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Recording and Tagging Capital Equipment Procedure
Procedure # 3008.1
Rev.: 0
Effective Date: January 1, 2017

Download 3008.1 Recording and Tagging Capital Equipment Procedure (pdf)

Related Policy: Capital Equipment Policy
Functional Owner: Property Control, Business Services
Contact: Property Control Manager: (608) 890-3131, Property Control Mailbox: property@bussvc.wisc.edu

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Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Contact Roles and Responsibilities
V. Definitions
VI. Related References
VII. Revisions

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I. Procedure Statement

UW-Madison departments must code capital purchases to 46XX accounts in the UW System Chart of Accounts. All capital purchases are routinely reviewed by Property Control upon payment as the trigger to identify new capital equipment items that have been acquired by campus. To later aid in physically identifying capital equipment, Property Control will assign a unique asset barcode tag to be affixed to each item. Asset barcode tags are color-coded based on whether the University owns the asset (blue – “Property of University of Wisconsin”) or a sponsor owns the asset (red – Property of Federal Government”). Assets that belong in whole or in part to a sponsor must be tagged with the red Federal ownership tag. Property Control will mail asset barcode tags along with a Capital Equipment Confirmation Form to the Department Property Administrator (DPA) with instructions for completing the recording of new capital equipment items in the University’s asset management system. Fabricated capital equipment assets (refer to Procedure 3008.4 Fabricated Capital Equipment) are tagged once the item is placed into initial service. Qualified capital equipment upgrades are generally not issued an additional asset barcode tag (refer to Procedure 3008.5 Upgrades to Existing Capital Equipment). If Property Control has not mailed an asset barcode tag for a newly acquired item within a reasonable amount of time, the DPA should contact Property Control with the purchase order number or other referenced information. Property Control will verify if payment has been made or that the correct account code was assigned to the purchase.

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II. Who is affected by this Procedure

This procedure applies to all UW-Madison departments. It should be understood by department managers, DPAs, Principal Investigators (PI’s), lab managers, department chairs, directors, deans, and all employees responsible for capital equipment.

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III. Procedure

The following steps represent the overall process of inventorying new asset purchases:

1. Department financial staff must code capital purchases to the 46XX accounts in the UW System Chart of Accounts. No additional reporting of purchases is necessary.
2. Property Control reviews capital purchases at the end of each month in WISDM and establishes partial inventory records for each item purchased, obtaining information from:
   1. Purchase Orders: Purchasing System, Image Now
   2. P-Card: Purchasing Card Capital Equipment Documentation Form
   3. Direct payments/payments to individual: Image Now
   4. MDS Orders: Shop@UW Shopper Lookup Website
   5. Inter-departmental billings: Journal Entry Tool comments
   6. Cost transfers: Cost Transfer Tool Research and Sponsored Programs Cost Transfer Policy.
3. If an item does not meet the capital purchase definition, Property Control will not establish an inventory record. Instead, Property Control will contact department financial staff to gather additional information. If confirmed as a non-qualified capital equipment purchase, Property Control will complete a journal entry to reassign the purchase to an appropriate account. If confirmed as a capital equipment purchase, the capital equipment processes will continue.
4. Property Control will issue a unique asset barcode tag and generate a Capital Equipment Confirmation Form for each item. Property Control will mail asset barcode tags and Capital Equipment Confirmation Forms to DPAs, in batches, weekly.
5. DPA affixes asset barcode tag. For best adherence, DPAs should affix asset barcode tags onto a clean, dry surface when temperatures are above freezing. Asset barcode tags should be placed onto the equipment in a location that will be readily visible on an on-going basis. This will also make scanning the asset barcode tag during subsequent physical inventories much easier. If an asset barcode tag cannot be affixed to the item, then it should be affixed in an alternate location/method within the department that the DPA maintains. Qualifiers for assets that asset barcode tags cannot be affixed to include:
   1. Item is too delicate to tag (e.g. laser optics)
   2. Tag would de-face or de-value the asset (e.g. antique piano)
   3. Tag would make the asset un-usable (e.g. centrifuge rotor would be unbalanced by tag)
   4. Asset is not accessible (e.g. satellite dish on tower, roof-mounted asset without stair access)
   5. Asset shape or size prohibits tagging (e.g. asset smaller than the tag)
   6. Asset does not have compatible surface/environmental conditions (e.g. environment too hot/cold/wet)
   7. Asset is subsequently impractical to scan (e.g. asset will be in space, buried underground)
6. DPAs are responsible for affixing asset barcode tags or explaining on the Capital Equipment Confirmation Form if tag cannot be affixed, changing/confirming the accuracy of the information prelisted on the form (e.g. building and room location,equipment’s responsible employee) and recording balance of the asset information unavailable to Property Control (e.g. serial #). DPA should return the Capital Equipment Confirmation Form to Property Control via mail or email within two (2) weeks. DPAs are responsible for completing these tasks, but may engage the assistance of others (including the responsible employee).
7. Upon return of the Capital Equipment Confirmation Form, Property Control will update the equipment record in the asset management system. If Property Control does not get confirmation that the asset barcode tag has been affixed after two (2) weeks, a follow up email will be sent to the DPA.
8. If the DPA has not received an asset barcode tag from Property Control for a newly acquired item within a reasonable time period, the DPA should contact Property Control with the purchase order number or other referenced information. Property Control will verify if payment has been made or that the correct account code was assigned to the purchase.

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IV. Contact Roles and Responsibilities

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V. Definitions

• Capital Equipment Definitions

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VI. Related References

• UW System Chart of Accounts
• Procedure 3008.4 Fabricated Capital Equipment
• Procedure 3008.5 Upgrades to Existing Capital Equipment
• Research and Sponsored Programs Cost Transfer Policy

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VII. Revisions

Procedure Number	110.1
Date Approved	January 1, 2017
Revision Dates	1/19/21 – Procedure Number changed to 3008-1 from 110.1

Asset Loan Agreement Procedure
Procedure # 3008.10
Rev.: 0
Effective Date: January 1, 2017

Download 3008.10 Asset Loan Agreement Procedure (pdf)

Related Policy: Capital Equipment Policy
Functional Owner: Property Control, Business Services
Contact: Property Control Manager: (608) 890-3131, Property Control Mailbox: property@bussvc.wisc.edu

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Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Contact Roles and Responsibilities
V. Definitions
VI. Related References
VII. Revisions

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I. Procedure Statement

To maintain control and assign responsibility for capital equipment removed from University premises, Property Control must authorize the loan of, and track assets. Completion of Asset Loan Request Form is required when equipment is to be borrowed for more than 30 days and will reside at a location not directly associated with the University. Property Control must authorize loans before equipment is removed from campus. Risk Management should also be notified for executing appropriate insurance and risk management activities.

• Equipment may be loaned for a specified period (maximum five years), and the borrower must sign an Agreement for Loan of University Property within 30 days prior to the loan.
• Property Control will monitor loaned equipment aging and will work with the DPA 30 days prior to the end of the agreement term to determine and formalize if the loan will be renewed or ended. Property Control will require a new agreement to extend beyond one year.

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II. Who is affected by this Procedure

• Departmental staff members, Responsible Employee
• DPA
• Property Control
• Borrowing institution or entity
• Risk Management

III. Procedure

The following steps represent the overall process:

1. The employee responsible for the equipment notifies the DPA for guidance on the capital equipment loan procedures, as well as contacts Risk Management to inquire about insurance guidelines.
2. The DPA works with the Responsible Employee to gather the terms of the loan (i.e. the duration of the loan) and contact information for the borrowing institution or entity to which the capital equipment will be loaned.
3. The DPA completes the Form 110.10F Asset Loan Request Form and obtains signatures of approval from Department Chair/Dean/Director. The form is submitted to Property Control.
4. Property Control reviews the request and the funding sources of the equipment. If funding sources include sponsored funding, Property Control will verify with RSP to confirm if equipment can be loaned to another institution or entity. Equipment that is owned by a sponsor (e.g. title vests with Federal agency) cannot be loaned to another institution or entity without written consent from the sponsor.
5. Property Control authorizes the equipment loan and notifies the DPA, the Responsible Employee, and Department Chair/Dean/Director.
6. Property Control prepares an Agreement for Loan of University Property, which is to be signed by the borrowing institution. The agreement should be signed by the borrowing institution or entity at least 30 days prior to the loan.
   1. Property Control will work with the DPA, Responsible Employee and Department Administrators to coordinate and obtain sign-off from the borrowing institution. The responsible party for obtaining approval is the individual negotiating the loan of equipment to the borrowing institution. This is most often the Principal Investigator, but may be other parties. Property Control intends to team with the DPA to ensure appropriate personnel approve the loan prior to allowing the equipment to be borrowed.
7. Upon receipt of signed Agreement for Loan of University Property, Property Control provides a signature and sends a copy of the fully executed loan agreement to the DPA and borrowing institution or entity.
8. Property Control notifies the DPA and Responsible Employee that loan agreement is signed and the equipment can be shipped to the borrowing institution or entity.
9. Property Control updates the asset management system to indicate that the equipment has been loaned to another institution or entity.
10. The DPA, Building Manager and/or Responsible Employee coordinate shipment of capital equipment to the borrowing institution or entity.
11. When the loan agreement approaches its end date, Property Control will contact the DPA to initiate conversations to determine whether an extension of the loan agreement is necessary.

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IV. Contact Roles and Responsibilities

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V. Definitions

• Capital Equipment Definitions

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VI. Related References

• Asset Loan Request Form

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VII. Revisions

Procedure Number	3008.10
Date Approved	January 1, 2017
Revision Dates	09/12/18 – Updated Form 110.10F 01/19/21 – Changed Procedure Number to 3009.10 from 110.10

Departing Employee Request to take Capital Equipment to a New Institution Procedure
Procedure # 3008.11
Rev.: 0
Effective Date: January 1, 2017

Download 3008.11 Departing Employee Request to take Capital Equipment Procedure (pdf)

Related Policy: Capital Equipment Policy
Functional Owner: Property Control, Business Services
Contact: Property Control Manager: (608) 890-3131, Property Control Mailbox: property@bussvc.wisc.edu

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Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Contact Roles and Responsibilities
V. Definitions
VI. Related References
VII. Revisions

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I. Procedure Statement

This document covers procedures to be followed when a departing employee requests to take capital equipment with them to a new institution. In all cases, Request for Authorization to Transfer/Sell University Property to a Departing Employee’s New Institution and an Agreement for Transfer/Sale of University Property must be completed and signed prior to equipment being shipped to the new institution. Please note, Departments and Divisions may require additional review, approval, and discussion with the Deans Office when a departing employee requests to take capital equipment with them to a new institution.

Criteria for Determining Authorization of Transfer/Sale of Capital Equipment

Department Chair/Deans Office/Director/Designee and Property Control may authorize departing employees to take University equipment if all of the criteria are met:

• The departure of equipment does not adversely affect instructional needs, graduate students or other research remaining at UW-Madison.
• Formal resignation has been submitted by the departing employee and received by the Department Chair/Supervisor.
• The departing employee was a permanent, University employee, including Faculty and Academic Staff roles. Student employees and zero-dollar appointees are excluded from this definition.
• The departing employee’s role was directly related to at least one element of the University’s core mission (instruction, research, or public service). This excludes administrative roles.
• The capital equipment will be used for the same purpose at the new institution.
• The new institution is another institution of higher education or academic research. Equipment cannot be transferred to a for profit or start-up business.
• Equipment does not contain any UW-Licenses, UW-Proprietary Software, nor any sensitive data.

If all of the above criteria are met and the Department Chair, Dean/Director/Designee approves the transfer/sale of equipment, departments must complete Form 110.11F Request for Authorization to Transfer/Sell University Property to a Departing Employee’s New Institution.

Criteria for Determining if a Transfer of Equipment is Acceptable

Equipment may be transferred to the departing employee’s new institution under the following circumstances. The transfer of equipment is also referred to as a zero-dollar, cost transaction.

• The capital equipment item was solely funded by an active/on-going, sponsored research project AND the research project is moving with the departing employee to their new institution. Expenses for all packing, shipping and insurance costs are covered by the new institution.
  • Note: An active or on-going project is defined as a contract/grant/agreement having the same sponsor, that is currently in progress having not ended, and is being continued at the new institution.

Criteria for Determining if a Sale of Equipment is Acceptable

Equipment may be sold to the departing employee’s new institution under the following circumstances.

• The sale is a negotiated exchange as part of the departing employee’s recruitment between the UW department and the departing employee’s new institution.
  • Departments may be allowed to sell equipment in situations involving departing employees and their new institutions. Sales involving departing employees may be granted, because such sales are customary exchanges in academia and are commonly negotiated as part of a larger recruitment/employment package offered to the departing employee. This circumstance does not meet the state’s definition of surplus and therefore is an allowable sale. In situations where this is not the case, departments must coordinate sale through Surplus with a Purpose (SWAP). Please refer to Procedure 3008.7 Equipment Dispositions.
• Equipment was funded by a sponsored project, but the project is closed AND there are no sponsor restrictions on the award.

Criteria for Determining a Sale Price of Equipment

• Property Control provides a listing of the capital equipment and information including initial acquisition cost of equipment, acquisition date, and net book value (NBV) for which equipment is recorded in the University’s financial sub ledger.
• Property Control does not require departments to sell at the NBV, but does ask for a brief explanation if there is a difference between NBV and sale price.
• An employee’s Department Chair and/or Dean/Director/Designee has the final authority to set the sale price of the equipment, as they are most closely involved in situations when prices must be negotiated with a new institution.
• At their option, Department Chairs and Deans/Director/Designee may seek the advice of the Division of Business Services, Purchasing Services for a suggested sales price.

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II. Who is affected by this Procedure

This procedure applies to all UW-Madison departments. It should be understood by Department Managers, DPAs, Department Chairs, Directors, Deans, Chief Financial Officers, Principal Investigators, and other employees responsible for equipment.

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III. Procedure

The following steps represent the overall process:

1. Departing employee notifies their Department Chair and DPA of their pending departure, and that they are requesting permission to take capital equipment to a new institution.
2. The DPA contacts Property Control to request a list of capital equipment items associated with the departing employee.
3. Property Control provides a list of equipment to the DPA. The equipment list will include the asset tag number, description, acquisition date, acquisition cost, funding sources and percentages, net book value (NBV), etc.
4. The DPA provides the equipment list to the Departing Employee, Department Chair, Dean/Director/Designee for review.
5. The Department Chair, and/or Dean/Director/Designee determines that all eligibility criteria are met:
   1. The departure of equipment does not adversely affect instruction needs, graduate students or other research remaining at UW-Madison.
   2. Formal resignation has been submitted by the departing employee and received by the Department Chair/Supervisor.
   3. The departing employee was a permanent University employee, including faculty and academic staff roles. Student employees and zero-dollar appointees are excluded from this definition.
   4. The departing employee’s role was related to at least one element of the University’s mission (instruction, research, or public service). This excludes administrative roles.
   5. The capital equipment will be used for the same purpose at the new institution
   6. The new institution is another institution of higher education or academic research. Equipment cannot be transferred to a for-profit businesses or start-up business.
   7. Equipment does not contain any UW-Licenses, UW-Proprietary Software, nor any sensitive data.
6. The Department Chair and/or Dean/Director/Designee approves one or more items on the equipment list to be either transferred and/or sold to the new institution. The criteria listed for a transfer and a sale of equipment must be used to determine the treatment of each piece of equipment.
   1. If the equipment meets the criteria to sell equipment, the departing employee’s Department Chair and/or Dean/Director/Designee has the final authority to negotiate and determine the sale price of the equipment with new institution.
7. Along with the DPA, the Department Chair, and Dean/Director/Designee, completes Form 110.11F Request for Authorization to Transfer/Sell University Property to a Departing Employee’s New Institution.
   1. Signatures from the Departing Employee, Department Chair, and Dean/Director/Designee represent an agreement to release the equipment to the departing employee’s new institution and attests that the equipment does not contain sensitive data, UW Licenses, or UWProprietary Software. (Examples of sensitive data: UW-Madison Knowledgebase-Protecting University Data.)
8. After Form 110.11F Request for Authorization to Transfer/Sell University Property to a Departing Employee’s New Institution is completed, the DPA sends the form to Property Control along with the approved list of equipment to be transferred and/or sold to the new institution.
   1. Note: In cases when equipment is to be sold and the selling price exceeds the NBV, please include a justification along with the request form.
9. Property Control and Research and Sponsored Programs (RSP) reviews the terms and conditions of the grant or contract for restrictions that would prevent the departing employee from taking the equipment.
10. If restrictions do not exist, Property Control will prepare an Agreement for Transfer/Sale of University Property and will send it, along with a copy of the approved equipment list, to the authorized official at the new institution for signature. Property Control will notify the Departing Employee, Department Chair, DPA and/or Dean/Division/Designee of the action.
    1. If equipment is being sold to the new institution, the sale price will be included in the agreement.
11. The authorized official of the new institution accepts the terms of the agreement, signs the Agreement for Transfer/Sale of University Property and returns it to Property Control.
    1. Note that the new institution accepts responsibility for all packing, shipping, and insurance costs for the equipment.
12. Upon receiving the signed Agreement for Transfer/Sale of University Property, Property Control will authorize the departing employee to take or ship the equipment. Property Control will update the asset management system to show retirement of the asset. Property Control will also provide the Departing Employee, DPA, Department Chair and Dean/Director/Designee a copy of the fully-signed agreement.
13. The DPA or designee must remove and discard the asset barcode tag(s) prior to shipping the equipment.
14. If equipment was sold to the new institution, the Departing Employee’s UW department financial staff should prepare and send an invoice, along with a copy of the Agreement for Transfer/Sale of University Property, to collect on the sale price of the equipment. The invoice should reference the capital equipment description, amount billed, UW department financial contact, along with an appropriate funding string to which the sales amount should be credited. If necessary, check with your Deans Office for guidance on the appropriate funding string to use. The UW System Chart of Accounts revenue code specifically approved for this type of transaction is account code 9939.

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IV. Contact Roles and Responsibilities

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V. Definitions

• Capital Equipment Definitions

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VI. Related References

• Request for Authorization to Transfer/Sell University Property to a Departing Employee’s New Institution
• Procedure 3008.7 Equipment Dispositions
• UW-Madison Knowledgebase-Protecting University Data

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VII. Revisions

Procedure Number	3008.11
Date Approved	January, 1, 2017
Revision Dates	01/19/21 – Changed Procedure Number to 3008-11 from 110.11

Delegation of Department Property Administrator (DPA) Procedure
Procedure # 3008.12
Rev.: 0
Effective Date: January 1, 2017

Download 3008.12 Delegation of Department Property Administrator (DPA) Procedure (pdf)

Related Policy: Capital Equipment Policy
Functional Owner: Property Control, Business Services
Contact: Property Control Manager: (608) 890-3131, Property Control Mailbox: property@bussvc.wisc.edu

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Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Contact Roles and Responsibilities
V. Definitions
VI. Related References
VII. Revisions

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I. Procedure Statement

This procedure outlines the steps and individuals responsible for identification of Department Property Administrators (DPAs) and establishment of the DPA Acceptance Agreement between the designated DPA, the Division’s Chief Financial Officer and Property Control Office.

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II. Who is Affected by this Procedure

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.

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III. Procedure

The following steps represent the overall process for establishing a Department Property Administrator:

1. The Division’s Chief Financial Officer (CFO) works with administrative leadership within their departments to identify an individual who will be assigned the capital equipment property administration responsibilities for one or more departments within the Division. Discussion with and approval by the individual’s supervisor and the designated DPA is expected before submitting the name of the designated DPA and assigned departments to Property Control Office.
2. Property Control Office fills out the DPA Acceptance Agreement and emails a PDF to the designated DPA.
3. Designated DPA signs the Acceptance Agreement and sends to the Division’s Chief Financial Officer for signature.
4. Once CFO signs, they send the signed document to Property Control Office.
5. Property Control Office signs the DPA Acceptance Agreement and emails a PDF of the fully signed agreement to the DPA and CFO.
6. The CFO provides a copy of the fully signed document to the administrative leader for each department that the DPA is assigned to support, and confirms the DPA’s position description has been updated to reflect the DPA responsibilities.
7. The DPA completes the required capital equipment training sessions and achieves a passing score on the session evaluation.
8. If the DPA leaves the University or changes positions such that they will no longer serve as the DPA, the DPA or CFO must notify the Property Control Office immediately, and the CFO begins the procedure again at step #1.

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IV. Contact Roles and Responsibilities

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V. Definitions

• Capital Equipment Definitions

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VI. Related References

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VII. Revisions

Procedure Number	3008.12
Date Approved	January 1, 2018
Revision Dates	01/19/21 – Changed Procedure Number to 3008.12 from 110.12

 

Transfer-in with New Hire Procedure
Procedure # 3008.3
Rev.: 0
Effective Date: January 1, 2017

Download 3008.3 Transfer-in with New Hire Procedure (pdf)

Related Policy: Capital Equipment Policy
Functional Owner: Property Control, Business Services
Contact: Property Control Manager: (608) 890-3131, Property Control Mailbox: property@bussvc.wisc.edu

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Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Contact Roles and Responsibilities
V. Definitions
VI. Related References
VII. Revisions

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I. Procedure Statement

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.

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II. Who is affected by this Procedure

This procedure applies to all UW-Madison departments. It should be understood by Department Managers, DPAs, Department Chairs, Directors, Deans, Division CFOs and employees responsible for equipment.

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III. Procedure

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:

1. 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.).
2. 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 Purchases).
3. For $0 transfers, Property Control will attempt to contact the transferring organization’s property control function to obtain book value of transferring equipment.
4. 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.
5. Department financial staff should estimate market value and gather supporting documentation for the estimate. This may include but is not limited to:
   1. Independent appraisal
   2. Invoice or receipt associated with similar purchase
   3. Market pricing for similar equipment
6. 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.
7. 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.
8. Follow Procedure 110.1 Recording and Tagging Capital Equipment Purchases after corresponding step #4.

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IV. Contact Roles and Responsibilities

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V. Definitions

• Capital Equipment Definitions

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VI. Related References

• Procedure 3008.1 Recording and Tagging Capital Equipment Purchases

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VII. Revisions

Procedure Number	3008.3
Date Approved	January 1, 2017
Revision Dates	01/19/21 – Changed Procedure Number to 3008-3 from 110.3

 

Fabricated Capital Equipment Procedure
Procedure # 3008.4
Rev.: 0
Effective Date: January 1, 2017

Download 3008.4 Fabricated Capital Equipment Procedure (pdf)

Related Policy: Capital Equipment Policy
Functional Owner: Property Control, Business Services
Contact: Property Control Manager: (608) 890-3131, Property Control Mailbox: property@bussvc.wisc.edu

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Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Contact Roles and Responsibilities
V. Definitions
VI. Related References
VII. Revisions

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I. Procedure Statement

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.

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II. Who is affected by this Procedure

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.

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III. Procedure

The following steps represent the overall process:

1. The employee responsible for fabricating a new piece of equipment expected to cost $5,000 or more should contact their 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 Form 110.4F Capital Equipment Fabrication Request.
2. The DPA sends the form to Property Control for review. Property Control reviews the submission and confirms title requirements.
   1. If title is vested with a sponsor, Property Control will notify the Department and DPA.
   2. 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.
3. After the completed Form 110.4F 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.
4. 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.
5. 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:
   1. Purchase Order: In the requisition comments field in the External Requisition Generator, which feeds into BusPO.
   2. P-Card: The current Purchasing Card Capital Equipment Documentation Form. This form generates an email to the Property Control inbox (property@bussvc.wisc.edu).
   3. Cost Transfer Tool: The comments field in the Cost Transfer Tool.
6. If Property Control cannot find the Asset ID number, they will ask department financial personnel to provide this.
7. Property Control examines 4670 purchases to ensure they meet four criteria:
   1. Items are fabricated over a period of time, which can range from weeks to years.
   2. 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.
   3. 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.
   4. 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.

8. 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.
9. 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.
10. 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.
11. Follow Procedure 3008.1 Recording and Tagging Capital Equipment Purchases after corresponding step #4.
12. 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).

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IV. Contact Roles and Responsibilities

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V. Definitions

• Capital Equipment Definitions

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VI. Related References

• UW System Chart of Accounts
• Capital Equipment Fabrication Request Form
• Procedure 3008.1 Recording and Tagging Capital Equipment Purchases
• Procedure 3008.5 Upgrades to Existing Capital Equipment

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VII. Revisions

Procedure Number	3008.4
Date Approved	January 1, 2017
Revision Dates	01/19/21 – Changed Procedure Number to 3008.4 from 110.4

 

Upgrades to Existing Capital Equipment Procedure
Procedure # 3008.5
Rev.: 0
Effective Date: January 1, 2017

Download 3008.5 Upgrades to Existing Capital Equipment Procedure (pdf)

Related Policy: Capital Equipment Policy
Functional Owner: Property Control, Business Services
Contact: Property Control Manager: (608) 890-3131, Property Control Mailbox: property@bussvc.wisc.edu

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Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Contact Roles and Responsibilities
V. Definitions
VI. Related References
VII. Revisions

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I. Procedure Statement

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.

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II. Who is affected by this Procedure

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.

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III. Procedure

The following steps represent the overall process:

1. 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.
   1. Upgrades must be made on existing capital equipment.
   2. Upgrades must have aggregate costs of $5,000 or more, by themselves, regardless of the cost of the existing equipment being upgraded.
   3. Upgrade must result in either:
      1. 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.
      2. 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.
2. 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 Form 110.4F Capital Equipment Fabrication Request.
3. 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.
4. If Property Control cannot obtain needed information, they will ask for more information from the DPA.
5. 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.
6. 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.
7. If Property Control sends an asset barcode tag, follow Procedure 3008.1 Recording and Tagging Capital Equipment Purchases after corresponding step #4.

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IV. Contact Roles and Responsibilities

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V. Definitions

• Capital Equipment Definitions

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VI. Related References

• Capital Equipment Fabrication Request Form
• UW System Chart of Accounts
• Procedure 3008.1 Recording and Tagging Capital Equipment Purchases

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VII. Revisions

Procedure Number	3008.5
Date Approved	January 1, 2017
Revision Dates	01/19/21 – Changed Procedure Number to 3008.5 from 110.5

 

Physical Inventory Procedure
Procedure # 3008.6
Rev.: 1
Effective Date: June 18, 2018

Download 3008.6 Physical Inventory Procedure (pdf)

Related Policy: Capital Equipment Policy
Functional Owner: Property Control, Business Services
Contact: Property Control Manager: (608) 890-3131, Property Control Mailbox: property@bussvc.wisc.edu

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Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Definitions
V. Related References
VI. Revisions

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I. Procedure Statement

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.

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II. Who is affected by this Procedure

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.

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III. Procedure

The following steps represent the overall process of conducting a physical inventory and reconciliation:

1. 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.
2. Property Control will notify DPAs of upcomig 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.
3. 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.
4. 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:
   1. Observe the item by direct sighting.
   2. Document their observation of the item. Property Control will facilitate this documentation by providing a barcode scanner and/or capital equipment list.
   3. 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.
   4. 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.
5. Property Control coordinates inventories including training and providing equipment lists. Property Control uses a two-phase approach:
   1. Initial search.
   2. Final search for unaccounted items and subsequent reconciliation.
6. 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.
7. During the initial search, DPAs or others supervised by the DPA use the scanner to verify items by scanning the tags affixed to equipment.
8. Upon the due date, Property Control collects the barcode scanner and loads results to update the capital equipment inventory records.
9. 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.
10. During the final search, DPAs or others supervised by the DPA should check items off the printed list by hand as they verify them.
11. 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).
12. 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.
13. 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.
14. Upon the due date, Property Control collects the completed unaccounted items listing.
15. 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:
    1. they do not belong to a sponsor, and
    2. they are more than three years old, based on the date of acquisition.
16. 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
17. 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.

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IV. Definitions

• Capital Equipment Definitions

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V. Related References

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VI. Revisions

Procedure Number	3008.6
Date Approved	January 1, 2017
Revision Dates	06/18/18 – Reference UW System Administrative Policy 334.C for physical inventory selection criteria. 01/19/21 – Changed Procedure Number to 3008.6 from 110.6

 

Equipment Disposition Procedure
Procedure # 3008.7
Rev.: 0
Effective Date: January 1, 2017

Download 3008.7 Equipment Disposition Procedure (pdf)

Related Policy: Capital Equipment Policy
Functional Owner: Property Control, Business Services
Contact: Property Control Manager: (608) 890-3131, Property Control Mailbox: property@bussvc.wisc.edu

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Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Contact Roles and Responsibilities
V. Definitions
VI. Related References
VII. Revisions

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I. Procedure Statement

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 covers all retirement reasons except two: items transferred to a departing employee’s new institution and items that are declared lost. These two types of disposition occur as part of broader, separate procedures (refer to Procedure 3008.11 Departing Employees Request to take Capital Equipment to a New Institution and Procedure 3008.6 Physical Inventory).

Accountable disposition reasons:

• Items have become surplus to the department’s needs, obsolete, or unrepairable.
  • Formal category is Scrapped Assets
• Items will be traded in for credit on purchase of a like item.
  • Formal category is Traded In for another Asset
• Items will be cannibalized for parts.
  • Formal category is Cannibalize for Other Assets
• Items will be returned to a vendor:
  • Equipment returned and replaced.
    • Formal category is Like Kind Exchange
  • Equipment returned but not replaced.
    • Formal category is Scrapped Assets
• Items will be delivered to a sponsor per contract terms.
  • Formal category is Returned to Inventory

Unaccountable disposition reasons:

• Items have been lost.
  • Formal category is Disappeared Assets
• Items have been stolen.
  • Formal category is Disposal Due to Theft
• Items have been destroyed.
  • Formal category is Casualty Loss

Record keeping reasons:

• Items should be removed from records because Property Control should not have entered.
  • Formal category is Expensed

** Refer to Procedure 110.11 Departing Employees Request to take Capital Equipment to a New Institution:

• Items will be transferred to a departing employee’s new institution:
  • Transfer with ongoing sponsored project.
    • Formal category is Donated to External Group
  • Sell or move at no cost to new institution.
    • Formal category is Retirement by Sale

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II. Who is affected by this Procedure

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.

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III. Procedure

The following steps represent the overall process:

1. 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).
2. The DPA must complete Capital Equipment Disposition Request Form and select one of the retirement reasons described below:
   1. Accountable disposition reasons (decision by department to retire equipment)
      1. 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.
      2. 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, Form 110.7F Capital Equipment Disposition Request 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:
         1. UW-titled property cannot be traded on the purchase of sponsor-titled property.
         2. Sponsor-titled property cannot be traded in without prior authorization from the sponsor, RSP and Property Control.
         3. Departmental vehicles cannot be traded in.
      3. 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.
      4. 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.
      5. Items will be delivered to a sponsor per contract terms: Departments may deliver assets constructed in-house to a sponsor per contractual terms.
   2. Unaccountable disposition reasons (no decision made)
      1. 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 110.6 Physical Inventory).
      2. 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.
      3. 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.
   3. Recordkeeping reasons
      1. 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.).
3. The DPA and the Dean, Director or designee sign the Capital Equipment Disposition Request.
4. The DPA sends the completed request form to Property Control.
5. Property Control will review the request for:
   1. Completeness.
   2. Appropriate signatures. NOTE: Signatures do not guarantee Property Control will authorize disposition, but indicates the department supports the disposition request.
   3. 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 UWMadison Environment, Health and Safety confirm whether safety restrictions exist.
6. If no restrictions exist, Property Control will authorize disposal and notify DPA in writing
7. DPA notifies the person requesting the asset’s disposition that the request is approved and that the asset barcode tag can be removed.
8. Property Control will document the retirement reason in the asset management system. Depending on the retirement reason, Property Control may forward the completed request:
   1. to SWAP, when items have become surplus to the department.
   2. to Purchasing Services, if the item will be traded in for credit on purchase of a like item or returned to vendor.
   3. to Risk management, if the item has been destroyed.
   4. to Environment, Health and Safety, if the item was hazardous.
9. For surplus dispositions, the DPA contacts SWAP by submitting a Surplus Request Form, which will assess the item’s suitability for resale.
10. 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.
    1. 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.
11. Property Control reviews all losses (refer to Procedure 110.6 Physical Inventory).
12. Property Control notifies the divisional Chief Financial Officer of all unaccountable dispositions.

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IV. Contact Roles and Responsibilities

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V. Definitions

• Capital Equipment Definitions

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VI. Related References

• Procedure 3008.11 Departing Employees Request to take Capital Equipment to a New Institution
• Procedure 3008.6 Physical Inventory
• Capital Equipment Disposition Request Form
• Surplus Request Form

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VII. Revisions

Procedure	3008.7
Date Approved	January 1, 2017
Revision Dates	01/19/21 – Changed Procedure Number to 3008.7 from 110.7