9.2 Property Management Life Cycle
1. Phase 1: Acquisition
The Acquisition phase occurs during the research proposal phase when equipment needs are identified and budgeted. When submitting proposals, it is important to budget equipment appropriately. Later, when the award is received, it is important to follow award restrictions regarding equipment. If funding for the purchase of an asset comes from multiple awards, consult your DPA (Department Property Administrator).
Concepts to Consider
If a need for equipment that is not budgeted arises, and prior approval is required, a request must go to the sponsor’s administrative contracting officer or business office, through the Office of Sponsored Research. In most cases, technical officers or persons engaged in scientific activities at the agencies DO NOT HAVE AUTHORITY for this type of transaction.
It is important to use the appropriate expenditure type, which determines ownership (which can change during the life of an asset) because it drives depreciation and helps Stanford to be consistent in our accounting practices.
Pre-purchase screening is the process used to check for asset availability prior to purchase. All capital equipment must be screened - your DPA will do this for you when they approve the purchase order. If we are borrowing equipment from another institution, contact your DPA for help with the loan process.
When equipment arrives, it is important to notify the DPA immediately so the equipment can be identified with a Stanford barcode tag and a SFA record initiated. Because of the way the Oracle Financial System and Sunflower reconcile, it is imperative that receiving is performed and asset records created within 30 days of receipt.
Tagging equipment identifies ownership and is required by sponsors. Stanford uses a barcode tag for equipment, and each asset is assigned an individual number. Additional identification in the form of overlays are used to identify the equipment as either government-owned, donated, leased, or non-capital. In addition to uniquely identifying equipment, this also facilitates physical inventory.
It is also important to identify "non-capital" assets and assets that do not belong to Stanford.
A graduate student using his own laptop for a sponsored project on campus should physically identify it as non-Stanford owned.
Two printers of the same make and model sit side by side. One is tagged; the other is not. The one that isn't tagged may have been overlooked, or perhaps it was purchased on sale and truly isn't capital equipment. An inventory taker or auditor wouldn't know which unless it had a non-capital overlay on it. This identification assists physical inventory analysts and auditors and is a theft deterrent. Some assets are too small or sensitive to tag - for these we assign a tag number but do not put the actual tag on the equipment.
2. Phase 2: In Service
The In Service phase occurs throughout the performance period of the project. At this time, equipment is acquired, used, moved, and inventoried. Activities in this phase include the following.
- Subaward Administration
- Utilization & Maintenance
- Off-Campus Equipment
- Location of Equipment
- Physical Inventory
- Research Award Phase/Research is in “full swing”
Concepts to Consider
Every asset must have a current location recorded, according to federal requirements. Generally, there should be a direct relationship between the location of an asset and its use. Location also impacts risk management reporting, accountability, tracking, and the indirect cost rate calculation.
Use of Stanford or Sponsor-funded equipment off campus is a privilege, not a right. If equipment will be used in a location that is not part of Stanford (i.e.; someone's home), it must be recorded on an Off Campus Equipment Verification Worksheet and must be used in direct support of a sponsored project or Stanford work. This form is available on the DPA Update site, and your DPA will help you with it. If equipment must be taken out of the country, there are additional requirements. The DPA should be contacted for assistance as soon as the travel destination is known.
When a subaward includes equipment, ensure the following property issues are addressed within the subaward:
- Appropriate property clauses have been flowed down
- Approvals necessary to purchase equipment are obtained
- Ownership is identified
- Record keeping and reporting requirements are fulfilled
- Equipment is disposed of appropriately
When completing a closeout, PMO ensures all subawards have been closed and property issues are resolved. If you need assistance related to property in a subaward, contact your UPA.
Assets must be utilized for the purpose for which they were acquired. Maintenance and calibration must be performed as necessary to maximize the life of the asset and the associated records must be retained.
There are many reasons an asset might be put into storage - a building renovation, the item is a spare, etc. If an item is put into storage, you must ensure it is a secure facility that is appropriate for the type of asset, the DPA must be notified so they can update the SFA record as “not in use”, and the asset must be made available for physical inventory.
You may wonder why it’s so important to identify the location of equipment. We recover a higher amount of IDC from equipment coded in research space, so it’s very important that we identify the locations as accurately as possible. If equipment is moved, the new location must be recorded so we depreciate the equipment at the proper rate. Location is also important for risk management reporting, accountability and tracking.
If you are loaning equipment to another institution, contact your DPA and they will help you with the loan process. There may also be sponsor approval required.
3. Phase 3: Excess
The Excess phase begins when the asset is no longer needed for the project. In most cases this occurs as the project nears completion. Excess activities include transferring equipment to other awards, selling, or returning to the sponsor. If equipment is broken or obsolete, then it may be eligible for scrap. Research administrators should work with a DPA to process disposal paperwork for any asset! The Property Management Office is responsible for property management reports to government agencies and sponsors. These include financial, equipment status, and closeout.
All employees and many students at Stanford have some responsibility for equipment. Those involved in the research administration process may have more. Throughout the research process, equipment is used - much of it sponsor-funded or owned. Complete information is available in the Property Management Manual.
Note: When a sponsor or government auditor (such as The Office of Naval Research or Defense Contract Audit Agency) plans an audit with a department, they are required to coordinate the event with Internal Audit. The Property Management Office should be included in these audits as well. Always contact your DPA to accompany you in a department property audit.
Concepts to Consider
When an asset is no longer needed, departments are encouraged to re-utilize equipment within Stanford. Equipment should never be thrown away. If equipment is broken or obsolete, then it may be eligible for scrap. Coordinate all excess requests for both capital and non-capital equipment through your DPA. Processing excess requests for sponsor-owned equipment may require contract officer approval; the PMO (property management office) can help coordinate this. To complete the sponsored projects closeout for property, the PMO must certify that all disposals have been completed.
Consider the following if processing equipment as "Excess"
- Try to “reuse” within Stanford
- Transfers to other institutions must be approved and documented in advance
- Consider Health & Safety or Biohazardous impact
- Take special note of “Sensitive Items"
- Don’t throw it away – notify your DPA
Appropriate disposition of equipment is an area that is often overlooked. The source of funding for an asset has a direct impact on how it can be disposed. Sponsor funded purchases and donations may have specific disposal-change to excess (disposal) restrictions. The key to determining disposal-change to excess restrictions is to read the sponsor agreement or donation documentation. Also, non-capital equipment should not be thrown away - it should be processed through PMO to ensure EH&S (Environmental Health & Safety) and sponsor requirements have been satisfied. Additionally, Stanford must now ensure that all “sensitive items” are disposed of in an appropriate manner. These are generally electronics items, such as PDAs, computer monitors, cell phones, etc.
Timely processing of excess reduces risk of loss, reuse and additional inventory reconciliation. Re-utilizing assets can save both Stanford and sponsors a great deal of money.
Advertise and find Stanford owned items that are no longer needed here.
Equipment may also be transferred to another university, in which case it must be approved and documented in advance. If a PI is moving to another institution and taking research, there must be an approval from the sponsor. The PI’s department chair or dean should be made aware of the transfer. PMO must coordinate the capital equipment part of that transfer.
In transferring lab equipment, which involves a health, safety, or biohazard impact, Environmental Health and Safety regulations require proper cleaning of contamination. Other equipment may need to be certified. Your DPA can ensure that certifications are done appropriately.
Equipment should never be thrown away. Sales of equipment must be processed through the Surplus Property Sales Office, which is the only campus organization authorized to write a bill of sale for equipment.
Tags must not be removed from equipment. The Surplus Property Sales or Property Management Office will deal with equipment tags. Since equipment is tracked over its life, it will retain its original ID number until its final disposition. Your DPA will assist you with any of these processes.