Handbook of Business Procedures
Feb. 17, 2005
July 2, 2012
16.2. ACQUISITION OF EQUIPMENT
All equipment and material items purchased from The University of Texas at Austin accounts are the property of the university (ref. The University of Texas at Austin HOP policy 3-2020-PM). Inventory Services reviews purchase vouchers for proper coding of equipment expenditures. An expenditure for an equipment item with a unit cost of $5,000 or more shall be coded as capital equipment. Expenditures for items that meet criteria set by State Property Accounting (SPA) and have a unit cost of $500.00 to $4,999.99 and firearms, regardless of value, are considered controlled items. Capitalized and controlled expenditures are assigned to a department’s inventory based on the departmental accounts used to pay for the item. Visit the Inventory Services website for a current listing of items that are considered controlled.
Freight and shipping charges associated with acquiring capital assets must be included in the asset's value as well as all modifications, attachments, accessories, or apparatuses necessary to render the assets usable for service. The total value determines whether the item is expensed (less than $500 or $5,000, as appropriate), controlled, or capitalized. Warranty costs and service agreement costs are expensed if the warranty costs or service agreement costs are listed as separate line items on the purchase orders or invoices. Otherwise, warranty costs and service agreement costs are added to the value of the asset (capitalized).
Inventory Services or self-tagging departments affix a barcode numbered property control plate to the property (or assign an inventory number) within 30 days of acquiring the capitalized or controlled item. If the property is U. S. Government-owned, then it must be tagged within 10 days. Inventory Services then enters appropriate data on the university's computerized inventory system.
Newly purchased vehicles and electric carts (costing $5,000 and up) that are received by Fleet Management Services in Parking and Transportation Services are tagged by Fleet Management Services. Self-tagging departments are not responsible for tagging these items but must still supply Inventory Services with the tagging detail. Note: Attaching property control plates or tags, or otherwise marking equipment to indicate university ownership is required by state law. Unless a property item purchased at a unit cost less than $5,000 is being added to or becoming part of a capitalized or controlled item, the item is assigned an appropriate non-capitalized expenditure code and, where possible, marked or has a blank tag affixed to indicate it is the property of The University of Texas at Austin. For information about the sale and purchase of vehicles, refer to 16.4.1. Vehicle Title Transfers.
For any property that is checked out, kept at someone’s home, or housed out in the field and not on campus, a checkout log or off-campus form must be completed and kept by the department in addition to any other departmental liability forms. For an example of the information required on a checkout log or off-campus form, go to Equipment Located off Campus*. This sample form or equivalent is required to be kept by departments for all equipment kept off campus.
B. Rent/Purchase - Lease/Purchase - Installment Payment
Property items acquired on a rent/purchase, lease/purchase, or installment payment basis will normally be added to the departmental inventory when the initial payment is made or when the property has been received or becomes property of the university, at the total value of the purchase. These items will be inventoried and controlled in the same manner as direct or outright purchases.
C. Fabrication of Equipment
Fabricated equipment is defined as a unique one-of-a-kind item that is built or assembled from individual parts or materials by or under the direction of university personnel. The completed item of fabricated equipment may have, but is not limited to, a single power source and may result as a stand-alone item. Fabrications are created by assembling a number of components (manufactured or custom made) 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.
All services purchased for equipment fabrication must be used in the fabrication process and become a permanent part of the end product’s value. All items purchased must become a permanent part of the end product’s value as well, unless they are destroyed during testing or consumed in fabrication. The completed item of fabricated equipment with an aggregate cost of $5,000 or more is recorded as capital equipment on the *DEFINE NV1 screen and in the FRMS Departmental Inventory Portal. Upon completion, the end product must have a useful life greater than one year.
D. Noncash Gifts to the University
Noncash gifts to the university are added to *DEFINE command NV1 and the FRMS Departmental Inventory Portal upon formal acceptance by the university via the University Development Office. The inventory value of such items is an appraised or fair market value as provided by the donor. The official acceptance of all gifts on behalf of the university is governed by the University of Texas System Board of Regents Rules and Regulations Series 60101 and UT System Systemwide Policy UTS138 Gift Acceptance Procedures.
E. Equipment Transferred to the University
There are two types of equipment transfers to the university.
- Inter-agency Transfers, or transfers from another state agency such as Texas Department of
Transportation, University of Texas M.D. Anderson, Texas Tech University, etc., to The University of Texas at
Austin requires the Texas state agency to complete the
Non-Texas State Agency Incoming – Property Transfer Receipt form.
Approval by the property manager or designee must be obtained prior to the transfer of any university-owned equipment to another state agency or institution. A written explanation for the transfer, along with any charges that will be assessed for the equipment, must accompany the Non-Texas State Agency Incoming – Property Transfer Receipt form and be sent to Inventory Services for processing.
- Transfers in from a Non- Texas State Agency or Private Institution
Transfers to the university from a non-Texas state agency or private institution, such as Baylor University or Stanford University, as a result of a principle investigator (PI coming to the university or for equipment that is not being received by the University Development office requires that the non-Texas state agency complete the Non-Texas State Agency Incoming – Property Transfer Receipt form and submit to Inventory Services for processing.
The property manager or a designee must be made aware of any equipment transferred to the university from another non-Texas state agency or private institution if the transfer is not received through the University Development office.
A written explanation for the transfer, along with any charges that will be assessed for the equipment, must accompany a Non-Texas State Agency Incoming – Property Transfer Receipt form and sent to Inventory Services for processing.
Once a completed Non-Texas State Agency Incoming – Property Transfer Receipt form with the required signatures has been received by Inventory Services, Inventory Services will add the transferred equipment that meets the controlled or capitalized thresholds to the department's inventory listing.
F. Inventory Numbering
Inventory Services is responsible for the control of inventory barcode numbers and will assign numbers to those items of property that are acquired by the university as capital or controlled assets.
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