Office of Research and Project Administration

SPONSORED PROGRAMS COMPLIANCE

15. Equipment

Proper Stewardship of Equipment

UR's Property Management System is another point of audit focus. The proper identification and use of equipment is critical to the University's management of both the direct and indirect costs of research. The integrity of this system depends on individuals throughout the campus paying proper attention to the acquisition, use, tracking, physical inventory and disposition of equipment.

Capital equipment is defined as equipment with an acquisition cost of $1,000 or more per unit and a useful life of more than one year. Fabricated equipment, where the aggregate cost of the components is $1,000 or more and where the fabricated asset has a useful life of more than one year, is also defined as capital. Capital assets must be accounted for in UR's property management system. Equipment (especially computers) should not be purchased on personal credit cards. Rather, all equipment should be purchased through established University Purchasing processes (Procurement Card or 312 requisition), to ensure proper accounting and identification in our property system.

Be sure to check the terms and conditions of your particular award for information related to:

• allowability of equipment charges
• equipment title
• joint funding or
• fabrication of equipment

Any of these conditions require careful attention at the time that the award is established and throughout the life of the project.

Awards may also require advance notification or prior approvals of equipment acquisitions. In these cases, the written approval of the sponsor's Grant or Contract Officer must be obtained before acquiring the equipment. This is particularly important during the last 90 days of the award period (see examples of Late-in-Period costs)

If you intend to use a piece of equipment to support multiple projects, or to support both sponsored and unsponsored activity, there should be an appropriate, documented allocation of the cost. If a piece of "special purpose", i.e., scientific, equipment is purchased especially to carry out a particular project, A-21 allows that the expense may be charged fully to the project, even if it is subsequently used for other purposes.

In addition, if you plan to purchase "general-purpose" equipment for your project, you will normally need prior sponsor approval. You will also need to include a particularly clear justification in your proposal, and consider carefully the appropriate allocation of the cost of such equipment. As with administrative costs, the direct charging of "general-purpose" or non-technical equipment is subject to significant audit scrutiny by both UR and external reviewers. (This includes the acquisition of desktop computers.) Such acquisitions are often unallowable, unless the computer is necessary for, and directly allocable to, the project (i.e. functioning as, or in direct support of, specialized scientific equipment; the principal use of the computer is toward the project's activities (i.e. it is used approximately 95% for the programmatic conduct of the sponsored project); and the computer would not have been purchased other than to support the goals of the research project).

One key to effective property management is the early involvement of your departmental administrator. In particular, it's important to keep your administrator informed about the condition and the location of equipment, particularly when equipment is moved to an off-campus site. The federal government requires that the UR conduct a physical inventory of equipment (to be reconciled with our property records) at least once every two years. It is critical that departments respond in a timely manner to this inventory, and an up-to-date knowledge of the location of equipment is vital.