On July 1, 1996, MSU adopted the new federal definition of equipment, i.e., items costing $5,000 or more with a useful life of one year or more. Please see Section 224 of the Manual of Business Procedures for MSU specific details concerning Capital Asset Management (CAM). You can learn more about capital assets at the EBS capital assest information page.
When a faculty member accepts an appointment at another University, s/he may want to take their active grants and equipment with them. Generally, these requests must be accompanied by a statement that the equipment will be used to continue the research, the transfer request must be approved by the department, dean, and CGA, and finally, the other university must be willing to accept responsibility for the equipment. Things the Chair may want to consider before approval include: how much MSU/non-grant money was used to purchase the equipment, will the project continue at MSU even though the PI is leaving, who will be paying the cost of shipping, etc. Assuming all parties agree to the transfer, and there are no unusual restrictions in the original award document that might limit our ability to transfer title, and the equipment is not being shipped outside the United States, please use the following procedure.
- Prepare a columnar list of the equipment to be transferred. The list should include columns for: number/count, description, Funding Agency/Acct #, serial #, and MSU inventory #. The bottom of the page should contain line for acceptance by the receiving institution. See the attached file below labeled "Sample Equipment Transfer Listing Sheet.pdf".
- Prepare a memo to CGA from the PI with approval signoffs from the Chair and the Dean. This memo should state that they have accepted a position at Another U. (for example) and they are requesting the equipment on the attached list be permanently transferred so they can continue their research. See the attached file below labeled "Sample Equipment Transfer Memo.pdf". This memo could also request that grants X, Y, and Z be closed to allow the transfer.
- Submit an Asset Retirement Global e-Doc using the "Retirement Reason" of 9 - External Transfer. Ad-hoc route this e-Doc to CGA for approval. For additional information see MBP 224 Section V. - Equipment State Changes (Transfer and Disposal of Equipment).
- After the above forms have been completed and the authorized representative of the other University has indicated they will accept the equipment listed, the equipment can be shipped to the other institution. If you have any questions, please call your contact in CGA or the main CGA number at 5-5040.
Disposal Of Equipment
What happens to equipment purchased with federal money that is no longer needed?
- Federal regulations governing equipment disposals are found in OMB Circular A-110 section 34 Equipment which says:.
- MSU shall use the equipment in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds and shall not encumber the property without approval of the Federal awarding agency. When no longer needed for the original project or program, the MSU shall use the equipment in connection with its other federally-sponsored activities, in the following order of priority:
- Activities sponsored by the Federal awarding agency which funded the original project
- activities sponsored by other Federal awarding agencies
- When acquiring replacement equipment, MSU may use the equipment to be replaced as trade-in or sell the equipment and use the proceeds to offset the costs of the replacement equipment ...
To answer the question, you need to know if the equipment is "exempt" or not. Exempt property is usually associated with basic research GRANTS from agencies like NSF, NIH and USDA.
For non-exempt equipment, usually acquired under federal contracts, the following applies:
- When MSU no longer needs the equipment, the equipment may be used for other activities in accordance with the following standards. For equipment with a current per unit fair market value of $5000 or more, MSU may retain the equipment for other uses provided that compensation is made to the original Federal awarding agency or its successor. The amount of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to the currentfair market value of the equipment. If MSU has no need for the equipment, MSU shall request disposition instructions from the Federal awarding agency. The Federal awarding agency shall determine whether the equipment can be used to meet the agency's requirements. If no requirement exists within that agency, the availability of the equipment shall be reported to the General Services Administration by the Federal awarding agency to determine whether a requirement for the equipment exists in other Federal agencies. The Federal awarding agency shall issue instructions to the recipient no later than 120 calendar days after the recipient's request and the following procedures shall govern.