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Accounting for Controlled Property and Capital Assets

Effective: 04/21/10 Approved By: Sr. Associate Vice President for Financial Affairs and Deputy CFO
Revised: 06/18/21
For Assistance Contact: Inventory Manager

Purpose/Scope

This guideline provides information about current State of Texas laws and University of Texas (UT) System rules, regulations and procedures for the proper acquisition and accounting of UTSA property, including information for inventorying, safeguarding, transferring and maintaining UTSA property.

Authority

University Guidelines

Table of Contents
  1. Proper Use of UTSA Property
  2. Capitalized Property
  3. Controlled Property
  4. Roles and Responsibilities
  5. Equipment and Quality Assessment Reviews
  6. Inventory Record System
  7. Inventory Carrying Values
  8. Acquisition of UTSA Property
    1. Purchases
    2. Lease-Purchase
    3. Fabrication
    4. Gifts
    5. U.S. Government Excess Property
    6. U.S. Government Property
    7. Disposal of U.S. Government Property
  9. Property Acquired Under Sponsored Programs
  10. Moving Furniture, Furnishings and Equipment
    1. Transfers between UTSA Departments
    2. Transfers between UTSA Departments with Charge
    3. Transfers from UTSA to another State Agency
    4. Transfers to UTSA from another State Agency
    5. Transfers from/to a Non-State Agency or Private Organization
    6. Equipment Returned to Manufacturer
    7. Trade-in of Equipment
    8. Warranty Exchange of Equipment
    9. Surplus Equipment
    10. Transfers from one Campus Location to Another
    11. Movement within an Allocated Department Area
  11. Lending of Equipment
  12. Removing Equipment from UTSA Premises
    1. Exceptions to Annual Physical Inventory (API) Requirements for Equipment Removed from Campus
    2. UTSA Property Taken Out of the Country
    3. Computer Encryption Requirement
  13. Removing Artwork
  14. Inventory Department Role in the Employee Separation Process
  15. Annual Physical Inventory and Procedures
    1. UTSA Inventory Methods
    2. Inventory Training
    3. Scanning Procedures
    4. Condition of Property
    5. Missing or Stolen Property
    6. Reporting and Reconciliation
    7. Completion of the API
  16. Damage to UTSA Property
  17. Tagging Equipment in New Buildings
  18. Marking Non-State (Personal) Property
  19. Property Records Retention Policy
  20. Works of Art and Historical Treasures
    1. Sale of Artwork or Duplicate Volumes
    2. Acquisitions of Artwork and Historical Treasures
    3. Artwork Capitalization Policy

A. Proper Use of UTSA Property

UTSA equipment should only be used for official business, and should not be used for personal gain or in competition with private enterprise. Regulations regarding proper use of university/state property by university employees are included in the UT Regents' Rules and Regulations, Rule 80101, Sec. 2, Authorized Users. Note: In this guideline, equipment and property are interchangeable terms.

B. Capitalized Property

Any asset, other than software purchased on 09/01/2009 or later, with a unit cost of $5,000 or more is considered capitalized property (or a capital asset) and is recorded to UTSA's inventory. All such items are assigned UTSA inventory numbers, and a barcode shall be affixed to each item indicating it is UTSA property.

Expenditures capitalized in the cost may include:

  • Original contract or invoice price
  • Freight charges and import duties
  • Handling and storage charges
  • In-transit insurance charges
  • Sales, use and other taxes imposed on the acquisition
  • Installation charges (if performed externally)
  • Charges for testing and preparation for use
  • Costs of reconditioning used items when purchased
  • Parts and labor associated with the construction of equipment
  • Binding – library
  • Electronic access charges – library
  • Reproduction and like costs required to place assets in service, with the exception of library salaries - library
  • Modifications, attachments, accessories or apparatus necessary to make the asset usable or render it into service

If an item costing less than $5,000 is intended to be incorporated into an existing inventory item, it will be added to the inventory listing under the same number as the original item, and the inventory value will be increased accordingly.

Except for controlled property, all equipment with a unit cost of less than $5,000 is considered non-capitalized (or non-capital) property but still constitutes UTSA property and shall be properly used, maintained and protected.

For information on capitalized software, see Financial Guideline – Accounting Treatment of Intangible Assets.

C. Controlled Property

In accordance with the State Comptroller's policy, controlled property refers to assets that have a unit cost less than $5,000 and are recorded to UTSA’s inventory but are not considered capitalized items. All controlled items are assigned UTSA inventory numbers, and a barcode shall be affixed to each item indicating it is UTSA property.

Controlled Items ($500 to $4,999.99):

  • Sound Systems and other audio equipment
  • Cameras – portable – digital, SLR
  • TV, video players/recorders
  • Computers (desktop, laptop)
  • Data projectors
  • Smartphones, tablets & other hand-held devices
  • Unmanned Aerial Vehicle (UAV) Drones
Other Controlled Items (at any cost):
  • Handguns
  • Rifles and shotguns
  • Artwork

D. Roles and Responsibilities

Each State of Texas agency is responsible for ensuring that property is tracked and secured in a manner that is most likely to prevent theft, loss, damage or misuse. Precautions must be taken to ensure that state property is secured. UTSA departments must know at all times where all property under their control is located, should have a method for locating any inventory item on-site or off-site and should be able to locate a given item upon request. At any time, the Inventory Department and external/internal auditors may perform a physical inventory of property items.

The president of UTSA is responsible for property in the possession of UTSA.

The assistant vice president of financial services and university bursar has been designated by the president as the UTSA property manager as required for each state agency. The UTSA property manager is responsible for property records which are maintained by the Inventory Department.

The director of financial services reports to the UTSA property manager, is responsible for the management and direction of the UTSA Inventory Department and Surplus Department, is responsible for recording and tracking all capitalized and controlled equipment, and serves as the alternate property manager for all capital inventory equipment.

The inventory manager reports to the director of financial services and is responsible for the daily operations and supervision of the UTSA Inventory Department and staff and for ensuring UTSA and departmental compliance with all property rules, regulations and policies.

The surplus property manager reports to the director of financial services and is responsible for the daily operations and supervision of the UTSA Surplus Property Department and staff.

The Inventory Department provides information to UTSA personnel regarding current state laws and UTSA rules, regulations and procedures that must be followed in using, safeguarding and disposing of UTSA property. The Inventory Department administers the Annual Physical Inventory process, maintains equipment inventory records, and is responsible for all property reporting.

The senior vice president for business affairs is required by the board of regents’ rules to facilitate an Annual Physical Inventory as discussed in this guideline.

Department managers are responsible for the care and accountability of UTSA property used by their department, which includes ensuring that the Annual Physical Inventory of UTSA property assigned to their department is completed each year. This responsibility may not be delegated and it is the duty of the department manager to see that all members of their staff take every reasonable precaution to prevent loss of or damage to UTSA property while it is in their possession or students' possession under their direct supervision. Department managers are responsible for ensuring that the department's inventory is maintained in accordance with UTSA and state policies.  

All department managers should emphasize, to all members of their staff, the importance of vigilance in preventing loss of or damage to UTSA property and in identifying those responsible for such damage when it occurs.

Ideally, inventory records are maintained by one person within the department to ensure compliance with requirements.

An inventory contact person (ICP) must be designated by the department manager to maintain departmental records regarding equipment removed from campus and property/equipment transfers, to update inventory records in PeopleSoft, and to conduct the departmental Annual Physical Inventory and assist in Quality Assurance Reviews. The department manager may also designate an alternate ICP to assist with departmental inventory responsibilities.

Employees are responsible for exercising reasonable care for university property and ensuring that it is used only for university business purposes. If removing property from UTSA premises, employees retain financial responsibility for safeguarding the property, and must make the property available and return it to UTSA premises as appropriate.

Supervisors who approve removal of property from UTSA premises have fiduciary responsibility for the property should the employee separate from UTSA and the item is not recovered.

E. Equipment and Quality Assessment Reviews

These reviews are not audits, nor do they substitute for audits. Equipment Reviews are conducted by the Inventory Department to ensure the accuracy of the reported Certification of Departmental Annual Physical Inventory. Quality Assurance Reviews may be conducted by the Office of Institutional Compliance and Risk Services to assess a department’s system of internal controls in relation to the criteria in UTSA’s Management Assessment Tool. To facilitate these reviews, it is recommended that the departments have the following documentation in their possession:

  • Copy of department's most recent Annual Physical Inventory
  • Missing/stolen property, equipment or inventory reports
  • Campus police incident reports
  • Inventory transfer documentation
  • Surplus documentation
  • Removal of Equipment forms
  • Departmental logs for equipment taken off campus
  • Correspondence to Inventory Department

F. Inventory Record System

The Inventory Department uses PeopleSoft to record and maintain the capital/controlled property inventory. The system provides the ability to add and delete property items to/from the departmental inventory.

Departmental personnel with access to PeopleSoft are required to use the PeopleSoft system to change the location of property items, assign custodial responsibility for property, and submit transfer requests for capital/controlled property. These are the only inventory updates department personnel are authorized to make in PeopleSoft. Only Inventory Department staff are authorized to make other changes to inventory data in PeopleSoft.

Departmental staff needing access to these functions should request access from Business Information Services.

G. Inventory Carrying Values

The acquisition cost of a property item remains the same as long as the item is carried on the UTSA inventory. Department personnel should always reference the acquisition cost of an item on forms and in correspondence requiring the inventory value, not the depreciated or current value.

H. Acquisition of UTSA Property

UTSA acquires property/equipment items through various means, as described below.

1. Purchases

All equipment purchased with UTSA funds is the property of UTSA. Likewise, items purchased with grant and contract funding become UTSA property upon acquisition unless the grant or contract specifically stipulates otherwise.

Accounting Services reviews purchase orders and payment vouchers to identify all equipment purchases. If the purchase is for capital or controlled equipment, the Inventory Department will assign an inventory number for each item and use the purchase order and voucher for entering the item into PeopleSoft and the inventory database.

Equipment purchased through PeopleSoft is automatically assigned to a departmental inventory based upon the funding source from which payment for the item was made. If the item was purchased for a different department, it must be transferred to that department in order to be reflected on the proper departmental inventory. Property transfers are processed through PeopleSoft Asset Management using the Asset Change Request.

Purchases of capital or controlled assets using the UTSA One Card is prohibited.

2. Lease-Purchase

A lease-purchase involves an item paid for in installments, with UTSA assuming outright ownership when the terms and conditions of the lease-purchase agreement are met. Capital equipment acquired by lease-purchase will be added to the department's inventory after the first payment has been made, with the inventory carrying value determined by the payments that have been made.

3. Fabrication

Fabricated equipment valued at $5,000 or more ($500 or more if the item is a controlled item) is assigned an inventory number and added to the department's inventory. Departments involved in the fabrication of equipment must keep track of all costs related to the fabrication. When a department fabricates equipment, the department must provide the Inventory Department with the item's description, cost documentation, department ownership and physical location.

4. Gifts

All gifts to UTSA (including capital and controlled property gifted to administrative units, colleges, divisions, departments, programs, faculty and any operation under the auspices of UTSA) must be processed and acceptance approval granted through the UTSA Office of Development and Alumni Relations.  

It is the recipient department’s responsibility to initiate the Gift Processing Package.

Development and Alumni Relations will notify the Inventory Department of any gift of property, including all artwork, with appropriate supporting documentation. The approved Gift Processing form will specify the property value, which the Inventory Department will use to determine whether the item must be inventoried. The Inventory Department will coordinate the tagging of gifts with the recipient department.

5. U.S. Government Excess Property

Equipment may be obtained through U.S. Government excess property disposal sources. This is equipment no longer needed by federal government departments and agencies and is made available for transfer to other government agencies, colleges and universities. Unless otherwise indicated in the transfer documents, equipment acquired from government excess property sources becomes UTSA property upon acceptance by the department. If the unit value is $5,000 or more ($500 or more if the item is a controlled item), the item will be assigned a UTSA inventory number, tagged, entered on the acquiring department's inventory, and controlled the same way as any other item of UTSA property.

6. U.S. Government Property

Specific questions regarding procedures for accounting for property used by UTSA departments to which the U.S. Government has retained ownership should be referred to the UTSA property manager.

7. Disposal of U.S. Government Property

Equipment acquired from U.S. Government excess property sources may have restrictions on disposal and therefore should not be indiscriminately thrown away. If a department wants to dispose of such property, either by sale or turn-in as surplus property, the department manager shall advise the UTSA property manager by memorandum. The following information must be provided: UTSA inventory number, item description, date acquired, excess property order number, owning government agency, inventory carrying value, estimated actual value, condition, and location of the item. This procedure is necessary because some agencies have restrictions affecting the disposal of equipment acquired through excess or surplus property sources. See Property Acquired Under Sponsored Programs for more information.

I. Property Acquired Under Sponsored Programs

Equipment acquired under sponsored programs is UTSA property unless specifically exempted by the terms of the sponsor's agreement. This property is placed on the inventory of the principal investigator (PI)'s assigned department. It should be handled and protected as UTSA property. PIs may require full-time use of equipment acquired with the grant or contract funds to perform the research specified in the agreement. Such exclusive use is permissible; however, ownership of the equipment is vested with UTSA, not with the individual.

Grants or contracts may specify that equipment acquired with the sponsoring agency's funding be transferred upon request by the agency. Often this will involve transfer of the PI and the grant to a new institution. When requested, UTSA will provide the receiving institution and the sponsoring agency with an equipment listing including the dates of purchase and acquisition costs.

Before transferring equipment to another institution, the PI should submit a letter to the Office of Sponsored Project Administration and the UTSA property manager through the dean or director, requesting approval. Include the following in the letter:

  • Grant number and grant name
  • Receiving institution name
  • Name and title of the official authorized to receive the property
  • The inventory number, item description, acquisition cost and year acquired.

In addition, a copy of the letter from the sponsoring agency directing the transfer of the grant and equipment to the receiving institution should accompany the request. Do not remove the equipment from UTSA until the department manager has received approval from the UTSA property manager. After approval, the department should remove the inventory tags only when physically transferring the equipment, and send the tags to the inventory manager along with a copy of the transfer authorization. UTSA should obtain from the receiving institution written acknowledgement of receipt of the equipment. This will authorize the Inventory Department to adjust the department's inventory.

Under no circumstances should property owned by the federal government be transferred to another department, declared as surplus or otherwise disposed of without acquiring clearance of ownership through the Office of Post Award Administration. When such a transfer is requested, copies of the ownership clearance documentation should accompany the transfer request. Property transfers are processed through PeopleSoft Asset Management using the Asset Change Request. No change can be made regarding federal property without appropriate clearance from the sponsoring federal agency.

J. Moving Furniture, Furnishings and Equipment

1. Transfers between UTSA Departments

All property transfers within UTSA are completed electronically through PeopleSoft Asset Management using the Asset Change Request. The transfer requires electronic approvals from both the transferring and receiving department managers. The transferring department remains accountable for the property until the transaction is approved by the Inventory Department.

Departments use the PS Asset Change Request to assign ownership of property to a new department. Do not use an Asset Change Request if equipment is temporarily loaned out to another department, as original ownership is not changed.

This applies to all equipment regardless of funding source.

2. Transfers between UTSA Departments with Charge

If a UTSA department desires to transfer equipment to another department contingent on receiving payment for the item(s), a sale may be negotiated by the two departments. The selling department must initiate an Interdepartmental Transfer (IDT) and complete an Asset Change Request to transfer the asset to the new department.

3. Transfers from UTSA to another State Agency

Property is sometimes transferred to other state agencies from UTSA. A UTSA State Property Transfer Request form is used to document these transfers. The UTSA department transferring the equipment completes this form, which must be signed by the department manager, the dean or appropriate vice president (VP) and the UTSA Office of Post Award Administration (if grant specific) and then forwarded to the UTSA property manager for approval and signature, prior to the relocation of the item. The State Property Transfer Request form must contain the transferring and receiving agencies’ contact information, assigned state agency number, requestor's information, justification (to include a statement reflecting the reason the asset is being transferred as opposed to being declared as surplus), the required approval signatures, a list of all the inventory numbers, a description of each item, serial number, date purchased, purchase order number (if applicable) and price (the present inventory carrying value), grant number (if applicable), cost center/project ID used to purchase the item(s) and a current location. The inventory value is reflected on UTSA's property records. Attach all supporting documentation (justification, memo, emails, etc.) to the transfer request.

Upon final approval from the UTSA property manager, the form and all supporting documentation will be forwarded to the inventory manager and capital asset accountant for coordination, processing and input into applicable inventory systems/databases. The receiving agency coordinates and pays for the shipping of the asset. The transferring department must notify the Surplus Property Department of the date and time of shipping, in order for the Surplus Property Department to witness when the asset leaves UTSA and to collect any shipping documents from the carrier. The inventory manager/capital asset accountant will coordinate with the receiving agency for acceptance by the agency's property manager and, upon final completion, will send a signed copy of the UTSA State Property Transfer Request form back to the transferring department for record keeping.

Outgoing transfers to other state agencies will be processed within 10 business days, provided required supporting documentation and signatures are complete.

4. Transfers to UTSA from another State Agency

Property is sometimes transferred to UTSA from other state agencies. A state property transfer request form is normally used to document these transfers. If the transferring agency does not have a standard form, they may use a copy of the UTSA State Property Transfer Request form to initiate the transfer. This form must be signed by the transferring state agency’s authorized departmental officials and property manager and forwarded to the UTSA property manager for approval/signature and acceptance. The form must contain that agency's contact information, assigned state agency number, justification, UTSA departmental contact information, a description of each item, serial number, the transferring agency’s inventory number, date purchased, purchase amount and the present inventory carrying value. This inventory value will be reflected on UTSA property records.

Upon receipt of the state property transfer request form, the Inventory Department will physically verify the asset, assign a UTSA barcode, and route the form to the UTSA property manager for acceptance. Upon receipt of all required signatures, the inventory manager/capital asset accountant will process and input the asset into the applicable inventory systems/databases, and will return signed copies of the state property transfer request form to the transferring agency for adjusting that agency’s property records and to the receiving UTSA department for the department's files.

Incoming transfers from other state agencies will be processed within 10 business days, provided required supporting documentation and signatures are complete. 

5. Transfers from/to a Non-State Agency or Private Organization

Property is sometimes transferred to or from non-state agencies or private organizations. A State Property Transfer Request form (or equivalent) and/or memorandum is normally used to document these transfers. This form is signed by the property manager of the agency/organization transferring or receiving the item(s) and is forwarded to the UTSA property manager for acceptance/approval and signature. It will contain the agency's/organization's full name and address, contact information, inventory number, a description of each item, and the present inventory carrying value to be reflected on UTSA property records.

The Inventory Department will validate the inventory number of the property item. Upon receipt of all required documentation and signatures, the inventory manager will coordinate property acceptance with the receiving agency's/organization’s property manager and forward final copies of all signed documentation to the agency/organization for record keeping. Transfers to and from non-state agencies or private organizations will be processed upon completion of required coordination. See the following sections for further information:

6. Equipment Returned to Manufacturer

When returning equipment to the manufacturer, an Equipment Trade-In form must be completed and forwarded to the Inventory Department. Since there is a possibility that the original item will not be returned to UTSA, the UTSA Inventory barcode must be removed and affixed to the Equipment Trade-In form. A duplicate inventory barcode will be issued to the replacement unit. No equipment should be returned to the manufacturer with the UTSA barcode attached. The departmental inventory contact person must be advised on any equipment returns, and a Removal of Equipment form must be completed. 

7. Trade-in of Equipment

UTSA equipment may be traded-in for credit toward the purchase of new equipment. A description of the item being traded-in, including the inventory number and the trade-in allowance, must be noted on the purchase order, as well as on any other document pertaining to the purchase of the new item. This is necessary to ensure the item being traded-in is properly accounted for and clearly identified for removal from the department's inventory records. A new inventory barcode will be issued for the replacement unit.

Before relinquishing the trade-in item to the manufacturer, the inventory barcode must be removed and affixed to the Equipment Trade-In form and sent to the Inventory Department. The departmental inventory contact person must be advised on all equipment trade-ins. No equipment should be traded-in with a UTSA barcode attached. A new inventory barcode will be issued for the replacement item.

If the item traded-in is on the department's equipment listing at the time of the next annual inventory, the department should advise the Inventory Department and provide a copy of the purchase order for the new item to confirm the trade-in. If there is no purchase order, a memorandum from the department manager documenting the trade-in will suffice to have the item removed from the departmental inventory.

Departments must contact the Office of Post Award Administration for approval before trading in equipment purchased with a grant or contract. 

8. Warranty Exchange of Equipment

UTSA equipment under warranty may be returned for repair or exchange. Before relinquishing the trade-in item to the manufacturer, the inventory barcode must be removed and affixed to an Equipment Trade-In form and sent to the Inventory Department. Attach to the form the supporting documentation (all correspondence regarding the exchange, including the warranty exchange program, Return Material Authorizations, invoices, etc.). No equipment should be returned to the manufacturer with a UTSA barcode attached. A duplicate barcode will be issued for the returned or replacement item. The departmental inventory contact person must be advised, and a Removal of Equipment form completed. 

9. Surplus Equipment

When a department determines that capital/controlled items held as part of their inventory are obsolete, unused or broken, the equipment is declared as surplus property. Federal, state and UT System requirements apply to surplus property. Surplus property may only be disposed of (or sold) by the Surplus Property Department. For further information on transferring controlled/capital assets to the Surplus Property Department, see Financial Guideline – Surplus Property

Cannibalization of Equipment

There are times when it is practical or economically feasible to remove parts from an item of equipment which is obsolete, broken, or is intended to be discarded. This practice is commonly called “cannibalization”. Normally, it should be avoided. However, if the best interests of UTSA can be served by the removal of parts from an item before transferring it to the Surplus Property Department for disposal, the department manager shall recommend that cannibalization be permitted.

The department will complete and sign the Equipment Cannibalization Request form and forward to the inventory manager for approval to cannibalize the equipment. This should include a statement that the item is obsolete, or is inoperable and not economically feasible to repair, and that the parts to be taken from it will be used to repair or construct other UTSA equipment. Also list the specific parts being removed. The inventory manager will contact the department and may inspect the property being removed prior to approval. When the inventory manager approves the request, a signed copy of the form will be returned to the requestor, and cannibalization may begin. Do not dispose of the remaining pieces.

After removal of the approved parts, the departmental inventory contact person, through PeopleSoft Asset Management using the Asset Change Request, must initiate the transfer of the remaining pieces of the equipment to the Surplus Property Department, and attach the approved Equipment Cannibalization Request form. The Surplus Property Department will contact the department inventory contact person to arrange pick up of the cannibalized equipment. The ORIGINAL cannibalization form must accompany the equipment to the Surplus Property Department.

10. Transfers from One Campus Location to Another

Any changes to the location of capital/controlled equipment must be made by the departmental inventory contact person through PeopleSoft Asset Management using the Asset Change Request. 

11. Movement within an Allocated Departmental Area

Within an area assigned to a department ID, furniture, furnishings and equipment may be moved at the discretion of the department manager. The department manager must ensure that adequate internal controls exist at the department level to monitor this activity. Such movement should be minimized, and must be reported to the departmental inventory contact person (ICP) to ensure locations and custodian changes are updated in PeopleSoft Asset Management using the Asset Change Request. 

K. Lending of Equipment

Departments may lend equipment to another department or to a state agency for official purposes. UTSA inventory records are not affected by the loan of the equipment and the lending department remains responsible for the property, including the scanning of the equipment for the department’s Annual Physical Inventory. The lending department manager must ensure that the borrowing department manager is aware of the loan of equipment and acknowledges receipt. Contact the Inventory Department for guidance prior to engaging in any loan of property to an entity outside UTSA, including other UT institutions.

L. Removing Equipment from UTSA Premises

UTSA-owned property may be removed from the campus and other UTSA facilities to be used in conducting official UTSA business. Such property is not for personal use. When an item is taken off campus, the individual assumes financial responsibility for the property and, if the property is negligently lost or stolen, will be required to replace the item or reimburse UTSA for the fair market value of the item.

Prior to removal of the equipment from UTSA, a Removal of Equipment (ROE) form must be completed and signed.

The inventory contact person (ICP) retains the original, approved ROE form and uses the ROE form to update the equipment's temporary location, off campus, in PeopleSoft. The ICP also uses the original form to update the equipment's return to campus.

ROE forms are valid for one year (by fiscal, annual, or calendar year, at the discretion of the department). The equipment must be made available for scanning at least once per year during the department's Annual Physical Inventory. ICPs are responsible for maintaining accurate logs of all equipment that is not located on UTSA premises and for ensuring the department's ROE forms are current.

A departmental log for equipment removed from campus must contain the following information:

  • The name and employee ID of the employee borrowing the equipment
  • Business reason
  • Item description and UTSA barcode number and serial number
  • Date checked out and expected return date

A copy of the signed ROE form must accompany all equipment being removed from campus to demonstrate the removal has been authorized by UTSA.

1. Exceptions to Annual Physical Inventory (API) Requirements for Equipment Removed From Campus

Equipment that is not located on any UTSA campus may be excluded from the API provided the requirements pertaining to each exceptional situation are met, as listed below. The department manager must send a memorandum to the UTSA property manager stating that the equipment is located at a specific location and attach correspondence from an accountable person stating that the item was physically verified (or stating other circumstances/providing other documentation, as noted below). Exceptions that are not described in one of the following situations below may be granted but must be requested in advance before removing the item from campus.

If an item is not located on campus and no ROE form has been prepared, the absence of the item must be reported to the UTSA Police Department. Such equipment will be determined to be stolen, with the following exceptions:

  • Equipment in hazardous or inaccessible areas requires a memorandum from the department manager stating that the equipment is located in a specific inaccessible area. The location, the tag number, the serial number, and the department ID must be identified. A specific time period and reason for inaccessibility of the item(s) must be included.
  • Equipment geographically separated from any UTSA campus
    • Within 100 miles of any UTSA campus: Must be scanned annually and an ROE form must be completed
    • Further than 100 miles from any UTSA campus: Must be scanned every other fiscal year and an ROE form must be completed
    • If the equipment is a computing device, the employee should log into the UTSA VPN at least every 30 days. Certain computing devices that meet the criteria for electronic verification of equipment will automatically meet the API requirements.
  • Equipment not within the continental United States must have an ROE form completed annually, and must have been cleared through the UTSA Office of Research Integrity (ORI). To satisfy the API requirements, submit a copy of the current ROE and a clear date-stamped photo of the tag and serial number.
  • Art collections on tour require documentation that includes a memorandum from the Office of the President with the tour itinerary, a list of items on the tour, and a point of contact.
  • Equipment confiscated by legal authorities must be documented by an annual memorandum from the withholding agency listing the items confiscated.
  • Equipment being used by employees who are on an extended medical leave and are working from home.
2. UTSA Property Taken Out of the Country

Travelers who take UTSA property, such as laptops or GPS devices, out of the country are considered to be temporarily exporting those items under Export Control Regulations. Laptop computers and GPS, and their underlying software, are subject to Export Control Regulations and may require a license for export to some destinations. All UTSA property taken out of the country must be cleared through ORI before removing the property from campus, and an ROE form must be completed.

3. Computer Encryption Requirement

Before being removed from a UTSA campus, all laptop/desktop/notebook computers must be encrypted or be formally approved for a waiver by the UTSA Office of Information Security in accordance with the UTSA Standard for Data Encryption.

M. Removing Artwork

UTSA-owned artwork is acquired, distributed and positioned at the discretion of the president. While the UTSA  art specialist/curator is responsible for all artwork, artwork is distributed to each UTSA campus for the benefit and enjoyment of all visitors, faculty, staff and students. Therefore, it is the responsibility of all individuals to report any damage or theft to the UTSA Police Department and to the UTSA art specialist/curator.

Artwork positioned in a department or common area of UTSA may not be relocated without the prior approval of the president or designee. This includes relocation from one wall to another in an area or to another area. Only the personnel authorized by the president may handle art for any reason. If the current positioning has become insecure and presents a risk of damage or theft, the UTSA art specialist/curator must be notified immediately to have the situation remedied.

Artwork may not be removed from UTSA campuses without advance approval from the UTSA art specialist/curator and may only be transported by authorized personnel.

N. Inventory Department Role in the Employee Separation Process

Employees separating from UTSA must have any property assigned to them in PeopleSoft reassigned to a new user before final clearance from the Inventory Department for the separating employee can be granted. To do so, the inventory contact person from the separating employee's department updates the Custodian Tab in the PeopleSoft Asset Management Basic Add Screen.

Final clearance is the Inventory Department’s confirmation that the separating employee's employee ID has been cleared of any inventory obligations. 

O. Annual Physical Inventory and Procedure

A complete Annual Physical Inventory (API) of all UTSA-owned property in the possession of departments, centers and designated UTSA offices shall be made each year as directed by the State Property Accounting Process User's Guide, Chapter 2, Section 2.12. If a state agency fails to keep records or perform an API, the State Comptroller may refuse to draw warrants or initiate electronic fund transfers on behalf of the agency.

1. UTSA Inventory Methods

UTSA uses two methods for conducting and recording the Annual Physical Inventory 1) Barcode Scanning; and 2) Electronic Verification of Equipment.

2. Inventory Training

Each year, a department must designate the primary and/or alternate inventory contact person (ICP) who will be required to attend mandatory training. The DE675 Inventory: Initial Training is a training class for newly designated ICPs. The DE676 Inventory: Refresher Training is a training course for ICPs who have previously attended DE675.

3. Scanning Procedures

After completing the required training course, each ICP will receive a departmental Inventory Listing and Inventory Custody Reports for each property custodian.

To conduct the department’s inventory, the ICP will be issued a barcode scanner. The ICP will complete the physical scanning of each tagged departmental asset and return the scanner, along with the Inventory Listing and Inventory Custody Reports, to the Inventory Department within a prescribed timeframe. The timeframe will be determined according to the number of assets within the department.

The ICP must locate and scan all assets identified on the departmental Inventory Listing. Computers reporting to Insight will be excluded from the Inventory Listing if a connection was made within the last 30 days. Telecommuters may connect to the UTSA network through VPN in order for their computer to be auto-inventoried.

All UTSA (faculty/staff) employees must annually sign the Inventory Custody Report(s) for all items for which they are responsible.

The above processes help promote responsible stewardship of UTSA property.

4. Condition of Property

The condition (fitness to render services) of each asset should also be evaluated and updated on the Inventory Listing, as appropriate. These categories of condition apply: 

  • New: New or excellent condition.
  • Good: Somewhat used or reconditioned property that, while still in usable condition, is slightly shopworn, soiled or otherwise precluded from being considered “new.” The condition of the property does not impair its utility.
  • Fair: Property that is soiled, shopworn, rusted, deteriorated or damaged to the extent that utility is slightly impaired;  or reconditioned property that has been repaired or renovated but has since deteriorated and which needs or may need additional repair or renovation in the near future.
  • Poor: Property so badly broken, soiled, rusted, mildewed, deteriorated or damaged that its utility is seriously impaired; or property that has been repaired or renovated but has since seriously deteriorated due to factors such as major wear and tear, corrosion or exposure to weather.
5. Missing or Stolen Property

Missing or stolen assets, changes or erroneous data should be reported, as appropriate, on the appropriate inventory form.

UTSA is evaluated on its ratio of lost and stolen property, which is reported annually. As a state agency, UTSA must keep its ratio of lost and stolen asset value to no more than one (1%) percent of the total value of all assets or risk having its budgets reduced.

All department personnel should continue to aggressively search for assets reported as missing or stolen and, if found, must reinstate the asset using the appropriate form. The property manager makes the final determination as to negligence or non-negligence.

Missing Property

Property is considered missing when it cannot be found, and no evidence of theft is apparent. Property that is missing must be reported to the UTSA Police Department. If confidential or personally identifiable data was stored or present in the missing property, it must also be reported to the Office of Information Security. The department must conduct a thorough search for the property. If the property is not located, the department must submit a Missing Property/Reinstatement form (with attached supporting documentation) to the property manager. On the Missing Property/Reinstatement form, the department manager must make a recommendation as to whether the loss was due to negligence on the part of an employee. 

Per Texas Government Code Section 403.275 – Liability for Property Loss, pecuniary liability for missing property may be assigned to an employee when the employee's failure to exercise reasonable care over the property contributes to the loss (negligence). UTSA may seek reimbursement for the fair market value of the missing property when the property manager finds negligence.

Missing property is carried on the department’s inventory for two calendar years after the initial report. The department must submit a Missing Property/Reinstatement form to the Inventory Department for items located after being reported missing. If items are not located during this two-year period, they will be marked for disposal and reported to the area VP.

Stolen Property

When a departmental employee becomes aware that an item of equipment is missing, a thorough search must begin immediately and must continue until the item is found or determined to be stolen.

If property is believed to be stolen, the UTSA Police Department and the property manager must be notified  immediately. 

If property is stolen on campus, the department must obtain a copy of the offense/incident report or other documentation from the UTSA Police Department and send it along with a  Stolen/Recovered Property Report form to the property manager.

If property is stolen off campus, the theft must be reported to an outside law enforcement agency and the UTSA Police Department. The UTSA Police Department will log the theft into the Dispatch Log and create a Dispatch Entry. A copy of the Dispatch Entry along with a copy of the outside agency's offense/incident report or other documentation must accompany the Stolen/Recovered Property Report form to the property manager.

In all cases of theft, the department manager must make a recommendation on the Stolen/Recovered Property Report form as to whether the loss was due to negligence on the part of an employee.

It is essential that the information included on the Stolen/Recovered Property Report form is accurate and contains sufficient detail.

A Stolen/Recovered Property Report form must be submitted to the Inventory Department for recovered items that were reported stolen.

Per Texas Government Code Section 403.275 – Liability for Property Loss, pecuniary liability for stolen property may be assigned to an employee for failure to exercise reasonable care for the property's safekeeping (negligence). UTSA may seek reimbursement for the fair market value of stolen property when the property manager finds negligence.

UTSA property that is stolen remains on a department's inventory until approval for deletion is obtained from the UTSA property manager.

6. Reporting and Reconciliation

Questions about specific assets should be addressed to Inventory Department staff during the inventory process. The ICP should use the annual inventory process as an opportunity to ensure that the property is still being used, properly cared for and maintained. Any property not being used should be declared as surplus property to avoid future loss.  

After completing the steps above, the department manager should ensure that all assets on the departmental Inventory Listing are located, and all Inventory Custody Reports are signed by the custodian of each asset.

The ICP and department manager then sign the Certification of Departmental Annual Physical Inventory form.

Departments must return the original copies of the certification, departmental Inventory Listing and Inventory Custody Reports, all supporting documentation, forms, etc. to the Inventory Department.  

Departments should keep a duplicate copy of all documentation on file and use this as a management tool in controlling inventory assets during the year. These documents may be subject to review during UTSA Quality Assurance Reviews (QARs).

7. Completion of the API

The API is considered complete when the Inventory Department downloads the inventory data from the scanners, conducts a reconciliation of the data, and sends a Post-Inventory Report back to the department detailing the reconciliation results of each asset inventoried.

P. Damage to UTSA Property

If a student damages UTSA property, the student will be reported to the department manager and to the senior vice president for business affairs (VPBA). The department manager will submit a non-routine work request to the Office of Facilities for repair of the damage, and the repair may be billed to the responsible student. A student's failure to pay may be referred to the senior VPBA.

If the student is also an employee and the damage occurs in that capacity, the following procedure applies.

When state or UTSA property has been destroyed or damaged through the negligence of an employee, the department manager responsible for that property must immediately report such loss or damage to the UTSA Police Department and to the property manager who will in turn forward a report to the senior VPBA. If warranted, the senior VPBA will direct an investigation to determine the cause of loss or damage.

When damage to UTSA property is discovered for which an individual student or employee can be held responsible, the responsible person may be required to reimburse UTSA for the damage. It is the responsibility of the department manager and individual faculty or staff members to report such damage as soon as it is discovered so that the item can be repaired or replaced.

Q. Tagging Equipment in New Buildings

The facilities coordinator provides the Inventory Department with the equipment listing of all new furniture and equipment, including descriptions of the equipment, location and acquisition price. The Inventory Department assigns an inventory number to each controlled/capitalized item and determines which department owns the equipment. After tagging, the inventory numbers are entered into PeopleSoft and appear on the appropriate department's Annual Physical Inventory. 

R. Marking Non-State (Personal) Property

All personal property belonging to students, faculty or staff of UTSA shall be marked: “Personal Property of ___________.” Any property belonging to an outside company but placed on UTSA premises, whether for trial use or other purposes, should be clearly identified as “Property of ____________ Company”. Marking items this way saves significant time and effort during the API and departmental audits of equipment. 

S. Property Records Retention Policy

The Texas State Records Retention Schedule requires UTSA to maintain property records for the life of the asset and for a period not less than three fiscal years after the disposal of property. Property records should include any payment-related source documentation (invoices, payment vouchers, receipts, etc.) necessary to substantiate the value of the asset. The Inventory Department and Disbursements and Travel Services will retain all required documentation for the specified retention period. 

T. Works of Art and Historical Treasures

According to the State Property Accounting Process User's Guide Chapter 1, Works of Art and Historical Treasures are collections or significant individual items that are owned by a state agency and are not held for financial gain but rather for public exhibition, education or research as part of a public service. Collections or individual items are subject to an organizational policy that requires the proceeds from their sales to be used to acquire similar items. 

In compliance with GASB 34 Paragraph 27c, every UTSA Work of Art and Historical Treasure (donated or purchased) is currently:

  1. Held for public exhibition, education, or research in furtherance of public service, rather than for financial gain.
  2. Protected, kept unencumbered, cared for and preserved.
  3. Subject to the policy of the UT System that any proceeds from the sale of a collection item be used to acquire other items for collections (per the UT System Regents' Rules and RegulationsRule 80201: Disposal of U. T. Surplus Property Sec 6).
1. Sale of Artwork or Duplicate Volumes

When the president determines that a work of art or a duplicate of a valuable, rare or significant volume is no longer of significant use for the purposes of teaching or research, the item is subject to sale following the procedure outlined in this section. The disposability and current fair market value of the item shall be certified by a three-member panel (including either an art historian or a bibliographer) and the director of the collection disposing of the property. The UT System and any of its institutions shall be given first choice in acquiring the item before it is offered for sale. Proceeds from the sale shall be used for purchases to improve the collection from which the item was drawn or to select items more appropriate to the institution's collection areas. Sale is subject to the approval of the president and must be for the fair market value of the item. A permanent record shall be made of the disposition and future location of the item.

2. Acquisitions of Artwork and Historical Treasures

Purchases: All Works of Art and Historical Treasures purchased with UTSA funds in the name of UTSA are considered property of UTSA.

Donations: All Works of Art and Historical Treasures donated to UTSA become the property of UTSA upon acceptance approval being granted by the UTSA Office of Development and Alumni Relations. See the UTSA Handbook of Operating Procedures (HOP) 9.23 — Procedures Governing Private Gift Solicitation, Acceptance, and Management for more information.

3. Artwork Capitalization Policy

UTSA capitalizes all Works of Art and Historical Treasures at the purchase cost at the time of acquisition or, for donated items, at the value indicated on the Gift Processing Form.

Related Forms

  1. Certification of Departmental Annual Physical Inventory
  2. Equipment Cannibalization Request form
  3. Equipment Trade-in
  4. Missing Property/Reinstatement
  5. Removal of Equipment
  6. State Property Transfer Request
  7. Stolen/Recovered Property Report

Revision History

Date Description
06/18/21 Combines and supersedes the “Capital Asset Property Accounting” and “Administration and Management of Capital Assets & Controlled Property” guidelines. Significant revisions reflect new processes (e.g. use of PeopleSoft Asset Management). Moved content relating to surplus property processes to the Surplus Property guideline.
06/19/20 Editorial updates throughout.