Accurate maintenance of property records is essential in order to assure safeguarded assets, financial accountability, reporting accuracy, adequate insurance coverage and efficient utilization of property already on hand. This paper establishes a systemwide policy to ensure that these objectives are achieved.
In addition to the policies and procedures set forth in this paper, personal property is subject to the following rules and regulations:
- Chapter 36.11(1)(a)(b) and (c), Wisconsin Statutes, Protection of People; Custody and Management of Property
- Chapter 2, B, UW System Risk Management Manual
- OMB Circular A-21, Cost Principles for Educational Institutions
- OMB Circular A-110, Attachment N, Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations
- Federal Acquisition Guidelines
- U.S. Department of Health and Human Services Grant Administration Regulations (45 CFR Part 74, Subpart O)
- NACUBO Financial Accounting and Reporting Manual, Chapter 400
- State Procurement Manual, PRO-F-3, Property Disposal Policy
- Regent Policy Document 22-2 – Disposal of Works of Art
III. Definitions of Terms
“Capital equipment” is defined as any single asset which has an acquisition cost of $5,000 or more and a useful life of at least two years, whether purchased outright, acquired through a capital lease or through donation. It also includes certain constructed or fabricated items and certain component parts (See UW Shared Financial System Accounts and Definitions). It does not include real property (land), software or library holdings (see UW System Administrative Policy 332 (SYS 332), Financial Reporting of Library Holdings).
Capital class codes are used for certain software acquisitions to conform with the class code usage mandated by the Department of Administration. However, the cost of purchased software should not be capitalized for financial reporting purposes since such software is generally licensed and not owned, even if the license agreement allows perpetual use of the software without additional license payments. While not subject to this capital equipment policy, computer software should be inventoried to ensure accountability and to maximize effective use of resources.
Each institution shall maintain an inventory system and internal procedures which will ensure accountability for capital equipment and the accuracy of information for financial reports and indirect cost calculations. Specific requirements are included in the attachments as follows: