The University of Wisconsin–Madison conducts research studies that are 1 year or longer and the research participants are compensated with payment by check. Replenishable Bank Accounts are used for these research participant studies.
This procedure applies to all Deans, Directors, Financial Officers, and staff involved with research participant studies that provide payments by check to research participants.
Custodian obtains the NR Number from the NR Number Generator. The NR Number from the NR Number Generator is required on some of the necessary forms for opening a Replenishable Checking Account.
Custodian composes a Letter of Justification explaining the purpose of the study and how it is linked to the project.
Custodian completes the following forms and obtains the necessary departmental approvals:
Custodian e-mails the Cash Management Office (cstdnfnd@bussvc.wisc.edu) to obtain a US Bank Authorized Signature Form. Custodian then provides the Signers with the US Bank Authorized Signature Form.
Signers sign the US Bank Authorized Signature Form and provides it to the Custodian.
Custodian routes the Letter of Justification and signed forms to the Dean/Director’s office.
Dean/Director’s office verifies that the Custodian needs a Replenishable Checking Account by verifying that:
The research study will be for 1 year or longer.
The research study has an Institutional Review Board (IRB) Number or self-certification paperwork showing that no IRB approval or certification is necessary.
Each payment to a research participant will be $249 or less.
The payment(s) to the research participants will be made by check.
At least 10 checks will be written per month.
Dean/Director’s office verifies accurate funding information.
Dean/Director’s office reviews the documentation and signs the necessary forms.
Dean/Director’s office keeps a copy of the forms for internal records.
Dean/Director’s office sends the original forms to via inter-d mail or email to the Cash Management Office (cstdnfnd@bussvc.wisc.edu).
Cash Management processes the request.
Cash Management will notify the department and Dean/Director’s office when the US Bank checking account is set up and checks are ordered.
The Custodian can check WISER using account code 6167, on the balance sheet, to see if the request has been processed. On the Transaction Search page in WISER, ensure the Show Balance Account checkbox is checked.
Maintaining Replenishable Checking Account
Reconciliations
Reconciler completes and documents monthly bank reconciliations between the US Bank SinglePoint bank statement and the check register on the Bank Reconciliation Worksheet within 30 days of month end.
Reconciler submits the monthly bank reconciliation and check register, and all supporting documentation via the Custodian Fund System and their Dean’s/Business Office within 30 days of month end.
Replenishments
Reconciler obtains the research participant log, without HIPAA or sensitive information, and completes the Custodian Fund Accounting Form to replenish the Replenishable Checking Account at least every 90 days, based on activity.
Reconciler obtains necessary departmental approvals for the Custodian Fund Accounting Form.
Custodian routes the completed/signed Custodian Fund Accounting Form, along with the research participant log, reconciliation(s), bank statement(s), list of outstanding check(s), and stop payment report from US Bank SinglePoint to the Dean/Director’s office for review and approval.
Dean/Director’s office reviews the documents and signs the Custodian Fund Accounting Form.
Department keeps a copy of the forms for internal records. Department is the official record holder.
Dean/Director’s office sends the original forms via inter-d mail or email to the Cash Management Office (cstdnfnd@bussvc.wisc.edu).
Cash Management processes the replenishment request.
Other
Any errors on the bank account are to be reported by the Reconciler via e-mail to Cash Management (cstdnfnd@bussvc.wisc.edu) and their Dean’s/Business Office within 30 days of month end.
Reconciler is to ensure stop payments are placed for 24 months on all checks older than 90 days old by using US Bank SinglePoint.
Notify the Dean/Director’s office and Cash Management when there is a change in Custodian, Reconciler, and/or Signers and prepare applicable Custodian Fund forms.
Respond to Cash Management’s periodic review request.
Closing Replenishable Checking Account
Custodian completes the Custodian Fund Accounting Form and obtains the research participant log.
Custodian obtains the necessary departmental approvals for the Custodian Fund Accounting Form.
The remaining checks are shredded by two individuals and the Check Shred Confirmation statement is signed by both individuals and provided to the Custodian.
Custodian routes the completed/signed Custodian Fund Accounting Form, research participant log, and check shred confirmation to the Dean/Director’s office.
Dean/Director’s office reviews the documents and signs the Custodian Fund Accounting Form.
Dean/Director’s office keeps a copy of the documents for internal records.
Dean/Director’s office sends the original documents via inter-d mail or email to the Cash Management Office (cstdnfnd@bussvc.wisc.edu).
Custodian: UW–Madison employee who is responsible for monitoring the cash advance for research participant studies.
Signer: UW–Madison employee responsible for writing and signing checks to the appropriate recipient and responsible for ensuring all checks are logged and accounted for.
Reconciler: UW–Madison employee who is responsible for performing and submitting monthly reconciliations.
Procedure # 131.2; Rev.: 0 (Effective December 12, 2017) Related Policy:UW-3010 Gift Funds Policy Functional Owner: Financial Information Management, Business Services Contact: Gift Management Accountant, Gift Management Mailbox: giftmgt@bussvc.wisc.edu
This procedure describes the processes for accessing and expending funds deposited in Wisconsin Foundation and Alumni Association (WFAA) funds, and provides examples of typically appropriate and typically inappropriate payments from gift funds.
All UW–Madison employees using gift funds. Campus and Divisional Leadership have a formal responsibility to ensure individuals within their Division(s) using gift funds are fully informed and understand gift use procedures.
The following steps represent the overall process for receiving and processing gifts from the WFAA:
Requests to draw funds from WFAA accounts to the University in payment of expenditures must be made on a WFAA Check Request Form available on the WFAA Advancement Resources web site for those with authorized access.
A Gift Deposit Routing Form must be completed when requesting funds from the WFAA to be deposited into a Fund 233 project. See Section VII of this procedure for further details related to the forms and routing process.
Each form must be printed and routed for signature through the appropriate school/college/auxiliary Dean’s/Director’s Office before it goes to the WFAA.
Both forms are submitted to WFAA for review and approval.
It is recognized that there are events held with the sole purpose of fundraisings, such as an alumni dinner or golf outing.
For fundraising events held, University Divisions are to develop a budget of event proceeds and expenses in advance of the event, and share that information with their financial leadership personnel and the applicable development personnel at the WFAA. (Event proceeds in this context refers to any fees charged for participation in the event. It does not include the estimated donation revenue to be generated by the event. )
The Division will set up a registration merchant account with the WFAA. The event registration will be coordinated and arranged by the WFAA recognizing the registration portal can include the option for the participant to provide additional donor gift funds when paying for the registration fee.
Event expenses that are incurred and allowed to be paid using University funds will be charged to University gift funding projects (e.g. a specific 233 or 533 (Athletics) project) by the Division. Event expenses incurred that are not allowed to be paid using University funds will be submitted to the WFAA for payment to the extent allowable under WFAA policies.
Following the event, the Division will complete and submit a WFAA Check Request Form and a University Gift Deposit Routing Form, and post funds received to the University 233/533 project to cover the expenses charged.
Only in accordance with UW-Madison and WFAA policies and procedures may the WFAA be requested to pay funds directly to a vendor for a University program or purpose. (See table below for examples of appropriate and inappropriate expenditures.)
In such cases, the WFAA will make payment based on a request from the University custodian of the related WFAA fund from which disbursement is requested. This would generally be a School or College Principal Investigator, Department Chair, or Administrative Director.
Requests require appropriate Dean or Director’s office approval prior to submitting the request for payment to the WFAA.
If payment is for the School/College Dean or Auxiliary Director, request for payment requires Chancellor or VCFA office approval, respectively.
The University Division requesting the payment is responsible for maintaining adequate justification of why University funds could not be used to pay for the expenditure. Such justification as well as supporting documentation are considered open University records, subject to public inspection as provided in the Wisconsin Public Records Law. The level of documentation held by the initiator of the payment should be similar to that required for payment through regular University channels.
This listing is illustrative; it is not intended to be an exhaustive list of all potential University operational situations.
Appropriate Expenditures Made by the Foundation These expenses require pre-approval prior to incurring the expense.
Inappropriate Expenditures the Foundation Will Not Pay
Travel reimbursements exceeding University rates, to the extent they cannot be processed by the University with appropriate explanations. (See Hosted meal in excess of University limits visit UW-3039 Business Meals.)
Faculty and graduate student candidate hosting cost when not allowable using University funds.
Moving expenses for new employees allowable under IRS rules and regulations that are not allowable using University funds.
Costs related to school or college board of visitors meetings that are not allowable using University funds.
Cost of alcohol served at events at which other costs of the event are allowable using University funds.
Payment for goods or services to avoid the state bidding process.
Reimbursing travel expenses of employees not in compliance with University policies and procedures (i.e. University employee travel was not booked using the University travel vendor, Fox World Travel or Concur.)
Paying for University events, which are merely social, such as parties, unless the Foundation fund to be used to pay for the event has explicit donor documentation that the funds are intended for such a purpose.
If there is a University business purpose related to the instruction, research and/or service mission of the University, the expenses can generally be paid by the University.
Paying for retirement dinners or flowers for funerals of former department employees, unless the Foundation fund or donor documentation is explicit that the donor intended the funds to be used for such purposes.
Paying for retirement gifts.
Paying for parking tickets of visitors and employees.
Making donations or memorial gifts to non-profit organizations.
Paying for upgrades to first class travel where such upgrades are not allowable under University travel regulations.
Payment for significant others/guests’ attendance at events lacking a legitimate business purpose.
Payments to University employees for services, including awards or honoraria. These must be made through the University’s payroll system.
If the University can process the items being requested for payment under State procurement and travel rules, they must be processed through the University.
Requests by the University for the WFAA to purchase goods and services for University use will be rejected if the goods and services can be obtained through the State purchasing process.
Requests for employee travel expense reimbursement will be rejected if the expenses are reimbursable under University travel policies.
The WFAA will not make payments directly to UW employees for services or honoraria, or make payment directly to recipients for scholarships, fellowships, prizes and similar awards. Such payments must be made through the University.
Some direct payments made by the WFAA will result in taxable income to the recipient.
As required by the Internal Revenue Code, the WFAA will report certain payments to recipients on forms 1099-MISC. In certain cases, the IRS rules deem the University the payer of amounts disbursed by the WFAA. In these cases, payments made by the WFAA will be combined with the payments made by the University for tax reporting purposes.
The parties requesting and approving reimbursement or direct payment must be comfortable that the reimbursement or payment was necessary to support University programs and in compliance with applicable policies and procedures such that they would be comfortable talking to the donor or the press about the reimbursement or payment.
Any requests for payments from the WFAA, whether for transfer to a University account or a direct payment request, which are not clearly appropriate under Section IV of this Procedure will be referred back to the requesting Dean or Director’s Office, and may not be resubmitted for payment without authorization from the Vice Chancellor for Finance and Administration (VCFA) (or designee).
Any resubmission must include supporting documentation justifying why the submission requires reconsideration.
In addition to approval of the Divisional Dean or Director (or his/her financial designee) and the VCFA (or designee), the VCFA (or designee) may require that a resubmission request undergo University legal review and/or review and approval by the Foundation President (or designee)
Procedure # 3010.1; Rev.: 0 (Effective December 12, 2017) Related Policy:UW-3010 Gift Funds Policy Functional Owner: Financial Information Management, Business Services Contact: Gift Management Accountant, Gift Management Mailbox: giftmgt@bussvc.wisc.edu
All UW- Madison employees accepting and receiving gift funds. Campus and Divisional Leadership have a formal responsibility to ensure individuals within their Division(s) accepting gift funds are fully informed and understand gift acceptance procedures.
The following steps represent the overall process for receiving and processing gifts:
Donors who wish to make gifts to the WFAA should be advised to make the check payable to “UW Foundation” or to make payment to the WFAA through the WFAA website. This is done by visiting The Support UW website and clicking on “Give Now” or by contacting the WFAA at uwf@supportuw.org. If the donor would like to make a donation to WFAA via ACH or wire, contact the WFAA gift processing team at help@uwadvancement.org for assistance.
It is acceptable to deposit checks payable to other names with the WFAA if there is clear documentation that the donor intended the check to be a gift to the WFAA or deposited into a fund at the WFAA. That documentation must be forwarded to the WFAA with the check.
A University of Wisconsin Foundation Gift Deposit Form must be forwarded with the checks when they are sent to the WFAA. This form is available on the WFAA’s Advancement Resources web site for those with authorized access.
This form must be printed and routed for signature through the appropriate school/college/auxiliary Dean’s/Director’s Office before it goes to the WFAA.
Where correspondence with the donor will be useful in documenting the intent to give the gift, the correspondence should be attached to the form. Questions regarding the deposit of WFAA checks should be directed to the WFAA’s gift processing team at help@uwadvancement.org.
All gifts made directly to the University and other receipts that will not be routed to WFAA for deposit must be deposited to University accounts. (Example: check received from another University for collaboration on a project):
For checks, complete a UW-Madison Gift Deposit Routing Form, and route to your Dean’s office for processing. Appropriate University deposit procedures should be followed to deposit such funds (Refer to UW-3029 Revenue Accounting Policy).
Questions regarding deposit of gift funds directly to University accounts should be directed to Accounting Services, Gift Management at giftmgt@bussvc.wisc.edu.
Donors may also provide the University with goods/services as in-kind donations. All tangible property gifts received by the University from a donor are to be reported on a Gift in Kind Routing Form. See the UW-3009 Gift in Kind Policy and Procedure 3009.1 for more information.
Whether checks are payable to the University or the WFAA, good internal control procedures must be followed. These include:
Restrictively endorsing checks “for deposit only” immediately upon receipt.
Depositing checks within five days of receipt.
Logging and tracking receipts and verifying posting following processing.
Storing un-deposited funds in a locked desk or safe overnight.
Segregating duties of handling and depositing physical checks with separately assigned review and monitoring duties.
In accordance with the IRS regulations and good donor relationships, all gifts must be acknowledged in writing. The organization that is the recipient of the gift is responsible for providing the donor with the gift acknowledgment (i.e., gifts made to the WFAA must be acknowledged by the WFAA, and gifts made directly to the University must be acknowledged by the University). A sample gift acknowledgment letter can be found on the Gift Management website.
In situations where the donor makes a gift and receives any goods or services in exchange for the gift, such as an alumni dinner or golf outing, the gift is classified by the IRS as a quid pro quo transaction that is partly a gift and partly the purchase of goods and/or services. All solicitation materials produced by the University or the WFAA for donations involving quid pro quo are required to contain information about the tax effect of the contribution as well as a reasonable estimate of the value of the goods and services being delivered to the donor in exchange for the gift.
For joint University-WFAA fundraising activities, work with WFAA personnel in any situation where gifts involve an element of quid pro quo before solicitation materials are distributed.
University Divisions are to develop a budget of fee for service revenues and expenses in advance of the event and to share that information with their financial leadership personnel and the applicable development personnel at the WFAA.
When capital equipment is transferred to another UW–Madison department it is a change in custody. This type of occurrence is not reported as a disposal because the equipment is still in use by another department. Revenue is not generated in the transfer of equipment to another department. If the current custody department has expenses related to the transfer (e.g. packing/unpacking, setting up, re-calibrating, training, etc.) to the new department, the reasonable costs for these expenses may be transferred to the new department.
To record a change of custody between UW–Madison departments, departments must notify Property Control in writing via email. The department initiating the change must indicate the new department, responsible employee, and location for the piece of equipment. Property Control will update the records in the asset management system.
The following steps represent the overall process:
The responsible employee sends written notice to the DPA requesting the change in custody of equipment. The email should indicate the intended recipients name and department.
The DPA forwards the request, via email, to the Department/Division Chair and Property Control for review and authorization of the change in custody.
If the equipment is funded by 133/144 funds, Property Control will contact the Office of Research and Sponsored Programs to verify change of custody is acceptable.
Property Control will notify both the current and new departments and DPAs of approval.
For costs related to packing/unpacking, setting up, re-calibrating, training, etc., the department may initiate cost transfer journal entries or internal billing to recover costs of the change in custody. Capital account codes in the 46xx series are not authorized for these cost transfers. Example of accounting for the capital equipment department transfer: EXAMPLE: Cost transfer (ALLOWABLE)
Debit: Transfer Cost to the New Custodial Department
$XXXX
Credit: Transfer Cost from the Prior Custodial Department
$XXXX
Capital account code, series 46xx, is not permitted for the allowable cost transfers. Departments may recover direct costs incurred to move equipment to a new custodial department (such as decommissioning, transportation, set-up, or recalibration). Direct costs may include, for example, an average hourly rate for a staff member multiplied by the number of hours it took to transport an item. Direct costs should not include administrative overhead. Direct costs should be supported by reasonable estimate and coded to an expense account.
EXAMPLE: Internal sale (NOT ALLOWABLE)
Debit: Internal Bill to the New Custodial Department
$XXXX
Credit: Internal Sale for the Prior Custodial Department
$XXXX
It is NOT ALLOWABLE for departments to “sell” equipment in their custody to other departments by processing an internal billing. Such transactions lack economic substance because they do not represent arm’s length transactions between independent parties. UNDER NO CIRCUMSTANCES may a change in custody be recorded as a revenue transaction in the ledger.
Property Control will update the records in the asset management system.
The Department Property Administrator (DPA) is responsible for notifying Property Control of capital asset location changes. A move to a different room or building, but staying in the custody of the same department, is considered a location change. See Procedure 3008.9 – Change in Custody to Another Department if the location change is due to a permanent change in department custody.
The following steps represent the overall process:
The responsible employee or user of the capital equipment is responsible for notifying the DPA of a location change (e.g. room and/or building) of capital equipment through written notice via email.
The DPA completes the Property Transaction Form with the information related to the change in room and/or building location of the capital equipment.
The Property Control Office updates the records in the asset management system.
To maintain a controlled environment, accurate records, and fulfill contractual obligations, departments must receive written approval from Property Control prior to disposing of capital equipment. Property Control must record how equipment is disposed/retired. Property Control cannot delete item records, but must assign a code to indicate a retirement reason. Property Control has defined 10 retirement reasons, each of which has a corresponding code.
The retirement reasons fall into two general categories: accountable (pro-active decision made by department to retire equipment) and unaccountable (no decision made by department to retire equipment), in addition to potential recordkeeping reasons (correcting a record error).
This procedure applies to all UW–Madison departments. It should be understood by all users of, or employees responsible for capital equipment, Department Administrators, DPAs, Department Chairs, Directors, Deans, Chief Financial Officers, and other employees responsible for capital equipment.
The following steps represent the overall process:
Prior to disposing of capital equipment, the responsible employee or any other department employee in custody of the equipment must notify the Department Property Administrator (DPA).
Accountable disposition reasons (decision by department to retire equipment)
Items are defined as surplus when it a) does not function any more, b) is obsolete, c) is not useful any more, or d) is not needed by the Department in the foreseeable future.
Items will be traded for credit on purchase of a like item: Departments may trade in equipment for the purchase, not leasing, of like items (e.g. lab equipment for lab equipment). Departments should notify Division of Business Services Purchasing Services of their intent to trade equipment during the requisition process, as well as should work with Purchasing prior to negotiating any new purchase or trade-in allowance. In addition, the Disposition Request Form must be submitted to address the records of the current asset and confirm there are no contractual restrictions on the equipment that must be addressed before committing to trade-in. Please note the following list of exceptions for trade-ins:
UW-titled property cannot be traded on the purchase of sponsor-titled property.
Sponsor-titled property cannot be traded in without prior authorization from the sponsor, RSP, and Property Control.
Departmental vehicles cannot be traded in.
Items will be cannibalized for parts: Department would like to dismantle an asset and reuse parts for another asset. If equipment is sponsor-titled, approval must be obtained from the sponsor prior to being dismantled. The department must follow standard University surplus procedures for any unused parts not kept by the department.
Items will be returned to a vendor: Departments may return equipment to a vendor for replacement or solely returned (e.g. defective, replaced under warranty or returned because equipment does not perform as vendor claimed). When an item is being replaced with the same model, a new asset barcode tag will be issued for the same inventory record, and the DPA will need to update the serial number information upon arrival of the replacement equipment. If the item is not being replaced but returned for credit, the DPA should notify Property Control, who will retire the asset and make the appropriate financial record adjustments.
Items will be delivered to a sponsor per contract terms: Departments may deliver assets constructed in-house to a sponsor per contractual terms.
Unaccountable disposition reasons (no decision made)
Items have been lost: Departments may learn that an asset is missing but there is no evidence of theft. Most commonly, this occurs after a DPA inventories equipment. Assets should only be reported as lost after an exhaustive effort has been made to find them (refer to Procedure 3008.6 – Physical Inventory).
Items have been stolen: Departments may learn that an asset is stolen or presumed stolen. If so, the department must report the theft/presumed theft to the local Police Department (most often UWPD) and have their DPA submit the disposition request to Property Control. Property Control will provide the information to Risk Management.
Items have been destroyed: Departments may learn that an asset has been destroyed due to fire, flood, vandalism, etc. If so, the department should notify both Property Control and UW-Madison Risk Management, which is responsible for insurance claims.
Recordkeeping reasons
Items should be removed from records because Property Control should not have entered them: Departments may learn of an asset that should not have been entered into records by Property Control. (e.g. non-capital item such as lab supplies, or permanent fixture should that have been capitalized as part of a building.).
The DPA and the Dean, Director, or designee sign the Capital Equipment Disposition Request.
The DPA sends the completed request form to Property Control.
Property Control will review the request for:
Completeness.
Appropriate signatures. Note: Signatures do not guarantee Property Control will authorize disposition, but indicates the department supports the disposition request.
Potential restrictions on disposition. If equipment is grant-funded, Property Control will request UW-Madison Research and Sponsored Programs to confirm whether contractual restrictions exist. If equipment is reported as hazardous, Property Control will request UW-Madison Environment, Health and Safety confirm whether safety restrictions exist.
If no restrictions exist, Property Control will authorize disposal and notify DPA in writing.
DPA notifies the person requesting the asset’s disposition that the request is approved and if the asset barcode tag can be removed.
Property Control will document the retirement reason in the asset management system. Depending on the retirement reason, Property Control may forward the completed request:
to SWAP, when items have become surplus to the department.
to Purchasing Services, if the item will be traded in for credit on purchase of a like item or returned to vendor.
to Risk Management, if the item has been destroyed.
For surplus dispositions, the DPA contacts SWAP by submitting a Surplus Request Form, which will assess the item’s suitability for resale.
If SWAP deems item suitable for re-sale, they will arrange pick-up and advise next steps with the DPA. If surplus items are not suitable for resale, SWAP advises DPA of alternative and acceptable options.
DPA’s are responsible for working with appropriate facilities personnel at their location to establish secure, clearly distinguishable capital equipment pickup areas so that SWAP/FP&M personnel can easily determine what capital equipment items are to be picked up.
1) Prior to disposal, notify DPA of intent to dispose of capital equipment.
X
2
2) Complete Capital Equipment Disposition Request Form.
X
3
3) Sign the form.
X
X
4
4) Send the completed form to Property Control.
X
5
5) Review the request. Confirm no restrictions exist on disposal.
X
X
6
6) If no restrictions exist, authorize disposal and notify DPA in writing.
X
7
7) Notify requestor that the accountable disposition may proceed, and remove the asset barcode tag
X
8
8) Indicate the retirement reason in the asset management system. Dispositions that included trade-ins, casualty lossesor identified as hazardous will beforwarded to Purchasing Services, Risk Management or EHS respectively.
X
9
9) If the item’s disposition was approved as “surplus”, contact SWAP for their assessment of suitability for re-sale.
X
10
10) If surplus items are suitable for SWAP resale, arrange pick-up and advise DPA. If surplus items are NOT suitable for resale, inform DPA of alternative and acceptable options.
X
11
11) Reviews losses. Use judgement to allow or disallow loss removal.
X (may be consulted)
X
12
12) Notify the divisional Chief Financial Officer of all unaccountable dispositions
Periodically, Department Property Administrators (DPAs) must inventory capital equipment in their department’s custody. Property Control coordinates inventories, including scheduling, training, and providing capital equipment lists to facilitate the process. DPAs must oversee or supervise the work of employees who conduct inventories within their department. Employees who conduct inventories must verify items by direct sighting unless the items are off-campus, in which case an email from the responsible person is sufficient.
This procedure applies to all UW–Madison departments. It should be understood by Department Managers, DPAs, Department Chairs, Directors, Deans, and employees responsible for equipment.
The following steps represent the overall process of conducting a physical inventory and reconciliation:
Property Control schedules departmental inventories each fiscal year. Departmental inventories are spread out over the entire year skipping June and July due to fiscal year end. The selection criteria for annual inventories will follow UW System Administrative Policy 334.C.
Property Control will notify DPAs of upcoming inventories and propose an inventory timeline with a start and completion date at least one month in advance, with a copy to the divisional Chief Financial Officer.
If a proposed schedule or timeline is not feasible, DPAs can request to reschedule. Property Control will be as flexible as possible, recognizing the needs of all campus departments currently scheduled.
DPAs may delegate work to other employees (including student employees) so long as the DPA supervises the work. To inventory a department’s items, employees must:
Observe the item by direct sighting.
Document their observation of the item. Property Control will facilitate this documentation by providing a barcode scanner and/or capital equipment list.
If items are off-campus, employees must obtain written confirmation from the items’ responsible person indicating that the item is still intact, are in his or her custody, and identify/confirm present location.
If items are on loan to another institution as part of an active UW loan agreement, employees should indicate this. Loaned items are not subject to inventory.
Property Control coordinates inventories including training and providing equipment lists. Property Control uses a two-phase approach:
Initial search.
Final search for unaccounted items and subsequent reconciliation.
Property Control will first request that the DPA conducts an initial search. At the start of the initial search, Property Control provides a capital equipment list, barcode scanner, instruction sheet, and due date by which to return the scanner to Property Control.
During the initial search, DPAs or others supervised by the DPA use the scanner to verify items by scanning the tags affixed to equipment.
Upon the due date, Property Control collects the barcode scanner and loads results to update the capital equipment inventory records.
When items are not accounted for during the initial search (this outcome is expected at most departments due to volume and sharing equipment amongst researchers), Property Control will request the DPA conduct a final search for the unaccounted items. Property Control provides a printed unaccounted items listing. The DPA has 15 business days to complete the final search and return documentation to Property Control.
During the final search, DPAs or others supervised by the DPA should check items off the printed list by hand as they verify them.
If unaccounted items are determined to have been disposed of, DPAs should attempt to determine what happened to the item, completed a Disposition Request Form indicating the reasons for disposal, and attach supporting documentation to the disposition (e.g. a pick-up request form if items disposed through SWAP).
If unaccounted items cannot be found and DPAs cannot determine what happened to them, DPAs should indicate the items as lost on the Disposition Request Form. A concerted effort should be made to find items before simply declaring the items “lost”. The Department will attest to these efforts on the Disposition Request Form by marking the attestation boxes under the lost section of the Disposition Form.
For all disposed items, DPAs must sign and obtain the signature of the Department Chair, Director, or designee on the Disposition Request Form. Two signatures are required to ensure adequate segregation of duties in authorizing removal of unaccounted items that were determined to have been disposed or lost during the final search.
Upon the due date, Property Control collects the completed unaccounted items listing.
Property Control reviews all losses to determine eligibility for removal from records as “lost”. Property Control may allow items to be removed as lost if:
they do not belong to a sponsor, and
they are more than three years old, based on the date of acquisition.
If Property Control determines that an item is ineligible to be removed from records as “lost”, Property Control will ask the department to notify the UW Police Department. Property Control will require a copy of an official police report before deactivating the item from records.
Property Control will enter all results into records and provide a summary of department’s inventory results to the DPA, with a copy to the Department Chair/Administrator and divisional Chief Financial Officer.
June 18, 2018 – Reference UW System Administrative Policy 334.C for physical inventory selection criteria.
Jan. 19, 2021 – Changed Procedure Number to 3008.6 from 110.6
Procedure # 3008.5; Rev.: 0 (Effective January 1, 2017) Related Policy:UW-3008 Capital Equipment Functional Owner: Property Control, Business Services Contact: Property Control Mailbox, property@bussvc.wisc.edu
UW–Madison departments must code upgrade purchases to 46XX accounts if all of the following criteria are met:
Upgrades must be made on existing capital equipment.
Upgrades must have aggregate costs of $5,000 or more, by themselves, regardless of the cost of the existing equipment being upgraded.
Upgrade must result in either:
A substantial increase in the functionality of equipment, which allows it to function or perform tasks that it was previously incapable of performing and extends the useful life of the asset.
A substantial increase in the efficiency of the equipment, that is, an increase in the level of service provided by the equipment without the ability to perform additional tasks, and extends the useful life of the asset.
If equipment vendor’s software upgrades cost $5,000 or more and result in in either of the above described gains, they can be a qualified capital equipment upgrade. For UW–Madison implementation simplicity and clarity under White House OMB Uniform Grant Guidance § 200.313 (d) – equipment, repairs or maintenance costing $5,000 or more do not qualify as a capital equipment upgrade.
UW–Madison departments may obtain upgrades as either purchased complete or fabricated upgrades. If purchased complete, the qualified upgrade must reference the asset tag number of the existing capital equipment item. For fabricated upgrades, if the existing capital equipment was fabricated, departments cannot use the prior Asset ID number, they must obtain a new Asset ID number. As with other fabrications, departments must code parts and labor to the 4670 account and submit Capital Equipment Fabrication Request Form to obtain a new Asset ID number associated with the fabricated upgrade. The request form needs to reference the asset barcode tag number of the existing capital equipment item that is being upgraded. Property Control routinely reviews 46XX purchases. For upgrades, Property Control establishes a new inventory record associated with the existing inventory record. Property Control does not assign or mail a new asset barcode tag for upgrades if the existing capital equipment is already tagged.
This procedure applies to all UW–Madison departments that upgrade existing capital equipment. It should be understood by department managers, DPAs, department purchasing and financial personnel, Department Chairs, Directors, Deans, CFOs and employees responsible for equipment in these departments.
The following steps represent the overall process:
Department financial staff code upgrades to the 46XX accounts in the UW System Chart of Accounts and reference the asset barcode tag number on the existing equipment being upgraded.
Upgrades must be made on existing capital equipment.
Upgrades must have aggregate costs of $5,000 or more, by themselves, regardless of the cost of the existing equipment being upgraded.
Upgrade must result in either:
A substantial increase in the functionality of equipment which allows it to function or perform tasks that it was previously incapable of performing and extends the useful life of the asset.
A substantial increase in the efficiency of the equipment, that is, an increase in the level of service provided by the equipment without the ability to perform additional tasks and extends the useful life of the asset.
If an upgrade is to be fabricated over time, the department financial staff must code parts and labor to the 4670 account and the employee responsible for the fabricated upgrade must work with their DPA to submit the Capital Equipment Fabrication Request Form.
Property Control reviews capital purchases at the end of each month. For upgrades, Property Control attempts to find the asset barcode tag number of the existing equipment being upgraded. Property Control establishes a new inventory record associated with the existing inventory record.
If Property Control cannot obtain needed information, they will ask for more information from the DPA.
If Property Control believes an item does not meet the required criteria, they will not establish an inventory record. Instead, they will contact the DPA and department financial personnel to investigate. If it is confirmed as not meeting the criteria, Property Control will complete a journal entry to reassign the purchase to an appropriate general ledger account. Property Control will not establish inventory records for repair and maintenance costs (e.g. replacement parts) because these do not increase equipment value under Generally Accepted Accounting Principles.
If needed, Property Control will assign or mail a new asset barcode tag. Usually a new asset barcode tag is not needed for upgrades because the existing capital equipment being upgraded is already tagged.
1) Code qualified capital equipment upgrades to 46XX accounts, reference asset barcode tag number of existing equipment being upgraded.
X
2
2) If needed, complete Capital Equipment Fabrication Request and send to Property Control.
X
X
3
3) Review 46XX activity and establish upgrade inventory record associated with existing inventory record.
X
4
4) If necessary, ask DPA for more information.
X
5
5) If necessary, ask department financial personnel for clarification of purchases coded to capital equipment. Complete journal entry to reassign purchases that do not meet upgrade criteria to appropriate account.
X
6
6) Assign and mail asset barcode tag to the DPA (only if existing equipment is not already tagged).
X
7
7) If Property Control issues an asset barcode tag, affix per Procedure 3008.1.
Procedure # 3008.4; Rev.: 0 (Effective January 1, 2017) Related Policy:UW-3008 Capital Equipment Functional Owner: Property Control, Business Services Contact: Property Control Mailbox, property@bussvc.wisc.edu
Some departments internally fabricate custom pieces of equipment. When fabricating an equipment item with aggregate costs of $5,000 or more and that meets the definition of capital equipment, UW–Madison departments must code component parts and direct labor purchases to the 4670 (Fabrication in Progress) account in the UW System Chart of Accounts. In order to correctly assign purchases to an in progress fabrication, an Asset ID number must be created by completing Capital Equipment Fabrication Request Form and using the assigned Asset ID number for all qualifying purchases. Property Control routinely reviews purchases and will contact departments to gather more information before establishing inventory records.
This procedure applies to all UW–Madison departments that fabricate equipment, which may require the completion of the fabrication and ability to initiate the use of the capital equipment over a period of time. The period of time can range from weeks to years, depending on the complexity of the capital equipment being fabricated. It should be understood by Procurement Specialists, DPAs, Department Chairs, Department Managers, Directors, Deans, CFOs, department financial staff and employees responsible for fabricating equipment.
The following steps represent the overall process:
The employee responsible for fabricating a new piece of equipment expected to cost $5,000 or more should contact their Department Property Administrator (DPA) to confirm the anticipated equipment will meet the definition of capital equipment, and obtain an Asset ID number by working with the DPA to complete Capital Equipment Fabrication Request.
The DPA sends the form to Property Control for review. Property Control reviews the submission and confirms title requirements.
If title is vested with a sponsor, Property Control will notify the Department and DPA.
If the fabrication is to be paid for with a sponsored award, Property Control will route the request to Research and Sponsored Programs (RSP) for additional review.
After the completed Capital Equipment Fabrication Request is received, Property Control will establish an inventory record, assign an Asset ID number, and notify the responsible employee, DPA, department financial personnel, and RSP. Although an Asset ID number will be established for fabricated equipment, Property Control will not assign or mail a physical tag at this time.
During fabrication, department financial staff must code components and direct labor to the 4670 account in the UW System Chart of Accounts and always reference the Asset ID number. All qualified components or direct labor should be coded to 4670, regardless of cost. 4670 is the only capital purchase account for which it is permissible to code single item purchases less than $5,000. The cost of replacement/spare parts for the equipment should not be coded to 4670 as these items are considered repair or maintenance expenses.
Property Control reviews 4670 purchases at the end of each month. Property Control attempts to find the referenced Asset ID number and accumulate costs on the inventory record. The following is where Property Control will look to find the Asset ID number:
Purchase Order: In the requisition comments field in the External Requisition Generator, which feeds into BusPO.
P-Card: The current Purchasing Card Capital Equipment Documentation Form. This form generates an email to the Property Control inbox (property@bussvc.wisc.edu).
Cost Transfer Tool: The comments field in the Cost Transfer Tool.
If Property Control cannot find the Asset ID number, they will ask department financial personnel to provide this.
Property Control examines 4670 purchases to ensure they meet four criteria:
Items are fabricated over a period of time, which can range from weeks to years.
Component parts must be attached to, or internal to the completed fabrication and essential for the equipment’s operation (i.e. if the component is removed, the equipment will not operate correctly). Replacement/spare parts cannot be capitalized, they must be expensed. Generally, software is not capitalized, but software can be considered a capital component if it serves as the operating system for the fabricated equipment.
Direct labor must be hands-on assembly labor and traceable to the equipment (e.g. Physical Sciences Lab). Direct labor would not include expenses such as design, salaries, or personnel expense, as these would normally be considered part of indirect costs.
For electronic systems, component parts must be attached in a manner of dependency integral to the functional operation of the fabrication. Interchangeable component parts purchased during the fabrication period will not be disconnected from the electronic system and/or used in a similar manner with another system. The component parts will be used in the same electronic system for the entire duration of the system’s life.
These criteria are in place to ensure that fabricated items are properly accounted for, can subsequently be located, and valuations can be adequately supported. Please contact the Property Control Office if you have any questions or may have an exception to the criteria listed above. Otherwise, if Property Control thinks a purchase does not meet criteria, they will contact the DPA and department financial personnel to investigate. If it is determined that it isn’t a qualifying purchase, Property Control will complete a journal entry to reassign the purchase to an appropriate account.
Because fabrications do not begin to depreciate until completion, they can be at risk for impairment if they are not completed on schedule. To mitigate this risk, Property Control will request, once per year, that DPAs with fabrications open past their estimated completion date contact the responsible employee for the fabrication to confirm in writing that the equipment is still not in use and no impairment has occurred. The responsible employee should also provide a revised estimate of the date the fabricated equipment will be ready to put into initial use.
When the fabricated asset is ready to be placed into initial service, the employee responsible for the fabricated equipment must notify their DPA, who will inform Property Control in writing.
Property Control will aggregate all costs during the fabrication period to establish the value of the capital equipment, and change its status to “in-service”, which will start depreciation. Property Control will also assign and mail an appropriate asset barcode tag (red or blue) to the DPA.
After the fabricated asset is placed into initial service, further purchases cannot be coded for capitalization unless the purchases meet the criteria for a qualified upgrade to an existing equipment item. Qualified upgrades may be fabricated or an item costing $5,000 or more. A fabricated upgrade requires a new Asset ID number to correctly capture upgrade costs (refer to Procedure 3008.5 – Upgrades to Existing Capital Equipment).
1) Complete and sign Fabrication Request
Form and send it to Property Control, who
will review submission and confirm title
requirements.
X
X
2
2) Fabrication Request Form is reviewed to
confirm title requirements.
X
X
3
3) Inventory record established, Asset ID
number assigned, responsible employee,
DPA, department financial personnel, and
RSP are informed.
X
4
4) Code components and direct labor to 4670,
referencing the Asset ID number
X
5
5) Review 4670 account activity and
accumulate cost on the inventory record.
X
6
6) If necessary, ask department financial
personnel for the Asset ID number.
X
7
7) If 4670 purchases do not appear to meet
criteria, investigate with department
financial personnel. If confirmed invalid,
complete journal entry to reassign to
another account.
X
8
8) Annually, follow up with DPA if a fabrication
is open past its estimated completion date.
X
9
9) When fabricated asset is ready to be placed
into service, notification sent to DPA, who
will notify Property Control
X
X
10
10) Aggregate all fabrication costs, capitalize
equipment and start depreciation by
changing system status to “in-service”.
Assign and mail asset barcode tag to the
DPA.
X
11
11) Affix asset barcode tag per Procedure 3008.1.
X
12
12) After equipment placed into initial use,
disallow future code 4670 purchases (except
qualified upgrades that cost more than
$5,000).
With prior approval from their respective Dean’s Office, departments may transfer-in equipment from another institution as part of a new hire’s recruitment package. The term “transfer-in” refers to capital equipment received from another institution (usually another university) either at no cost to UW–Madison, or at an agreed upon purchase of existing (used) equipment from a new hire’s prior institution. Purchase is only allowed if the equipment already exists at the new hire’s prior institution. UW–Madison departments that receive transfers-in are responsible for notifying Property Control in writing.
Property Control will create a new inventory record for individual transferred items valued at $5,000 or more that meet the definition of capital equipment. For $0 transfers, Property Control will record items at the book value provided by the transferring organization. For purchases, Property Control will record items at the item level sale price. If this is not possible, Property Control will record items at market value estimated by the receiving department.
This procedure applies to all UW–Madison departments. It should be understood by Department Managers, Department Property Administrators (DPAs), Department Chairs, Directors, Deans, Division CFOs and employees responsible for equipment.
The following steps represent the overall process of recording and tagging capital equipment items that transfer-in with a new hire from their prior institution:
Employees (Department Chairs, Department Administrators or new hires) who anticipate transfer-in of equipment from another institution should notify their Department Property Administrator (DPA) and provide information on the transaction (e.g. sale or $0 transfer, description of capital equipment items, new hire’s name, former department’s name, and point of contact for approving the transfer at the other institution, etc.).
DPA notifies Property Control of the transfer-in via email. For capital equipment transfers under a purchase scenario, notify Division of Business Services, Purchasing Services to assist with negotiation of the purchase price of the equipment. When the UW-Madison department codes the purchase to a capital equipment account code, payment to the new hire’s prior institution will trigger Property Control to follow-up under the normal capital equipment purchase process. Together, Property Control and the DPA will establish the completed records (refer to Procedure 3008.1 – Recording and Tagging Capital Equipment).
For $0 transfers, Property Control will attempt to contact the transferring organization’s property control function to obtain book value of transferring equipment.
If Property Control cannot contact the transferring organization, Property Control will request the new hire’s department provide an estimated market value of the transferring equipment.
Department financial staff should estimate market value and gather supporting documentation for the estimate. This may include but is not limited to:
Independent appraisal
Invoice or receipt associated with similar purchase
Market pricing for similar equipment
After determining value, Property Control establishes inventory records for items valued at $5,000 or more. Property Control obtains information from the transferring organization and the new hire’s department.
Property Control will issue a unique asset barcode tag and generate a Capital Equipment Confirmation Form for each transferred capital equipment item. Property Control will mail asset barcode tags and Capital Equipment Confirmation Forms to DPAs, in batches, monthly.
1) Notify DPA of pending transferred
capital equipment and associated
equipment description and contact
information for person at the new hire’s
prior institution authorizing the transfer.
X
X
2
2) Notify Property Control in writing. Notify
Purchasing Services to negotiate the
purchase price of the equipment.
X
3
3) If a $0 transfer, attempt to contact
transferring organization to obtain book
value.
X
4
4) If cannot contact transferring
organization, request estimated market
value.
X
5
5) Estimate market value, support
estimate.
X
6
6) Establish inventory records for
transferred items valued at $5,000 or
more.
X
7
7) Create Capital Equipment Confirmation
Form and send it, along with appropriate
asset barcode tag (red or blue), to the
DPA for each transferred asset entered
into the system.
X
8
8) Pick up and follow balance of Procedure
3008.1 after the point that Property
Control sends the Capital Equipment
Confirmation Form (step #4).