3008.9 Change in Custody to Another Department Procedure

Procedure # 3008.9; Rev.: 1 (Effective July 1, 2025)
Related Policy: UW-3008 Capital Equipment Policy
Functional Owner: Property Control, Business Services
Contact: Property Control Mailbox, property@bussvc.wisc.edu

Contents

1. Procedure statement
2. Who is affected by this procedure
3. Procedure
4. Contact roles and responsibilities
5. Definitions
6. Revisions

I. Procedure statement

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 by initiating the “Request to Edit an Asset” process in Workday. 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.

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II. Who is affected by this procedure

• Department personnel – both current and future custody departments
• Department Property Administrator (DPA) – both current and future custody departments
• Property Control
• Research and Sponsored Programs (depending on original funding source)

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III. Procedure

The following steps represent the overall process:

1. 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.
2. The DPA will initate in Workday, the “Request to Edit Business Asset” process indicating the Asset ID/Tag of the equipment to be transferred along with the new information (i.e., coordinating cost center (department), location, and Issued To Employee (PI)).
3. If the equipment is funded by 133/144 funds, Property Control will add Office of Research and Sponsored Programs to the approver list to verify change of custody is acceptable.
4. Property Control will notify both the current and new departments and DPAs of approval.
5. For costs related to packing/unpacking, setting up, re-calibrating, training, etc., the department may initiate an Accounting Adjustments Entry or internal billing to recover costs of the change in custody. Capital account codes in the Trackable Spend Category of Equipment 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

   Equipment Trackable Spend Categories are 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.

6. Property Control will update the records in the asset management system.

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IV. Contact roles and responsibilities

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V. Definitions

Capital Equipment Definitions (PDF)

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VI. Revisions

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