Property and Equipment Management Policy

Responsible Unit: Facilities | Executive lead: CIO 
Created: 1/1/2008 | Reviewed/Revised: 5/2011, 2/16/2023 | Effective: 2/16/2023 
Compliance: NWCCU 2.E.1, 2.E.3
Approving Body: BOT | Classification: Institution-wide 

Purpose: 
This policy provides a standard of practice for the management, accounting and control of moveable capital equipment (also referred to as capital equipment) owned by PNWU, titled to the University, under the custody of the University, or for which the University is accountable to the federal government and other sponsors.  

Policy:  
Capitalization of Equipment: Assets with a useful life greater than a year, costing greater than $5000, are capitalized as fixed assets on the financial statements. 
  
Fixed assets:  Fixed Assets (capitalized > $5,000) are inventoried annually for physical existence. Fixed assets inventories are reconciled to the sub-ledger upon completion of the periodic fixed assets inventory. Discrepancies are researched and lost or stolen assets are written off as approved by the CFO, COO, or CBO. 
  
Idle or Obsolete Equipment: Annually, all idle equipment or equipment to be scrapped or sold is identified, appropriately disposed of and accurately removed from the list of fixed assets and the related gain or loss from disposal is recorded. 
   
Construction projects: When applicable, all construction project costs are documented, and all relevant costs are captured, including labor, overhead, and interest, as appropriate. 
 
Depreciation method: Capital Equipment is depreciated using the straight-line method (for GAAP purposes) over the estimated useful lives of the assets as follows: 

Years
Laboratory equipment5-15
Furniture & fixtures7
Computers & office equipment4
Vehicle(s)5

Leasehold improvements are depreciated over the shorter of the term of the applicable lease or the estimated useful life of the asset. 

Leased equipment is capitalized or expensed, as applicable, in accordance with GAAP. 
  
The University accurately and consistently depreciates assets. Depreciation expense calculations are verified by the Controller. 
  
Federal Awards:  Fixed assets inventories purchased with Federal awards are tracked separately with special “Federal” property tags and are reconciled to the sub-ledger upon completion of the periodic fixed assets inventory. Assets are identified as necessary by funding source, if applicable. Asset details that facilitate identification of location, user, reporting, etc. are included in the fixed asset detail. The Controller is responsible for ensuring any federal assets are disposed of properly, with appropriate valuation and reimbursement, in accordance with the applicable regulations or guidelines. Discrepancies are researched and lost or stolen assets are written off as approved by the CFO or COO. 
  
Construction cost overruns: The Facilities Director or Facilities Committee is responsible for reporting on the status of construction projects, including any cost or schedule overruns. Change orders, greater than 10% or greater than $100,000, whichever is less, whether purchased or constructed, are reviewed the Board of Trustees, or their designee (i.e. Facilities Committee). 
  
Cost accounting and capital asset records:  Due to the size of the organization, cost accounting is maintained by one of the two staff accountants. There is adequate segregation of duties to safeguard the university, as the cost accountant has no authority over the purchase of the asset or control over the custody of the asset.
  
Safeguarding assets:  Assets are assigned to a person, office, or location and periodically inventoried to validate existence. Buildings and offices are to be secured and access will be limited to authorized personnel. The applicable Budget Director/Supervisor is responsible for all assets assigned to his/her staff.

Definitions: 
Total cost: A unit is a combination of parts or components necessary to equip the asset for its original intended use. 

Acquisition cost is the unit price of an item including tax, insurance, freight, and/or installation.

Procedure: 
Property and Equipment Management Procedure 

Related documents: 
Competitive bid: Construction and Renovation 
Competitive bid: Goods and Services 
Conflict of Interest policy 
IC21 – A policy for capitalization of equipment is routinely followed. 
IC1 – Fixed assets are inventoried for physical existence. 
IC25 – Recorded assets and records of physical inventories of assets agree. 
IC28 – A physical inventory of equipment is periodically taken and compared to property records.  Management reviews the results of periodic inventories and follows up on inventory. 
IC2 – Idle equipment or equipment to be scrapped or sold is identified and appropriately classified and assessed for carrying value adjusted. 
IC22 – Construction project cost accounting procedures are documented, and all relevant costs are captured, including labor, overhead and interest, where appropriate. 
IC24 – Depreciation is properly calculated and allocated to the accounts in a manner consistent with established policies. 
IC26 – Procedures exist to identify risk of misappropriation or improper disposition of property acquired with Federal awards. 
IC27 – Accurate records are maintained on all acquisitions and dispositions of property acquired with Federal awards. 
IC29 – Management reviews dispositions of property to ensure appropriate valuation and reimbursement to Federal awarding agencies, as appropriate. 
IC30 – Fixed assets system provides for separate identification of property acquired wholly or partly with Federal funds and with non-Federal funds. 
IC34 – Detailed capital asset records identify the fund or function that owns or otherwise uses the asset. 
IC33 – The entity subjects cost overruns on construction projects to the same level of approval, review, and control as the originally approved amount. 
IC35 – Personnel who maintain project cost accounting and detailed capital asset records have no general ledger or asset custody duties. 
IC36 – Assets are adequately safeguarded from loss due to fire, theft, or misplacement. 
IC23 – Depreciation methods, determination of salvage value and useful life policies are documented and followed. 
Competitive bid: Construction and Renovation policy 
Competitive bid: Goods and Services policy 
Conflict of Interest policy 

Policy Resources

For assistance with policies and procedures contact:

Lori Fulton
lfulton@pnwu.edu