Property Accounting Guidelines & Procedures

Guidelines & Procedures

Please refer to the following policy to understand how we properly record the acquisition, maintenance, and disposal of all equipment and property acquired by Rice: University Policy 809: Control of Equipment and Other Property.

Guidelines & Procedures: Asset Acquisition

Asset Purchases 

All asset purchases made on behalf of Rice University must be made in accordance with the Rice University Purchasing Policy (available here: Policy No. 814: Rice University Purchasing Policy). 

Asset purchases involving contracts must be made in accordance with the Rice University Policy on Signature and Approval Authority for Contracts available here: Policy 810: Signature and Approval Authority for Contracts).

If your purchase requires a certificate of insurance, additional information is available here: Certificates of Insurance 

The Rice University Purchasing & Payment Policy (available here: Purchasing & Payment Policy) provides detailed guidelines and instructions regarding the tasks required to maintain compliance.

Acquisition Reporting and Tagging 

Once the initial invoice for an asset purchase has been paid, a property tag is created and affixed to the equipment/property.

Asset Tags allow the Rice University property to be correctly identified by the responsible department members, Property Accounting, and internal/external auditors. Work with Property Accounting to affix an asset tag to the corresponding asset upon receipt.

Rice uses three kinds of equipment and property ID tags. Property Accounting furnishes all tags:

• A white ID tag identifies equipment with a cost of $5,000 or more, which is capitalized as an asset and subject to the biennial inventory.
• A red ID tag identifies property with a cost of less than $5,000. Red tags are only provided to departments upon request to assist with property control and to help identify items not subject to the biennial inventory. Property Accounting does not track the issuance of these tags as they are for administrative purposes only.
• A yellow ID tag identifies equipment titled to the U.S. government. This includes equipment loaned to the University by a government agency or equipment purchased by the University using research funds whose award documents state that all the title to all purchased equipment vest with the government.

Samples of the three types of tags currently in use are shown below:

Note: Certain equipment cannot be tagged, such as such as lasers, software, and heat sensitive items, but must still be inventoried. In such cases, the item will be assigned an equipment number (PTag) but will not be tagged. It is the department’s responsibility to notify Property Accounting whether or not an item may be tagged. A white ID tag will be assigned to the equipment and mailed to the department to be kept on file. It must be presented during the biennial equipment inventory. The equipment number in FAS for the non-taggable item will have the suffix ‘NT’ added, e.g., 12345NT, as an indication the equipment is non-taggable.

Fabrication

Occasionally, a piece of equipment that is needed to conduct research is not available for purchase from a vendor. Fabrication is the process of creating a unique fabricated item to meet a specific research requirement. The fabricated item is assembled from a number of parts, supplies and components, and as such is comprised of individual items which cannot function or be useful alone, or which lose their individual identity when incorporated into the fabricated item.

If the fabricated item is expected to have a combined cost of $5,000 or more and a useful life of more than one year. The following steps are required:

• Please be sure to indicate the Fund-Org-Acct of the funding sources of the item.
• The completed and signed form may be emailed to fascard@rice.edu.

Property Accounting, Research & Cost Accounting, and the Office of Sponsored Research (if necessary) will review the request for a Fabrication Fund to determine whether the work contemplated is in accordance with the terms and conditions of the funding sources.

• If approved, Research & Cost Accounting will establish a new Fabrication project number (or issue a new sub-project number if the fabrication is part of an existing project), process the budget revision to transfer the funds to the new fund or sub-fund, and inform you of the fund or sub-fund number. This new Fabrication project number will be used to identify all costs relating to the fabricated item, and a capital account code is to be used for all charges. The expenditure type EQP:FabricationEquipment must be used for all costs associated with the Fabrication.

• If denied, Research & Cost Accounting will explain the issues that need to be addressed. Your request may be denied if the planned fabrication violates the terms and conditions of any of the funding sources.

Each purchase of a component for a fabricated item must be made in accordance with the Rice University Purchasing Policy.

Equipment Transfer

For the purposes of property and equipment control, the term “Transfer” can apply to:

1. Change in the Rice University organization that is responsible for the item “Interdepartmental Transfer”
2. Change in the title or ownership of items (A) coming to Rice from another organization with a new faculty member“Incoming Professor” or (B) leaving Rice to another organization with an exiting faculty member“Exiting Professor”

Interdepartmental Transfer or Sale

An asset that is no longer of use to a department should usually be disposed in accordance with the Disposal Procedures defined elsewhere in this document. In some cases, before the item is listed in the Rice Classifieds, another department is identified that wishes to use the equipment. Responsibility for the property may be transferred to the new department at no cost or sold to that department at an agreed upon price.

• If an asset is to be transferred:
  • The department relinquishing control of the property must (1) notify Property Accounting by email or memo, and (2) if receiving payment from the new department, initiate an Interdepartmental Transfer (IDT) to transfer payment, instructions here: Internal Transfer, see Interdepartmental Transfer (IDT).
  • The department accepting control of the property should submit an equipment transfer via the Disposal form to Property Accounting.
  • Property Accounting reviews the documentation submitted and approves the Disposal form

Transfer of Equipment - Incoming Professor -See also Policy 331

To transfer equipment from their previous university, an incoming faculty member should submit the following documentation to Property Accounting (fascard@rice.edu)

• Completed Transferred Property Form
• Completed Property Control Registration Form for each piece of equipment.
• Copy of the approval(s) to transfer equipment from the previous institution.
• Documentation of original acquisition date and cost of each piece of equipment.If documentation of the original purchasing information is not available, this information must be provided on the Transferred Property Form based on the transferring institution’s records. In this case, Property Accounting or another authorized official of the transferring institution must sign the form.
• If the transferred equipment is part of a fabrication that is new to Rice, complete a Fabrication Form. If the transferred equipment is part of an existing fabrication, provide the fund number.
• If any Rice Purchase Orders or invoices payable to Rice have been created or paid in association with this transfer, provide a copy of each.
• If the previous institution is receiving payment as a condition of this transfer, provide a written description or copy of the agreement and the current status of payments.

Transfer of Equipment - Exiting Professor

When transfers occur because a professor is leaving Rice and wishes to transfer the title of Rice-owned equipment, the following actions are required:

• The Department Chair or Dean must provide a memorandum to the Vice President of Finance (VPF) stating that the transfer is appropriate, the reason(s) why it is appropriate, that the equipment is not required at Rice for other research and that any expected payment is fair to Rice University. This memorandum must be accompanied by an invoice and bill of sale for the equipment and a Transfer of Title for Exiting Professors Form (PDF) listing the equipment to be transferred.
• A copy of the memorandum, invoice, bill of sale and form must be submitted to Property Accounting for review.
• Property Accounting will review the documents to ensure that Rice holds clear title to the equipment and that the expected payment amount is reasonable in relation to the net depreciated value of the asset(s). Property Accounting will inform the VPF and department of the results of that review. If Rice does not hold clear title to any of the items in question, Property Accounting will work with Research and Cost Accounting, the Office of Sponsored Research and the department to attempt to resolve the issues and obtain clear title. If title cannot be obtained, the department will be informed that the item(s) may not be transferred. Title to equipment may not be transferred until all issues are resolved.
• Once the VPF approves, all original documents with appropriate signature, are returned to the originating office, and copies are sent to Property Accounting.
• After receiving the signed documents, the originating official is responsible for sending the invoice for payment and coordinating the removal of the equipment from Rice.
• For items purchased using grant funds, the proceeds of the sale must be deposited into the grant(s) used to purchase the equipment, if still open. For items purchased using University funds, the organization that provided the funds designates where the proceeds are deposited.

Donations

Acquisition of equipment or property through donations must be made in accordance with Resource Development’s “Gift Policy and Procedure Document” Section III.B.5, Tangible personal property. For a copy of this document, contact Resource Development at 713-348-4600 or giving@rice.edu.

Lease

Property may be acquired by lease rather than purchase. For additional information, see Section 4.E, Lease vs. Purchase Decision Making of the Rice University Purchasing & Payment Policy (available here:Purchasing & Payment Policy). Property acquired by entering into a “Capital Lease” will be subject to the same control and reporting requirements as property that is purchased.

Guidelines Procedures: Asset Inventory/Tracking 

Biennial Inventory

Each Chair or Department Administrator should keep Property Accounting advised of the contact person for equipment-related matters within their department. Property Accounting will survey each area annually to confirm the current contact person, but recommends they be notified when changes occur.

Prior to the start of the inventory, equipment downloads showing the information currently contained in the Fixed Assets System records will be provided for review. If changes are required, the electronic file should be modified to show those changes and returned to Property Accounting within seven (7) working days. This will ensure the inventory crew is provided with the most current and accurate data when performing the inventory.

Assigned department personnel must be available to accompany the inventory crew member(s) in all restricted areas or provide access as required. It is the responsibility of the department coordinator to disclose the contents of, or open for inspection, any locked or inconspicuous areas during the inventory.

Equipment downloads will be provided to each department upon request after the inventory is complete. Additionally, equipment downloads are available upon request at any time during the year.

Reporting Changes

Moving Equipment

If the location of a piece of equipment will change for longer than 30 days, the move must be reported to Property Accounting. The possible situations are:

• For equipment remaining on-campus, email fascard@rice.edu the following information: PTag #, original location, and new location
• Equipment should not be removed from campus unless an Authorization to Remove Property or Equipment from Rice University form (PDF) has been signed by the requesting faculty/staff member and the appropriate department head/approving authority, and submitted to fascard@rice.edu.

If the condition of a piece of equipment renders it unable to perform the function for which it was acquired, the item is eligible for disposal and the Guidelines and Procedures for a disposal should be followed: Link disposals guidance here

Guidelines & Procedures: Asset Security

Each department or administrative area should develop procedures to ensure that equipment and property are protected from loss or damage, such as:

• Promptly notifying Property Accounting of availability to affix the appropriate ID tag.
• Preventing unsupervised access to sensitive or fragile equipment and property by unauthorized person
• Locking doors or otherwise denying access to vacant areas containing movable equipmen

Guidelines & Procedures: Asset Disposal

Disposal of all University property and equipment must meet five standards:

1. The responsible organization must attempt to capture the remaining value of items (if any) as part of the disposal process,
2. Items no longer required by the organization currently responsible for them must be made available to other departments on campus,
3. Items that could contain confidential or sensitive data must be disposed in accordance with the University’s data security policies and procedures,
4. All reasonable measures must be taken to ensure items are disposed in an environmentally appropriate manner and,
5. The ultimate disposition of all equipment must be reported to the Office of Property Accounting.

Property and equipment purchased using research funds must also be disposed in accordance with the terms and conditions of the funds used for purchase.

The mechanism for ensuring these standards are met is Rice Classifieds. In addition to facilitating the appropriate disposal of University property and equipment, Rice Classifieds is the only online sales site that should be used to sell University property. Other sites, such as eBay and others, do not provide sufficient administrative or financial controls and should not be used.

When a department determines that a piece of property or equipment is no longer needed by the department and should be disposed, the person with primary responsibility for the item must obtain approval from the department chair to dispose it. This approval should include agreement upon the remaining value, if any, of the item and minimum sale price required for sale.

Special consideration must be given to technology items to ensure they are disposed in accordance with data security policies and procedures. Guidelines for proper preparation and disposal of these items are available here: https://iso.rice.edu/resources-disposal. OIT Divisional Representatives can assist with the proper disposal of equipment.

Used lab equipment (including, but not limited to, research equipment, glassware, measurement tools, refrigerators, etc.) and other items that could be environmentally hazardous, must be reviewed by the Office of Environmental Health and Safety to confirm the appropriate method of handling. The Office of Environmental Health and Safety does review Rice Classifieds entries to assist in identifying items requiring special handling but departments are advised to contact them prior to listing an item, if possible.

Once the department chair’s approval has been obtained, the minimum sales price has been determined and all technological and environmental special needs have been met, the item should be listed for sale in the Rice Classifieds at classifieds.rice.edu. This listing ensures that a reasonable attempt has been made to capture any remaining value, other departments have had an opportunity to acquire the item and Property Accounting and Research and Cost Accounting have had the opportunity to confirm that Rice has clear title and the item may be sold.

To list an item for sale, login using your NetID and password. If the item was a capital asset, or you are unsure whether it was a capital asset, begin by searching the Property Accounting Inventory in Banner. If the item is in the Inventory, the posting form will be pre-populated with the available information.

Once the posting form has been completed and saved, the item is available for purchase for two weeks by Rice University organizations only. Sales are transacted using an IDT as described in Transfer: Interdepartmental Transfer or Sale.

Items not sold to University organizations after two weeks are available to off-campus buyers. University organizations may still purchase an item and pay for it by IDT, however, any off-campus person or organization is free to bid on items available for sale. This includes Rice students, faculty and staff although sales to a person affiliated with Rice must clearly be an arms-length transaction to avoid any appearance of impropriety.

When an acceptable off-campus bid is agreed upon, the seller should return to classifieds.rice.edu, change the status of the item from “Listed” to “Sold” and click “Create an Invoice” to prepare an invoice to present to the buyer. The buyer should take the invoice to the Cashier’s Office, make payment and receive a receipt. The buyer can take the receipt to the seller and take ownership of the item.

Please note:

• Items are sold without warranty or guarantee.
• Purchasers are expected to arrange for pick-up and delivery of all purchases.
• All technological and environmental issues must be resolved prior to sale.
• All laws and regulations related to export controls must be followed. If you have any questions whether they apply to your sale, contact either the Office of Technology Transfer or the Office of General Counsel.

Items not sold after being available to off-campus purchasers for two weeks may be disposed in any approved way. After the items have been removed from campus and are no longer eligible to be shown as active in the Banner inventory listing, you should return to the Classifieds listing and change the status from “Listed” to “Recycle/Salvage”. This will notify Property Accounting of the ultimate disposition of the item.

For items that require immediate disposal or should bypass the normal disposal process, submit an email or memo explaining the need for authorization to circumvent the established procedures to the Assistant Controller of Accounting Operations, Joanna Duncan , at Joanna.K.Duncan@rice.edu.

To visit the Rice Classifieds website click HERE.