Property Management Administration
Property primarily includes equipment. Effective stewardship and accountability of property, both Stanford and sponsor owned, are essential. Property management at is an integral process supported by all departments, each of which is responsible for the day-to-day management, use, care, record-keeping, and disposal of those assets.
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Equipment
Equipment has a full life-cycle process. For a Sponsored Project, it begins with the identification of the need for equipment during the proposal process. Methods of acquisition will be either purchased, furnished by the sponsor, or fabricated.
Once the proposed equipment has been approved, it is managed under Stanford’s approved Property Management System.
Key participants in the management of equipment on sponsored projects are the PI, the Research Administrator, the Department Property Administrator (DPA), the asset User, and the Property Management Office (PMO). The DPA and PMO are valuable resources to help facilitate what needs to be accomplished to ensure the objectives of the award are met.
The concept of accountability is a key factor for effective management of equipment purchased or furnished for use on a sponsored project.
Equipment is accountable to the award for which it was originally purchased or furnished. Use on other Contracts must be authorized by the Sponsor. Use on other grants is allowable as long as it does not interfere with the primary purpose for which the item was acquired.
When that award ends, or if the asset is no longer needed for that award, the Property Management Office is informed and coordinates communication with the Sponsor to ensure appropriate disposal occurs or the asset is transferred for use on another award.
Capital Equipment
Unless otherwise specified by the sponsor terms and conditions, assets are defined as capital equipment by Stanford when the following three criteria are met.
- Cost is $5,000 or greater
- Useful life of more than one year, and
- Individual, stand-alone, moveable, tangible item
Sponsor Terms and Conditions
Always read the award terms and conditions as sponsors may define equipment differently. Verify equipment ownership as well. Review the terms and conditions for required prior approvals and check for other management obligations. It is critical to use the correct Expenditure Types for purchases.
Include in the budget: type of equipment, manufacturer’s name or identifying mark, quantity, estimated cost, and basis for the estimate, vendor quote, and sales tax.
Budget for a specific item “or equivalent.” This will give you the flexibility to substitute something equivalent later for the same amount of money.
Budget sales tax and freight if applicable.
Expenses included in the price of the equipment
Expenses included in the price of the equipment are listed below. Although some expenses must be excluded from the purchase price they can and should be proposed if applicable. Include these types of expenses in the "other" expense category.
Expenses Includedin the Price of Equipment |
Expenses Excludedin the Price of Equipment |
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Equipment Fabrication
“Equipment fabrication” is the building of a unique individual piece of equipment, or scientific instrument by Stanford personnel (not a vendor or subcontractor).
A fabrication must meet all of the following criteria:
- The item has unique specifications and is described in the research proposal or award. Details are specified in a dimensioned engineering drawing. When design changes occur, the engineering drawing should be subsequently updated.
- The total cost for acquired materials, supplies, and components must be $5,000 or greater. All items acquired for a fabrication must be permanently integrated into the resulting discrete item.
- The completed fabrication has an estimated useful life of one (1) year or more. (Note: If the fabrication is owned or funded by NASA, the useful life must be two (2) years or more.)
- When completed, the item will not be affixed permanently to a building or structure.
- The fabrication results in a unique, stand-alone, tangible item capable of specific identification and continuous control through tagging and periodic physical inventory. Components should be designed to remain at one position in the fabrication; they are not to be removed and replaced throughout the useful life of the fabrication.
- It must be completed in ample time to directly benefit the funding project and used for its intended purpose. If it is a contract-deliverable item, it must be completed in time to meet the delivery schedule as outlined in the funding sponsored project.
General Purpose Equipment
General purpose (non-scientific) equipment budgeted in a proposal will require an especially careful budget justification. A similar type of justification is needed if you are proposing to purchase general purpose equipment. Office equipment is normally considered an indirect cost.
Ownership of Equipment
Correct determination of equipment title or simply stated who owns the equipment, prior to placing purchase requisition is critical. It will determine whether the transaction is taxable. It also defines identification, stewardship, and reporting compliance requirements for the asset as well as disposition options available at the end of its useful life.
Generally speaking, for equipment purchased with sponsor funds on a grant, title will vest with Stanford University at the time of acquisition.
This requires sales/use tax to be applied to the purchase transaction. In these cases, sales tax is an allowable direct charge to the sponsored project.
Equipment purchased with contract funds must be treated on a case by case basis. It is critical to read and understand the terms and conditions guiding equipment.
Fabrication
Stanford’s dynamic research environment often requires the creation of one-of-a-kind equipment intended to perform unique, specific functions. Fabrications are complex, not commercially available items, configured and built by Stanford University personnel. Federal sponsoring agencies often refer to these as Special Test Equipment (STE) or Special Tooling (ST).
Equipment fabrications may be Stanford or Sponsor funded. They have specific requirements for acquisition, accounting, tracking, capitalization, and reporting processes.
“Equipment fabrication” is the building of a unique individual piece of equipment, or scientific instrument by Stanford personnel (not a vendor or subcontractor).
What is a fabrication?
- Unique, specialized equipment that you must build because it is not commercially available
- It is not commercially available
- Useful life of more than one year after completion (2 years if NASA funded)
- Aggregate cost of $5,000 or more
- Material records maintained by project personnel
- May require sponsor approval
- One fabrication per task
- Each fabrication has a unique fabrication number assigned
- No Stanford labor can be included in the cost of a fabrication, including labor services from a service center
- Progress of fabrications are monitored by PMO so they can be capitalized upon completion
- Fabrication expenses are stored in Grants Accounting until the fabrication is complete, when they will be incorporated into the fabrication record – it is critical that the expenditure type and task are correct so that all charges can be tracked!
Records of material are maintained by the departments. You may refer to the Property Management Manual for additional information:
Property Lifecycle
Phase I: Acquisition
Capital equipment must be screened prior to a purchase. Your DPA will do this for you when they approve the purchase order. If we are borrowing equipment from another institution, contact your DPA for help with the loan process.
Using an appropriate “Expenditure Type” is of great importance no matter what process you are performing. It is especially critical when purchasing equipment – this determines ownership, drives depreciation, and helps Stanford remain consistent in our accounting practices!
Tagging equipment identifies ownership and is required by sponsors. Stanford uses a barcode tag for equipment, and each asset is assigned an individual number. Additional identification in the form of overlays are used to identify the equipment as either government-owned, donated, leased, or non-capital. In addition to uniquely identifying equipment, this also facilitates physical inventory. Some assets require an additional identifying overlay (donated, leased, government). It is also important to identify “non-capital” assets and assets that do not belong to Stanford. For example, a graduate student using his own laptop for a sponsored project on campus should physically identify it as non-Stanford owned.
In another example, two printers of the same make and model sit side by side. One is tagged; the other is not. The one that isn’t tagged may have been overlooked, or perhaps it was purchased on sale and truly isn’t capital equipment. An inventory taker or auditor wouldn’t know which unless it had a non-capital overlay on it. This identification assists physical inventory analysts and auditors, and it is a theft deterrent. Some assets are too small or sensitive to tag -- for these we assign a tag number but do not put the actual tag on the equipment
Research Proposal Phase – Research set-up and commencement
Phase II: In Service
In Service Considerations
You may wonder why it’s so important to identify the location of equipment. We recover a higher amount of F&A (Facilities & Administrative)from equipment coded in research space, so it’s very important that we identify the locations as accurately as possible. If equipment is moved, the new location must be recorded so we depreciate the equipment at the proper rate. Location is also important for risk management reporting, accountability and tracking.
If you are loaning equipment to another institution, contact your DPA for help you with the loan process. There is liability risk and sponsor approval may be required.
Physical Inventory
There are various methods by which an inventory is conducted. For example, wall-to-wall inventories in which every asset in the department is scanned, or stratified where a sampling of assets is inventoried.
Inventory results of equipment on sponsored projects must be reconciled and reported by project to the sponsor. If items are not found, the sponsor may require Stanford to pay for them. A pattern of continuing losses could result in additional audit scrutiny, as well as liability for asset replacement. Additionally, the approval rating of Stanford’s property system can be placed in jeopardy.
Phase III: Excess
Excess Definition
The Excess phase begins when the asset is no longer needed for the project. In most cases this occurs as the project nears completion. Excess activities include transferring equipment to other awards, selling, or returning to the sponsor.
Disposal and Closeout Considerations
Appropriate disposition of equipment is an area that is often overlooked. The source of funding for an asset has a direct impact on how it can be disposed. Sponsor funded purchases and donations may have specific disposal restrictions. The key to determining disposal excess restrictions is to read the sponsor agreement or donation documentation.
Staff are encouraged to transfer useable equipment to other Stanford departments through the Property Reuse Website, which is for inter-departmental transfers only (people can list both capital and non-capital items on the reuse website, and can also post “wanted” ads).
If items do not transfer on the Reuse site, they should be sold through the SPS Surplus Property Sales Office, which is open to the public. SPS is the only campus organization authorized to write a bill of sale for equipment. Tags must not be removed from equipment. The Surplus Property Sales Office will remove equipment tags. Since equipment is tracked over its life, it will retain its original ID number until its final disposition. Your DPA will assist you with any of these processes.
Regardless of funding source, equipment should never be thrown away. This includes non-capital equipment; your DPA must process all capital and sensitive non-capital equipment (electronic items such as PDAs, computer monitors, cell phones, etc.) via the Sunflower Assets system to ensure EH&S (Environmental Health & Safety) and sponsor requirements have been satisfied. Check for electronic waste recycling sites online.
Transfers to other institutions are considered “disposals." Often, PIs transfer their research to another institution and take equipment with them. These transfers must be approved and documented by the dean’s office in advance! There may be a negotiation or transfer of funds from the receiving institution. Contact your DPA for guidance in this process.
Stanford’s equipment inventories and property management systems are under scrutiny by the ONR (Office of Naval Research), Stanford’s cognizant government agency. Stanford’s online system of record is Sunflower Assets (SFA); all data is entered into it by Department Property Administrators (DPAs).
Check the terms and conditions of your particular award for information related to the acquisition, ownership, and disposition of property. Some awards do not allow the purchase of particular types of equipment, while other awards are made specifically for that purpose. Some require pre-approvals before equipment may be purchased.
Documentation of allocability, i.e., the way in which the equipment benefits the project, is critical, particularly if the equipment is acquired late in the project period. Similar to the rules for the direct charging of administrative expenses, there is a parallel requirement for a good budget justification whenever you plan to charge “general purpose” equipment to a project. The federal bias is that such equipment is an indirect cost. If you need to purchase such equipment specifically for a project, the budget justification should be detailed in its linkage of the expense to the technical work of the project. There are no indirect cost waivers on non-capital equipment costing less than $5,000. Information on which rates to use each fiscal year, are available on the F&A Rate Page.
What is Sunflower Assets?
Sunflower is the official system of record for property management at Stanford University and is called Sunflower Assets, or SFA. Research administrators provide information about equipment to the DPA. Types of information may include asset user, change in location, use, need to process equipment as excess (dispose), and others. The DPA is responsible for creating asset records (note: it's important to notify your DPA immediately when equipment arrives as they have to record the asset in Sunflower within 30 days of receipt). The DPA also modifies SFA records to ensure the information is current. These records are reviewed and reconciled on a monthly basis by the Property Management Office.
Sunflower is used to:
- Track status of equipment, use, ownership and excess (disposal)
- Track support in Oracle and CRISP systems for depreciation and IDC (Indirect Costs) for expense on equipment
- Track physical location of equipment
