12.9 Reporting Loss, Theft, or Destruction of Property
- University property: Any University property, including items of equipment, supplies, foodstuffs, etc., stolen or otherwise missing must be reported to the University of Iowa Police Department, https://police.uiowa.edu, at the time it is discovered missing. A police officer will assist the department in filing a police report. Within 24 hours these losses also should be reported to the Department of Risk Management, Insurance, and Loss Prevention, https://uiowa.edu/riskmanagement/. If the equipment was valued over $5,000, an equipment deductions form must be submitted to Capital Assets Management when it is determined the asset will not be found or returned (typically 60 days from date of loss).
- Federal property: If the property was purchased with federal grant funds, then, in addition to the reporting requirements in paragraph a above, written notification must also be made to the Grant Accounting Office so that the incident can be reported to the applicable federal agency.
(See also V-20 Lost or Stolen Property.)
12.10 Private Use of Public Property
No public officer, deputy, or employee of the state or any governmental subdivision thereof, having charge or custody of any automobile, machinery, equipment, or any other property owned by the state or a governmental subdivision of the state, shall use or operate the same or permit the same to be used or operated for any private purpose (IC 721.2). In addition, no public officer, deputy, or employee of the State of Iowa or any governmental subdivision thereof shall, either directly or indirectly, make use of the purchasing power of the State of Iowa or said governmental sub-division for any private purpose. (See also II-18.1d(5) Conflict of Interest.)
12.11 Library Books
Library books are catalogued in the University Library where detailed records of the book inventory are maintained. The libraries furnish Capital Assets Management with annual reports for proper update to the central assets records. The annual report from the Main Library and the Law Library must be provided on a timely basis and will include the annual expenditures for collection additions by fund, the amount of gifts-in-kind, the number of volumes added, the number of volumes withdrawn (lost, destroyed, etc.). Capital Assets Management will post the library collection additions and withdrawals to the asset management system for reporting to the University's Annual Financial Report. All negotiations leading to gifts and bequests of such materials must be submitted to the University Librarian before commitments are made. (See also V-1.2.)
12.12 Off-Campus Use of Property
- Short-term use: When any equipment belonging either to The University of Iowa or to the federal government, and under the custody of The University of Iowa, is going to be used off-campus for periods up to six months, this off-campus use shall be approved by the appropriate departmental office. Such records are to be maintained in departmental offices and do not need to be sent to Capital Assets Management (departments may utilize the Off-Campus Use of Property form).
- Long-term use: When any equipment belonging either to The University of Iowa or to the federal government, and under the custody of The University of Iowa, is going to be used off-campus for periods longer than six months, this off-campus use shall be approved by the appropriate departmental office and that office shall notify Capital Assets Management in writing (Off-Campus Use of Property form) as to the University number, asset description, location, custodian (person responsible), and the expected return date.
Note: The Off-Campus Use of Property form and the instructions for completion are available in Capital Assets Management or can be found at the following website: https://cam.fo.uiowa.edu/content/forms-and-instructions.
12.13 Works of Art
- Acquisition. Works of art given to the University or purchased with funds subject to the control of the University are to be regarded as property of the University, subject to all policies concerning University property. In addition, works of art may be subject to the Federal Copyright Act and the Visual Artists Rights Act, which may confer certain continuing rights to the artist. Acquisitions of art by the University Museum of Art are considered part of the Museum of Art's collection and are assigned accession numbers by the Museum of Art. The Museum of Art also maintains its own inventory system of its art collection and on a regular basis reports acquisitions over $5,000 to Capital Assets Management for financial reporting purposes. Donated art values are reported to Capital Assets Management at the same value as the donation gift receipt. If there is not a gift receipt, acquisition value will be determined by the department based on objective justification. Acquisition value is defined as the price that would be paid to acquire an asset with equivalent service potential in an orderly market transaction at the acquisition date.
- Disposition. Departments wishing to dispose of a work of art must notify the Director of Facilities Management. Operating with the advice of the Art on Campus Committee, the Director of Facilities Management will determine whether the work should be moved to another site on campus, offered for sale, or disposed of in some other manner consistent with University policy and federal law.
- De-accession. De-accessions of Museum of Art collection items will be according to the recommendation of the Director of the Museum of Art, in consultation with the curatorial staff and the Museum Advisory Committee and approval of the Executive Vice President and Provost. De-accessioned objects will be sold or disposed of in a manner consistent with University policy and federal law.
12.14 Equipment Capitalized as Part of Construction Project
The University of Iowa has an equipment capitalization threshold of $5,000 for all individual asset purchases. However, an exception to this policy exists when equipment is acquired as a component of a construction project. In these situations equipment items below the University's capitalization threshold of $5,000 that are part of the building project are grouped (bundled) together with other similar asset classifications and capitalized in the University's capital asset management system.
12.15 Equipment Inventory Reporting Requirements
- Physical inventory. Each department is required to conduct a complete physical inventory of equipment every two years. Any additions, deletions, transfers or corrections discovered during the biennial physical inventory must be reported to Capital Assets Management on the appropriate CAM reporting form, i.e., Additions Request form, Deductions Request form, Internal Transfer of University Equipment form. Departments should coordinate the physical inventory effort with Capital Assets Management. Capital Assets Management can provide bar code scanners with which to take an initial inventory or with a listing of the departments current inventory. Upon completion of the department's physical inventory, the departmental executive officer must sign any applicable equipment adjustment forms and forward them to Capital Assets Management, along with an approved, signed certification letter, certifying that the physical inventory has been completed. Physical inventories should be completed in a timely manner to ensure that the property records are up to date and that the recording of the depreciation of equipment, where appropriate, is accurate.
- Spot checks. Spot checks may be performed by Capital Assets Management to test the validity of the biennial inventories received from departments. In general, inventory spot checks may be undertaken in any department responsible for more than 200 assets. If a sufficient number of discrepancies is noted during a spot check, the department may be asked to perform additional work on the inventory before the physical inventory is accepted by Capital Assets Management.
- Federal compliance. The federal government requires the University to audit its federally titled assets each year and conducts its own audit once every two years. Departments holding federally titled equipment must annually provide appropriate information to Capital Assets Management for validating and updating the location, custodian, and condition of these federally titled assets. The departments also need to provide disposition requests when appropriate. The Grant Accounting Office is responsible to submit the disposition requests to the appropriate federal agency and for the government award closeout process as defined by the Department of Defense Property Manual 4161M. Submission of year-end property reports (i.e., DoD 1662, NASA 1018, and grant reports) is the responsibility of the Grant Accounting Office.
12.16 Equipment Tagging
The physical tagging of capitalized equipment is the responsibility of any department acquiring equipment to be capitalized. Capital Assets Management will assign tag numbers for such acquisitions and will send tags to either a designated department representative, to the custodian if appropriately noted by the department, or to the requestor noted on the requisition. Departments must tag assets in cooperation with Capital Assets Management and verify various information, e.g., serial number, model number, custodian, location, etc.
12.17 University Surplus
- All university-owned items must be disposed of by University of Iowa Surplus.
- UI Surplus will dispose of the property in one of the following ways:
- Allow department to use as a trade-in;
- Transfer to another Regent Institution, state agency, or Iowa government entity;
- Auction to the highest bidder;
- Sell internally through UI Surplus sales open to the public;
- Negotiate a direct sale to an outside entity when in the best interest of the institution;
- Dismantle for parts utilization;
- Recycle or dispose of in the best interest of the institution if de minimis residual value.
- Departments receive reimbursement for items selling for more than $300. Sales-related expenses are deducted from the selling price.