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Administrative Procedure 8.543 Administrative Procedure 8.543



Title

Property and Equipment Transfer and Retirement

Header

Administrative Procedure Chapter 8, Business and Finance
Administrative Procedure AP 8.543, Property and Equipment Transfer and Retirement
Effective Date:  May 2016
Prior Dates Amended:  None.  This is a new procedure that replaces AP 8.518 and
AP 8.535.
Responsible Office:  Office of the Vice President for Budget and Finance/Chief Financial Officer
Governing Board and/or Executive Policy: EP 1.102, Authority to Manage and Control the Operations of the Campus
Review Date:  August 2018

I. Purpose

To describe the process, roles and responsibilities associated with transferring or retiring of University of Hawaiʻi (University) and sponsor-owned equipment and controlled property in accordance with University procedures, State of Hawaiʻi (State) and federal regulations (refer to Section VI. References, for hyperlinks to the federal regulations.)

To promote the reutilization and repurposing of University-owned property in excess to a program in accordance with State and federal guidelines.

II. Definitions

Refer to AP 8.509, Section II. for property and equipment related definitions.

III. Administrative Procedure

A.    Transfer of Property

    1.    General Guidelines

        a.     Ownership of equipment and controlled property vests with either the University or the sponsor of an award.  It is the responsibility of the principal investigator (PI), asset representative or fiscal administrator (FA) to obtain the appropriate approvals and documentation required to facilitate the transfer of property.

        b.    University-owned equipment in excess to a program should be offered for reutilization by another University department or State agency.  Such equipment shall not be physically transferred until the Property and Fund Management Office (PFMO) has approved the transfer in the Kuali Financial System (KFS).

        c.    Property furnished by the Federal Government or whose cost was charged to a project supported by a federal contract, grant or other agreement, shall be utilized in accordance with AP 8.542, Property and Equipment Utilization.  Transfer of this property shall follow the same hierarchy outlined in AP 8.542 unless otherwise specified in the sponsored agreement. 

    2.    Transfers within the University System

        a.  University-owned property acquired with non-extramural funds

            (1)    Excess University-owned property acquired with non-extramural funds shall be made available to other University departments via The UH Swap Meet (https://www.hawaii.edu/swapmeet/) administered by the Information Technology Services department.

            (2)    Transfer of University-owned  property acquired with non-extramural funds shall be transferred by processing an asset transfer e-Doc.

        b.  University-owned property acquired with extramural funds

            (1)     If the property is on an active award, the property may be transferred after the PI of the property obtains the necessary documentation to support the transfer.  If the transfer is in accordance with the terms of the contract, grant or other agreement, a copy of such terms would be sufficient.  Otherwise, the PI shall obtain the following:

                (a)    Property acquired under a federal contract requires written authorization from the sponsor’s Federal Contracting Officer.

                (b)    Property acquired under a federal grant or other agreement may be transferred if the transfer is in accordance with the hierarchy outlined in AP 8.542, Property and Equipment Utilization.  Written documentation in support of this will be sufficient.  All other transfers will require written authorization from the sponsoring agency.

            (2)    If the property is on an expired federal award with a current value of $5,000 or less, the property may be transferred if the transfer is in accordance with the hierarchy prescribed in AP 8.542, Property and Equipment Utilization.  All other transfers will require written authorization from the federal sponsoring agency.

            (3)    Transfer of University-owned property acquired with extramural funds shall be processed by submitting an asset edit e-Doc to transfer the asset FO code, the asset location and the asset representative, as necessary.  The organization owner chart of accounts code and the account number for the receiving department shall be noted on the asset edit e-Doc and PFMO will use this information to update the asset record in KFS.

        c.     Federally-owned and agency-owned property require written authorization from the sponsoring agency prior to transferring the property.

    3.    Transfers to other State Departments

        a.    If there is no other University department or program that has need for a department’s excess property, the property may then be offered to a State department via the State Procurement Office’s Excess State Property List. 

        b.    Departments must forward a completed Excess State Property Form SPO-019 to PFMO for submission to the State Inventory Management Office.  Property acquired with extramural funds may require sponsor’s approval as outlined in section A.2.b. and c. above.

        c.    If there is interest by another State department, the custodial department shall submit an asset retirement e-Doc to transfer the asset from the University to the consenting State department.  The custodial department shall complete and attach the State of Hawaiʻi Transfer of Property, SPO Form 26, to the asset retirement.

        d.    The custodial department shall be responsible for subsequently attaching to the approved asset retirement a fully completed and signed SPO Form 26 (i.e., with the receiving signature and date of receipt).

    4.    Transfers to Another Institution

        a.    Federally-owned or agency-owned property furnished to support the efforts of the transferring PI shall be transferred along with the PI only when written authorization from the sponsor has been obtained (e.g., authorization from the Federal Contracting/Grants Officer for federally-owned property).

        b.    University-owned property acquired with extramural funds on on-going active awards may be transferred with PIs to continue their research at another institution.  In such instances, the property whose cost was charged to the on-going projects supported by a federal contract, grant or other agreement shall be transferred along with PI with verification of the transferred award.

        c.    University-owned property acquired with extramural funds on an expired or terminated award may be transferred with PIs to continue their research at another institution.  The following documentation shall be required for the transfer of such property:
   
            (1)    If the property was funded by a federal contract and the current value is more than $5,000, the PI or the FA shall obtain written authorization from the Federal Contracting Officer to transfer the property.

            (2)    If the property was funded by a grant or other agreement or if the property was funded by a contract and the current value is $5,000 or less, the Dean or Director of the department shall submit a memo to PFMO confirming that the property is no longer required by the department and is in excess to the program.  The PI shall also provide certification to the University that the property shall be used in accordance with the Office of Management and Budget (OMB) Circular A-110.

        d.    University-owned property acquired with both University and extramural funds may not be transferred without the receipt of adequate compensation to the University.

    5.    Transfer of Ownership to the University

        a.    The PI of an award is responsible for requesting the transfer of ownership from the sponsoring agency to the University for extramurally-owned property.

        b.    The fiscal office shall notify PFMO when the transfer of ownership from the sponsoring agency has been granted and PFMO will initiate an asset retirement in KFS.

        c.    If the current value of the property is less than the University’s capitalization
criteria of $5,000 or more per unit, a new University-owned asset will not be established in KFS. The custodial department shall immediately remove the University asset tag and the red federal property tag, if applicable, from the property.

        d.    If the current value of the property is $5,000 or more per unit and has a useful life of more than one year, a new University-owned asset will be established in KFS by PFMO. The asset will be established at the current value and depreciation will begin to be calculated and posted.  The property will retain the same University asset tag and the custodial department shall immediately remove the red federal property tag, if applicable, from the property.

B.    Retirement of Property

    1.    General Guidelines

        a.    Ownership of equipment and controlled property vests with either the
University or the sponsor of an award.  It is the responsibility of the PI or asset representative to obtain the appropriate approvals and documentation required to facilitate the retirement of property.

        b.    Prior to the retirement of property, the program should first determine if the item has potential for use by another University department.  If it is determined that the cost to restore the asset is impractical or no other department has use for such item, an asset retirement e-Doc may be initiated.

        c.    Property with no further use or value shall be retired only when the
appropriate documentation and approvals have been obtained and the asset retirement e-Doc has been approved by PFMO. 

        d.    Equipment and controlled property shall not be disposed, destroyed, donated, exchanged, traded-in, transferred out of the University or salvaged for parts, without prior approval from PFMO.

        e.    In general, the asset condition shall be updated from “good” or “excellent” prior to processing an asset retirement e-Doc. It is not necessary to update the asset condition for lost/missing property or for stolen property.  Upon PFMO approval of the asset condition change, the custodial department shall process an asset retirement.

        f.    For federally-owned and agency-owned property, the University is
responsible for retiring property as directed by the extramural sponsor, and to take such action for its disposition as directed or pursuant to the terms of the contract, grant or other agreement.  The asset representative or custodial department shall submit a form PFMO-75, Request for Relief of Accountability for Non-Expendable Personal Property (Title Not Vested with University), to PFMO for extramurally-owned property that is damaged beyond economic repair, worn and unserviceable or no longer useful because of its condition.  PFMO will use the information on the form PFMO-75 to request disposition instructions from the extramural sponsor.

        g.    The proposed method of disposal shall be annotated on the asset retirement (i.e., dispose by destruction, eWaste, salvage for parts, trade-in, exchange, gift or donation, transfer out, sale, etc.). 

            (1)    The individual, by annotating the proposed method of disposal, will be
responsible for ensuring that the equipment is disposed in the proposed manner and that said property will not be directed or converted into improper use.  Further, any mark, decal or tag indicating University ownership will be removed.

            (2)    If property is disposed by destruction or salvaged for parts, the property should be destroyed in such a manner as to prevent reuse by other parties.

    2.    Disposal by Destruction

        a.    Property that is worn and unserviceable, obsolete, destroyed or damaged beyond economic repair may be disposed by destruction.
             
        b.    Custodial departments should follow the procedures established by their respective campus Facilities Office for the removal and destruction of equipment.  Custodial departments should also adhere to the procedures established by their respective campus Environmental Health and Safety Office regarding the disposal of equipment (i.e., refrigerators, freezers, air conditioners, etc.) containing hazardous materials.

    3.    eWaste Program – Custodial departments may dispose of University property through their campus eWaste recycling program, if available.  The eWaste program requirements can be found at https://www.hawaii.edu/technology/recycle.

    4.    Traded-In Property

        a.    University departments can trade-in University-owned property on new equipment purchases.  Property can be traded-in to a vendor in exchange for monetary consideration which is then credited towards the acquisition of another equipment item.

        b.    In some cases, a vendor will remove and dispose of an older equipment item as a courtesy to the University with the delivery of a new equipment item (i.e., no monetary credit or discount).

        c.    The item to be traded-in should be clearly indicated on the purchase order (i.e., asset tag number, serial number, etc.) so that proper steps can be taken to ensure that the equipment traded-in is retired in KFS, if applicable.

        d.    The custodial department shall submit an asset edit e-Doc to update the asset condition.  The department should indicate in the explanation field that the equipment will be used as a trade-in for new equipment.  PFMO shall contact the custodial department if additional information is required.

        e.    Upon approval of the asset edit e-Doc, an asset retirement e-Doc shall be submitted by the custodial department to request PFMO approval to trade-in the equipment. 

        f.    The custodial department is responsible for obtaining written quotes from potential vendors and to provide the following information on the asset retirement:

            (1)    Name of the vendor

            (2)    Cost of equipment to be purchased without trade

            (3)    Trade-in offer

            (4)    Cost of equipment to be purchased with trade

        g.    Upon PFMO approval, the custodial department may proceed with the trade-in.  The asset tag indicating University ownership shall be removed prior to the trade-in. 

        h.    When acquiring replacement equipment acquired under federal awards, the equipment to be replaced may be used as a trade-in or proceeds of the sale may be used to offset the cost of the replacement property.

    5.    Sale of Surplus University-Owned Property

        a.    University-owned surplus property may be sold to external organizations. It does not apply to property transferred to another University or State department. 

        b.    The custodial department must first offer the property to other University departments as well as other State departments as described in A.2. and A.3. above.

        c.    If there is no interest from other University or State departments, the custodial department’s FA shall contact PFMO to request approval to sell the surplus University property.

        d.    The sale of property with an acquisition cost of less than $25,000 shall be conducted by the custodial department’s FA with the guidance of PFMO. 

        e.    The sale of property with an acquisition cost of $25,000 or more, shall be conducted by PFMO in accordance with the following procedures:

            (1)    The custodial department shall contact PFMO to initiate the sales process by competitive sealed bid.

            (2)    If the property to be sold was purchased with federal funds, the custodial department must first get written authorization from the sponsor prior to initiating the sale of property.  This authorization shall be submitted to PFMO with a written justification requesting approval to sell the surplus property.

            (3)    If the sale is successful and the process concluded, the fiscal administrator shall submit an asset retirement e-Doc with the appropriate supporting documents (i.e., justification/ reasons for selling the property, documentation that the property had been offered to other University and State departments, etc.).

            (4)    Proceeds from the sale of property shall be processed according to the funding source for the acquisition of the property:

                (a)    Proceeds from the sale of property acquired with State funds shall be returned to the State.

                (b)    Proceeds from the sale of property acquired with federal or extramural project funds shall be returned to the sponsor.

                (c)    All other proceeds shall be deposited into the account from which the equipment was purchased.

    6.    Lost or Stolen Property

        a.    Property that cannot be found after a thorough search has been conducted
shall be reported promptly by the asset representative or the custodial department to their respective campus security office or police department as well as to PFMO.

        b.    Lost or Stolen University-Owned Property

            (1)    The State of Hawaiʻi, Form RMP-001, Report of Loss or Damage of State Property, shall be filed for any lost, missing or stolen University-owned property.  This form shall also be filed for University-owned property damaged or lost in a disaster or other casualty (i.e., flood, hurricane, fire, earthquake, etc.). The Form RMP-001 shall be attached as a supporting document to the KFS asset retirement.  PFMO will forward a copy of the Form RMP-001 to the University’s Office of Risk management (ORM) as appropriate.
    
            (2)    Custodial departments shall follow the procedures for filing loss property insurance claims established by the University’s ORM which can be found at https://www.hawaii.edu/riskmanagement.  The State of Hawaiʻi, Department of Accounting and General Services, Risk Management Office, will determine if the loss shall be covered under the State insurance policy.

        c.    Lost or Stolen Extramurally-Owned and Extramurally-Funded Property

            (1)    The sponsoring agency for extramurally-owned property or for property accountable to an on-going extramural award shall be notified immediately of any loss of such property.

            (2)    The custodial department or the FA shall submit a completed form PFMO-75, Request for Relief of Accountability for Non-Expendable Personal Property (Title Not Vested with University), and a completed State of Hawaiʻi, Form RMP-001, Report of Loss or Damage of State Property, to PFMO.

            (3)    PFMO shall utilize the information on the PFMO-75 to request relief of accountability for the lost or stolen property from the sponsoring agency.

            (4)    Upon approval from the sponsoring agency, PFMO shall retire the asset in KFS.     

    7.    Gift or Donation

        a.    Extramurally-owned property shall not be donated without prior approval from the sponsor.

        b.    Surplus property may be donated when a transfer to another University program or State department is not feasible.
    
        c.    Surplus property may be donated to a:

            (1)    non-profit, tax exempt charitable organization

            (2)    City and County agency within the State

    8.    Salvage for Parts

        a.    Salvaging for parts (i.e., cannibalizing for parts) is the process of removing component parts or subsystems from equipment for reuse to repair or build other equipment.

        b.    Under no circumstances shall property be salvaged for parts without prior approval from PFMO.

C.  Exceptions:  If any requirement of the procedures for the transfer or retirement of property results in undue hardship for the custodial department, PFMO may grant an exception to that requirement, if it is determined that such exception is in the best interest of the University.

D.  Disposition Procedures for Terminated or Completed Federal Government Contracts

    1.    Within thirty (30) days after termination or completion of a government contract, the PI, asset representative, or custodial department shall perform a physical inventory adequate for disposal purposes of all government property applicable to the terminated or completed contracts. 

    2.    The requirement for physical inventories shall be waived when the property applicable to the completed contract is authorized for use on a follow-on contract.  In those instances, the PI, asset representative, or custodial department shall initiate an asset transfer of the property to the accountable award within thirty (30) days after authorization notification from the sponsor’s Contracting Officer to use property on the follow-on award has been obtained (refer to A.2. above).

IV. Delegation of Authority

There is no administrative specific delegation of authority.

V. Contact Information

Property & Fund Management Office, 956-7835, or pfmo@hawaii.edu
Website:  http://www.fmo.hawaii.edu/capital_assets/index.html

VI. References

    A. Link to superseded Executive Policies in old format https://www.hawaii.edu/policy/archives/ep/
    B. Link to Administrative Procedures in old format https://www.hawaii.edu/policy/archives/apm/sysap.php
    C. Uniform Guidance 2 CFR 200, §.310 to §.316 and §.439 (Property Standards) 
http://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title02/2cfr200_main_02.tpl
    D. OMB Circular A-110, §.30 to §.37 (Property Standards) https://www.whitehouse.gov/omb/circulars_a110/
    E. OMB Circular A-21, §.18 (Equipment and Other Capital Expenditures) https://www.whitehouse.gov/omb/circulars_a021_2004
    F. Federal Acquisition Regulation 52.245-1 (Government Property) https://www.acquisition.gov/far/html/52_245.html

VII. Exhibits and Appendices

Attachment 1:  PFMO-75, Request for Relief of Accountability for Non-Expendable Personal Property (Title Not Vested with University)
Attachment 2:  RMP-001, State of Hawaii Report of Loss or Damage of State Property
Attachment 3:  SPO-019, State of Hawaii Excess State Property
Attachment 4:  SPO Form 26, State of Hawaii Transfer of Property

Approved

    Signed    
    Kalbert Young    
    June 13, 2016    
    Date    
    Vice President for Budget and Finance/Chief Financial Officer

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