Property Management - Statement of Policy Change

Date:Monday, May 01, 2000
From:Ed Ruotsinoja, Director, Business & Financial Services; Linda Van Ceylon, Manager, Property Management Unit
Regarding:Change in Threshold of Capital Equipment to $5000
Federal regulations allow educational institutions to increase the equipment threshold to $5,000. Analysis of the University's capital assets has shown the costs saved by substantial reduction in the number of equipment assets managed will balance the eventual loss of indirect cost recovery. Therefore, the University has decided to increase the equipment capitalization threshold from $1,000 to $5,000.
This memo outlines certain implementation procedures resulting from this change. This memo includes the following topics:
  1. Effective Date of Accounting Change
    1. Non-sponsored funds
    2. Exceptions
    3. Seamless transition
  2. New Equipment Definitions
  3. Reasoning Behind the Change
  4. Equipment Records and Inventory
    1. Retagging
    2. Database Purge
    3. Non-capital/High-risk
    4. FRS Data Warehouse Access
  5. Disposition of Materials/Equipment
  6. Information Resources
Office of Sponsored Programs will publish separate information, more specific in dealing with the sponsored funding process.
If you have questions regarding the threshold change please contact:
  • Property questions (current accounts): Business & Financial Services, Property Management Unit Janice Inman, 970-491-6752
  • Sponsored Fund proposal questions: Office of Sponsored Programs, Check the website under "What's New" or call 970-491-6355
  • Recharge Center funds (21): Self-Funded Accounting, 970-491-6752
  1. Effective Date of Accounting Change
    1. Non-sponsored funds:
      Beginning with FY01 budget, July 1, 2000, for most funds, the capital threshold for Colorado State University will be $5,000. Equipment purchasers use the $5,000 threshold for non-sponsored fund purchases from that point forward.
    2. Exceptions:
      • Active sponsored funds, associated cost share and work in process funds will honor $1,000 threshold (or specified agreement) until project completion.
      • Proposals or renewals for sponsored funds will use the $5,000 threshold beginning January 1, 2001.
    3. Seamless transition:
      The Property Management Unit currently reviews each proposed or potential equipment purchase via the Campus Information System (CIS). For a transition period, until sufficient training is distributed, threshold issues will be addressed and corrected by Property Management personnel. This will alleviate delay of purchase document processing.
  2. New Equipment Definitions
    • Capital Equipment is defined as an item having the characteristics of: cost is $5,000 or more; life expectancy exceeds one year; item is an independent unit (not parts); and is nonconsumable (the item does not change form with use).
    • Fabricated Capital Equipment is defined as above except having an aggregate cost of components, materials and/or labor of $5,000 or more.
    • Transitional Equipment is defined as either of the above which is on an active sponsored project and has a value under $5,000.
  3. Reasoning Behind the Change:
    • Changing the capital equipment threshold will reduce the number of items managed by ~80%, while the overall value of University equipment will only be reduced by ~20%.
    • 42% of the Peer Universities have thresholds of $5,000 for capital equipment.
    • The State of Colorado and the federal government use the $5,000 threshold.
  4. Equipment Records and Inventory:
    1. Retagging of active $5,000 threshold items will be done during FY01 physical inventory. (Some retagging has already begun).
    2. Database Purge of equipment inventory records of all items under $5,000, will begin FY01, except:
      • active sponsor-funded items
      • depreciating recharge items
      • as sponsored projects close or recharges fully depreciate, items under $5,000 will be purged
    3. Non-Capital/High-risk items may be recorded at the discretion of equipment holder. An improved process will be introduced in September, 2000, by Property Management.
    4. FRS Data Warehouse Access to Equipment Records will be available in September, 2000 for active, inactive and non-capital/high-risk items.
  5. Disposition of Materials/Equipment: (no change) The current procedures for disposition of University Property remain in force via the Equipment Accountability Change Request (EACR). The threshold change does not affect the EACR process. See Financial Policy and Procedure, F-1, Section I, #III, A-F.
  6. Information Resources:
    Watch for notification of the pending threshold change in the following:
    • Fiscal yearend 2000 closing meetings
    • Memos
    • E-mail
    • Worldwide Web
    • Article in Comments
    • CAAG meetings
    • Business and Financial Services ListServ
    • University Staff listed bottom of page on e of this memo.