Manual

This document contains Florida Tech's procedures regarding the acquisition, maintenance, reporting, and the disposition of capital assets. If you have any questions, please contact the Property Administrator at (321) 674-7288.

Chapter One: Property The Real Picture

1.1 Key Concepts of Property Management

Overview

The importance of property management
Property management is a key component in an efficient, professionally administered business. It supports the educational, research and administrative missions of the University.

Benefits include:
readily identify availability of equipment
meet departmental management needs
comply with external regulations
saves money by reducing waste, redundancy and equipment loss
allows the University to have an accurate record of its investment in equipment
provides data which enables the University to obtain indirect cost recovery for equipment depreciation
allows the University to issue timely and accurate property reports

The core component to efficient property management at the University is the FAS (Fixed Asset Software). It is designed to track property and expenses for capital or sponsor-funded assets accountable to the University.

The FAS database provides a central information resource where property administration & accounts payable can locate a given piece of equipment by searching for a tag number, serial number, PI, purchase or requisition number, etc. FAS is the central, auditable property record for the University. This database provides crucial information for the University relative to the University's capital assets and government or sponsored funded assets. Information from FAS also provides a historical trend of property purchases.

At the University, a capital asset is defined as having all of the following:

an acquisition cost of $1,000 or more
a useful life of more than one year
a stand-alone item (not permanently affixed to a structure or building)

Concepts of Managing Capital Equipment:

When Equipment arrives at the University
Capital equipment should be properly received, including unpacking and inspecting, if appropriate, to insure that the proper equipment has been sent and is in good condition. Incoming equipment should be promptly tagged with a University tag and any other appropriate identifying markings then recorded into the FAS database as soon as possible.

While the Equipment is at the University
When the equipment is moved, its new location must be recorded into the database. If the equipment needs maintenance, it should be done in accordance with the manufacturer's recommendations. University equipment should be used for work benefiting the University.

When Equipment is no longer Needed
An ongoing task in property management is assessing what equipment is excess and taking steps to reutilize or dispose of that property. In addition, sponsor-funded equipment may have to be handled in accordance with specific sponsor regulations or procedures.

Property Requirements
Property at the University is acquired in a variety of ways, such as a purchase order, a transfer from sponsors, loan or donation, private donors or corporations. The way property is acquired determines how it should be recorded and managed throughout its lifecycle.

Three key questions regarding property:

1. How did the property come to the University?

Purchase
Donation
Loan
Transfer

2. Who funded the acquisition?

University funded and owned
University owned property, funded by a sponsor
Government owned property

3. What was the dollar value of the property when acquired?

Under $1,000, option to tag with a non-numbered University tag
Over $1,000, always tag and enter information into the FAS database after receipt

1.2 Roles and Responsibilities

Who to Contact

Issue	Contact
Any property issue:	Property Administration
Disposal of equipment:	Property Administration

Overview

Property management is an important function at the University. Prudent business practices help the University's multi-million dollar investment in capital equipment, meet government and sponsor requirements, and support indirect cost recovery associated with assets at the University.

Role of University Property Administration

Property Administration provides assistance in handling any property management situation and a variety of property related issues that arise from the time a purchase or other method of acquisition is planned for an asset through its disposal. Property Administration provides assistance with many areas of information including:

Acquisitions

Research equipment documentation
Classifying equipment as expendable or capital
Records and Documentation
Transferring equipment from or to another institution
Documenting and recording
Transferring equipment to other departments within the University
Documenting use and verifying the value of donated equipment
Understanding property regulations
Using University's FAS database
Reconciling physical inventories of department equipment
Reporting on property issues to University management

Disposal

Screening prior to disposal of surplus equipment
Understanding disposal restrictions
Obtaining disposition instructions for sponsor-owned equipment
Obtaining disposition instructions for scrap or unusable equipment

Sponsored Projects

Documenting appropriate information on sponsor-funded equipment

The University environment benefits when there is a reduction in the amount of excess and duplicative equipment; reuses equipment by transferring equipment to other departments; and recycles equipment.

Role of University Management

The University Officers that are responsible for management of their fund account for equipment are also responsible for ensuring that policies and practices applicable to the work of the University, including instruction, and research are carried out, and that standards, policies and regulations are consistent with sponsor and donor expenditure restrictions. Specific responsibilities include:

Ensure implementation of property management policies, processes, and personnel assignments within their department, to enable the meeting of compliance and department business needs;
Emphasize importance of appropriate and compliant property management within the university.

1.3 Reconciliation

Who to Contact

Reconciliation	Contact
Reconciling FAS - Fixed Asset Report:	Property Administration or Accounts Payable
Contract/Grant Equipment Reconciliation:	Property Administration or Office of Sponsored Programs
Physical Inventory Reconciliation:	Property Administration

Overview

Reconciliation is the process of comparing one set of records with another and taking the steps necessary to adjust discrepancies. The two most common types of reconciliation are:

Physical inventory reconciliation
Financial reconciliation

Physical Inventory Reconciliation

Physical inventory reconciliation is performed annually/bi-annually. This reconciliation involves reconciling physical inventory reports against the FAS record of capital equipment. The reconciled physical inventory provides a snapshot in time of the inventory conducted for each department. The inventory highlights equipment which may not have been:

Properly tagged
Input into FAS
Properly identified as excess
Properly identified as located off campus
At the conclusion of the inventory, the following can be identified:

-assets inventoried in departmental space by location
-assets added to FAS during the inventory. This includes:

Untagged assets found
Tagged assets found but with no record in FAS
Assets found which belong to another department
Assets in FAS which were not located during the inventory

Physical Inventory Reconciliation Procedure:

Discrepancy Resolution

Untagged Assets Found and Tagged Assets Found but not Recorded in FAS
Property Administration must verify item added is indeed an asset requiring recording in FAS if an item was added to FAS in error, appropriate corrective measures should be taken information must be collected to ensure completion of the full FAS record
List of Assets Found in a Location which appear to belong to another department
Property Administration must verify to which department the capital asset belongs, and take appropriate corrective measures
List of Assets in FAS Not Located During the Inventory

Each department will be provided a specified period of time during which they must make every effort to locate those items not found by the physical inventory. When items are found:

Arrangements will be made to inventory the newly located assets

Financial Reconciliation

There is often a discrepancy between the dollar amount stated in FAS, and the Fixed Asset Report. This difference is due to the fact that the Fixed Asset Report takes into consideration the invoice amount and the asset depreciation.

Chapter Two: Acquiring Property

2.1 Purchases to Upgrade Existing Equipment

Trade-Ins

Since the equipment being traded-in is permanently leaving the department, a disposal or transfer form must be completed. The disposition must be approved by the VPFA if the equipment is to be removed from inventory permanently.

Upgrades

An upgrade is defined as a change in an existing piece of equipment which has a minimum cost of $1,000, and either extends the useful life of the equipment by two years or significantly adds to the worth of the benefits that the equipment can yield. Significant upgrades must be noted in the FAS database. If an item is repaired and has no new equipment added to it, no new record for these services should be added to the FAS record.

2.2 Donations to the University

Who to Contact

Donation	Contact
Fair Market Value:	Advancement
Unable to find Donation Documents:	Advancement
Recording/Receipt of 'Gift in Kind	Advancement

Overview

The University is a recipient of property donations from many sources, such as corporations, companies, and individual donors. The appearance of donor documents vary considerably, however, the procedure for processing donations is consistent. It is important to remember that there should be a need or purpose for a donation of equipment. All donations, without exception, are owned by the University. The dollar threshold for entering donated equipment in FAS is $1,000 and over.

Procedure for Processing Donations

Property Administrations Role in Donation Documentation:

Appropriate acknowledgement of gifts is particularly important. Donations should be processed immediately by advancement after the donation is received at the University. The tasks listed should be followed:

1.) Gather all donation documentation and fill out the Donation Transmittal Form. Property Administration will retain a copy of all donation documents as the official record of the University. Departments should forward a legible copy of all donation documents to Property Administration, including:

letter of intent to donate
Donation value
shipping and receiving documents
acknowledgement of receipt of property and certification
proof of value, i.e.; appraisal
any other documentation regarding the donation

2.) Create a capital asset record, if appropriate, in the FAS database, including tagging the property and the determination of fair market value.

3.) Provide a copy of all donation documents to the Office of Advancement for processing. The Office of Advancement will prepare and send an official University gift/donation receipt to the donor. IRS rules require donors, not the University, to establish the value of items donated for any tax-related purposes.

Policy Regarding Donations:

Donations of money for the purpose of Purchasing Equipment

When money is donated to the University, the money is the gift, not the equipment subsequently purchased with the funds. Equipment purchased with donated or gift funds is not donated equipment, and therefore is not subject to any of the procedures in this section. This equipment must be included in the FAS database, if appropriate.

Use and Restrictions

Donations may not be transferred in exchange for money, other property, or services.

Equipment provided as part of a Grant

Equipment provided in conjunction with or as part of a grant is not a donation. A grant has a set of expectations associated with it, and with detail within it whether specific pieces of equipment will be furnished, loaned, or donated. Specific handling of these instances may involve assistance by the Office of Sponsored Programs.

Donations intended for immediate sale

Donations of equipment intended for sale pose significant tax implications for donors. When a donation is given for immediate fund-raising, it must be sold within sixty days. If the donation is retained by the University longer than sixty days, it must be recorded into the FAS database in the same manner as all donated equipment.

New versus Used Equipment Donation

New equipment is defined as not used prior to receipt by the University, and manufactured in the last two years; the donor must also be the manufacturer of the equipment. Equipment is considered used if it is over two years old, even if it is in the original unopened box and donated by the original manufacturer. If you receive a used donation, see advancement.

Non-Capital Asset Donations

Property Administration should be notified of any donations of property, regardless of value. Equipment donations with a total value of less than $1,000 will not be included in the FAS database, but still processed with a no-cost entry and tagged with a University identification tag. Appropriate paperwork will be sent to the Office of Advancement.

Disposal of Restricted Donations

Those donations designated as restricted may not be transferred by the university in exchange for money, other property, or services. Most donations are kept until they are scrap. In general, you cannot sell any donated items before the three year IRS retention rule.

2.3 Fabrications

Who to Contact

Fabrication	Contact
Acceptance as Capital Equipment:	Property Administration

Overview

A fabrication is usually a one-of-a-kind creation. Fabrications are created by assembling a number of components to produce a piece of equipment that meets unique research specifications. Most fabrications are sponsor-funded and therefore have a number of compliance requirements related to acquiring and tracking individual pieces of equipment in an assembled fabrication.

Tagging and Recording Fabrications
Recording the Fabrication in the FAS database
The initial record of fabricated equipment will be tagged and tracked in the FAS database.
Joint Ownership Issues and Funding

Commingling of Funds

Funding from several different sources is not uncommon when building a fabrication. Ownership and accountability may be an Issue with some agencies if authorization to commingle funds is not approved at the inception of the award. Occasionally it may be necessary to incorporate equipment which is donated to the University into a fabrication.

Government Furnished Material and Property

Government furnished material is property that is furnished to the University by the federal government and for which ownership remains with the federal government. The material may be incorporated into or attached to a fabrication or deliverable end item to be delivered under a contract or which may be consumed or expended in the performance of an agreement. All government furnished property, regardless of value, must be put into the FAS database.

Chapter Three: Property Arrives at the University

3.1 Receiving Property

Who to Contact

Equipment	Contact
Receiving and Acceptance of Equipment	Property Administration
Damaged Sponsor-Owned Equipment	Property Administration of Sponsored Programs

Overview

Receiving is the first step in establishing physical accountability for property. The process ensures that the correct equipment is received and is in good working order. Receiving and acceptance of equipment in a timely manner directly impacts warranty periods for assets. In case of damaged goods, it also affects the period during which any liability claims may be processed.

Refer to Receiving Policy on the Property Administration web page.

Procedure for Receiving Property

Check each shipment:
Was the shipment delivered to the correct destination?
Is there external package damage?
Does the package contain all necessary documentation, such as a packing list?
Is this the exact item described on the purchase order?
Was the correct quantity of items shipped?
Are all components included?
Are all items and components in good condition?
Were any items received that were not ordered?

If there is a discrepancy with any of the above items, it must be resolved.

All capital equipment items must undergo the receiving process. This process is required not only by Accounts Payable, but by the federal government. The receiving process is done on-line in the Banner system.

3.2 Identification: Tagging/Recording Property in the FAS Database

Who to Contact

Tag	Contact
Tag Placement on Capital Assets	Property Administration
Assistance with Tag Information	Property Administration / Accounts Payable
Questions on Tag Use	Property Administration / Accounts Payable

Overview

One of the most important tasks assigned to the Property Administration operating unit is identifying newly acquired capital assets or sponsor-funded equipment with the appropriate tags, and recording information about the equipment into the FAS database. FAS is an official University property record system. No other system can be used as a means of officially documenting property for the University.

Why there needs to be an official Campus-wide Record

The University needs a single official property record to track:
Compliance with required financial reports to sponsor
Accurate accounting and budgeting for University equipment
Inventory movement, utilization, status and disposition of equipment
Property related requirements for contractual agreements
Insurance estimates for University coverage
Tracking Donations and Surplus

Types of Tags

Tagging and recording of property is the responsibility of Property Administration. There are two basic parts to recording property at the University:

Recording the property into FAS database and identifying the equipment with a tag number. Each asset must have one tag, and each tag number must have one FAS record.

Identifying equipment with a non-inventory tag includes equipment, under $1,000, that is tagged with a University tag, but is not entered into the FAS database.

Tagging Property:

How proper tagging assists in the Physical Inventory Process

The identification tag placed on each piece of equipment, after the unopened box (s) are received and functional, at department level, thus, allowing easy recognition of the equipment that must be inventoried. Proper tagging is beneficial to the department as it reduces the amount of reconciliation the Property Administration Office has to perform.

Where to physically tag the Property

Tags should be affixed in an easily readable and accessible location. The more accessible the tag, the easier and more efficiently an inventory or verification of an asset can be executed and the less likely a duplicate tag number may be assigned during inventory.

Information to obtain when Inspecting/Tagging Equipment

When tagging new equipment, key information must be obtained for the equipment from the department before it can be entered into the FAS database. The asset details include:

Description
Model number
Serial number
Category
Manufacturer
Condition of asset
Department
Custodial name
In-service date

Identification of Computer Equipment

CPUs, monitors or miscellaneous equipment, may be purchased on the same purchase order as individual line items, and can be over the capital asset threshold. Each item will have its own tag number, and be entered into the FAS database individually.

Software Capitalization

Software is not capitalized unless it is part of an operating system of a computer, where its cost is captured as part of a computer. If you are capturing the cost of software only, (in excess of $1,000), treat it as untaggable.

Tagging non-capital Equipment

On occasion, non-capital equipment needs to be tagged.

What to do when Property is Untaggable

Some capital assets are too small or otherwise impossible to tag. This does not eliminate the need to create a FAS record. In cases where items cannot be physically tagged but qualify for recording in the FAS database, print a copy of the FAS record and place the tag on it. The tag should also be on file with a photo.

Trade-In/Disposed Equipment

To process the trade-in:

Initiate the Disposal Form for the FAS record of the item being traded-in/disposed. Reference the purchase order, if applicable, and the trade-in/disposed value being applied to the new equipment, if appropriate. Department Head and Vice President signatures are required

Recording Equipment into FAS Database

To be considered a capital asset, the following criteria must be met:

Acquisition cost of $1,000 or more

Includes: invoice amount, initial installation, accessory and auxiliary apparatus necessary to make it usable for the purpose for which it is acquired, less trade or trade-in discounts and/or educational allowances.

Excludes: Federal Excise Tax, duty, insurance, freight, maintenance and warranty costs.

Has a useful life of more than one year
If the item will not have a useful life of more than one year, it is considered expendable material, even if it costs more than $1,000.
Stand Alone

Tagging and Recording Accessories

Accessories, if easily separated from the main components and having a value of $1,000 or more, should be tagged and recorded into the FAS database individually, including their individual cost. If the accessories do not meet the capital threshold, tag the main component, and add the entire acquisition cost to the original file.

Government Owned Property (please reference Chapter 9)

Who to Contact

Government Property Contact

Recording of Government furnished items:

Property Administration

Government Property	Contact
Recording of Government furnished items:	Property Administration

Overview

Government furnished property is government-owned property which is provided directly from the government to the University. Property ownership remains with the Federal government.

Recording

The University is required to record the following information on the government furnished material and equipment:

Name, description, and national stock number, if applicable
Quantity received, or issued
Unit price and unit of measure
Agreement/contract number or the applicable fund number
Location
Disposition and date of transaction

Chapter Four: Documentation

4.1 Record Keeping

Who to Contact

Record	Contact
Record retention and audit trails:	Property Administration / Accounts Payable

Overview

The FAS database is one of the official University property records. (The Controllers Office uses a fixed asset report as another official property document for the University). A centralized database is the primary source for University Property Administration to provide numerous reports to sponsors, to departments, to insurance agencies for direct cost recovery and other financial reports to central administration units and manage capital property for the University.

A single official property record, in the FAS database, is most efficient because:

Ensure consistent, complete record keeping

Comply with Sponsors and IRS for financial reporting

Allow for accurate accounting and budgeting for the University

Track: movement, utilization, status and disposition of equipment

Provide information from which to negotiate indirect cost recovery

Provide information to analyze depreciation

Conduct accurate physical inventories

What Records Must be Retained

The Property Administrator is responsible for organizing and storing paper records related to capital assets and sponsor-owned property, in their operating unit. These are referred to as supporting documents, and are used for reconciliation and audit purposes. A typical file should contain the following:

Purchase order or grant information document
Approval to purchase, if sponsor required
Shipping records
Donation form and associated documents, including appraisal

Record Keeping for Government Furnished Property:

In addition to the above, retain the following:

Shipping document: Bill of Lading or letter of transfer
Department of Defense Form 1149 (for used equipment) or any other government forms provided
Disposal Documentation, including:
Approval letters from the sponsors
Repair, maintenance and calibration records if government owned equipment.

How Long Records Must be Retained

Financial and property records, supporting data, statistical records or any document pertinent to any agreement should be retained for the life of the property.

4.2 Required Property Reports

Who to Contact

Report Contact

Adjustments to Property Reports

Property Administration / Accounts Payable

Request for FAS Reports:

Property Administration / Accounts Payable

Report	Contact
Adjustments to Property Reports	Property Administration / Accounts Payable
Request for FAS Reports:	Property Administration / Accounts Payable

Overview

The Property Administrator is responsible for authoring and filing these reports, and will provide information from FAS to various Financial Affairs Offices.

The Property Administrator provides reports which include:

Physical Inventory Report
Quarterly Summary Report of Capital Equipment, Donations, Transfers, Surplus and Sales
Individual reports including: sponsor-owned equipment, year-end reports, donations, disposals and sales.

Chapter Five: Physical Inventory

5.1 Physical Inventory

Who to Contact

Inventory	Contact
Preparing for Physical Inventory:	Property Administration / Accounts Payable
Inventory Reconciliation:	Property Administration / Accounts Payable

Overview

The purpose of a Physical Inventory is to verify the existence, current utilization and continued need for capital equipment owned by, donated, furnished to or otherwise accountable to the University, as well as government-owned property. This is a team effort involving the Property Administration operating unit and other campus departments.

The University conducts an all-encompassing physical inventory of its capital equipment and government-sponsored property every two years. In addition, inventories may be conducted at the close of a sponsored agreement, or as needed to fulfill property administration responsibilities.

It is easier and more efficient for the Property Administration & Accounts Payable if, prior to the inventory, all adjustments are made to FAS and disposals processed. Campus departments will receive advance notice from the Property Administration unit regarding the planned date and scope of the inventory.

Preparation for Inventory:

Pre-inventory Preparation for the Inventory

Some of the tasks that should be initiated by the Property Administrator:

Tag all unrecorded capital equipment
Add new capital assets to FAS
Initiate a FAS Disposal Report
Identify selected areas that need special attention

Some tasks that should be completed preceding the physical inventory:

Identify untagged equipment, and have FAS and purchase order records available
Identify assets that belong to other campus departments

Personally-Owned Property

University staff members who have personal property on campus should clearly identify on the equipment that it is not University property, and who owns it. This will make the inventory process easier and eliminate the mistake of the equipment being inventoried.

Off-Campus Information

All equipment that is currently located off-campus must be accounted for in the physical inventory process. To ensure that this equipment is physically verified by a custodian, physical inventory reports should be provided for inventory purposes.

Inventory Day

Each capital assets information will be verified:

Location

Status

Condition

Description

Manufacturer

Model Number

Serial Number

Year Manufactured

Reporting Inventory Results

Inventory adds and 'deletes' paperwork will be made available during the inventory. This document requires quick response in order to identify items that are not capital, donated, or sponsor-funded equipment, so they can be added or purged in the FAS database.

Typical Reports:

Master list of all inventoried assets by Location
List of all assets added to FAS during inventory, including:
- Untagged assets found
- Tagged assets found but with no record in FAS
List of assets found which belong to another department
List of assets in FAS not located during the inventory

Inventory Reconciliation

The reconciliation process is the most important part of Property Administrations involvement and may demand a substantial commitment of time, depending on the volume of transactions needing resolution.

Chapter Six: Caring for Property

6.1 Movement, Utilization, Maintenance and Storage

Who to Contact

Movement	Contact
Movement of Equipment:	Property Administration
Tracking Government Furnished Property:	Property Administration

Overview

Proper care, handling and storage of property is required to ensure maximum use and availability. Equipment that is cared for and maintained properly can result in considerable savings to the University. Sponsor-funded equipment which is excess to departmental needs should be promptly processed for disposal.

Movement:

Movement Versus Transfer of Equipment

When property is relocated from one area to another, such as a building change, and title remains with the University, it is defined as movement. If you are changing the accountability of equipment between departments, it is considered movement, whether the asset physically moves or not.

A transfer is when property is permanently moved from the University to another entity. The University no longer has title to, ownership of, or accountability for the property, and it will not be returned to the University. Permanent transfers to outside entities are performed via disposal. If the item was originally sponsor-funded or donated, there may be restrictions.

Use of University Equipment Off-Campus

When equipment is used off-campus; 100% of use of equipment must benefit the University or the sponsored project for which the property was acquired. The custodian of this equipment must complete the required property forms to take the equipment off-campus.

Utilization

Any property that is not needed for department use or use on sponsored projects should be reported to Property Administration for reutilization or disposal. For many sponsored projects there are specific restrictions regarding how you may use a piece of property. Government-owned property normally is restricted to use on the project for which it was provided. Property acquired with Federal grant funds and titled to the University may be used on federally sponsored projects other than the acquiring project.

Requirements for Return of Equipment Employee Separation

The Property Administrator should periodically review the issue of principle investigator/custodial separation from the University and the reassignment/transfer of associated capital equipment within the FAS database.

Maintenance

Maintenance is the responsibility of the principle investigator/custodian of the capital equipment. Copies of the service, repair and maintenance records should be kept in a file with copies of the packing slip and invoice for that piece of equipment.

If the equipment was purchased with sponsored funds the funding agency may outline general maintenance requirements in each agreement.

Storage

All equipment should be utilized as we can only take depreciation or indirect cost recovery on items that are usable and in use. As soon as there is the determination of excess equipment, initiate the transfer or disposal process.

Chapter Seven: Disposition

7.1 Disposition of Assets

Who to Contact

Disposition	Contact
Screening for Disposal Eligibility:	Property Administration
Posting Surplus Equipment	Property Administration
Equipment Pick-up:	Property Administration
Surplus Equipment Bill of Sale	Property Administration

Overview

In the world of property management, disposal means a series of actions that lead to final disposition of property. The source of funding for an asset has the direct impact on how it can be disposed. The key to determining disposal restrictions is within the sponsor agreement or donation document. The first step in the disposal process is determining if the item is excess, or, needs to be moved/transferred, and identify the condition of the asset. The second step is to research the disposition restrictions. If there are no restrictions, a disposal or transfer form must be generated for assets in the FAS database.

Determine When Equipment is Excess

Excess equipment is a term that describes a lack of use or benefit a piece of equipment can give to a project or a person. Any excess equipment, should immediately be considered eligible for disposition. If it is sponsor funded, it may have to be made available to another department on campus, or another institution through screening. The goal is to provide an opportunity for maximum utilization of assets. If reutilization is not possible internally, proceed with disposition immediately. The Property Administrator can process the equipment through surplus if there are no restrictions for disposal. The University is liable for all equipment for the life of the asset, including; hazardous, government-owned, donated, etc.

Other Considerations:

Disposing Obsolete Assets

If an item is considered obsolete to a department, the Property Administrator should dispose the item using the actual method of disposal (i.e. scrap, surplus, etc.) and use the following guidelines to identify the asset as obsolete.

1.) The condition of the asset should reflect the true working order.

2.) Determine if the asset has a fair market value.Documenting Disposals After the Fact

Periodically, assets are disposed of without the Property Administrators knowledge. Appropriate documents must be processed as soon as the disposal is discovered. The Property Administrator will use the following procedure to document this type of disposal:

Verify the asset is definitely gone

Research the circumstances

Establish the date of occurrence

Document the findings:

Obtain a written statement from the person who is certifying the condition of the disposal.

Keep this document on file with other paperwork on this asset.

Write a statement in the Note field in the FAS database

Enter the actual disposal method used in the FAS database.

Route disposal request for approval signature, attaching appropriate documents.

Disposition of Computers and Related Peripheral Equipment

In addition to the traditional disposal requirements, the University has to deal with situations that may compromise University databases, security, or licensed software agreements and sensitive and proprietary information that may be stored on computer hardware or other media.

For purposes of resale, all freeware, and all operating system software can be transferred with the machine. Any other software transferred will depend on the particular license agreement. When in doubt, assume that the software may not be transferred and must be permanently removed.

Disposal Methods and When to Use Them

Sale: Requested to be sold through Surplus Property
Scrap: Broken or beyond repair with no reasonable value other than recovery value of the basic raw materials.
Return to Manufacturer: (RMA) Returned to the manufacturer for credit
Cannibalization: Not functioning properly and will be used for replacement or spare parts.
Physical Inventory Adjustment: Contact Property Administration

Non-Capital Disposal Procedure

Part of the decision on how to dispose of equipment is determining if it is a capital asset or not, and also whether there is a FAS record for the asset or not. If no FAS record exists, the Property Administrator must determine if the item is a capital asset.

Capital Asset Threshold

University Property: $1,000 and greater

Government Property: No value threshold, all must be recorded

Loaned Assets: No value threshold, all must be recorded

Donated Property: $1,000 and greater

Selling through Surplus Property Sales

In general, it is always a good idea to process property for disposal as soon as it is excess. Timely sale of property provides the following benefits:

Higher prices (equipment not outdated)
Remove excess equipment from storage
Less items to inventory and reconcile
Contribute to successful property audit

Disposition of Assets Due to Contract/Grant Expiration

Resolution of disposition, according to either grant or contract requirements, is both a departmental and Property Administration responsibility. Partial guidance can usually be found in the agreement property terms and conditions. There may be more than one disposition method per agreement; these may be dependent on future use requirements and restrictions on use.

Loss, Damage or Destruction of Assets

When equipment is lost, damaged or destroyed, regardless of ownership, Property Administration should be notified immediately. Incidents, of loss, damage or destruction of sponsor-owned equipment must be, reported to the sponsoring agency. Determination is based upon a, physical inventory or scan of the area where the equipment was last, used. Best effort by the department to locate the equipment will be used, in cases where loss is not clearly evident.

The damage or destruction of equipment must be reported to the, Property Administrator immediately. A written description outlining the, date of the incident, equipment involved and a description of the damage, or destruction must be submitted to Property Administration.

Chapter Eight: Audits

8.1 Property Audits

Who to Contact

Audit	Contact
External Property Audit	Property Administration

Overview

The key to an approved property control system and a successful audit is timely and accurate record keeping throughout the year. The University Property Administrator assumes the role of primary liaison for all property related audits.

When audits are scheduled, the Property Administrator will give as much advance notice to the department as possible. Each department must be able to locate and identify property as required by the audit, and must be able to provide property related documentation upon request.

External Audits

The purpose of an audit is to determine whether policies and procedures are documented and followed. Successful completion of these audits are critical to ensure continued approval of the Universitys property system.

Property audits examine many areas including:

Purchase approvals
Procurement
Receiving and identification
FAS record completeness, accuracy and timeliness
Record retention
Disposals and excess property
Physical inventory
Availability and completeness of supporting documents
Compliance with procedures

What is the impact of an audit?

The results of a satisfactory property audit mean that new proposals and on-going research can continue unimpeded. Sponsors want assurance that research dollars for equipment are used for the purpose for which they were acquired, are tracked and the equipment is managed properly.

Audit Results

Audit results are provided in written reports. Audit findings and recommendations may affect business processes and require changes in policies and procedures.

Chapter Nine: Government Owned Property

9.1 Introduction

This manual sets forth the basic procedures to be followed by Florida Institute of Technology in the management of Government Property under its control in compliance with FAR 48 CFR 52.245. If there are any inconsistencies between this manual or the Government manuals referenced, and the contract under which the Government property is provided, the terms of the contract shall prevail.

9.2 Definitions of Government Property

Government property means all property owned by or leased from the Government or acquired by the Government under the terms of a contract. Government property includes both Government-furnished property and contractor-acquired property as defined below:

1.) Government-furnished property is property in the possession of, or acquired directly by, the Government and subsequently delivered or otherwise made available to the contractor.

2.) Contractor-acquired property is property procured or otherwise provided by the contractor for the performance of a contract, title to which is vested in the Government or to which the Government has a reversionary right.

3.) Government Loan/Lease property is property procured or otherwise provided by the Government or contractor on a temporary basis.

9.3 receiving Property

Government property, either Government-furnished or contractor-acquired should be checked by a responsible individual against the inbound shipping document to ensure the quantity, condition, and description are as represented. The shipping documents and/or payment voucher is used as a receiving report and maintained in the Project Leader’s and/or Procurement files. Immediate steps will be taken by Property Administration to prepare necessary property records and provide required identification markings or tags.

9.4 Property Records

Control System

The control system is based on individual property records. A property record will be maintained for each item of equipment to reflect any changes in the status of the equipment. The property record for each item of equipment shall contain, at a minimum, the following:

Contract/grant number
FOAP number
Federal ID number when applicable/provided
Florida Tech Assigned Property control number (Gov’t tag)
Name and description
Manufacturer's name, model number, part number, and serial number
Quantity, unit and total cost
Location
Disposition, condition and source (Government-furnished or contractor acquired.)
Date placed in service

Separate property records must be kept for each contract or Government property asset.

Shipping Document

All items of Government-furnished property will be accompanied by a Government shipping document. All items of contractor-acquired property will be accompanied by a copy of the manufacturer's or vendor's invoice. The vendor's invoice will be used to prepare individual asset control sheet and a signed and dated copy forwarded to Property Administration. A signed and dated copy of the shipping document should be forwarded to the Designated Property Leader.

C. Material (Expendable Property)

Material is considered expended upon receipt by the project. However, the portion of this material not consumed by the project must be included in the final inventory. The Government invoices or contractor's purchase documents, of acquisition and issue are acceptable as property control records.

9.5 Inventories

Inventory of Government property is generally of three types:

A. Interim Inventories should be conducted once a year. A statement is required signed by the Project Leader or his designee, indicating a physical inventory was completed on a given date and the official property records were found to be in agreement with the physical inventory except for discrepancies noted. A listing will be attached or included properly identifying all discrepancies disclosed by the physical inventory. The inventory must be submitted to the Designated Property Coordinator.

B. Joint Inventory and Selective Checks may be made by the Federal Government Property Administrator whenever he/she deems it necessary to protect the Government's interest.

C. Terminal Physical Inventory shall be taken at the completion or termination of a contractor grant. The inventory shall be adequate for disposal purposes of all Government property applicable to the contract or grant in the custody, control or possession of Florida Institute of Technology. The terminal inventory shall be prepared on a quantitative and monetary basis and submitted to the Designated Property Administrator.

Recommendations for disposal/disposition will be indicated on a separate sheet; not on the inventory report form. Sub-contractors equipment is to be included.

9.6 Movement of Property

Government property when moved from one physical location on campus to another on, or off campus will be noted on the property records to show the new location. Project Leaders must be able to locate property on the call of Office of Sponsored Programs, Property Administrator, Federal Government Property Administrator or Auditors. The physical location must agree with that shown on the property records.

9.7 Loss, Theft, Damage or Destruction of Property

Loss, theft, damage or destruction of Government property must be promptly reported to the Property Administration, and Office of Sponsored Programs for appropriate action. Project Leaders must furnish all factual data as to the circumstances surrounding such loss, theft, damage, or destruction. Immediately upon verification of missing, damaged, or stolen property.

9.8 Alterations, Additions and Improvements

No substantial alterations, additions or improvements shall be made to items of Government property unless authorized by the contract or grant as granted by the Contracting Officer.

9.9 Maintenance

The Project Leader is responsible for the maintenance of all property accountable under his/her contract or grant. He/she shall establish and administer a program for the maintenance, repair, utilization and protection of Government property to ensure proper measures are taken to comply with sound business practices and applicable provisions of the cost of maintenance or minor repair of Government property is an allowable charge against contract funds. If major repairs are necessary, the Project Leader should contact the appropriate OSP Contract Administrator to determine if sponsor approval is required.

9.10 Storage

Prior to inactivating an item of property for storage, the Property Administrator shall be informed as to the necessity for retaining the property under cognizance of the contract or grant; proposed storage location; conditions under which the item is to be stored, specifically concerning preventive maintenance requirements while in storage. Maintenance for stored equipment is the responsibility of the assigned Project leader.

9.11 Scrap

Scrap should be handled in a manner such that the project will receive the benefit from the disposal. It shall be the responsibility of the Project Leader to notify the Property Administrator when such disposition is necessary.

9.12 Salvage

In the event property under a Government contract or grant becomes worn, damaged, deteriorated or because of its incomplete condition or specialized nature, does not have are reasonable prospect of sale or use without major repairs or alterations, then this information shall be reported to the Property Administrator with recommendations for its disposal. Upon receipt of disposition instructions and after disposition has been made, appropriate inventory record entries shall be made. Salvage does not include the dismantling of experimental setups which are inherently temporary in nature. These components will normally be carried on the inventory as separate items. In the event an item of controlled property is expended in the course of research and development work, a letter containing the facts shall be prepared and transmitted to the Property Administrator requesting deletion of the item from the property account. Salvage of property will be made by separating the useful components and setting aside the remainder as scrap for disposal, if the amount so warrants.

9.13 Disposition of Government Property

During the course of a project, the Project Leader should periodically review the need for the Government property assigned to his/her project and, if finding that certain property is no longer needed, should request disposition of the excess property. At the completion of a contract, recommendations for disposal of Government property should be furnished by the Project Leader to the Property Administrator, so disposition can be requested. Recommendations for disposal should include all pertinent information available.

Reference:

200.312 Federally-owned and exempt property

(a) Title to federally-owned property remains vested in the Federal government. The non-Federal entity must submit annually an inventory listing of federally-owned property in its custody to the Federal awarding agency. Upon completion of the Federal award or when the property is no longer needed, the non-Federal entity must report the property to the Federal awarding agency for further Federal agency utilization.

(b) If the Federal awarding agency has no further need for the property, it must declare the property excess and report it for disposal to the appropriate Federal disposal authority, unless the Federal awarding agency has statutory authority to dispose of the property by alternative methods (e.g., the authority provided by the Federal Technology Transfer Act (15 U.S.C. 3710 (i)) to donate research equipment to educational and non-profit organizations in accordance with Executive Order 12999, ‘‘Educational Technology: Ensuring Opportunity for All Children in the Next Century.’’). The Federal awarding agency must issue appropriate instructions to the non-Federal entity.

(c) Exempt federally-owned property means property acquired under a Federal award the title based upon the explicit terms and conditions of the Federal award that indicate the Federal awarding agency has chosen to vest in the non-Federal entity without further obligation to the Federal government or under conditions the Federal agency considers appropriate. The Federal awarding agency may exercise this option when statutory authority exists. Absent statutory authority and specific terms and conditions of the Federal award, title to exempt federally- owned property acquired under the Federal award remains with the Federal government.