REG 10.05.16 – Equipment Acquisition, Management, Transfer and Loans

Authority: Vice Chancellor for Finance and Administration and Vice Chancellor for Research, Innovation and Economic Development

History: First Issued: July 1, 2002. Last Revised: May 23, 2017.

Contact Info: Assistant Director, Systems and Compliance, (919-515-8011). Office of Contracts and Grants, Director of Compliance (919-515-0518).

Additional References:
NCSU General Terms and Conditions- Safety Standards

INTRODUCTION

1.1 This regulation provides the guidelines that NC State’s colleges, institutes, centers, departments, programs and units (collectively, “units”) shall follow in accounting for equipment purchased from a sponsored award, as well as loan-out of equipment acquired by units through any mechanism or funding source.

1.2. Effective July 1, 1998, the following constitutes equipment and supplies:

1.2.1 Equipment – nonexpendable, tangible, personal property having a useful life of more than one year AND an acquisition cost of $5,000 or more. This threshold is consistent with the definitions of equipment referenced in Office of Management and Budget (OMB) Circulars A-21 and A-110, and recognized by UNC General Administration and in university accounting procedures. For contracts and grants awarded prior to July 1, 1998, the threshold for equipment is $500 or more. Equipment may be further categorized as either general purpose or special purpose equipment.

1.2.2 Supplies – expendable property having a useful life of one year or less OR an acquisition cost of less than $5,000.

1.2.3 Equipment fabrication – when multiple items which could be classified individually as supplies are purchased to create/fabricate an integrated unit of equipment having a total value of $5,000 or more. In these instances, the individual item 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 should be budgeted and charged as supplies.

1.2.4 If an award includes the fabrication of equipment, the unit is responsible for requesting a change from the standard equipment code in Financials to a code reflecting fabrication.

EQUIPMENT ACQUISITION

2.1 University Purchasing Procedures

The Principal Investigator and/or departmental administrative personnel assisting in the acquisition of equipment must adhere to university purchasing procedures (see Basic Procurement Guidelines).

2.2 Equipment Not in Approved Proposal/Budget

Formal approval is normally required from federal 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 compile a list of all anticipated equipment for a one-time approval in order to reduce the paperwork and time necessitated by approving each piece of equipment separately.

2.3 Screening Requirements Prior To Equipment Purchase

OMB Circular A-110, Subpart C, Section 44 requires equipment screening in an effort to avoid purchasing unnecessary items. This screening shall be undertaken prior to issuing a purchase requisition for the equipment. The University has established the following guidelines for equipment screening:

2.3.1 The Principal Investigator shall screen within his/her department for availability of equipment costing $5,000 or more.

2.3.2 The Principal Investigator shall 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 prior to issuing a purchase requisition. The Capital Assets Accounting Office shall retain a record of the screening to confirm compliance for audit purposes.

Additional screening requirements may be necessary for specific federal agencies. Please see award documentation for more detail.

GOVERNMENT-FURNISHED PROPERTY

3.1 Government-furnished property includes:

3.1.1 Equipment acquired under federal contracts that are governed in accordance with FAR 45.5, Government Property, and

3.1.2 Property furnished by the federal government to the University/Principal Investigator.

3.2 Equipment transferred to the University and governed according to FAR 45.5 shall be recorded in the PeopleSoft Assets Management System (PSAM). A copy of correspondence related to the transfer of federal government property to the campus shall be forwarded to the Office of Contracts and Grants.

3.3 In most cases, title to federally owned property that is used by the University during the award period remains vested in the federal government. Title and disposition of federal government property is to be administered in accordance with FAR 52.245-5 Alternate I. Disposition and final title vestment instructions to federal government property are provided during the project close-out process.

INVENTORY CONTROL

4.1 The Principal Investigator and the appropriate administrative personnel in the unit 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.

4.2 Disposal of Equipment

4.2.1 Equipment purchased under a contract or grant trust fund project may provide for title to vest in the University. The conditions of agreement cited in the award document must be reviewed to determine if the federal government intends to retain title to the equipment. For projects with a class code of 501, 503 or 504, in which title to equipment vests in the University, refer to REG 07.40.01 and NCGS 143-64.05.

4.2.2. Equipment purchased in part from appropriated funds and trust funds shall be disposed of in compliance with university PRRs related to disposition and NCGS 143-64.05. Proceeds attributed to contract and grant trust funds with a class code of 501, 503 or 504 shall either be returned to the sponsor, if required by the agreement, or to the State according to NCGS 143-64.05.

4.2.3 Equipment purchased in whole with appropriated university funds must remain at the University until ready for surplus and must be disposed of in compliance with university PRRs related to disposition.

4.2.4 Disposal of equipment must be made in compliance with REG 07.40.01 – Disposal of University Property.

4.3 Transfer of Equipment

4.3.1 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.

4.3.2 The University adheres to the following procedures regarding transfer of title to equipment or temporary loan of equipment to which NC State University holds title. Equipment with title vested in NC State University may not be transferred from the university equipment inventory except under the following conditions:

4.3.2.1 If an active contract or grant is being transferred to another academic institution, equipment purchased on that project may be transferred to the new institution in accordance with the terms and conditions of the contract or grant. If the equipment was partially funded with appropriated project(s) funding sources, the appropriated project(s) must be compensated by the receiving institution at a rate commensurate with market value or an accepted appraisal (and in consultation with the unit where the equipment is located), prorated at the original contribution percentage.

4.3.2.2 Equipment purchased on a contract and grant trust fund project that is no longer active shall be disposed of in accordance with the terms and conditions of the grant. Absent any applicable sponsor terms related to transfer or disposition, university PRRs related to disposition shall be followed and the proceeds managed according to the guidelines outlined in Section 4.2 (Disposal of Equipment) of this regulation.

4.3.2.3 For sponsored awards that provide for equipment title to remain in the federal government, prior written approval shall be received from the appropriate funding agency prior to the trade, transfer or disposition of equipment.

4.3.2.4 If equipment is no longer needed by the University, university PRRs related to disposition shall be followed and the proceeds managed according to the guidelines outlined in Section 4.2 (Disposal of Equipment) of this regulation.

4.3.3 On a case-by-case basis, reimbursement of a portion of the acquisition costs may be negotiated. Negotiation will be documented and approved by relevant units and University Capital Assets Management, and the following general guidelines will apply:

4.3.3.1 Transfer of specialized research equipment purchased solely from external sources during the current grant period may be approved by the University if the receiving unit/institution provides all shipping or relocation costs and assumes all liability and maintenance responsibilities from the time the equipment is moved from its position in the University. University approval must be given jointly by the units and University Capital Assets Management.

4.3.3.2 If partial funding was derived from state sources, some repayment of state funds may be negotiated and approval by the Department of Administration’s Surplus Property Officer is required. University Capital Assets Management will coordinate and manage this process.

4.3.3.3 Transfer of general research equipment or of equipment purchased before the grant period will be allowed only if there is no substantial and documentable need within the University, and the Department Head and Dean approve. Reimbursement of some part of state or other external agency funds used to acquire such equipment may be negotiated, and approval above the unit level may be required.

4.3.3.4 If transfer is not an approved arrangement for use of the equipment at NC State, loan of the equipment may be negotiated as described in Section 5 of this Regulation.

4.3.4 If the Principal Investigator on an external grant/contract transfers to another unit or institution, guidelines of the sponsoring agency must be adhered to, but additional requirements may be imposed by the University.

4.3.5 Equipment transfer always requires notification of the Capital Assets Management System Director and may require the approval at some administrative level beyond the University.

Equipment Loan-Out

Equipment with title vested in NC State University may be loaned to another unit or institution if the Department Head and the Dean of the unit approves and the following conditions are met:

5.1 A request is made in writing and approved by an administrative official of the requesting unit/institution authorized to negotiate contracts.

5.2 The request must include a statement of the intended use of the equipment and identify the specific person in charge of the equipment during the loan period.

5.3 An agreement of the conditions of the loan shall be prepared and approved by the unit and by an authorized official of the requesting institution. The loan period may be approved for up to six months and is renewable for additional periods up to six months with agreement of both parties.

5.4 Borrower shall agree to:

5.4.1 Assume shipping or relocation costs between University and the borrowing unit/institution

5.4.2 Provide insurance on the equipment sufficient to repair or to replace the equipment if lost, stolen or damaged beyond repair

5.4.3 Assume all liability and hold NC State University harmless in the use of the equipment during the loan period, and

5.4.4 Return the equipment to its original position in substantially the same condition as when loaned.

5.4.5 Alternatively, the contract between borrower and University may provide that NC State University will provide some portion of the above items (e.g., maintenance, insurance, etc.) for a fee.

5.4.6 The Director of the NC State Capital Assets Management System must be notified of the loan and be provided a copy of the loan agreement before equipment leaves campus.