Financial Services and Operations

Chapter 11: Disposition, Disposals, and Transfers

Sponsor Funded Property

Delivery To Sponsor

When sponsor or government-owned equipment is to be returned or permanently delivered to the sponsor or other agency directed by the sponsor, Financial Services and Operations must be notified prior to physical movement.  Financial Services and Operations will process the appropriate paperwork required and document the transaction in the financial and equipment records. 

Excess Property

Equipment accountable to an active contract or grant should be retained and used for that research. When property is no longer needed (also called excess property), the PI is responsible for notifying Financial Services and Operations.

In accordance with FAR 45.606, Financial Services and Operations will prepare Form 1428, Inventory Schedule B, and shall promptly submit the schedule to the contract administration office. Such schedules are used for screening with other Federal agencies so that the equipment may be redirected to another agency.

Unless a release of accountability is obtained from the sponsoring organization, or the property is returned to the sponsor, agency-owned equipment in excess may not be disposed of.

Intent To Dismantle

Department chairs/heads must notify Financial Services and Operations and obtain authorization before any obsolete or nonfunctional item may be dismantled, junked, or scrapped.  Dismantling of sponsored equipment must be approved by the sponsoring agency.  Michigan Technological University must send the intent to dismantle request, and receive direction from the sponsor in writing.

Project Closeout

Title to federal funded equipment may be claimed by a sponsoring agency or other government entity.  The Federal awarding agency may reserve the right to transfer the title to the Federal Government or to a third party named by the Federal Government when such third party is otherwise eligible under existing statutes. The Federal awarding agency can issue disposition instructions within 120 calendar days after receipt of a final inventory.

Upon termination or completion of a contract, a physical inventory of federally owned property is prepared by Financial Services and Operations. The Principle Investigator or the department inventory coordinator completes a physical review of the equipment.   Regardless of whether there is sponsor-owned property or not, it may be necessary to send a property listing to the sponsor when required by the terms of the award document.

If the sponsoring organization transfers title to Michigan Tech, Financial Services and Operations will correct the title codes on the Banner fixed asset equipment records. The disposition information is recorded on the each equipment record and the contract number is removed. The PI or equipment coordinator is also notified of any release.

The sponsor may allow government owned equipment to be transferred to a new or follow-on award.  Title will remain vested with the sponsor. When accountability transfers to a new award it is no longer considered contractor-acquired property, but classified as government furnished.

If the project's residual (unconsumed) supplies at the end of the agreement exceed $5,000 actual cash value (i.e., the value that the University could receive if they were sold in their current condition), they may also need to be reported. The PI is responsible for furnishing this information to Sponsored Program Accounting and Financial Services and Operations.  "Supplies" may include minor equipment under $5,000, such as personal computers, printers, and other non-capital equipment. Occasionally the research sponsor will require that residual supplies (especially minor equipment) be returned to the sponsoring agency as part of closing out the project.

Sponsored Project Transfer

Equipment and supplies, acquired under an active sponsored project where the sponsor’s agreement is moved to another institution, may be transferred only when necessary to do so for the continued conduct of the research. 

Procedure 

To authorize the transfer or release of sponsored funded equipment, do the following:

  1. Contact Research and Sponsored Programs, to discuss possible contractual restrictions on transferring the equipment.
  2. Contact Financial Services and Operations to discuss possible equipment regulations pertaining to the specific contract or grant.  
  3. Complete the Transfer/Release form, along with the following information:
    1. Department name and date of request
    2. Equipment description
    3. The quantity of items being transferred, the item name, the University tag number, the model and serial numbers
    4. Borrower's name, department, or group name
    5. The destination address and phone number
    6. The destination building and room numbers
    7. Release date
    8. Purpose of use
  4. Have the investigator and co-investigators remaining at the University (who will have continuing responsibility for conduct of parts of the project) sign the Release form.
  5. Submit the completed form and any attachments to the department chair or school dean.

    NOTE: When considering the request, the chair/dean should consider at least the following:

    1. Whether any non-grant funds were used to purchase the equipment (such as start-up or grant cost-share funds) and reimbursement of cost-share for equipment purchase (based on fair market value of the equipment).
    2. The needs of other investigators on the project remaining at the University.
    3. Any other departmental factors.
    4. The cost of shipping the equipment to the new institution (normally expected to be paid by the new institution).

The department chair forwards the form to the college dean (if relevant) for concurrence with the chair's decision. The dean will concur (or not) and forward the request to the vice president for research for determination of contractual limitations and federal and state requirements for transferring equipment that might affect the transfer to a new institution and approval of the transfer.

NOTE: Items valued in excess of $50,000 in aggregate requires prior Board of Trustees approval. Refer to Board of Trustees policy 13.14.

  1. If all parties agree to the transfer, and there are no contractual restrictions in the original award or by the federal and state governments, prepare a letter for signature by a responsible official at the receiving institution indicating acceptance of the transfer. The letter will contain:
    1. A detailed list of the equipment to be transferred.
    2. The date purchased.
    3. The grant number and University index number under which it was purchased.
    4. The serial number of each piece of equipment.
    5. The University property tag numbers.
    6. The agreed upon price for the equipment including any applicable shipping costs.
  2. Include with the letter, the Surplus Property Transfer - Terms and Conditions acknowledgement. Have the receiving institution sign and date the acknowledgement and return with the signed letter.
  3. Send copies of the signed letter and the Transfer - Terms and Conditions from the receiving institution and the initial request approved by the vice president for research to the Research and Sponsored Programs office and the Property Office. A copy should be retained in the departmental office files.