University of Arkansas at Little Rock
Policy Name: Sponsored Programs Capital Equipment
Policy Number: 603.12
Effective Date: June 15, 2016
Capital equipment is any item purchased with extramural funds with an acquisition cost of $5,000 or more and a life expectancy of one year or more. This policy summarizes the required treatment of capital equipment in any area of UALR that has sponsored research. To the extent there is any inconsistency between this policy and the terms and conditions of the applicable award agreement, the more restrictive of the two shall govern.
According to federal and UALR policies, all capital equipment must be consistently and properly classified, safeguarded, and depreciated. Federal regulations including but not limited to the OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR 200 (Uniform Guidance) must be followed when equipment is purchased utilizing federal funds.
To Whom Does This Policy Apply
All UALR personnel and units that accept sponsored funding must comply with this policy and are required to employ equipment management practices that meet the federal requirements.
The following procedures dictate the general acquisition, tracking, and disposal of sponsored capital equipment. Each unit is responsible for unit-specific procedures and forms.
The following costs are applied towards the $5,000 acquisition cost and should be capitalized with the equipment: any initial modifications, attachments, accessories, or auxiliary apparatus necessary to make an item of capital equipment useable for its acquired purpose; shipping charges, protective in-transit insurance, freight, and installation costs; and upgrades, modifications or enhancement parts that increase the useful life of the equipment by one year or more or add additional functionality.
The following costs cannot be applied towards the $5,000 acquisition cost: equipment repair costs, separate warranty costs or maintenance contracts, demolishing or dismantling costs, and spare or replacement parts.
Title to or ownership of equipment is determined by the provisions of the sponsor or agency policy. There are four classifications of capital equipment: sponsor purchased/university-titled equipment, government-titled equipment, government-furnished property, and university-funded equipment. See the equipment webpage for more information on equipment classifications.
All equipment must be tracked and recorded in a consistent manner. A physical inventory of all equipment, both sponsored and non-sponsored, must be conducted each year.
Equipment must be disposed of and removed from inventory records when it is no longer in use or expected to have future use, no longer the responsibility of UALR (e.g., transferred or sold), or no longer part of the inventory of active items. Equipment purchased with extramural funds is often subject to sponsor-specific disposal restrictions and cannot be disposed without prior approval. Contact ORSP for assistance in determining sponsor restrictions. Information on equipment that has been removed from the inventory records must be maintained by the university.
Principal Investigators (PIs)
PIs are responsible for the management of capital equipment under their sponsored awards and have ultimate responsibility for compliance with this policy and the terms and conditions of the sponsored award. PIs are responsible for tracking equipment used in their lab or under their direction, assisting in the completion of reports and physical inventories, and notifying the department of any changes with respect to condition, location, loss, or damage.
Units are responsible for maintaining records of all capital equipment in their possession. In addition, units are responsible for using, maintaining, protecting, and disposing equipment according to federal and sponsor guidelines.
Office of Research and Sponsored Programs (ORSP)
ORSP is responsible for providing policy and procedural guidance. ORSP is also responsible for responding to requests for reports and information from sponsors, auditors, and other parties. ORSP, on behalf of the units, submits federal reports to the government.
Financial Services ensures adherence with Generally Accepted Accounting Principles (GAAP) and other regulatory requirements, to promote consistent accounting treatment across the University, and to ensure the operating results of university units are not misstated as a result of transactions unrecorded or recorded improperly.
Source: Office of Research and Sponsored Programs
Revised: Initial Policy
Approved By: Chancellor Joel E. Anderson, June 15, 2016
Custodian: Office of Research and Sponsored Programs