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Property Accounting - Guidelines & Procedures

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Introduction

These procedures provide detailed guidance for maintaining compliance with University Policy 809:  Control of Equipment and Other Property. As stated there:

All equipment and property acquired by Rice University must be used in a prudent manner and for appropriate university purposes consistent with University policy.  Equipment and other longer-lived property in the custody of Rice University, however acquired, must be properly identified, accounted for and disposed in line with university policy and procedures.

They describe how to properly record the acquisition, track and monitor the use and record the disposal of all equipment and property acquired by Rice.

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Acquisition

Purchasing

All purchases made on behalf of Rice University must be made in accordance with the Rice University Purchasing Policy (available online here:  Policy No. 814:  Rice University Purchasing Policy). 

Purchases involving Contracts must be made in accordance with the Rice University Policy on Signature and Approval Authority for Contracts (available online here:  Policy 810:  Signature and Approval Authority for Contracts).

If your purchase requires a certificate of insurance, additional information may be found online here:  Certificates of Insurance.

The Rice University Purchasing & Payment Manual (available online here:  Purchasing & Payment Manual) provides detailed guidelines and instructions regarding the tasks required to maintain compliance and how to perform them for Policies 810 and 814 and the Acquisition:  Purchasing section of 809.

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Fabrication

There are times when a piece of equipment that is needed to conduct research is not available for purchase from a vendor. The Fabrication process is the process of creating that unique item to meet a specific research requirement for that project. It is assembled from a number of parts, supplies and components. It is composed of individual items which cannot function or be useful alone or which lose their individual identity when incorporated into this item. This new item will ultimately have a combined cost of $5,000 or more and a useful life of more than one year. The following steps are required:

  • Complete a Notice of Fabrication and Request for Fabrication Fund(s) form (PDF), which is available from the Controller's Office Forms section of the web site. This form identifies the item to be fabricated, the location where it will reside, the estimated total cost, the responsible organization, the planned project start and end dates and whether the item will remain at Rice after completion. This information will allow reviewers to determine whether the work contemplated is in accordance with the terms and conditions of the funding sources. Copies of POs are not required, but a listing of the major costs is needed either on the form or as an attachment. Please be sure to indicate the Fund-Org-Acct of the funding sources of the item. The completed and signed form may either be mailed to Property Accounting, MS 70, or scanned and emailed to fascard@rice.edu.
  • Property Accounting, Research & Cost Accounting and the Office of Sponsored Research (if necessary) will review the request for a Fabrication Fund. If approved, Research & Cost Accounting or Current Funds Accounting will either establish a new fund number or issue a new sub-fund number if the fabrication is part of an existing project, process the budget revision to transfer the funds to the new fund or sub-fund and inform you of the fund or sub-fund number. Your request may be denied if the planned fabrication violates the terms and conditions of any of the funding sources. If denied, Research & Cost Accounting will explain the issues that need to be addressed.
  • This new Fabrication Fund number will be used for all costs relating to the equipment and a capital account code is to be used for all charges. There is no need to identify each item of cost as a component because the fund number does this for you.

Each purchase of a component, or components, of the fabrication must be made in accordance with the Rice University Purchasing Policy.

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Transfer

Interdepartmental Property Transfer or Sale

Property, which is no longer of use to a department, should usually be disposed in accordance with the Disposal Procedures defined elsewhere in this document. In some cases, before an item is listed in the Rice Classifieds, another department is identified that wishes to use the equipment. Responsibility for the property may be transferred to that department at no cost or sold to that department at an agreed upon price.

If transferred, Property Accounting must be notified by email or memo by the department relinquishing control of the property. The department accepting control of the property should complete a Property Control Registration (PCR) form and submit it to Property Accounting.

If sold, in addition to notifying Property Accounting and completing a new PCR, the department selling the property should initiate an Interdepartmental Transfer (IDT) for the transfer of the amount of the purchase price. Additional information about IDTs is available online here:  Internal Transfer, see Interdepartmental Transfer (IDT).

Once Property Accounting has received copies of all the needed forms, they will determine whether the property remains a capital asset eligible for tagging and covered by the biennial inventory process. If so, a copy of the submitted PCR will be returned with a new white asset tag, which should be affixed to the property as soon as possible. If it is determined that the property is not a capital asset, a copy of the PCR will be returned with the notation, “Not a Capital Asset” and a new red property control tag will be provided. Property Accounting encourages departments to place property control tags on property which is controlled by the department but which is not a capital asset and not eligible for the biennial inventory.

Transfer of Equipment with an Incoming Professor

When an incoming professor transfers equipment from his/her previous university, the following actions are required (see also Policy 331):

  • Complete the Transferred Property Form and send it to Property Accounting with the required documentation (described below).
  • Complete a Property Control Registration Form for each piece of equipment.
  • Provide a copy of the approval(s) to transfer equipment from the previous institution.
  • Provide documentation of original acquisition date and cost of each piece of equipment. This allows Property Accounting to determine whether the items meet Rice's capitalization threshold. If documentation of the original purchasing information is not available, this information (based on the transferring institution’s records) must be provided on the Transferred Property Form. In this case, the Property Accounting Office or other authorized official of the transferring institution must sign the form.
  • If any of these equipment items are part of a fabrication that is new to Rice, complete a Fabrication Form. If they are part of an existing fabrication, provide the fund number.
  • If any Rice Purchase Order(s) or invoice(s) payable to Rice have been created or paid in association with this transfer, provide a copy of each.

Note:  If the previous institution is being paid as a condition of this transfer, provide a copy of the agreement, or a written description of the agreement, and the current status of payments.

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Donations

Acquisition of equipment or property through donations must be made in accordance with Resource Development’s “Gift Policy and Procedure Document” Section III.B.5, Tangible personal property. For a copy of this document, please contact Resource Development at 713-348-4600 or giving@rice.edu.

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Lease

Property may be acquired by lease rather than purchase. The financial, accounting, inventory and tax issues of leases should be seriously considered prior to entering into a lease. For additional information about these issues, please see Section 4.E, Lease vs. Purchase Decision Making of the Rice University Purchasing & Payment Manual (available online here:  Purchasing & Payment Manual). 

Property acquired by entering into a “Capital Lease” will be subject to the same control and reporting requirements as property that is purchased.

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Reporting

The purpose of the Property Control Registration (PCR) Form is to document the purchase of equipment and to collect important information related to the equipment’s identification and control. The form should be submitted to Payment Solutions with the associated paper Purchase Order or uploaded and attached to a Purchase Order submitted via Rice Marketplace. It should include the following information (if available):

  • An accurate description of the equipment being purchased
  • Preferred description (if other than default description)
  • If a component, the Asset Tag number of the Primary Asset or Primary PO
  • Total cost
  • Responsible organization code and department name
  • Custodian ID/Name (PI should be listed as Custodian for equipment purchased using an R Fund)
  • Equipment Manager Name (All Funds),
  • Hazardous-Y/N (indicate one)
  • Taggable-Y/N (if no, indicate why)
  • Title-to (select how title vests)
  • Location (including building name and room number)
  • Purchase Order number
  • Manufacturer
  • Make/Year built
  • Model number
  • Serial number
  • Date received/paid
  • In Service date
  • Funding Source (Fund, Org and Account being charged)
  • Name and location of who completed the PCR Form
  • Name and location of person receiving asset tag

Once the initial invoice referencing that Purchase Order has been paid, a copy of the PCR, PO and invoice is sent to the person who completed it with an Asset Tag bearing the Permanent Tag (PTag) number assigned to the asset. That tag should be handled as described in the next section, “Tagging”.

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Tagging

Rice uses three kinds of equipment and property ID tags. Property Accounting furnishes all tags:

•  A white ID tag identifies equipment with a cost of $5,000 or more.

•  A red ID tag identifies property with a cost of less than $5,000. Red tags are provided to departments upon request or mailed as indicated in the Transfer section, Interdepartmental Property Transfer or Sale, to assist with property control and to help identify items not subject to the biennial inventory.

•  A yellow ID tag identifies equipment titled to the U. S. Government. This includes equipment loaned to the University by a government agency or equipment purchased by the University using research funds whose award documents state that all the title to all purchased equipment vest with the government.

 

Samples of the three types of tags currently in use are shown below:

Property Tag Examples 

It is essential that all Asset Tags be affixed to the asset they are associated with as soon as possible after receipt. Asset Tags identify the property as under the responsibility and control of Rice University. They allow the property to be correctly identified not only by members of the department where it is located but also by the staff of Property Accounting, internal and external auditors and members of the biennial inventory crew.

Certain items of equipment do not lend themselves to being tagged, but must be inventoried, such as lasers, software, and heat sensitive items. In such cases, the item will be assigned an equipment number (PTag) but will not be tagged. It is the department’s responsibility to notify Property Accounting whether or not an item may be tagged. A white ID tag will be assigned to the equipment and mailed to the department to be kept on file. It must be presented during the biennial equipment inventory. The equipment number in FAS for the non-taggable item will have the suffix ‘NT’ added, e.g., 12345NT, as an indication the equipment is non-taggable.

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Inventory/Tracking

Biennial Inventory

Each Chair or Department Administrator should keep Property Accounting advised of the contact person for equipment related matters within their department. Property Accounting will survey each area annually to confirm the current contact person, but recommends they be notified when changes occur.

Prior to the start of the inventory, equipment downloads showing the information currently contained in the Fixed Assets System records will be provided for review. If changes are required, the electronic file should be modified to show those changes and returned to Property Accounting within seven (7) working days. This will ensure the inventory crew is provided with the most current and accurate data when performing the inventory.

Assigned department personnel must be available to accompany the inventory crew member(s) in all restricted areas or provide access as required. It is the responsibility of the department coordinator to disclose the contents of, or open for inspection, any locked or inconspicuous areas during the inventory. 

Equipment downloads will be provided to each department upon request after the inventory is complete. Additionally, equipment downloads are available upon request at any time during the year.

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Reporting Changes

Equipment

Any long-term change (longer than 30 days) in the location of a piece of equipment must be reported to the Property Accounting office. The possible situations are:

  • For equipment remaining on-campus, submit an email listing the PTag #, the original location, the new location and the name of the person reporting the change to fascard@rice.edu.
  • Equipment should not be removed from campus and housed in a non-Rice location (including the residence of a faculty or staff member) unless an Authorization to Remove Property or Equipment from Rice University form (PDF) has been completed prior to the equipment being moved. The form may be sent via Campus Mail to Property Accounting MS70 or scanned and emailed to fascard@rice.edu. The form must have the signature of the faculty or staff member requesting the move and the department head, or other approving authority, with responsibility for the equipment.

Any long-term change (longer than 30 days) in the condition of a piece of equipment that affects its ability to perform the function for which it was acquired must be reported to Property Accounting if this change in condition will not result in the disposal of the item. If the item will be disposed, follow the procedures regarding disposal provided later in this document. If the item will be repaired, kept for parts, or kept for some other reason, an email must be submitted to fascard@rice.edu listing the PTag #, location of the item, description of the new condition and the name of the person reporting the change.

Property

Property should not be removed from campus and housed in a non-Rice location (including the residence of a faculty or staff member) unless an Authorization to Remove Property or Equipment from Rice University form (PDF) has been completed prior to the property being moved. The form may be sent via Campus Mail to Property Accounting MS70 or scanned and emailed to fascard@rice.edu. The form must have the signature of the faculty or staff member requesting the move and the department head, or other approving authority, with responsibility for the property.

This form is required only when the property is expected to remain housed at the off-campus location for more than thirty (30) days.

Red ID tags should be placed on all property that will be housed off campus.

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Transfers

For the purposes of property and equipment control, the term “Transfer” can apply to 1) change in the Rice University organization that is responsible for the item or 2) change in the title or ownership of items coming to Rice from another organization with a new faculty member or leaving Rice to another organization with an exiting faculty member.

Because a transfer of control between Rice organizations is an acquisition by the organization taking control, these procedures are shown in Acquisition:  Transfer:  Interdepartmental Transfer or Sale above.

Because a transfer of title or ownership of items coming to Rice with a new faculty member is an acquisition by Rice, these procedures are shown in Acquisition:  Transfer:  Transfer of Equipment with an Incoming Professor on above. 

When transfers occur because a professor is leaving Rice and wishes to transfer the title of Rice-owned equipment, the following actions are required:

  • The Department Chair or Dean must provide a memorandum to the Vice President of Finance (VPF) stating that the transfer is appropriate, the reason(s) why it is appropriate, that the equipment is not required at Rice for other research and that any expected payment is fair to Rice University. This memorandum must be accompanied by an invoice and bill of sale for the equipment and a Transfer of Title for Exiting Professors Form (PDF or Excel) listing the equipment to be transferred.
  • A copy of the memorandum, invoice, bill of sale and form must be submitted to Property Accounting for review. 
  • Property Accounting will review the documents to ensure that Rice holds clear title to the equipment and that the expected payment amount is reasonable in relation to the net depreciated value of the asset(s). Property Accounting will inform the VPF and department of the results of that review. If Rice does not hold clear title to any of the items in question, Property Accounting will work with Research and Cost Accounting, the Office of Sponsored Research and the department to attempt to resolve the issues and obtain clear title. If title cannot be obtained, the department will be informed that the item(s) may not be transferred. Title to equipment may not be transferred until all issues are resolved.
  • Once the VPF approves, all original documents, with appropriate signature, are returned to the originating office; copies are sent to Property Accounting.
  • After receiving the signed documents, the originating official is responsible for sending the invoice for payment and coordinating the removal of the equipment from Rice.
  • For items purchased using grant funds, the proceeds of the sale must be deposited into the grant(s) used to purchase the equipment, if still open. For items purchased using University funds, the organization that provided the funds designates where the proceeds are deposited.

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Security/Protection

Appropriate Procedures

It is the responsibility of each department or administrative area to develop procedures to ensure that equipment and property are protected from loss or damage.

Requirements of these procedures include:

  • Promptly affixing the appropriate ID tag.
  • Preventing unsupervised access to sensitive or fragile equipment and property by unauthorized person.
  • Locking doors or otherwise denying access to vacant areas containing movable equipment or property.

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Proper Reporting

Any unlawful act which results in the loss of or damage to equipment owned by Rice University must be reported to the Rice University Police Department, if the equipment is located on the Rice campus. For loss or damage of Rice-owned equipment located off-campus, the local law enforcement agency must be notified. Notification to the appropriate agency must be made as soon as possible after the incident has occurred.

Immediately after notifying the appropriate law enforcement agency, Property Accounting should be notified via email (fascard@rice.edu) of the status of the equipment (e.g., stolen, damaged beyond repair, damaged and in need of repair, etc.). The email should include identifying information such as PTag number, Make, Model and Serial Number for each item of equipment included in the incident. If available, a copy of the law enforcement agency’s incident report should be attached to the email or mailed to Property Accounting, MS 70. If the report is not available until a later date, it should be emailed or mailed as soon as received.

The cost of some losses or damages may be recoverable through Rice’s insurance coverage. For questions about eligibility, please contact the Director of Risk Management, Renee Block, at rab@rice.edu or x4751.

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Disposal

Disposal of all University property and equipment must meet five standards:  1) the responsible organization must attempt to capture the remaining value of items (if any) as part of the disposal process, 2) items no longer required by the organization currently responsible for them must be made available to other departments on campus, 3) items that could contain confidential or sensitive data must be disposed in accordance with the University’s data security policies and procedures, 4) all reasonable measures must be taken to ensure items are disposed in an environmentally appropriate manner and 5) the ultimate disposition of all equipment must be reported to the Office of Property Accounting. Property and equipment purchased using research funds must also be disposed in accordance with the terms and conditions of the funds used for purchase.

The mechanism for ensuring these standards are met is the Rice Classifieds web site. In addition to facilitating the appropriate disposal of University property and equipment, Rice Classifieds is an online sales site that is available to any internet user. It is also the only online sales site that should be used to sell University property. Other sites, such as eBay and others, do not provide sufficient administrative or financial controls and should not be used.

When a department determines that a piece of property or equipment is no longer needed by the department and should be disposed, the person with primary responsibility for the item must obtain approval from the department chair to dispose it. This approval should include agreement upon the remaining value, if any, of the item and minimum sale price required for sale.

Special consideration must be given to technology items to ensure they are disposed in accordance with data security policies and procedures. Guidelines for proper preparation and disposal of these items are available at this web site:  https://docs.rice.edu/confluence/display/ITTUT/Computer+equipment+disposal. It is also important to remember that, in accordance with the Core Rice IT Service Level Agreement, items purchased or re-purchased through Rice Classifieds sales are not supported by Information Technology. Because these items will not be supported by IT, they are exempt from the requirement they be offered only to on-campus purchasers for two weeks.

Used lab equipment (including, but not limited to, research equipment, glassware, measurement tools, refrigerators, etc.) and other items that could be environmentally hazardous, must be reviewed by the Office of Environmental Health and Safety to confirm the appropriate method of handling. The Office of Environmental Health and Safety does review Rice Classifieds entries to assist in identifying items requiring special handling but departments are advised to contact them prior to listing an item, if possible.

Once the department chair’s approval has been obtained, the minimum sales price has been determined and all technological and environmental special needs have been met, the item should be listed for sale in the Rice Classifieds at classifieds.rice.edu. This listing ensures that a reasonable attempt has been made to capture any remaining value, other departments have had an opportunity to acquire the item and Property Accounting and Research and Cost Accounting have had the opportunity to confirm that Rice has clear title and the item may be sold.

To list an item for sale, go to classifieds.rice.edu and login using your netid and password. If the item was a capital asset, or you are unsure whether it was a capital asset, begin by searching the Property Accounting Inventory in Banner. If the item is in the Inventory, the posting form will be pre-populated with the available information.

Once the posting form has been completed and saved, the item is available for purchase for two (2) weeks by Rice University organizations only. Sales are transacted using an IDT as described in Acquisition:  Transfer:  Interdepartmental Transfer or Sale above.

Items not sold to University organizations after two (2) weeks are available to off-campus purchasers. University organizations may still purchase an item and pay for it by IDT, however, any off-campus person or organization is free to bid on items available for sale. This includes Rice student, faculty and staff although sales to a person affiliated with Rice must clearly be an arms-length transaction to avoid any appearance of impropriety.

When an acceptable off-campus bid is agreed upon, the seller should return to classifieds.rice.edu, change the status of the item from “Listed” to “Sold” and click “Create an Invoice” to prepare an invoice to present to the buyer. The buyer should take the Invoice to the Cashier’s Office, make payment and receive a receipt for the payment. The buyer can then take the receipt to the seller and take ownership of the item.

Please note:

• items are sold without warranty or guarantee,

• purchasers are expected to arrange for pick-up and delivery of all purchases,

• all technological and environmental issues must be resolved prior to sale and

• all laws and regulations related to export controls must be followed, if you have any questions whether they apply to your sale, contact either the Office of Technology Transfer or the Office of General Counsel.

Items not sold after being available to off-campus purchasers for two (2) weeks may be disposed in any of the approved ways. After the items have been removed from campus and are no longer eligible to be shown as active in the Banner inventory listing, you should return to the Classifieds listing and change the status from “Listed” to “Recycle/Salvage”. This will notify Property Accounting of the ultimate disposition of the item.

For items that require immediate disposal or, you believe, should bypass the normal disposal process, submit an email or memo explaining the need for authorization to circumvent the established procedures to the Assistant Controller, Assets, Dow Hudlow, at dlh@rice.edu or Controller’s Office MS 70.

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Forms

All Forms are available for download from the Property Accounting Section of the Controller's Office Form Page.

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