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Property Service Policies
University Property and Inventory Control policies and procedures apply to all moveable equipment or property acquired by any division of Auburn University, except where noted. They do not apply to library books; equipment affixed to a building; maps; film; or equipment costing less than $2500.
TABLE OF CONTENTS
- Important Terms
- Acquisition
Banner Account Listings
Capitalization Criteria
Purchases from State Surplus Property
Gifts and Donations
Transfer
- Identification
Federal Property
Physical Verification of Inventory
- Disposition
Surplus Property
Federal or State Property
Theft or Loss
Trade-In
- Forms
IMPORTANT TERMS
Accountable Officer:
Each Dean, Director or Department Head may serve as the Accountable Officer or may delegate that responsibility to a staff member. The Accountable Officer is responsible for seeing that University equipment is acquired, inventoried, accounted for, and ultimately disposed according to University policies and procedures. When accountability is delegated or changed, Property Services should be notified in writing within ten days of the appointment. Notification should include the name and telephone number of the appointee.
Each Auburn University Department is responsible for all property or equipment that is in its custody. The Accountable Officer and, ultimately, Department Head, Dean or Vice President is accountable for the care, use and security of the property or equipment. Each AU department is also responsible for ensuring that each equipment
purchase is necessary.
Moveable Equipment and Property:
Any equipment, furniture, machinery or other tangible property of a non-expendable nature that is normally not
attached to or made a part of a building.
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ACQUISITION
Generally, when equipment is purchased by AU and properly coded as equipment, the item automatically feeds from the Purchasing System to the Fixed Asset System. Proper subcoding is essential on purchase requisitions, vouchers, and invoices to ensure that the equipment is included in the University's equipment inventory. (Information on completing and submitting purchase requisitions and payments can be found in the AU Spending Policies and Procedures.) Equipment meeting the criteria for capitalization should be coded in the 74XXX account range. If it is purchased from a
Plant Fund (92XXXX Fund), it should be coded in the 75XXX range of accounts. Equipment under $2500 should not be coded to a 74XXX account.
BANNER ACCOUNT LISTINGS
74010 Lease Purchase
74020 Automotive Equipment
74030 Vehicle Purchase
74040 Aircraft/Boats
74050 Classroom Equipment
74080 Computer Equipment
74090 Medical Equipment
74100 Office Equipment
74110 Photographic Equipment
74120 Major Appliances
74130 Lab Equipment
74140 Television Equipment
74150 Telecom Switching
74160 Telecom Station
74170 Telecom Distribution
74180 Fabricated/Upgrade
74190 Other Equipment
75470 Moveable Equipment (PLANT FUND ONLY)
Capitalization Criteria
Capitalization
refers to the establishment of an asset record in the Fixed Asset System and the inclusion of the cost of that asset in the University's balance sheet.
Equipment is capitalized if it costs $2500 or more and has a useful life of more than one year.
Such equipment is given a property tag and periodically inventoried. It must be tracked, accounted for, and disposed of according to University property procedures.
The $2500 threshold includes freight and the costs to put the equipment in service. Items of equipment which are components of an asset should be added together before applying the $ 2500 threshold. If a new component extends the useful life of an existing asset, it should be capitalized. However, repair and maintenance costs should not be capitalized and should be coded in 74XXX range of accounts.
Some equipment may be sensitive, portable or prone to theft, but may not meet the $2500 threshold. A department may wish to have such equipment tagged for control purposes. Property Services will make exceptions on a case-by-case basis.
If equipment is to be purchased with Contract or Grant funds or on an associated cost share account, the purchase requisition must be approved by the Office of Sponsored Programs prior to processing.
These procedures do not apply to Fixed Equipment such as built-in shelving, light and plumbing fixtures, boilers and other mechanical or electrical equipment that is an integral part of a structure. Ask Property Services if you cannot
determine whether equipment is fixed or moveable.
Some leases may actually represent the purchase and financing of equipment. Contact Procurement and Payment Services or Financial Reporting for assistance in determining if it is a lease-purchase arrangement.
Special-purpose equipment is sometimes manufactured by University shops. The department requesting such equipment must indicate
for fabrication
on the purchase order and an internal voucher may be required. It is the responsibility of the Accountable Officer to make sure that Property Services is informed when any equipment has been fabricated. After the equipment has been completed, the department to which the equipment will be assigned must report the equipment to Property Services on an
Equipment Transactions Form - BO 80-01. If fabrication is from existing University-owned equipment (cannibalization), include the property number of that equipment.
Besides buying, leasing and fabricating, equipment may also be:
- Purchased from State Surplus Property
- Acquired by donation
- Transferred from other departments
Purchases From State Surplus Property
Federal and state surplus property may be obtained through the Alabama State Agency for Surplus Property. Departments purchasing equipment from this agency should refer to the appropriate University purchasing procedures. When items are purchased from the Surplus Property Warehouse, the equipment and its Distribution Document
must be taken to Property Services for tagging and for recording into departmental inventory. The Accountable Officer should see that this is done by the next business day.
When equipment acquired from the Alabama State Agency for Surplus Property is tagged, a record is made of any restrictions placed on the equipment. These restrictions apply to
all
passenger motor vehicles and to any equipment which initially costs the government $5,000 or more. Restrictions remain in place for 18 months from the date of purchase. During that period, the equipment must be used in its original form and cannot be used for a secondary purpose.
All requests to cannibalize such equipment must be coordinated through Property Services. The equipment may be cannibalized within this period only with the prior written approval of the Alabama State Agency for Surplus Property. After the restriction period, departments wishing to cannibalize this equipment should apply to
Property Services for permission.
After approval has been received, departments may then cannibalize the equipment and the Accountable Officer should complete an
Equipment Transactions Form - BO 80-01
to remove the item from departmental inventory records. The completed form should be forwarded to Property Services.
Gifts and Donations
Any equipment or other property donated to a University department must be approved before it can be accepted. A
Gift and Donation Approval Application - B0 80-02,
must be completed and sent to Property Services. Property Services will request that the Executive Vice President make approval on behalf of the President. If approved, the application will be returned to the originator. See
policies for Collections, Accounts Receivable and Contributions or call the Auburn University Foundation (844-2586) for additional information.
Transfer
Equipment is sometimes transferred from one department to another. The Accountable Officer transferring the equipment should complete an
Equipment Transactions Form - BO 80-01 ,
before the property is transferred. The form is sent to Property Services for approval.
If assistance is required in moving this equipment, Property Services will send a copy of the approved Transactions Form to the Facilities Division. The approved Transactions Form is the only authorization to move Auburn University equipment. The second copy of the form is returned to the department and the third copy is sent to the
department which will receive the equipment.
For equipment purchased by contract or grant, any transfer of the equipment outside Auburn University, such as with the departure of the Principal Investigator, is dependent upon stipulations in the contract or grant and requires the
approval of the Office of Sponsored Programs.
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IDENTIFICATION
Unless otherwise waived, every capitalized piece of equipment must have an identification tag. Property Services will tag equipment located on the Auburn University main campus. The Accountable Officer will be provided with identification tags for equipment at outlying units. The tag is of durable plastic with a permanent adhesive
backing and contains an identification number.
Once applied, care should be taken not to paint over or obliterate the identification number. All tags should be uniformly-located. When practical, place the tag near the manufacturer's name plate indicating serial and model number:
- Desks - Left side of knee space
- Chairs - Middle upper edge of back or inside right rear leg
- Files, cabinets, racks, etc. - Front top left corner or
under manufacturer's name plate
- Equipment & other furnishings - Where convenient but not
distracting from appearance of item
- Automotive & other rolling stock - Where easily visible, but not subject to obliteration
Library books, maps, film and non-capital leased or rented equipment
are not to be tagged. Specific exceptions to the tagging policies may be made if Property
Services determines that tagging an item is not practical.
Federal Property
Each principal investigator must maintain a separate and complete file of purchase ordersand receiving reportsfor equipment acquired under each federal project. Receiving reports should show serial numbers and other pertinent data so that equipment can be readily identified.
Equipment purchased under a federal project should be tagged by Property Services. If title is to remain with the federal government, the identification tag will have a property controlnumber in the 400000 range.
Physical Verification of Inventory
A physical inventory of equipment is performed at least once every two years. At the scheduled time, Property Services will supply each Accountable Officer with two copies of the most current equipment inventory report, along with instructions for the inventory. The department must physically locate all equipment and confirm that the items are on hand. Any missing items should be noted.
In order to facilitate easily locating property, each Accountable Officer should maintain a listing of departmental property which also contains the signature of the employee to that the property is assigned. Jointly used property should be assigned to the Department Head or his/her designee.
A copy of the inventory report must be returned to Property Services within
30
days of receipt. The report should be dated and signed by the Accountable Officer and Department Head.
The department must
provide documents supporting status changes for property that is no longer assigned to the department or that is now assigned to the department, but is not included on the report.
The Accountable Officer/Department Head should contact Property Services if a delay in reporting is necessary. If the inventory report is not returned and Property Service is not contacted within the 30 days, a letter will be issued notifying the department head of the delinquency. The dean and Provost will also be sent a copy of the letter. Further failure to respond within 30 days following the date of the letter, will result in a penalty equal to 1% of the total inventory costs, not to exceed $1,000, assessed to the department. This amount will continue to be assessed via budget transfer after every 30 days, until the inventory report is returned.
Sample inventory verifications
will
be performed by Property Services and arranged with the Accountable Officer. If the inventory verification indicates that the number of items or value of missing equipment
exceeds acceptable limits as determined by Property Services,
Property Services will review the inventory with the Accountable Officer
and Department Head.
Material
unresolved discrepancies will be reported to the dean and/or vice president.
A budget assessment equal to 30% of the book value (cost less accumulated depreciation) of missing equipment that is over two years old and 100% of missing equipment that is less than two years old will be assessed for those departments with unacceptable levels of missing equipment.
Removing Property from University Premises
Written permission from the appropriate department head is required before University-owned or controlled equipment can be removed from University premises. Permission should include a description of the equipment, condition, any serial number, and the University property identification number. The Accountable Officer should retain
this permission for verification by Property Services. This procedure should be used whenever equipment is returned to the manufacturer or sent off campus for repairs.
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DISPOSITION
Surplus Property
When equipment is no longer useful or needed, departments may transfer it to Property Services as Excess and Surplus Property, using the
Equipment Transactions Form - BO 80-01.
After receiving the completed form, Property Services will arrange for Facilities to have the item moved. When this transfer is made, the department relinquishes control over the equipment.
Property Services will complete an
Equipment Release Form,
providing a copy to the department. The Accountable Officer should monitor all equipment in his or her unit. Any equipment no longer used should be transferred. Surplus Property and Excess Property held by Property Services is either available to all departments on a first-come, first-served basis or sold through the Surplus property process.
Notices of Excess Equipment will be periodically distributed to University departments. The property is available at a nominal cost to departments. At the end of the period specified in the notice, any equipment not requested by a University department will be transferred to Surplus Property and sold to the public. Sales of
property are held in accordance with state laws regarding the disposal of surplus property. Proceeds from the sale of specific items, less advertising and handling charges, will be transferred to the appropriate departmental accounts.
A copy of the bidding procedures, developed in accordance with the laws of the State of Alabama, is available from Property Services. University surplus procedures apply to all University departments, as well as to the Auburn University Foundation and the Auburn Alumni Association.
Federal or State Property
Sometimes property is purchased under a contract and grant, with title eventually reverting to the grantor. In such cases, Property Services should be notified regarding the disposition of the property at the end of the grant/contract period. For more information, see the Office of Sponsored Programs' Property Procedures for Government Property (February, 1989).
Theft or Loss
When it is believed that equipment has been lost or stolen, the Accountable Officer should immediately inform University Police and request an investigation. The Accountable Officer should forward a written report and a copy of the police investigation report to Property Services.
Trade-In
Approval by Property Services is required before any property can be traded for new equipment. A Purchase Requisition for the new equipment should be prepared which includes the following information on the item being traded:
- Description of the item
- Serial number
- Property Control number
Care should be given to not violate State bid law when trading. Please call Procurement and Payment Services when an item is bid and a trade-in is involved. The Accountable Officer must complete an
Equipment Transactions Form
when the purchase order is issued and send to Property Services for removal from the University property records.
Identification tags should be removed or obliterated before the property is released. Upon delivery or pickup of the property, an Equipment Transactions Form must be signed by the vendor and sent to Property Services. Under
Type of Transaction, check Other, and type "Trade-In" for explanation.
- Revised 5/6/08
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Business Office · Ingram Hall
Auburn University · Alabama 36849 USA
334-844-5588
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