UH System Policies and Procedures
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Administrative Procedure 8.521 Administrative Procedure 8.521
Property and Equipment Acquisition
Administrative Procedure Chapter 8, Business and Finance
Administrative Procedure AP 8.521, Property and Equipment Acquisition
Effective Date: May 2016
Prior Dates Amended: None. This is a new procedure that replaces AP 8.506 and
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: May 2019
To provide uniform guidelines and procedures for establishing property records and assigning asset tags for new acquisitions of equipment and controlled property in accordance with University of Hawaiʻi, State and Federal requirements (refer to Section VI. References, for hyperlinks to the federal regulations).
Refer to AP 8.509, Section II. for property and equipment related definitions.
III. Administrative Procedure
A. Purchases of Equipment and Controlled Property
1. Purchases of equipment are fed into the Kuali Financial System (KFS) based on the object codes for the payment transactions. Asset records are established by the Property and Fund Management Office (PFMO) for transactions that meet the criteria for equipment.
2. Purchases of controlled property are manually entered into KFS by PFMO based on an extraction of payment transactions assigned a controlled property object code.
3. Extramurally/Federally-Funded Purchases
a. The University may acquire property as a direct charge to an extramural/ federal contract or grant only when specified in the contract or grant or when authorized in writing by a contracting officer prior to acquisition. The award’s principal investigator (PI) and fiscal administrator (FA) shall comply with the University’s requirements for extramurally/federally-funded purchases and with all flow-down provisions imposed by the prime recipient when the University is a subcontractor in receipt of extramural/federal funds.
b. The PI and FA shall comply with federal screening requirements as outlined
in the University’s procurement procedures for federally-funded purchases. Departments shall also be aware of any agency-specific purchasing screening requirements prior to purchasing property.
B. Donations of Equipment and Controlled Property
1. All donations of equipment and controlled property shall be coordinated with the advice and assistance of the University of Hawaiʻi Foundation (UHF).
2. The receiving University department shall complete the Transmittal Form for
Non-Cash Gifts and forward to UHF.
3. The UHF shall review and process applicable donation forms and those that meet the capitalization criteria for equipment and tracking criteria for controlled property will be forwarded to PFMO.
C. Fabricated Equipment
1. Fabricated equipment is equipment that has been constructed or assembled into one identifiable unit. The cost assigned to the unit is the total of its component parts, materials, consumable supplies and applicable labor.
2. The custodial department shall submit an Asset Fabrication Maintenance e-Doc in KFS to establish the fabrication asset. A completed form PFMO-73, Fabricated Equipment, must be attached as supporting documentation.
3. Upon approval by PFMO, an asset tag number will be assigned and payments for component parts should cite the asset tag number for proper recordation of costs.
4. Payments for an equipment fabrication must be assigned an equipment
fabrication object code. Payments will be applied to existing fabrication assets as directed by the custodial departments.
5. Upon substantial completion of the fabricated equipment, the asset representative shall submit form PFMO-73C, Substantial Completion of Fabricated Equipment, to the FA for transmittal to PFMO.
a. A fabrication is considered substantially complete when the equipment is first used for its intended purpose or when the funding award has expired.
b. Upon notification of substantial completion, PFMO shall place the fabricated equipment into service in KFS.
D. Unrecorded Found Property
1. Unrecorded found property is property discovered by the custodial department which is not recorded in KFS. The property must meet the capitalization criteria for equipment or controlled property. All efforts will be made to determine the origin and ownership prior to taking action.
2. Unrecorded found property is manually entered into KFS by PFMO. The following information shall be provided by the custodial department to PFMO to create a property asset record:
a. Description of the property
b. Organization owner chart of accounts code and account number
d. Model Number
e. Serial Number
f. Location (building code and room number or off campus location)
g. Asset representative
h. Ownership (University, agency, federal)
i. Circumstances surrounding the discovery
j. Estimated cost or estimated fair market value
k. Date property was “found” (used as the in-service date unless the acquisition date can be determined or confirmed by other means)
E. Surplus Property
1. The University, as a non-profit, tax-exempt educational institution, may acquire federal or State of Hawaiʻi surplus property at a nominal cost from the Department of Accounting and General Services (DAGS), Surplus Property Office.
2. University departments and programs may acquire surplus property. The acquisition of such property shall be coordinated in advance with the fiscal administrator for the department or program.
3. The University is authorized to participate in the federal program by designating “authorized representatives” from the University system to coordinate with the DAGS Surplus Property Office to officially authenticate the acquisition of such property in accordance with applicable federal laws (Federal Property and Administrative Services Act, Rehabilitation Act, Civil Rights Act, etc.). The official representative designated for the University is PFMO.
a. Federal surplus property acquired from the DAGS Surplus Property Office shall be valued at 23.3 percent of its original acquisition cost. Federal surplus property meeting the equipment or controlled property criteria shall be recorded into KFS. Federal surplus property not meeting the criteria for equipment or controlled property shall be coded as expenditures of the current period.
b. Upon receipt of the federal surplus property, the property shall be placed in use for the purposes for which it was acquired within one year of receipt and shall continue to be used for such purposes for a minimum of one year from the date the property was placed in use.
c. The DAGS Surplus Property Office has imposed additional restrictions on federal surplus property with a unit acquisition cost of $5,000 or more and passenger motor vehicles, regardless of acquisition cost. These surplus property items shall be used for the purpose for which it was acquired for a minimum period of eighteen (18) months from the date the property was placed in use.
d. During the imposed period of restrictions, the custodial department shall not
sell, trade, lease, lend, cannibalize, dispose or permanently relocate the federal surplus property for use outside the State of Hawaiʻi without prior approval from the federal General Services Administration or from DAGS Surplus Property Office, as applicable.
e. These procedures are applicable for all funding sources, including extramural funds. The extramural contract or grant must permit the acquisition from the DAGS Surplus Property Office.
F. No-Cost Transfer of Property to the University
1. Equipment or controlled property transferred from another institution shall be reported to the department’s FA and PFMO as soon as possible after being notified of the intent to transfer equipment. The program shall provide the following to ensure proper recordation of the asset record:
a. A written statement transferring property to the University signed by an authorized representative of the institution providing the property.
b. Award information if the property is to be transferred to an active University federal or agency award.
c. Asset information to properly record the asset record:
(1) Description of the property
(2) Organization owner chart of accounts code and account number
(4) Model number
(5) Serial number
(6) Location (building code and room number or off campus location)
(7) Asset representative
(9) Original acquisition cost
(10) Original purchase date
(11) Date of transfer to the University
2. Ownership of equipment or controlled property transferred-in from a federal agency or other extramural sponsor to an on-going University award vests with the sponsor. The PI or other authorized representative is responsible for reporting the transfer-in of property to the department’s FA and PFMO as soon as possible after being notified of the intent to transfer the property. The program shall provide the following to ensure proper recordation of the asset record:
a. Contract modifications acknowledging the transfer of equipment for both the transferring and receiving awards.
b. Equipment information as listed above in section F1c.
G. Distribution of Property Tags
1. University asset tags and federal property tags (when applicable) shall be distributed by PFMO for new property acquisitions on a weekly basis to the FA.
2. Federally-owned property will require both a University asset tag and a red federal “Property of U.S. Government” tag. Both University and federal property tags shall be affixed to the property in a location that is readily visible.
3. When distributed to the FA, the property tags will be attached to individual screen prints of the asset records in KFS. The screen prints contain information such as asset number, organization owner account number, FO code, asset description, vendor name, manufacturer, model number, serial number, asset tag number, total cost, asset location and asset representative.
4. Upon receipt of the property tags, the FA shall ensure that the property tags are immediately affixed to the assigned property.
5. The screen prints of the asset records shall be viewed for accuracy and completeness by the asset representative or authorized designee. Asset records shall be updated in KFS as necessary by authorized departmental personnel.
Title to equipment and controlled property regardless of the method of acquisition (i.e.,purchased, transferred-in, donated, etc.) vests with either the University or with the project sponsor. Title to equipment and controlled property does not reside personally with principal investigators, asset representatives, faculty, or staff. Refer to AP 8.509, Property and Equipment Overview, for further guidance on the ownership of property.
IV. Delegation of Authority
There is no administrative specific delegation of authority.
V. Contact Information
Property & Fund Management Office, 956-8735, or firstname.lastname@example.org
A. Link to superseded Executive Policies in old format
B. Link to Administrative Procedures in old format
C. Uniform Guidance 2 CFR 200, §.439 and §§.310 to .316 (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-73, Fabricated Equipment
Attachment 2: PFMO-73C, Substantial Completion of Fabricated Equipment
Vice President for Budget and Finance/Chief Financial Officer
May 27, 2016
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