UGMS Equipment Criteria

Are capital assets and related records maintained in accordance with TSLAC grant requirements?

Source

http://governor.state.tx.us/files/state-grants/UGMS062004.doc

Page 79

Purpose

to document the key requirements for compliance;

Procedures:

documented below

Results

documented below; note that these are required in Texas as they are also issued by the

governor's office.

Conclusion

for reference.

____.32 Equipment

(a) Title. Subject to the obligations and conditions set forth in this section, title to equipment acquired under a grant or subgrant will vest upon acquisition in the grantee or subgrantee respectively.

(b) States. A state will use, manage, and dispose of equipment acquired under a grant by the state in accordance with state laws and procedures. Other grantees and subgrantees will follow paragraphs (c) through (e) of this section. Local governments and other subgrantees shall develop and use their own property management systems, which must conform with all applicable federal, state, and local laws, rules and regulations. If an adequate system for accounting for personal property owned by the local entity is not in place or is not used properly, the Property Accounting System Manual issued by the State Comptroller of Public Accounts will be used as a guide. It is the responsibility of the state awarding agency to provide guidance to local entities on property accountability and to obtain reasonable assurance that proper accountability is being used.

(c) Use.

(1) Equipment shall be used by the grantee or subqrantee in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by federal or state funds. When no longer needed for the original program or project, the equipment may be used in other activities currently or previously supported by a federal or state agency.

(2) The grantee or subgrantee shall also make equipment available for use on other projects or programs currently or previously supported by the federal or state government, providing such use will not interfere with the work on the projects or program for which it was originally acquired. First preference for other use shall be given to other programs or projects supported by the awarding agency. User fees should be considered if appropriate.

(3) Notwithstanding the encouragement in Section ____.25(a) to earn program income, the grantee or subgrantee must not use equipment acquired with grant funds to provide services for a fee to compete unfairly with private companies that provide equivalent services, unless specifically permitted or contemplated by federal or state statute.

(4) When acquiring replacement equipment, the grantee or subgrantee may use the equipment to be replaced as a trade-in or sell the property and use the proceeds to offset the cost of the replacement property, subject to the approval of the awarding agency.

(d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part with grant funds, until disposition takes place will, as a minimum, meet the following requirements:

(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date, and cost of the property, percentage of federal or state participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property.

(2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.

(3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft shall be investigated. Certain types of equipment are classified as “controlled assets”. Users of these standards should contact the Texas Comptroller of Public Accounts’ property accounting staff or review the Comptroller’s State Property Accounting User Manual, available on the internet, for the most current listing. Firearms must be maintained on the grantee’s or subrecipient’s inventory system irrespective of cost, and the following equipment with costs between $500 and $1,000 must be maintained on the grantee’s or subrecipient’s inventory system: (1) stereo systems, (2) still and video cameras, (3) facsimile machines, (4) VCRs and VCR/TV combinations and (5) cellular and portable telephones. See Texas Government Code, Sec. 403.271(b) for further information. State awarding agencies may specify special treatment for other items of equipment with costs between $500 and $1,000 or higher with a high potential for loss.

(4) Adequate maintenance procedures must be developed to keep the property in good condition.

(5) If the grantee or subgrantee is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return.

(e) Disposition. When original or replacement equipment acquired under a grant or subgrant is no longer needed for the original project or program or for other activities currently or previously supported by a federal or state agency, disposition of the equipment will be made as follows:

(1) Items of equipment with a current per-unit fair market value of less than $5,000 may be retained, sold or otherwise disposed of with no further obligation to the awarding agency. Methods used to determine per-unit fair market value must be documented, kept on file and made available to the awarding agency upon request.

(2) Items of equipment with a current per-unit fair market value of $5,000 or more may be retained or sold and the awarding agency shall have a right to an amount calculated by multiplying the current market value or proceeds from sale by the awarding agency’s share of the equipment. Methods used to determine per-unit fair market value must be documented, kept on file and made available to the awarding agency upon request.

(3) In cases where a grantee or subgrantee fails to take appropriate disposition actions, the awarding agency may direct the grantee or subgrantee to take excess and disposition actions.

(f) Federal or state equipment. In the event a grantee or subgrantee is provided federally-or state-owned equipment:

(1) Title will remain vested in the federal or state government.

(2) Grantees or subgrantees will manage the equipment in accordance with federal or state awarding agency rules and procedures, and submit an annual inventory listing.

(3) When the equipment is no longer needed, the grantee or subgrantee will request disposition instructions from the federal or state awarding agency.

(g) Right to transfer title. The federal or state awarding agency may reserve the right to transfer title to the federal or state government or a third party named by the awarding agency when such a third party is otherwise eligible under existing statutes. Such transfers shall be subject to the following standards:

(1) The property shall be identified in the grant or otherwise made known to the grantee in writing.

(2) The federal or state awarding agency shall issue disposition instructions within 120 calendar days after the end of the federal or state support of the project for which it was acquired. If the federal or state awarding agency fails to issue disposition instructions within the 120 calendar-day period the grantee shall follow Section ____.32 (e).

(3) When title to equipment is transferred, the grantee shall be paid an amount calculated by applying the percentage of participation in the purchase to the current fair market value of the property.