51ÔÚÏß

Research CCHIP #018

CLARIFICATION OR CHANGE IN PROCEDURE (CCHIP)

Purchasing Equipment on Sponsored Awards

OVERVIEW

The University has developed the procedures described below to account for equipment costs on a consistent basis in compliance with federal and state regulations.

DEFINITIONS

Capital Expenditures: Acquisition cost of capital assets (equipment, buildings, and land), or expenditures for improvements to capital assets that materially increase their value or useful life. USF includes ancillary charges, such as freight and installation in the acquisition cost.

Equipment: An article of nonexpendable, tangible personal property having a useful life of more than one year and an acquisition cost which equals or exceeds $5,000. All other equipment is treated as supplies for budget and accounting purposes.

Fabricated Equipment: Equipment that is built or assembled by individuals and/or sponsored project personnel, an internal shop, or an external shop.

General Purpose Equipment: Equipment that is usable for other than research, scientific or technical activities, whether or not special modifications are needed to make them suitable for a particular purpose.

Scientific Software: Direct charging of scientific software items should be restricted to projects that include specific justification in the budget narrative and do not have disallowances.

Special Purpose Equipment: Equipment that is usable only for research, scientific or technical activities. Capital expenditures for special purpose equipment are allowable as a direct cost.

CLARIFICATION OR CHANGE

This CCHIP covers:

• Budget accounts codes related to equipment
• Requirements regarding the purchase of new equipment
• Direct charging of equipment to federally sponsored awards
• Other compliance procedures

Budgeting for Equipment Purchases: The following matrix provides the general ledger purchasing and budget account codes:

GL Expense Account Code	GL Account Code Description	Federal Budget Account Code	Nonfederal Budget Account Code all 82800
63100	GENERAL USE COMPUTER FIXED A CLEAR	83800	82800
63105	RESEARCH COMPUTER FIXED A CLR	83850	82800
63110	RESEARCH EQUIPMENT FIXED A CLR	83860	82800
63115	FABRICATED EQUIPME	83860	82800
63120	OTHER FIXED ASSETS CLEARING	83800	82800
75060	UCS RSRCH EQUIPMENT EXP > $5000	83860	82800
75052	UCS EQUIPMENT INT EXP > $5000	83800	82800
75056-75058		83800	82800
75061	UCS RSRCH COMPUTER EXP > $5000	83850	82800
75746	IT COMPUTING INFRASTRUCTURE EX	83800	82800

General Channels for Technology Procurement:

In order to maximize volume discounts, provide efficient access, and standardize products, the University endorses the following sequence for technology purchases:

• Check first with the USF Computer Store. The Computer Store sells a wide array of technology products including computers, printers, software, cables, and peripherals.
• If not available through the USF Computer Store, follow the normal processes for procurement through the USF Purchasing Services as outlined below.
• PCard procurement of technology is allowed, but please follow the processes and limits outlined below.

Fabricated Equipment Process: Records expenses related to the fabrication of equipment in general ledger account code 63115. (Purchasing item category FABRICATED EQUIPME). Equipment fabricated at the University will be capitalized and included in the moveable equipment inventory if the following criteria are met:

• The end item has a final assembled cost at least equal to the capitalization threshold. Allowable costs that can be included in the threshold are the costs of materials, non-salary direct costs, such as freight, and the direct labor and their related fringe benefit costs attributable to the equipment fabrication. Costs that may not be included are maintenance, repair and administrative support costs. 
• The estimated useful life is greater than one year. Fabricated items that have been disassembled prior to meeting the useful life criteria of more than one year will be disallowed as capital equipment.

DIRECT CHARGE GENERAL PURPOSE EQUIPMENT

Charging a sponsored award directly for general purpose equipment is typically not allowable per Uniform Guidance (2 CFR §200). In order to request consideration for an exception to the general rule, the Cost Accounting Standards (CAS) Exception Request Form must be completed and submitted to Sponsored Research for review, and if approved, will be processed by Sponsored Research Post Award.

The Cost Accounting Standards (CAS) Exception Request Form should provide a detailed justification describing why general purpose equipment should be funded directly from the award. The justification should describe how this meets the unlike circumstances requirement. The general purpose equipment is: 

• Required to accomplish project’s distinctive scientific, technical and/or programmatic requirements
• Will be used exclusively for project activities and objectives; no equipment will be used for University general administrative purposes
• Disclosed in the proposal
• Disclosed to the agency in separate correspondence that is attached to request
• Has been approved by sponsor

OTHER COMPLIANCE PROCEDURES

Property Inventory: Asset Management maintains records of all university equipment having a value of $5,000 or greater, in accordance with 51ÔÚÏß Statute 273.02. They tag appropriate new acquisitions, perform an annual inventory, process property-related forms and work with the University Controller’s office to reconcile University assets financial data as required by the Auditor General.

Reclassification Entries: When appropriate, journal entries are used to reclassify items between equipment and general expense account codes. These entries are required to properly expense transactions that were erroneously coded to fixed assets because they do not meet USF’s capitalization criteria.

Examples of the types of transactions being reclassified:
Software license renewals
Computer equipment with a unit price < $5,000
Small furniture with a unit price < $5,000

These journal entries are reclassifications and can be avoided with proper initial classification. Questions on classification should be addressed to the Purchasing Department.

Timing of Equipment Purchases: Equipment and computers should generally be purchased early in the award period. If you place an order with the computer store during the last month of a sponsored award, the computer store will contact Sponsored Research for approval. Sponsored Research will review the award terms and conditions to determine the validity of the late purchase. You may be contacted for additional justification related to the late purchase of equipment or computers and the benefit to the project.

CONTACT

Please address your comments or questions regarding this CCHIP to Sponsored Research Compliance.

RELATED REFERENCES

Cost Accounting Standards (CAS) Exception Request Form
PCard

Asset Management
51ÔÚÏß Cost Accounting Standards Board Disclosure Statement (DS-2)

AGENCY GUIDELINES

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EFFECTIVE DATE

This CCHIP is effective as of the date of revision and rescinds all previous versions pertaining to the Purchasing of Equipment on Sponsored Awards.

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ISSUED: February 17, 2011
LAST REVISION: August 16, 2018