Guidance Letter B-071
CLEVELAND STATE COMMUNITY COLLEGE Cleveland, Tennessee
SUBJECT: Equipment: Capitalized and Sensitive Minor
Department heads and other designated staff are responsible for the purchase, custody, proper use, and maintenance of all equipment assigned to the respective offices. All equipment should be secured at all times. This also includes all property in the custody of, under the control of, but not owned by the College, and property stored at off-campus sites.
All equipment is assigned a unique inventory number which in most cases is affixed to the equipment; the exception being items that cannot be tagged because of their size or when the tag may inhibit the equipment use.
Physical Plant staff has the responsibility for moving large pieces of equipment on and off campus. College equipment can only be used for College business. An employee may use College equipment and/or property for job-related activities, but not for personal activities. Equipment should not be loaned for community use without approval gained through the College’s facility utilization process.
Surplus equipment is to be removed through completion of an Equipment Transaction form (Appendix A) in accordance with TBR Policy 4:02:20:00 for disposal of Surplus Personal Property.
Lost or stolen equipment is reported to Campus Police, and an investigative report is filed with a Campus Police Officer. Campus Police Officer then files a report with the Tennessee Board of Regents.
For the purposes of this guideline, equipment generally is categorized into two categories:
- Capitalized Equipment
- Sensitive Minor Equipment
Property records for assets acquired with federal funds should conform to OMB Circular A-110, Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations.
CAPITALIZED EQUIPMENT (ITEMS COSTING $5,000 OR MORE):
Capital equipment shall be defined as “any tangible personal property having a useful life of more than one year and a cost or fair value (for donated items only) of $5,000 or more.”
The following includes some of the cost that should be capitalized as part of the cost of the asset:
- The original bargained acquisition price.
- Freight, insurance, handling, storage, and other costs related to acquiring the asset.
- Cost of installation, including site preparation, assembling, and installing.
- Cost of trial runs and other tests required before the asset can be put into full operation.
- Cost of reconditioning equipment acquired in a used state.
The Office of Purchasing and Contracts has responsibility for maintaining an accurate inventory of capital equipment items costing $5,000 or more. All equipment meeting the definition of capitalized equipment shall be capitalized and retained on the permanent inventory records maintained by the Office of Purchasing and Contracts. At the end of the fiscal year, all capital assets are reconciled to the master data base, and the capital asset report is balanced against the general ledger by the Business Manager.
Annually, the Office of Purchasing and Contracts will provide each equipment custodian with a listing of all capitalized equipment assigned to that department and appropriate instructions for conducting a physical inventory. Each equipment custodian is responsible for ensuring that the physical inventory is conducted in a prudent manner and for returning the completed physical inventory listing to the Office of Purchasing and Contracts by the date specified in the instructions accompanying the listing of capitalized equipment.
If College capital equipment is needed for use at home or on an alternate worksite in pursuit of job-related activities, the equipment custodian may assign the equipment to the employee or allow for the equipment to be checked out for a specified time period.
Department heads and other designated staff are responsible for reporting capital equipment transfers. Capital equipment transfers, capital equipment assigned to an employee or capital equipment checked out by an employee is processed by completing an Equipment Transactions form (Appendix A).
SENSITIVE MINOR EQUIPMENT ITEMS
Sensitive minor equipment is items of a movable nature which are particularly vulnerable to theft and have a cost or fair value (for donated items only) between $1,500.00 and $4,999.99, regardless of funding source.
Sensitive items shall be specifically defined as those items on the list below.
Sensitive Minor Equipment Listing:
- Computers (to include all mobile computing devices)
- Maintenance Equipment (between $300.00 and $4,999.99)
- Weapons (regardless of cost)
The equipment custodian is responsible for maintaining an accurate inventory and control of sensitive items. All computer equipment will be inventoried by the Office of Information Technology. However, if a department is assigned a piece of computer equipment, that department should record and track
those items as well. Inventories will be conducted annually on all sensitive minor equipment. Sampling is an acceptable method of conducting the physical inventory of sensitive minor equipment.
The useful life of sensitive minor equipment (except for weapons) is estimated at 3 years, after which the fair value will be considered nominal. Since the fair value will be considered nominal after 3 years, annual inventory of the item will no longer be required. Each sensitive item will be assigned a unique pre-numbered asset tag. Sensitive items will be recorded by the equipment custodian or designee. It is the equipment custodian’s responsibility to ensure the data is updated as changes occur.
Sensitive minor equipment items may also be assigned or checked out for use at home or an alternate worksite, but only in pursuit of job-related activities. The equipment custodian or designee may assign the equipment to the employee or allow for the equipment to be checked out for a specified time period. Department heads and other designated staff are responsible for tracking and monitoring sensitive equipment that has been assigned to an employee or sensitive equipment that has been checked out by an employee. Items checked out or assigned must be logged by the custodial department and documentation must be retained to show the activity.
While it is generally expected that items are checked out for a relatively short period of time, items must be returned to the equipment custodian or designee within one year from the time of checkout. If the item is still needed, the employee may check the item out again or the item may be re-assigned subject to the equipment custodian’s approval. The equipment custodian may establish a shorter check out period.
Should permanent control of equipment be transferred to another department/equipment custodian, an Equipment Transactions form (Appendix A) must be completed and the departmental logs updated by both the transferring department and the receiving department to reflect this transfer. The form will be signed by the employee receiving the transferred asset as well as the person authorizing the transfer.
The equipment custodian or designee may establish additional procedures deemed necessary for control of assets for which they are responsible.
Exceptions to this policy may be approved by the President of the College.
Source: TBR Guideline B-110