eqpguide

ACQUISITION

- Am I required to do an equipment screening before purchasing equipment?

TRACKING

- What is the process for tagging government owned/loaned equipment?

- How do I know if equipment is government owned/loaned?

- What happens when a contract or grant requires that items below the equipment capitalization threshold be tracked and labeled?

- What should be done if government owned/loaned equipment is stolen?

- How do I transfer ownership of government owned/loaned equipment from MSU to another institution or from another institution to MSU?

- How do I transfer government owned/loaned equipment to another department?

DISPOSAL

- How do I dispose of government owned/loaned equipment?

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MSU Owned Equipment

ACQUISITION

- How is equipment identified?

- Do I need to notify anyone if I am fabricating equipment?

- What do I need to do if I send a piece of equipment back to the company?

- What do I do if I trade existing equipment for new equipment?

- What is the process if a department receives equipment as a gift?

- What is the process if a department receives equipment as a loan?

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TRACKING

- If I maintain my own department equipment inventory records, do I still have to report to the Inventory Department?

- What is the university policy on equipment taken off campus?

PHYSICAL INVENTORY

- When is a physical inventory done?

- Why is tracking equipment and conducting a physical inventory necessary?

STOLEN/VANDALIZED/DAMAGED EQUIPMENT

- What should I do if equipment is stolen, vandalized, or damaged?

- Who should I send copies of the police report to?

- What happens if stolen equipment is found and returned to campus?

EQUIPMENT TRANSFERS

- How do I transfer equipment to another department?

- Can a department transfer or sell equipment to an off-campus entity (including donations)?

- Who is responsible for moving equipment that is to be transferred to another department?

DISPOSITION

- How do I dispose of equipment that is no longer needed?

- How do I get large equipment to the MSU Surplus Store?

APPENDIX

Departmental Contact Information

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INTRODUCTION

This guide is the result of a cooperative effort between the Contract and Grant Administration, the Controller's Office, the Inventory Department, the MSU Surplus Store, the Purchasing Department, and Risk Management and Insurance and provides answers to frequently asked questions relating to the policies and procedures governing the acquisition, tracking, and disposal of equipment. The intent is to provide a resource to end users to improve the efficiency of each of the processes associated with equipment tracking.

This guide concludes with an appendix listing each of the above departments' telephone number, fax number, and Web address. Use this listing if you are unable to find answers to your questions.

The contents of this guide will be reviewed regularly to ensure that the policies and procedures outlined within remain up-to-date. We welcome any suggestions for improvement. Send your comments to: webmaster.

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DEFINITIONS

Damaged Equipment

Equipment that is rendered inoperable due to exposure to fire, water, etc., except for normal wear and tear, is considered damaged.

Equipment

Equipment is defined as an item with an acquisition cost of $5,000 or more, non-expendable, tangible personal property, having a useful life of more than one year, and has the capacity to function as a stand-alone unit without the assistance of another unit (i.e., is not an accessory or component). Equipment obtained by the university includes that which is purchased with university, contract, or grant funds; given as a gift, loaned by the government, or obtained through other means such as corporate loans and larger acquisitions (including equipment).

Fabricated Equipment

An item is considered to be fabricated equipment if: the total cost of the components used in the fabrication of the item is $5,000 or more, has an estimated useful life of more than one year, and has the capacity to function without the assistance of another item. The difference between fabricated equipment and other equipment is that fabricated equipment is purchased as component parts that are assembled into a final product. The component parts must be purchased under the object code 092 (equipment fabrication components).

Departments purchasing components and accessories for the purpose of fabricating equipment (expenditure code 092) must obtain approval from Contract and Grant Administration. To be considered equipment, the completed item must meet the first two criteria specified in Manual of Business Procedures - Section 224, III - Equipment Criteria. The requisitioning department must then contact the Inventory Department to obtain an inventory number and include this number on all applicable requisitions along with a description of the final piece of equipment. Any requisition with expenditure code 092 that does not provide the inventory number will be returned to the department.

Upon completion of fabrication, the department should record all non-labor/non-salary costs (092 expenditures) of the fabricated item and submit a letter indicating the description, location, and total dollar value of the item to the Inventory Department. If the fabricated item meets the equipment definition, the Inventory Department will complete the tagging process.

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Government Equipment

Government Property:

Property (equipment) owned by, leased by, or acquired by the government under the terms of a contract, including both government-furnished property and contractor-acquired property as defined below.

Government-Furnished Property:

Property (equipment) in the possession of, or directly acquired by, the government and subsequently made available to the contractor.

Contractor-Acquired Property:

Property (equipment) acquired or otherwise provided by the contractor for performing a contract and to which the government has title.

The equipment criteria definition still applies to government equipment.

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POLICIES AND PROCEDURES

Government Owned/Loaned Equipment

ACQUISITION

Q. Am I required to do an equipment screening before purchasing equipment?

A. The equipment screening process, formerly required on all Contract & Grant accounts, has been eliminated. However, the department and principal investigator are responsible for ensuring that duplicate or unnecessary purchases are avoided. Departments should check inventory listings to meet this requirement. All equipment purchased with federal funds (i.e. 61-0000 - 61-5999), must have the following certification on, or attached to, the requisition:

"I certify that this equipment is necessary and will be used primarily or exclusively for the project(s) to which the costs will be charged."

______________________________________

Principal Investigator or Project Representative

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TRACKING

Q. What is the process for tagging government owned/loaned equipment?

A. The process for tagging government owned/loaned equipment, for which the title remains vested with the federal government, is the same as for MSU owned equipment with one additional step: the federal government requires that the University affix a "Property of the U.S. Government" tag to all government owned/loaned equipment, typically next to the MSU inventory tag.

Q. How do I know if equipment is government owned/loaned?

A. Equipment acquired with contract or grant funds is identified by the account number used to acquire the equipment. Equipment that is loaned to the University by government agencies is also considered government equipment and is identified as such on the Consignment Gift form that accompanies the loaned equipment. Each of the above situations require that a "Property of U.S. Government" label be attached to the equipment.

Q. What happens when a contract or grand requires that items below the equipment capitalization threshold be tracked and labeled?

A. Departments who accept a contract or grant requires them to track and label items that are not considered equipment, as defined by the University, are responsible for tracking and labeling the items. Unnumbered property tags can be obtained from University Stores (stock #14086600) for departments that need to track such items. Inventory is not responsible for tracking items that do not meet the University's definition of equipment.

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Q. What should be done if government owned/loaned equipment is stolen?

A. The policy for stolen government equipment is similar to the policy for other equipment. You must immediately contact the Department of Police and Public Safety who will require that you complete a written report describing both the equipment and the circumstances of the theft. A copy of the report must be forwarded to the government property administrator through Contract and Grant Administration. Departments may be liable for government property that is stolen.

Q. How do I transfer ownership of government owned/loaned equipment from MSU to another institution or from another institution to MSU?

A. On occasion, equipment is obtained or removed through faculty transfers from MSU. When this situation arises, a special written notice must be forwarded to the Contract and Grant Administration. Details of the action requested should be documented (e.g., contract number, letter of agreement, etc.) and approved by the Contract and Grant Administration. The information must then be forwarded to Inventory to ensure records are updated to reflect status change (e.g., removed from inventory records, or added to inventory records and tagged).

Q. How do I transfer government owned/loaned equipment to another department?

A. Government owned/loaned equipment must be used for the purposes specified in the contract. Before government owned/loaned equipment can be transferred to another department, approval from Contract and Grant Administration and the property administrator must be obtained.

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DISPOSAL

Q. How do I dispose of government owned/loaned equipment?

A. Government owned/loaned equipment must be used for the purposes specified in the contract. Before government owned/loaned equipment can be disposed of, approval from Contract and Grant Administration and the property administrator must be obtained.

MSU Owned Equipment

ACQUISITION

Q. How is equipment identified?

A. The Inventory Department receives copies of all purchase orders initiated by the Purchasing Department, the National Superconducting Cyclotron Laboratory (NSCL), Food Stores, and Computer Store releases. Equipment purchases are identified (see Equipment) by expenditure object code 090 (equipment), 091 (equipment/installment purchase agreement), 099 (equipment, government owned), and various resale object codes for specific departments selling equipment to other campus departments. Upon notification of payment, Inventory will collect the required equipment information and affix the appropriate identification label(s) to the equipment.

Q. Do I need to notify anyone if I am fabricating equipment?

A. As described in the definition of fabricated equipment, departments are required to contact Contract and Grant Administration for approval and Inventory to obtain an inventory number at the beginning of the fabrication process. Any requisitions of equipment components using object code 092 must have a valid inventory number before the order will be processed.

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Q. What do I need to do if I send a piece of equipment back to the company?

A. There are two options for departments returning equipment due to failure or for an exact replacement exchange:

Option 1: A memo indicating the inventory number and a brief description of the item being returned must be sent to Inventory.

Option 2: A copy of the Material Return that indicates the inventory number must be sent to Inventory.

In the case of a replacement exchange, Inventory needs to be notified in order to tag and record information relating to the new equipment.

Q. What do I do if I trade existing equipment for new equipment?

A. Requisitions for new equipment that include a trade-in, must indicate the trade-in as a separate line item with the object code of "090", include the inventory tag number, description of equipment, and value of the trade-in. Purchasing will record this information on the purchase order. When Inventory receives a copy of the purchase order, the item being traded in will be removed from the active equipment inventory and arrangements to tag and record the new item will be made.

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Q. What is the process if a department receives equipment as a gift?

A. If a department receives equipment as a gift, a Consignment Equipment-Gift Form must be completed and signed. This form is required when new or used items are obtained as a gift from private companies, government agencies, or other organizations. The completed form must be forwarded to the MSU Foundation for processing.

Inventory receives copies of all Consignment Equipment-Gift Form, after approval by the Board of Trustees. The original copy is retained by the Inventory Department, and a copy is sent to the department for their records.

If the item is designated as a gift, Michigan State University gains ownership of the item. The forms are stamped upon receipt with a sheet number, and the items are assigned an inventory number if they meet the definition of equipment (see Definition).

For further instructions see Manual of Business Procedures - Section 315: Gifts, Grants or Contracts.

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Q. What is the process if a department receives equipment as a loan?

A. If a department receives equipment as a loan, a Consignment Equipment-Gift Form must be filled out and processed. This form is required when new or used items are obtained as a loan from private companies, government agencies or other organizations.

For further instructions see Manual of Business Procedures - Section 315: Gifts, Grants or Contracts.

Inventory receives copies of all Consignment Equipment-Gift Forms after Board approval and retains the original copy with a copy sent to the department for their records.

If the item is designated as a loan, MSU does not gain ownership. However, all loans, regardless of value, are recorded in the equipment inventory system and are coded with an "A" for agency loans, "N" for non-government loans, or "G" for government loans. Departments responsible for the loaned items are required to notify Inventory of any consignment changes (e.g., item changes to a gift, item is returned to lender, etc.).

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TRACKING

Q. If I maintain my own department equipment inventory records, do I still have to report to the Inventory Department?

A. Yes. According to federal guidelines and university policy, the Inventory Department is responsible for maintaining and tracking all equipment (over $5,000) for MSU. Departments that wish to maintain and track their own equipment may do so. However, the official source of equipment information resides in the Inventory Department.

Q. What is the University policy on equipment taken off campus?

A. When an employee has an assignment that requires a piece of equipment be taken off campus, a written request must be submitted to the department chair, dean, or director of the department to request permission to take the equipment off campus. If the written request is approved and signed, a copy must be filed with the department's equipment records. It is no longer necessary to provide a copy of the signed request to Inventory. For tracking purposes, the Inventory Department requires the department to provide the room number where the equipment records are filed. Requests to physically locate the equipment can be satisfied by providing the signed request to remove the item from campus.

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PHYSICAL INVENTORY

Q. When is a physical inventory done?

A. At the end of each fiscal year the Inventory Department distributes a list of in-use (active) equipment and an Annual Equipment Inventory Certification form to every department with responsibility for items meeting the definition of equipment. Inventory conducts an actual physical inventory for departments on an alternating yearly basis. This process allows half of the University departments (plus most off-campus departments) to verify inventory, make appropriate corrections with corresponding documentation, complete the form, and return the information to the Inventory Department by a specified date. Inventory conducts a physical inventory for the remaining departments.

Once the physical inventory has been performed (either by Inventory or the department) and the list of equipment has been verified, the department chair, director, or authorized representative must sign the form to certify completion of the validation. The validated list of equipment along with the signed form must be forwarded to the Inventory Department. Inventory will use the validated list of equipment to update the records in the equipment inventory system. Internal Audit will verify the accuracy of each department's certifications while conducting its departmental audits.

Q. Why is tracking equipment and conducting a physical inventory necessary?

A. As a public institution, the University has the fiduciary responsibility of maintaining proper control over all of its equipment, regardless of the location or purpose. Additionally, failure to accurately account for equipment could preclude the University as a whole from applying for federal grants and contracts, as the equipment inventory records are subject to federal and other external audits.

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STOLEN/VANDALIZED/DAMAGED EQUIPMENT

Q. What should I do if equipment is stolen, vandalized, or damaged?

A. In addition to any departmental policies on stolen, vandalized, or damaged property due to fire, water, etc., the incident must be reported immediately to the Department of Police and Public Safety. A written police report must be completed outlining the description of the stolen, vandalized, or damaged item, date of incident, building and room number, and any relevant information.

Q. Who should I send acopies of the Police report to?

A. A copy of the written police report should be sent to the Inventory Department and the Risk Management Insurance Office. Upon receipt of this report, the Inventory Department will remove the item from the active equipment inventory. The item will be properly coded on the disposal list with the annual inventory report distributed for physical inventory purposes.

Q. What happens if stolen equipment is found and returned to campus?

A. Since stolen equipment is removed from the active equipment inventory, the department must notify the Inventory Department that the equipment was found and returned to campus. The item will be re-activated in the system.

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EQUIPMENT TRANSFERS

Q. How do I transfer equipment to another department?

A. When equipment remains underutilized, the department should consider transferring or selling the item to another department on campus. Options include:

1. Interdepartmental or unit transfer using an ETN (see Manual of Business Procedures - Section 300: Equipment Transfer Notice (ETN))

2. Transfer the item to the MSU Surplus Store

Once the releasing and receiving departments have determined the value of the equipment, the transfer must be initiated by using an Equipment Transfer Notice (ETN). Follow the distribution instructions at the bottom of the form. A copy of the completed ETN must be sent to Inventory so the releasing and receiving departments' records will reflect the transfer and/or sale of the equipment. If an item is transferred to the MSU Surplus Store, they will forward the ETN to the Accounting Department to transfer the funds to the releasing department once the item has been sold.

If equipment was purchased with sponsored research funds or grant funds, the transfer or sale may require approval from the granting agency prior to disposition. Contact Contract and Grant Administration for further details or see Section 315 MBP.

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Q. Can a Department transfer or sell equipment ot an off campus entity (including donations)?

A. No. If a need does not exist on campus for the equipment, the MSU Surplus Store will sell the item to an off campus purchaser. Departments can not donate, transfer, or give equipment to an off campus entity.

Transfer/disposal options include:

1. Interdepartmental or unit transfer using an ETN (see Manual of Business Procedures - Section 300: Equipment Transfer Notice (ETN))

2. Transfer the item to the MSU Surplus Store

Q. Who is responsible for moving equipment that is to be transfered to another department?

A. Once the releasing and receiving departments determine who will be responsible for the relocation the options include:

1. Contact the MSU Surplus Store.

2. Contact University Stores Distribution.

3. MSU Physical Plant Set-up Crew, for a fee.

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DISPOSAL

Q. How do I dispose of equipment that is no longer needed?

A. Transfer the item to another department on campus or to the MSU Surplus Store for disposition. Other departments may have a need for the equipment and also may be willing to pay for it. When transferring equipment, an Equipment Transfer Notice (ETN) must be completed and signed by the releasing and receiving departments. A copy of the form must be forwarded to Inventory. The records are revised to reflect the status change. If the MSU Surplus Store is involved in the transaction, they will arrange to pick the equipment up and make it available for purchase by other campus departments and the general public (all hazardous materials must be cleared by ORCBS.

Under no circumstances should the department conduct its own sale to staff, faculty, or the public. Sale of equipment to an on campus agency, such as student organizations, (Account operation - acct. range 31-3500 and all 71-5XXX) are considered to be sales to the public and must be handled through the MSU Surplus Store.

Q. How do I get large equipment to the MSU Surplus Store?

A. Special arrangements with professional movers may be required for equipment too large for the MSU Surplus Store staff to handle. Departments are responsible for any moving costs assessed by a professional mover. In such instances, the MSU Surplus Store should be contacted to determine the appropriate means of moving the item(s).

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APPENDIX

DEPARTMENTAL CONTACT INFORMATION

ACCOUNTING DEPARTMENT
Phone: (517) 355-5000
FAX: (517) 353-1706

CONTRACT AND GRANT ADMINISTRATION
Phone: (517) 355-5040
FAX: (517) 353-9812
Equipment Information

CONTROLLER'S OFFICE
Phone: (517) 355-5020

INVENTORY DEPARTMENT
Phone: (517) 355-6081
FAX: (517) 353-2024

MSU SURPLUS STORE
Phone: (517) 355-0364
FAX: (517) 353-0836

PURCHASING DEPARTMENT
Phone: (517) 355-0357
FAX: (517) 353-2024

RISK MANAGEMENT AND INSURANCE
Phone: (517) 355-5022
FAX: (517) 432-3854

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