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SPONSORED
PROGRAMS OPERATIONS GUIDE
Property Definitions (Circular
A-110)
Introduction. Circular No. A-110 prescribes uniform standards governing management of property furnished by the federal government or whose cost was charged to a project supported by a federal grant or other agreement. Federal sponsoring agencies shall require recipients to observe these standards under grants and contracts.
Property Definitions.
Real
Property. Real property means land, including land improvements,
structures and appurtenances thereto, but excluding movable machinery and
equipment.
Personal Property. Personal property of any kind except real property. It may be tangible, having physical existence, or intangible, having no physical existence, such as patents, inventions and copyrights.
Intangible Property.
Inventions and Patents. If any program produces patentable items, patent rights, processes, or inventions, in the course of work sponsored by the federal government, such fact shall be promptly and fully reported to the federal sponsoring agency. Unless there is a prior agreement between the recipient and the federal sponsoring agency on disposition of such items, the federal sponsoring agency shall determine whether protection of the invention or discovery shall be sought. Recipients are subject to applicable regulations governing patents and inventions, including government-wide regulations issued by the Department of Commerce at 37 CFR Part 401, "Rights to Inventions Made by Non-Profit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements".
Copyrights. Except as otherwise provided in the terms and conditions of the agreement, the author or the recipient organization is free to copyright any books, publications, or other copyrightable materials developed in the course of or under a federal agreement, but the federal sponsoring agency shall reserve a royalty-free, nonexclusive and irrevocable right to reproduce, publish, or otherwise use, and to authorize others to use, the work for government purposes.
Tangible Property.
Federally-Owned Property. Title to federally-owned property remains vested in the federal government. Recipients shall submit annually an inventory listing of federally-owned property in their custody to the federal awarding agency. Upon completion of the agreement or when the property is no longer needed, the recipient shall report the property to the federal awarding agency for further agency utilization.
If the federal awarding agency has no further need for the property, it shall be declared excess and reported to the General Services Administration. Appropriate disposition instructions will be issued to the recipient after completion of the federal agency review.
Fabricated Equipment. In the case of equipment fabricated by the University, the principal investigator and the department head are responsible for maintaining cost records of the total costs of such fabrication and for notifying the Inventory Office upon completion. At such time, the Institution will ensure the property records required herein are prepared.
Supplies and Personal Property. Expendable personal property refers to all tangible personal property other than nonexpendable property. Title to supplies and expendable personal property shall vest in the Institution upon acquisition. If there is a residual inventory of unused supplies exceeding $5,000 in total aggregate value, upon termination or completion of the project or program, and the supplies are not needed for any other federally-sponsored project or program, the Institution shall retain the property for use on nonfederally-sponsored activities, or sell it, but must in either case, compensate the federal government for its share. The amount of compensation shall be computed in the same manner as for equipment.
Acquisition Cost of Equipment. Acquisition cost of equipment means the net invoice price of the equipment including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it was acquired. Other charges such as the cost of installation, transportation, taxes, duty or protective in-transit insurance, shall be included or excluded from the unit acquisition cost in accordance with the Institution's regular accounting practices.
Exempt Property. Exempt property means tangible personal property acquired in whole or in part with federal funds, where the federal awarding agency has statutory authority to vest title in the recipient without further obligation to the federal government. An example of exempt property authority is contained in the Federal Grant & Cooperative Agreement Act (31 USC 6306) for property acquired under an award to conduct basic or applied research by a non-profit institution of higher education or non-profit organization whose principal purpose is conducting scientific research.
Each federal sponsoring agency shall prescribe requirements for recipients concerning the use and disposition of real property acquired partly or wholly under award. Unless otherwise provided by statute, such requirements, at a minimum, shall contain the following:
Title. Title to real property shall vest in the recipient subject to the condition the recipient shall use the real property for the authorized purpose of the project as long as it is needed.
Use Approval. The recipient shall obtain written approval by the federal awarding agency for the use of real property in other projects when the recipient determines the property is no longer needed for the purpose of the original project. Use in other projects shall be limited to those under other federally-sponsored projects (i.e., awards) or programs having purposes consistent with those authorized for support by the federal sponsoring agency.
Disposition. When the real property is no longer needed, the recipient shall request disposition instructions from the federal awarding agency or its successor federal awarding agency. The federal awarding agency shall observe the following rules in the disposition instructions:
The recipient may be permitted to retain title after it compensates the federal government for that percentage of the current fair market value of the property attributable to the federal participation in the project.
The recipient may be directed to sell the property under guidelines provided by the federal agency and pay the federal government for that percentage of the current fair market value of the property attributable to the federal participation in the project (after deducting actual and reasonable selling and fix-up expenses, if any, from the sales proceeds). When the recipient is authorized or required to sell the property, proper sales procedures shall be established that provide for competition to the extent practicable and results in the highest possible return.
The recipient may be directed to transfer title to the property to the federal government provided that in such cases the recipient shall be entitled to compensation for its attributable percentage of the current fair market value of the property.
Title to equipment acquired by a recipient with federal funds shall vest in the recipient subject to a number of conditions.
Right to Transfer Title. The federal awarding agency may reserve the right to transfer the title to the federal government or to a third party named by the federal government when such third party is otherwise eligible under existing statutes. Such transfer shall be subject to a number of standards.
The equipment shall be appropriately identified in the award or otherwise made known to the recipient in writing.
The federal awarding agency shall issue disposition instructions within 120 calendar days after receipt of a final inventory. If the federal awarding agency fails to issue disposition instructions within the 120 calendar-day period, the recipient shall apply the standards Circular A-110 are appropriate. When the federal agency exercises its right to take title, the equipment shall be subject to the provisions for federally-owned equipment discussed previously.
Use of Equipment for Which the Recipient Has Title. The recipient shall use the equipment in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by federal funds, and shall not encumber the property without approval of the federal awarding agency. When no longer needed for the original project or program, the recipient shall use the equipment in connection with its other federally-sponsored activities, first for activities sponsored by the same federal agency, and second for activities sponsored by other federal agencies.
During the time that equipment is used on the project or program for which it was acquired, the recipient shall make it available for use on other projects or programs if such other use will not interfere with the work on the project or program for which the equipment was originally acquired. First preference for such other use shall be given to other projects or programs sponsored by the federal agency that financed the equipment; second preference shall be given to projects or programs sponsored by other federal agencies. If the equipment is owned by the federal government, use on other activities not sponsored by the federal government shall be permissible if authorized by the federal agency. User charges shall be treated as program income.
Disposition of Equipment. When the recipient no longer needs the the equipment, the equipment may be used for other activities in accordance with a number of standards.
Equipment with a unit acquisition cost of $5,000 or more may be retained for other uses provided compensation is made to the original federal agency or its successor. The amount of compensation shall be computed by applying the percentage of federal participation in the cost of the original project or program at the current fair market value of the equipment. If the recipient has no need for the equipment, the recipient shall request disposition instructions from the original awarding agency. The federal awarding agency shall determine whether the equipment can be used to meet the agency's requirements. If no requirement exists within that agency, the availability of the equipment shall be reported to the General Services Administration by the federal agency. The federal awarding agency shall issue instructions to the recipient no later than 120 calendar days after the recipient's request, and the following procedures shall govern:
Property Management Standards for Equipment. The recipient's property management standards for equipment shall include a number of procedural requirements. Equipment records shall be maintained accurately and shall include a description of the equipment; a manufacturer's serial number, model number, federal stock number, national stock number, or other identification number; the source of the equipment, award number whether title vests in the recipient or federal government; the acquisition date (or date received, if the equipment was furnished by the federal government) and cost; the percentage of federal participation in the cost of the equipment (not applicable to property furnished by the federal government.); the location, use and condition of the equipment, and the date the information was reported; the unit acquisition cost; and the ultimate disposition data, including date of disposal and sales price or the method used to determine current fair market value where a recipient compensates the federal awarding agency for its share.
Equipment owned by the federal government must be marked to indicate federal ownership.
An annual physical inventory of equipment will be taken and the results reconciled with the inventory records. Any differences between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the existence, current utilization, and continued need for the equipment.
A control system shall be in effect to ensure adequate safeguards to prevent loss, damage, or theft of the equipment. Any loss, damage, or theft of equipment shall be investigated and fully documented. If the equipment was owned by the federal government, the recipient shall promptly notify the federal awarding agency.
Adequate maintenance procedures shall be implemented to keep the equipment in good condition.
Where the recipient is authorized or required to sell the equipment, proper sales procedures shall be established which would provide for competition to the extent practicable and result in the highest possible return.
Accountability for University Property. The President of The University of Texas at San Antonio is responsible for property in the possession of the University. The Business Manager has been designated as the Property Manager. Responsibility for the day-to-day care and accountability of property has been delegated to the department heads. They are responsible for maintaining appropriate records, for completing an annual physical inventory of University property assigned to their departments, and for ensuring that University property is used for official purposes only. Property, as referred to herein, is defined as furniture, equipment, works of art, or other items of a non-consumable nature that are reasonably expected to last more than a year. Such property is often referred to as "Personal property".
Capital Equipment and Identification. Equipment, furniture items, and computer software with a unit cost of $5,000 or more are considered "capital equipment" and are recorded on the University inventory. Freight and installation charges, if any, are considered part of the cost of these items. Such item are assigned University inventory numbers, and a tag with the inventory number shall normally be affixed to each item indicating it is the property of The University of Texas. If tagging is not possible or feasible, the UTSA inventory number may be etched on or annotated with a permanent marking pen. Items that cannot be marked in any way (i. e., collection items) , will have a number "assigned" and shall be entered on the department's inventory.
Controlled Items. Such purchases constitute "noncapitalized equipment"; however, they are still University property and shall be properly used, maintained, and protected. A numbered tag may be used if specifically requested by a department. If an item costs less than $5,000, but it is to be an addition to an existing inventory item, it will be added to the inventory as part of the original item, and the inventory value will be increased accordingly.
DEFINE (Automated Inventory Record System). The DEFINE program is used by the Inventory Section to record and administer the capital equipment inventory for The University of Texas at San Antonio. Among its primary features are the ability to add property items to the departmental inventories through various means of acquisition or delete items from the inventories. Use of these features is restricted to the Inventory Section; however, department personnel do have limited use of DEFINE to assist them in managing the property assigned to their department. For example, department personnel with access to DEFINE may call up on the screen the number of an inventory item and view pertinent information such as the description of the item, inventory value, etc. Also, departmental personnel are required to use DEFINE to change the building and room number for the location of item assigned on their departmental inventory. They can also change, or add, serial number and change description. They are restricted, however, from changing any other data.
Annual Inventory. A complete physical inventory of all University owned property in the possession of departments, centers, and designated University offices must be taken at least once a year. This is a University requirement and it is also a State requirement, directed by the State Purchasing and General Services Act.
The time frame for each departments inventory is established by the Business Manager. The Inventory Section will mail instructions to each department along with a Report of Inventory and and a listing of the property items assigned to it. All the items indicated on the inventory listing should be located and their location annotated on the listing by the person taking the Inventory. Missing items, changes, or erroneous data should be noted, as appropriate, on the Report of Inventory form. Questions about specific items should be addressed to the Inventory Section while the inventory is being taken. In addition, department personnel should use the annual inventory as an opportunity to ensure that the items on hand are still needed and are being properly cared for and maintained.
One copy of the inventory listing shall be returned to the Inventory section along with the Report of Inventory signed by the department/division head. However, before signing the Report of Inventory form, the department head should ensure that all items on the inventory listing are located. If an item cannot be located, it should be noted on the inventory listing as missing. A duplicate copy of the inventory listing should be kept in the department and used as a management tool in controlling inventory items during the year.
Upon recommendation by the State Auditors and at the request of the Property Manager, the Inventory section, UT System Auditors, or UT San Antonio Internal Auditors may perform a physical inventory of randomly selected property items from a department's inventory listing. Each month a different department will be selected for this inventory. A list of items will be selected and the department will be asked to physically locate each item on the list. The department will have ten working days to find the items and then call the Inventory Section to schedule a time for someone to physically inspect each piece of property.
Care, Maintenance and Utilization
Responsibility. The individual department head is responsible for the operation, care, preventive maintenance, and protection of all government property in his/her custody. Accordingly, each will ensure preventive maintenance schedules are established and adhered to and inspection, maintenance and repair work is properly recorded. The responsibility for the proper care, maintenance and utilization of government property begins with the receipt of the property and continues until the University is properly relieved of responsibility in accordance with terms of the grant or contract and/or other applicable regulations of the federal agency.
Preventive Maintenance Records and Schedules. Each department head will ensure principal investigators, technicians, and/or other appropriate individuals under his/her supervision establish preventive maintenance schedules for all government furnished equipment within his/her area of responsibility. These schedules will take into consideration the manufacturer's specifications and recommendations. In addition, records of the performance of scheduled maintenance, inspection, calibrations, etc., along with the log of all repairs, modifications, maintenance, etc., of the equipment will be maintained throughout the period of responsibility. Such records must be available to representatives of the U.S. government and to appropriate officials of the University for review and inspection as necessary to ascertain compliance with appropriate regulations.
Maintenance Contracts. The existence of a maintenance contract on a piece of equipment shall be a conclusive presumption the required maintenance is being performed and, therefore, no records shall be maintained other than those provided by the contractor performing the maintenance.
Major Repairs. It shall be the responsibility of the department head to ensure only qualified repairmen are permitted to perform major repair work. Whether such an individual is a technician or other member of his/her staff, a Facilities Maintenance and Operations' employee, or an outside vendor, the department head must determine to the best of his/her ability the repairman is properly qualified. If the equipment is still under warranty, the vendor shall be notified and requested to provide the necessary repair work as covered by the warranty.
Utilization. The principal investigator jointly with the department head will be responsible for ensuring government property is utilized only for those purposes authorized in the contract; and that government equipment is being used sufficiently to justify its retention. Prior to reporting excess property, government property shall be screened for possible utilization on other federal projects currently in progress. An excess property listing shall be furnished to the principal investigators of authorized contracts; they, in turn, will notify the Inventory Section if they require any listed items. Upon submission of the final inventory to the Property Administrator, his/her approval will be requested for the title transfer of selected equipment items to another designated government contract.
Excess Property. Items which are excess to a federal grant or contract will be reported in accordance with the terms of the agreement with the federal agency or its established policies. When a project is terminated, a final inventory of all government property must be conducted and its results furnished to the federal property administrator through the Grants & Contracts Administration. Excess property in connection with a continuing contract or grant, shall be transferred to storage pending disposal instructions from the appropriate governmental official. The Physical Plant will coordinate the removal of such items to storage and be responsible for its control, security, protection, and care during the storage period. Upon receipt of proper authorization to ship an item of government property, arrangements for shipment will be made by the principal investigator and Grants & Contracts. The appropriate manuals, maintenance instructions, property records, shipping documents, special packing and crating instructions, etc., should accompany any item of equipment.
Storage and Movement. When government property is temporarily idle, but needed for authorized use at a future date, the cognizant principal investigator will be responsible for ensuring storage is accomplished under conditions which meet the requirements of these procedures as to protection, preservation, maintenance, security, control, etc. He/she must take special precautions to ensure protection against corrosion, contamination, accidental damage, and other similar hazards. Government property should, whenever possible, remain segregated from University-owned property in storage.
Prompt annotation of property records to indicate a change in location is particularly important in the case of stored property as well as in the case of any change in physical location of government property for any reason. Appropriate University officials must be able to locate property on call if the property administrator or auditors request, in which case the property's physical location must agree with that shown on the property records. Equipment location information shall be considered sufficient when property records contain both the department to which the equipment has been assigned and the building number in which the equipment is located. Should the location assignment be changed, the principal investigator will notify the Inventory Section.
Disposition of Government-Owned Equipment
When government-owned equipment is to be disposed of for any reason, the principal investigator and/or department head will notify the Director of Grants & Contracts Administration and, with her assistance, obtain necessary approval from the property administrator (for plant equipment, special tooling, or special test equipment). When this approval has been obtained Accounting Services will initiate action to effect the removal of the item from the inventory. When such disposition occurs, all essential information relative to the type of disposition (salvage, trade, transfer, etc.) will be shown. In the case of title to government-owned equipment being transferred to the University, the property will be recorded on-line by Inventory and action taken to effect the addition of the item to the University inventory listing. The date of title transfer will be shown.