This chapter provides detailed information on the role of the Plant Accounting Office (herein after referred to as the Plant Accounting or PA) to record the financial information and maintain the detailed property records related to the University’s equipment and software; and Property Accounting’s role in supporting the Central Property Office in relation to the physical location and physical inventory of equipment; and supporting the role of Central Receiving to receive, assign and affix bar code labels (tagging) to capital equipment on the Las Cruces Campus; and, to assist with the tagging of equipment at the Community College Campuses and remote locations. The Central Property Office and the Central Receiving Office are functions of the Central Purchasing Office. See Section 4A of this Business Procedures Manual (BPM) for a detailed discussion of Central Property.

1C.00 PROPERTY – INTRODUCTION

This section provides detailed information on the responsibilities of the Plant Accounting Office, definitions for Property Policy Applicability, Property Responsibility, and Maintenance of Records. PA establishes procedures for the management and recording of capital equipment, owned by, or in the care, custody and control of, the Regents of NMSU.

Certain property/equipment records are required for the State and Federal Agencies, the NMSU Financial Report, insurance coverage, budgeting, and for equipment use and control purposes. This policy, in compliance with applicable State, Federal, and University policies, prescribes procedures to accomplish these requirements.

These procedures apply to equipment belonging to, or in the care, custody and control of, NMSU. Federal sponsor-owned property, which is in the care, custody and control of NMSU, is subject to procedures for control of Federal property issued by the Office of Management and Budget (OMB).

Title to property/equipment rests with NMSU rather than with individual departments. Departments are assigned property for custody and use and are held accountable and responsible for such property.

Non-Capital equipment refers to any property item that does not meet the value threshold for capitalization; these items will not receive an inventory tag or be entered into the property system. The responsibility for maintaining and tracking inventory on Non-Capital equipment rests under the department that purchased the property. Non-Capital equipment items that are moveable assets with an expected useful life of one year or more are considered Sensitive Property due to being susceptible to theft. The responsible department will tag all Sensitive Property with a departmental tag unlike that used by the Central Receiving Office. The department will maintain a list of Sensitive Property.

For purposes of this following section, the term asset, equipment and property are used interchangeably and are used to describe capital equipment that are included in the property system. The terms asset tag, property tag, bar-code label or inventory tag are also used interchangeably.

Definitions for Property
Capital equipment (Net Value is included in the Statement of Net Assets):

Moveable assets
Valued at $5,000 or more
With an expected useful life of one year or more
Not permanently affixed to a building (i.e. not a function of the building)
Assigned a bar code label

Custodian is generally the NMSU staff that uses equipment belonging to, or in the care, custody and control of, NMSU. The Custodian can also be the person that controls or authorizes the use of equipment to other University staff.

Equipment Manager is the departmental staff person assigned to track equipment belonging to, or in the care, custody and control of the responsible department. The Equipment Manager conducts the annual physical inventory or supervises the physical inventory.

1C.00.05 Maintenance of Records

The Property Accounting Office (PA) maintains all inventory records through the Sungard Banner Fixed Asset Module. All property in the care, custody and control of NMSU that meets the definition of accountable equipment is recorded in the same manner and under the same rules as those used for recording University-owned inventory. The property system for capital equipment provides, at a minimum, the following information:

Inventory Control Number
Nomenclature (Description)
Organization Number
Location Code (Building and Room Number)
Manufacturer
Serial Number
Purchase Order Number
Cost
Partial Purchase Information (To identify property purchased with multiple funds. Separate columns are provided for University and non-University funds. Percentage by source of funds)
When applicable, Grant or Contract Number
Acquisition Date
Equipment manager
Custodian

There are additional records maintenance requirements for Government-owned equipment as described in Section 1C.10 – Government and Externally Owned Equipment.

1C.00.10 Commodity and Accounts Codes

Careful consideration should be given to the selection of commodity and account codes because this is the communication link between departments and the Property Accounting Office for classification of equipment and who holds title to such property. Purchase requisitions that involve the acquisition of equipment are approved by the Department Head to indicate whether the acquisition should be classified as supplies, general expense, capital equipment, and so forth.

NOTE: For assistance on correct account and commodity codes, contact the appropriate fiscal monitor.

A complete listing of account and commodity codes can be found at
https://analytics-p.nmsu.edu/cognos/bi/

1C.00.20 Reports

PA provides annual equipment or special reports as recorded in the NMSU property system.

See Section 1C.10 in this chapter for reporting discussion related to externally owned equipment.

1C.05 UNIVERSITY-OWNED EQUIPMENT

University-owned equipment can be identified by the inventory control number. See Section 1C.05.30 for more detailed information.

1C.05.05 Acquisition

Equipment/Property procurement should be initiated in accordance with procedures outlined in the BPM, Chapter 4 – Central Purchasing Office. All purchases for equipment will be itemized and priced separately on the Purchase Order (PO) in order to properly identify and tag each individual unit.

1C.05.10 Acquisition: Purchased Equipment

New equipment acquired through the purchasing process is identified on a PO by the use of account codes in the 780xxx series if capital equipment and 740xxx if non-capital equipment. See section 1C.00.05 for the information recorded in the property system. If the items were not tagged at Central Receiving, then PA will notify Central Receiving who will affix the bar code label to the appropriate unit of equipment. Bar code labels will be mailed to off-campus locations for attachment to off-campus equipment.

Accessory Item
Any item that facilitates or enhances the operation of plant equipment, but is not essential for its operation, and that, by itself, has no function is an accessory item. To be capitalized, the accessory must have an acquisition cost that meets the threshold for capitalization and a useful life of one year or more.

Betterment (Sometimes referred to as an improvement)
Betterment is a tangible component or enhancement that is affixed to a piece of capital equipment to extend or enhance the equipment’s life or increase its productivity. The betterment cost must meet the capitalization threshold or more to be added to the value of the equipment. The price of a betterment is determined by the individual unit price of each component and not on a combination of individual units.

NOTE: Replacement of a part of an existing asset by another of like quality is not a betterment, even though the useful life of the asset is maintained or extended.

1C.05.15 Acquisition: Gifts

Equipment acquired by gift or donation with a fair market value (FMV) of $5,000 or more at the date of donation is assigned an inventory control number and bar-code label.

The Vice President for University Advancement will notify PA and Central Property of the gift or donation and provide the (FMV) or each asset donated. Upon receipt of the Central Receiving Worksheet, PA will manually generate a property record and enter the data shown on the worksheet. For additional information, refer to the BPM, Chapter 3, Section 3.25, Sponsored Projects Accounting (SPA).

Acquisition of gifts that involve hazardous materials or contain regulated hazardous components must be approved by Environmental Health and Safety (EH&S). Examples of hazardous materials/regulated hazardous components include: any chemicals, paints, photography supplies, mercury, radioactive material, radiation producing devices such as x-ray machines, etc. Departments will notify EH&S in writing prior to acceptance of hazardous materials or regulated hazardous components. EH&S staff will evaluate the potential long term expense and regulatory liability related to acceptance of hazardous materials or regulated hazardous components donations in making a determination for NMSU acceptance. Contact information for EH&S is MSC 3578 and 646-3327.

1C.05.20 Acquisition: Fabricated Equipment

Upon completion of fabricated equipment within a department, the following guidelines should be followed.

Prepare a memorandum to the Property Accounting Office listing:

A complete description of the item
Location of equipment
Custodial department and Index (FOPAL) number(s) charged
Value – this should include the purchase price of all materials, supplies and fixtures used, any freight charges, as well as any labor costs for construction and installation
Serial number and/or model number if assigned
The Plant Accounting Office will assign an Inventory Control Number for the equipment built.

Account 785xxx should be used when acquiring components for fabricated equipment if the final cost is expected to be $5,000 or more. If the fabricated unit is expected to be less than $5,000, but at least $1,000, then account code 732410 should be used.

The Plant Accounting Office will generate transaction reports of fabricated equipment supply purchases to determine the need to tag fabricated equipment. Whenever a piece of equipment is completed, Plant Accounting will furnish all necessary information to the agency contract administrator, provided the fabricated unit will be owned by the external agency. The Plant Accounting Office will enter the item in the property system and will direct Central Receiving to affix a bar code label and complete a Receiving Worksheet. If fabricated equipment is externally owned and the agency provides an inventory tag, the tag will be affixed next to the bar code label on the subject equipment.

1C.05.25 Acquisition: Other

Construction Contracts or Work Order Equipment
Office of Facilities and Services (OFS) will report equipment acquired under construction contracts or work orders to the Plant Accounting Office. Equipment is listed and priced by OFS if it is different than the purchase order used to acquire the equipment. The PA will assign an inventory control number and direct Central Receiving to affix a bar code label to all capital equipment.

Found Equipment
Equipment previously reported to the BOR as missing, will be reported to the Plant Accounting Office. The custody is assigned to the using or responsible department. If the equipment had a depreciable value in excess of $5,000 when it was written off as missing, PA will manually generate a property record and add the inventory control number to the property system.

Acquisition of Surplus Property
Equipment secured through the New Mexico Federal Property Assistance Program will be assigned a bar code label and recorded in the property system if the FMV of each unit acquired meets the capital threshold or is greater.

These procedures will be used for all funds, including outside agency funds if the particular contract or grant permits the acquisition of surplus property.

1C.05.30 Identification of Equipment

University Inventory
All capital equipment is identified with a bar code label and assigned an inventory control number. It will remain so identified as long as it is in the care, custody and control of the University. Inventory tags are removed or obliterated from the equipment only when sold, scrapped, or otherwise disposed of. The inventory control number is not changed even if custody of the equipment is transferred through an ICR Should the bar code label be accidentally or mistakenly obliterated, defaced or removed, the equipment will be marked again with the original bar code number.

Bar code label prefixes are assigned as follows:

U – University owned

F – Federal Government owned

S – State of New Mexico owned

P – Privately owned

The application of the bar code label to the equipment is the responsibility of the Central Receiving Office; however, this function may be delegated to the receiving department or the department having custody when deemed appropriate. The bar code label is applied to the actual unit unless the size or nature of the unit makes it impractical, or the equipment is an accessory and attached to, or otherwise a part of, a unit of tagged equipment, and is required for its normal operation. In the latter case, such items are entered and described on the property record of the equipment to which, or of which, it is otherwise a part. The bar code label should be affixed to the equipment adjacent to the manufacturer’s nameplate as long as it is readily visible. Otherwise, the bar code label will be affixed in a clearly visible location and not in a position requiring movement of the equipment for tag number verification.

Easily moved component parts of a system meeting the capitalization threshold or more must be individually tagged. In the case of a PC, the CPU and the monitor will be tagged separately should each unit cost $5,000 or more. Should the monitor be less than $5,000, and acquired at a significantly different time than the CPU, it will be treated by the responsible department as Sensitive Property. The value of Sensitive Property is not added to the value of tagged equipment and account 740xxx should be used when acquiring such units.

University Property Other Than University Inventory
Each department is responsible for University property valued at less than $1,000. The responsible department will tag all Sensitive Property with a departmental tag unlike that used by the Central Receiving Office. The department will maintain a list of Sensitive Property.

1C.05.35 Item Cost or Value

Recording Value
The Plant Accounting Office records the value of equipment acquired through Purchase Orders (POs). In recording equipment value, the following rules apply:

Acquisition cost is $5,000 or more per unit
Freight charges are added to the acquisition cost or value of capital equipment
Installation or assembly costs should be added to the value of the equipment
Any customs duty charge should be added to the value of the equipment
Any cash discount should be deducted from the value of the equipment
Trade-ins do not reduce the value of equipment. If the equipment being traded-in has a University bar code number, the bar code number should be referenced on the Purchase Order
Handling and storage costs are not included in the cost or value of the item
The recorded value does not change throughout the life of the property, regardless of time owned
Maintenance contracts or extended warranties are not considered betterments to, nor are they included in, the value of the equipment

1C.10 GOVERNMENT AND EXTERNALLY OWNED EQUIPMENT

Government Furnished Equipment/Property (GFE or GFP) will be identified similarly to Contractor Acquired Property (CAP) owned by the government. For more detailed information see 1C.05.30 and 1C.10.10 – Identification of Equipment.

1C.10.05 Acquisition

Government Furnished Equipment
GFE may be shipped to the University from Government installations, or other Government agency contractors. The University becomes responsible for such property upon delivery. Since many of these transactions are consummated between the Principal Investigator (PI) and the agency or contractor without the Central Property Office and the Plant Accounting Office (PA) being involved, the PI is charged with the responsibility of notifying PA. The PI will furnish the PA with documents necessary to update the property system for the receipt of government owned property. It may be necessary to modify the award documents to include GFE. It is the responsibility of the PI or the College Contract Administrator (CCA) to notify PA within ten business days that GFE has been received or ten days before it will be moved to a remote site.

Contractor-Acquired Property
The Contracting Officer of a government agency must approve all direct property purchases made by the University necessary for completion of the contract. Equipment purchased by NMSU for which reimbursement is requested, becomes government property upon receipt by the University if specified in the contract. Account code 780400 should be used for federal government-owned property and 780500 for State of New Mexico owned property. Upon recording the asset in the property system, the Plant Accounting Office will notify the respective government agency if contract documents require notification, otherwise notification is made at the time the annual property reports are filed. The agency may send their own inventory tag, which will be placed in close proximity to the NMSU inventory tag.

The Vice President for Research, Research Administration Services (RAS), provides Plant Accounting with a copy of the award documents for all government or other external funded awards. Based on the award documents between the government agency and the University, the RAS is primarily responsible for determining that authority exists to acquire property or receive GFE and the ownership of such property, however, PA will validate the assessment. PA develops a file for each award that authorizes CAP or the receipt of GFE.

PA is responsible for coordinating requests to transfer equipment acquired on one award to another award and is also responsible for updating the property records for the transfer of equipment from one award to another. Correspondence and approval for the transfer from the government contract administrator is maintained in the Plant Accounting Office award file.

Government Property in the Custody of Sub-Contractors
All subcontractors of NMSU shall be required under terms of the subcontract agreement to properly maintain government property furnished or acquired. In the event that a subcontractor does not have an approved property control system, NMSU will provide property tags to the subcontractor for GFE or purchased property. Any loss or damage to government owned property will be reported to NMSU. The subcontractor must conduct a physical inventory once a year and provide a report to the PA stating the outcome of the inventory. Upon expiration of the subcontract agreement, government property will be returned to NMSU.

Excess Government Property
Excess Government Property is equipment, new or used, which is owned by the Federal Government but is no longer needed by the holding Federal agency, but has additional useful life. Items are available on a first come, first served basis. The University may also be authorized to receive excess Government property by a contracting agency when the equipment directly furthers an active contract. Such authorization is dependent upon the terms of each contract and the regulations of the specific agency involved. PA will be notified whenever excess government property is delivered to the University and will determine ownership and have Central Receiving tag the equipment accordingly.

Excess Government property is usually obtained without cost; however, the University specifies the method of shipment and pays all expense of packing, transportation and subsequent installation, rehabilitation if needed and maintenance. Contract funds may be used for these expenses if allowable. The University maintains records showing the location, description and value of the property. Items are recorded at the fair market value at the date of transfer, including all costs to acquire and place in service. The PI is charged with notifying PA of any transaction consummated with the Government agency. Expendable or consumable items are not subject to specific record keeping requirements, except for information supporting use.

Title to Property Acquired Under Contract with Outside Agencies
The specific provisions of the applicable contract govern in each instance. The Government may acquire title to property as a result of specific contract provisions, issuance of Change Orders or contract termination. Such property, unless otherwise provided by the contract, is considered Government property on acceptance of the title by the Government.

The Contracting Officer of the Governmental unit may transfer title to equipment to NMSU at the beginning, during, or end of a contract. Requests for transfer of title must be made by the PI responsible for the corresponding contract under which the equipment was obtained. Transfer of title is subject to the conditions that no charge may be made by the University for depreciation, amortization or use of the equipment under any existing or future Government contracts. When title is thus transferred, the University is without further obligation to the Government with regard to the equipment unless specific provisions to the contrary are stated in the contract or transfer document. It is highly recommended that the PI or RAS negotiate for University ownership at the time of award to minimize record-keeping activity.

Title to excess Government property remains with the Government. Upon request of the University, or at the initiative of the agency, title may be subsequently transferred to the University on the understanding that the property has a useful life. When no longer required, it may be transferred, cannibalized, traded-in, or sold.

Equipment Screening
When purchasing equipment related to Federal and State contracts, the PI will insure all terms of the contract are fulfilled. These steps will include:

Contracting Officer approval for purchase if required.
Certification of University (internal) screening conforms to policies in the BPM, Chapter 4 – Central Purchasing Office section 4.15.
Submission of Department of Defense (DD) Form 1851 and DD Form 1419 as follows:

ADPE	$25,000	DD Form 1851
IPE	$15,000	DD Form 1419
NASA EVS	$5,000	DD Form 1419

DD Form 1851 is prepared for Automated Data Processing Equipment (ADPE) with a value of $25,000 or more. DD Form 1419 is prepared to obtain a Non-Availability Certificate prior to purchase or lease of Industrial Plant Equipment (IPE) costing $15,000 or more. DD Form 1419 is prepared for NASA Equipment Visibility Screening (EVS), when applicable, for centrally reportable equipment costing $5,000 or more.

1C.10.10 Identification of Equipment

Government Inventory
The Principal Investigator (PI) or Department Head will identify Government inventory promptly upon receipt and will notify the Plant Accounting Office who will direct the Central Receiving staff to furnish property tags for attachment to the equipment. The property remains identified as such so long as it remains in the custody, possession or control of NMSU. All Government-owned equipment will be labeled with a University inventory tag, unless the size or nature of the equipment makes it impractical, or the equipment is an accessory or auxiliary and attached to, or otherwise becomes a part of, an item of Government equipment and is required for its normal operation. In the latter case, such items are entered and described on the record of the equipment to which it is attached or of which it is otherwise a part. The inventory tag number will begin with the letter “F” for Federal, “P” for Private or “S” for State-owned equipment.

If the University acquires title to the property, the Government identification is removed and a “U” tag will be assigned if the remaining depreciable value meets the capital threshold or is more.

Government Property Other Than Government Inventory
Identification, marking, and recording of Government property, other than that designated as Government inventory is the responsibility of the responsible department and/or the PI.

1C.10.15 Item Cost or Value – Government Property

The unit price of Government-furnished property is determined by the Government and furnished to the University. Transportation and installation costs are not considered as part of the unit price. Normally, the unit price of Government-furnished equipment is provided in the document covering shipment of the property to the University.

1C.10.20 Maintenance of Records

Acquisition
All Government-furnished property or University-acquired property screened through the Federal or State Surplus programs or purchased for a direct charge to a Government contract is recorded in the same manner as NMSU-owned property except that the equipment is tagged with a bar code label indicating that it is Government property. It is recorded in PA as Government property, reflecting Federal Supply Code (FSC), agency, and grant or contract number.

It is the responsibility of the PI or the CCA to notify PA of their intent to have government owned equipment transferred to a follow-on or new federal award. PA will work with the appropriate government contract administrator to arrange for the transfer of such equipment. Copies of the approval notification will be filed in the preceding and succeeding award file in the PA office. PA will update the Banner fixed asset system for the award number change on the effective date of the change. The property system maintains a record of all changes to organization, location, grant, custodian and/or equipment manager.

Records of Special Test Equipment
The PI or department head should provide PA the following minimum information regarding each item of Government-owned special test equipment:

Contract number or equivalent code designation
Nomenclature or description of item
Identification number if applicable
Quantity received or fabricated
Date of transaction
Location of equipment and unit price
Plant Equipment

Record of Accessory or Auxiliary Equipment
Accessory and auxiliary equipment, which is attached to or otherwise a part of an item of plant equipment or has been acquired for use in connection with a specific item, is recorded on the record of the item of plant equipment as a cost increase.

1C.10.25 Reports

Government financial or inventory reports will be submitted by the department head or PI upon demand by the contracting agency or in accordance with the following schedule:

NASA – Report of Government-Owned/Contractor Held Property as of 30 September. Submit annually (due 15 October) or at end of contract on NASA Form 1018.
Reports for Sandia National Laboratories.

Residual Inventory of Material, form SF 6110-AC, will be sent to the Plant Accounting Office by the PI or CCA. PA will generate a computer listing of any equipment which has been picked up on inventory by Banner grant code. The list will be sent to the PI or CCA where it will be added to the department file. The PI will complete the form and send it back to RAS where it will be copied for the file and submitted to Sandia National Laboratories.

Property billable to Sandia National Laboratories, form SF 6110-AA, will be handled identical to the form above.

1C.15 EQUIPMENT RENTED OR LEASED WITH OPTION TO PURCHASE

Equipment acquired by lease with option to purchase or other types of installment purchases are recorded at the time of acquisition. Capital leases are to be capitalized at an amount equal to the present value of the future lease payments plus the purchase option paid at the inception of the lease. In the event the purchase option is not exercised and the equipment is returned to the vendor, the item is deleted from inventory by an Inventory Change Report (ICR) form, which is completed by the department that that held the leased equipment. The department should include a copy of the return or pick up document to the ICR.

1C.20 DEPARTMENT HEAD AND PRINCIPAL INVESTIGATOR (PI) RESPONSIBILITIES

If a contract is involved, the department head of the responsible department and the PI have the primary responsibility for the care, maintenance, records, and control of material in their custody and/or all property acquired under the terms of a contract. They must maintain up-to-date departmental records and, if a contract is involved, initiate documentation to fully inform the Plant Accounting Office (PA) as to all provisions of each contract concerning the care, custody, maintenance, records, control, and all transactions involving said property so that PA can maintain accurate property records and file accurate and timely property reports.

Location of Equipment
The location of each item of capital equipment will be noted in the departmental records. Current records as to movement of equipment will be maintained in such a manner that any item of equipment can be located for inspection or inventory purposes, within a reasonable time. The responsible department will notify the PA of any building number or room number changes for tagged equipment. PA will enter updated information into the property system. Plant Accounting staff will randomly verify the location, maintenance and proper use of equipment from time to time.

Physical Security
If a contract is involved, the department head and the PI will make adequate provisions for the physical security of the equipment in their custody. Areas containing equipment will be kept locked after business hours or at other times when not in use. Special precautions will be taken in the case of high value, portable equipment.

Equipment Use
University Inventory – Annually the head of the department will review the use of University capital equipment in their custody. Any equipment that is either temporarily or permanently not in use will be reported to the Central Property Office for inclusion in a list of excess items. Central Property Office will screen this list for possible redistribution and use in other departments.

Storage and Movement
When equipment is temporarily idle but required for authorized future use, it must be stored in accordance with sound equipment management practices including adequate protection from corrosion, contamination, and damage to sensitive parts. Notation of the storage location will be made on departmental inventory records. Equipment may be moved to off-campus sites only with prior approval of the Central Property Office. A shipping document, transfer document, or a similar instrument of accountability must be obtained.

Care and Maintenance
Each department will provide the care necessary to maintain equipment in the condition received or better, normal wear accepted. Maintenance should be preventive in nature and on a regular schedule. Records of maintenance programs will provide the description and date maintenance performed. For Government property, such schedules will be made available to Government Auditors or NMSU Audit Services upon request.

Notification of Loaned Equipment
The department head and the PI are responsible for notifying PA of all Federal equipment loaned to their department. This would include loans from all sources; in particular, loan of equipment from Sandia National Laboratories and Los Alamos National Laboratory will be reported, in detail, to PA. All loaned equipment that becomes unused and/or obsolete will be returned to the lender or notification made to the lender requesting disposition instructions. PA must receive copies of all correspondence.

Excess Property
The PI will notify the College Contract Administrator (CCA) of any excess property. The CCA will formally request disposition instructions from the agency contract administrator with a copy going to PA.