Property Management Function: Overview

Purpose

This document defines property management and provides an overview of the Research Foundation's (RF's) property management system. It first defines the term "property" and specifies the scope of property coverage within this manual. It then defines "management" in relation to property and discusses general policies and procedures of the Research Foundation for this property management function. It presents an overview of the key internal controls of the Research Foundation for managing property.

Property Definition

Property is defined as things having ownership and value. There are three categories of property: real property, intangible property, and tangible property. All property acquired with sponsor or Research Foundation funds and for sponsored projects at the State University of New York (SUNY) is managed by the Research Foundation.

Real Property

Real property consists of land and its improvements. However, SUNY real property and its improvements are included in the determination of indirect costs for research and sponsored programs.

Intangible Property

Intangible property consists of conceptual items. Intangible property (such as inventions, patents, and copyrights) is the subject of the Research Foundation Technology Transfer business area. Therefore, intangible property is not discussed in the Property Management business area.

Tangible Property

Tangible property consists of all objects having substance other than real property. The Research Foundation manages all tangible property obtained in the conduct and administration of sponsored programs administered through the Research Foundation. The scope of documents in the Property Management business area, then, is the description of Research Foundation policies and procedures for managing this tangible property.

All tangible property can be classified further as expendable or nonexpendable.

Equipment Capitalization Policy and Inventory Threshold

The capitalization policy of the Research Foundation follows the Office of Management and Budget (OMB) Circular A-110 maximum guidelines which are currently set at $5,000 and a useful life of more than one year. Some sponsors may set a lesser threshold value.

For inventory purposes, all capitalized assets must be recorded into the SUNY Property Control System (PCS). In addition, if a sponsor has set a lesser threshold value, assets must be recorded into PCS in accordance with the sponsor threshold. Operating locations may choose to use a lower level threshold for inventory purposes if it better suits their internal control purposes.

Expendable Property

Expendable property consists of property having a value of less than $5,000 or a service life of one year or less.

Operating locations that have established a lower threshold should use "SUP Below Threshold Equip" expenditure type. For sponsors that set a lesser threshold value, operating locations should use "EQP Sponsor Defined Equipment" expenditure type. Purchases made from this expenditure types will appear on the property reports and should be entered in the PCS for inventory tracking. All other expendable property should be charged to a supply expenditure type. Refer to Expenditure Type under Field Level Info for descriptions of expenditure types..

If an item falls below the A-110 or sponsor's dollar or service life threshold but can be considered as an enhancement to a second more major item, then the property should be added to the value of, and reported as a part of, the major item of property.

Nonexpendable Property

Nonexpendable property consists of equipment of a capital nature. The property as a unit (with shipping, transportation insurance, and installation costs included) should have a value and service life above the A-110 limits (currently set at $5,000 and a useful life of more than one year). Some sponsors use a lesser threshold value (see the "Expendable Property" in this document).

All nonexpendable property must be entered in the PCS for inventory tracking. The property is budgeted and fiscally tracked on the RF accounting files in the "EQP" expenditure types.

Property Management Definition

Management is defined as "directing and controlling the use of." With reference to property, "management" concerns acquisition, title determination, utilization, security, maintenance, and disposition. Normally we think of these functions as being the concerns of a single person, the property owner. However, with property acquired though sponsored funding, the situation is more complicated because ownership is taken on by the Research Foundation for management purposes and to ensure compliance with sponsor guidelines.

Sponsor Guidelines

The federal guidelines for property management are set forth in the Office of Management and Budget Circulars A-110 and A-21. Government agencies require that if a project is to be supported, there must be in place at the sponsored location an accredited system for financial accounting and physical tracking of any property provided. They further require scheduled reports that account for property. They require that property must be accessible for periodic inventory and audit.

Other sponsors may have their own published terms and conditions or they may specify regulations at the time of negotiating the sponsored agreement. Failure to satisfy sponsor guidelines can lead to loss of future funding by the sponsoring agencies.

Physical Inventory of Equipment

The Research foundation follows the Office of Management and Budget (OMB) Circular A-110 guidelines which require a physical inventory of equipment be taken and the results reconciled with the equipment records at least once every two years. Any difference between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the difference. In connection with the inventory, verify the existence, current utilization, and continued utilization, and continued need for the equipment. If sponsor regulations require a more frequent inventory schedule, then those inventories should also be carried out.

Accreditation

The Office of Naval Research certifies our property system on behalf of all federal sponsors. The current date of certification for the Research Foundation’s property management system is February, 1995. Loss of accreditation can be individual, departmental, or University-wide.

To avoid accreditation problems and to allow project directors to spend full-time effort pursuing their research goals, the Research Foundation assumes many of the responsibilities for managing property obtained by SUNY project directors.

RF Property Management System

The property management system established by the Research Foundation (and which continues to be modified in accordance with sponsor guideline updates) is approved by the Office of Naval Research and does satisfy the requirements of other sponsoring agencies. The "utilization owner" of the property is the project director. Use must conform with University policies and must not void any of the management regulations set forth by sponsors or the Research Foundation. The property is sponsored so that the project director can accomplish his or her grant proposal goals.

In order for property management to be performed efficiently, the Research Foundation becomes the "steward" of the property so that SUNY project directors are relieved of the property management burdens. The Research Foundation assumes "title ownership" for property to which sponsors relinquish title. It is essential that project directors participate and cooperate in all phases of this stewardship.

Key Internal Controls

Internal controls are management procedures that ensure proper, inclusive, and timely managerial function. Key Research Foundation internal controls for the property management process are


Tagging

When property is first acquired, it is physically tagged with decals. The RF decal carries an asset number that serves to identify an item of property as a unique Research Foundation asset. The asset number is also linked to a unique database record. The tagging and database system serves inventory and insurance purposes. Other sponsor decals may be required when property is owned by a sponsor and is managed (stewarded) by the Research Foundation.


Recording on financial and physical databases

Databases are used to track financial and physical information related to property.


Reconciliation of financial and physical data

There is a reconciliation process that ensures that cost information about property purchased through the Research Foundation's accounts payable system is accurately recorded in the SUNY Property Control System in a timely manner.


Inventory

The Research Foundation performs a biennial inventory that accounts for property and identifies change. If sponsor regulations require a more frequent inventory schedule, then those inventories are also carried out.


Sponsor reporting

A database system is used to establish sponsor reporting requirements and to track reporting compliance.


Donation approvals

All donations must comply with policies for approval developed by the RF Board of Directors.


Insurance acquisition

The Office of the Chief Financial Officer is the risk manager for the Research Foundation and assists in purchasing insurance when deemed necessary.


Audit

The Office of Internal Audit provides an ongoing surveillance of the inventory process. It ensures that locations are complying with established property management procedures.

Change History

 

 

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