Capital Asset Management Policy
The purpose of this policy is to provide direction for LUC employees who are responsible for marking, recording, and/or safeguarding LUC owned capital assets. Capital assets are real or personal property that have a value greater than or equal to $5,000 and have an estimated life of greater than one year. Capital assets should be recorded at their historical costs, which include the vendor’s invoice, initial installation cost, modifications, attachments, and accessories necessary to make the asset usable. Historical costs include ancillary charges such as freight, site preparation costs, and professional and legal fees. For purposes of this policy, LUC considers capital assets to be all property purchased by external funds (gifts, grants, endowments, etc.) as well as internal funding (operating, capital budget, etc.). Note that this policy does not contain the approval process of purchasing capital assets, which can be found here: http://www.luc.edu/finance/capexppolicy.shtml.
This policy applies to all assets capitalized and tracked by Lawson. This includes projects that are partially or fully funded by outside funding sources (e.g. grants, gifts, etc.). Examples include:
- New or replacement equipment or furniture
- Donated item (such as Artwork)
- Software / Electronic journals
WHO SHOULD KNOW THIS POLICY
- Department business managers/administrators
- Finance/Accounting Personnel
- Office of Research Services Personnel
- For questions regarding the capital asset policy, please contact Brigid Smith, Senior Accountant (email@example.com or 5-8717) or Melissa Townsend, Senior Financial Analyst (firstname.lastname@example.org or 5-8713).
- For questions regarding property purchased by gifts or grants, please contact Cyndee Timmerman, SPA Manager (email@example.com or 5-8718).
- For questions regarding stolen property and insurance, please contact Shauna Conley, Risk Manager (firstname.lastname@example.org or 5-7788) or Tara Riley, Risk Management Coordinator (email@example.com or 5-7861).
- For questions regarding HSD Finance approval, please contact Roger Russell, HSD CFO (firstname.lastname@example.org or 6-3643).
- For questions regarding HSD Office of Research Services approval, please contact Dr. Richard Kennedy, Vice Provost for Research and Graduate Programs (email@example.com or 6-8434).
- For questions regarding Lakeside Office of Research Services approval, please contact William Sellers, Research Services Director (firstname.lastname@example.org or 8-2478).
SAFEGUARDING AND CARE
General Accounting’s responsibility is to maintain a database of capital assets, which is recorded in Lawson. Other university departments utilizing capital assets (defined as a purchase greater than $5,000 and having useful life greater than 1 year) are tasked with adequately protecting the assets against loss, damage, or theft. This includes locking equipment in secured locations, performing adequate maintenance and upkeep, training staff on proper procedures for handling and care, locking doors when rooms are not in use, not letting equipment sit idle for extended periods of time, and storing equipment in environmentally suitable locations. Equipment maintenance is usually funded by the department and not the capital budget.
USE OF GRANT-FUNDED EQUIPMENT
Grant-funded equipment must be used in accordance with the terms and conditions of the grant(s) under which the equipment was purchased. In particular, equipment purchased under a federally-funded grant to which the University has title: (1) must be used for the authorized purposes of the project until funding for the project ceases, or until the equipment is no longer needed for the purposes of the project; and (2) must be made available for use on other federally-funded projects, provided that such use will not interfere with the work on the project for which it was originally acquired.
All capital assets to which the University has title, regardless of funding source, will be identified by General Accounting and tagged with a University asset tag, unless applying a tag is not possible or will damage the asset (such as artwork). General Accounting tracks all capital assets in Lawson, which includes pertinent information such as the life of the asset, location, original purchase amount, and contact person. As new capital assets are entered in Lawson, General Accounting sends an asset tag and an Asset Tag Form for each capital asset to the contact person identified on the invoice or purchase order.
Asset tags are alphanumeric. Tags for grant-funded capital assets to which the University has title start with a “G”, and tags for university-funded capital assets start with an “L”. Asset Tags Forms requests information critical for the physical inventory such as asset description, primary user, serial number, and building/room number.
General Accounting keeps a log of asset tags sent out, asset tag forms received, and makes any necessary adjustments to Lawson based on the information provided on the asset tag forms.
Computers and equipment purchased by Loyola’s Information Technology department are tracked separately and maintained by an IT tag, regardless of purchase cost. IT tags are all numeric. Computers and equipment over $5,000 may have two tags, one to identify them as IT equipment (numeric), and one to identify them as capital equipment (alphanumeric).
If you have not received an asset tag for a new equipment purchase over $5,000, please contact General Accounting.
General Accounting performs a physical inventory of all capital assets to which the University has title at least every 2 years. Departments are responsible to keep track of and inventory any Government-owned capital assets on an annual basis.
The inventory of capital assets to which the University has title takes place early in the calendar year (February or March) and takes 2 to 3 weeks to complete. To notify departments of the upcoming inventory dates, General Accounting sends out an email 3 to 4 weeks in advance to department administrators. A list of assets to be inventoried is provided to each department at least 2 weeks before the inventory. This list is pulled from Lawson and includes relevant information such as asset tag, equipment description, acquisition date, acquisition cost, and asset location. Departments must review this information and notify General Accounting of any changes needed before the inventory.
Departments are responsible for keeping current records of equipment location and inventory counts, and must be prepared to show General Accounting where the listed equipment is located during the inventory.
General Accounting reviews the inventory findings and prepares a list of equipment disposed of and equipment not found during the inventory. Departments are required to submit an Equipment Disposal Form for the equipment sold, transferred, or scrapped before it is written off. Research is done to obtain more information on the equipment not found during inventory. If the equipment is not located, Department Chairs are notified before the equipment is written off.
If a department discovers that capital assets have been stolen, they must complete a Campus Safety report and contact Risk Management. Risk Management will report the theft to Loyola’s insurance company.
PROPERTY TRANSFER, SALE & DISPOSAL
Unauthorized removal, disposal, or expropriation of University-funded, grant-funded, or Government-owned property constitutes a serious breach of University policy. Departments must properly use and protect all capital assets in their custody.
Any capital equipment to be disposed of by way of sale, transfer, or scrapping requires prior approval in writing as described below. Disposal of HSD equipment must also be approved by HSD Finance.
Once approval has been obtained, the Equipment Disposal Form must be filled out and sent to General Accounting via email. This form does not grant approval to dispose of equipment; it only serves to update the inventory database. Departments should obtain and keep on file written approval from a Dean, Chairperson, or department administrator to remove capital equipment.
Departments need to determine if equipment was purchased by grant funds or university funds. Capitalized equipment can be identified by asset tag number (label attached to equipment). Tags for grant-funded equipment start with a “G”, and tags for university-funded equipment start with an “L”. If unsure, contact General Accounting.
- External Transfers
University-funded equipment not acquired from grants cannot be transferred but may be sold or donated with written approval from the Department Chair.
Research Services Transfers
Transfer of grant-funded equipment ownership and/or responsibility to another educational institution or non-profit organization may be allowable. In some cases, written approval from the funding agency may be required. This process should be reviewed and approved by Sponsored Program Accounting (SPA) and the Office of Research Services (ORS). For HSD equipment, the department must also obtain approval from HSD Finance before the transfer is completed.
To transfer research equipment when allowed by the grant terms, a written request from the Principal Investigator (P.I.) to the Department Chair is required. This request must provide a clear description of the equipment, date of purchase, purchase price, University asset tag number, and account number or source of funds used to purchase the equipment. Department Chairs may approve the request at their discretion. The department must then compile the written approvals from the funding agency (if required), the Department Chair, SPA, Lakeside or HSD ORS, and HSD Finance (for HSD equipment). The department then submits the Equipment Disposal Form, including all supporting documentation, to General Accounting.
The P.I. or new institution will be responsible for shipping and insurance of all equipment that is removed.
The department is responsible for ensuring these steps are completed when a P.I. leaves Loyola University Chicago.
The Equipment Transfer Policy for HSD equipment can be located here.
- Sale of property
University-funded equipment may be sold with written approval from the Department Chair. Grant-funded equipment may be sold when allowed by the terms of the grant. The selling price should be the greater of the net book value or the fair market value of the equipment.
There may be tax implications when equipment is sold. Please contact General Accounting for clarification before the sale.
- Internal Transfers
University-funded equipment may be internally transferred with written approval from the Department Chair. Grant-funded equipment may be internally transferred when allowed by the terms of the grant.
If the transfer is only of physical location, without a change of ownership and/or responsibility, the department should still fill out the Equipment Disposal Form.
- Scrapped property
Unwanted or unserviceable equipment may be scrapped. The department must ensure that the University has title to the equipment wishing to be scrapped. Grant-funded equipment requires approval, please contact SPA.
The department is responsible for the equipment removal.
Last updated April 21st, 2014