Presented by:
Ivonne Bachar, CPPM CF
Director, Property Mgmt. Office
Stanford University
Event:
NCURA – Regions VI and VII
Denver, CO
April 4-6, 2011
Page 1
A Property Management Primer
Key Elements Affecting Equipment in Research
Today’s Focal Points
Page 2
Property Life Cycles – A Birds Eye Look Key Terms Regulatory Context Pre-Award Post Award Close-outs and Audits
Discussion Encouraged!
Page 3
Terms & Concepts
TitlePropertyEquipmentExempt EquipmentMaterial SuppliesScreeningCAPGFP/GFM
AccountabilityAccountabilityStewardshipStewardship
CapitalCapitalDepreciationDepreciation
Property Life CycleProperty Life Cycle
Rules & Business NeedsRules & Business Needs Policies & ProceduresPolicies & Procedures
Getting theGoods
(Need thru Acquisition)
Phase I Phase II Phase III
PropertyControl
(In-use period)
Close-out andDisposal
(Once item is excess)
Tracking – Training – Awareness
Reporting – Reconciliation – Adjustments
Audits – Process Improvements
Page 5
“Regulatory” Context
Office of Management & Budget (OMB) Circulars Federal Acquisition Regulations (FAR)
Agency-Specific Supplements State Regulations Accounting Standards (GASB, GAAP, FASB) IRS Guidelines Export Controls Other associated regulations (e.g. EPA) Data Security VCSs and ILPs Agreement-specific Terms & Conditions
6
Contractor Outcomes(Property Mgmt. System Components)(Property Mgmt. System Components)
AcquisitionReceipt
RecordsPhysical Inventory
Sub-contractor controlReports
UtilizationMaintenance
Contract close-out
FAR 52.245-1FAR 52.245-1
“Contractors shall develop property management plans and systems, at the contract, program, site or entity level that reflect their efforts to
obtain best value”
Imbedded Outcomes:
Identification, Storage, Movement, Disposal, Management, and Audit
Page 7
Regulatory Requirements(Grants)
Code of Federal Regulation / OMB CircularsCode of Federal Regulation / OMB Circulars2 CFR 220 ( OMB A-21)
Cost Principles for Educational Institutions
2 CFR 215 (OMB A-110) Uniform Administrative Requirements for Grants and Cooperative
Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations
A-87 Cost Principles for State, Local, and Indian Tribal Governments
A-123 Management’s Responsibility for Internal Control
A-133 Audits of Institutions of Higher Education & Other Non-Profit
Institutions
Page 8
FAR for Contracts
Key Clauses:
52.245-1
52.245-1 Alternate II
Alternate II > > > Preferred OptionAlternate II > > > Preferred Option
>>Government Property>>Property Plan
Page 9
52.245-1, Alternate II52.245-1, Alternate II
Gives title to recipient for equipment under $5,000, provided that the recipient obtained CO’s approval before each acquisition.
Gives title to recipient for equipment $5,000 or greater, with CO’s permission. (Note: Sponsor holds title during life of contract)
Applies only to Contractor Acquired Property
Beware of Tax Implications
Pre-Award
Support SOW Property Plan for contract proposals Budget justifications Identify methods of acquisition Clearly define
FabricationsDeliverables
Acceptance and delivery criteria Negotiate appropriate clause
Page 10
Page 11
Acquisition
Approved budget vs. authority to purchase Approvals & Screening Financial & Reporting Categorization Explicit listing of GFP needed Import & Export End of period purchases
Methods of Acquisition and Lifecycle Methods of Acquisition and Lifecycle ChangesChanges
Sponsor Furnished
Or Loaned
University (Contractor)
Acquired
• Purchases
• FabricationsFabrications
Donation
• Incoming Transfers
• Title Transfers
If Sponsor Title
Considered GFP
Lease
Rent
Equipment Title – GrantsEquipment Title – Grants
Sponsored Sponsored GRANTGRANT University
TitlePurchasesTaxable
Notes: In some cases granting agency may impose future use restrictions on equipment In rare cases when equipment is furnished on a grant or if specified in the terms of the
grant, it is treated as sponsor owned. Some Federal Sponsors retain right to title, and may opt to reclaim to non-exempt property
(OMB Circulars)
Equipment Title – ContractsEquipment Title – Contracts
FederalFederalSponsored CONTRACTSponsored CONTRACT
FAR 52.245-1 (Alt. II)
FAR 52.245-1 or per T&C
<$5K University TitleF&A (aka IDC) Applies
Sponsor TitleNon-Taxable
No F&A (aka IDC)
Notes: Equipment furnished by Sponsor, remains sponsor-owned Non-Federal, Sponsor-Owned equipment may be taxable (e.g. State of California) May request title transfer to Sponsor-owned property upon completion of award
$5K> Sponsor TitleNo F&A (aka IDC)
(FAR Clause)
Page 15
Property Title
Driven by agreement type and T&Cs Affected by
Acquisition MethodSource of funding
Title determines taxability May change throughout life of agreement Determines reporting Limits disposition options
How might this affectHow might this affectProject Budgets or theProject Budgets or the
Proposal Process?Proposal Process?
Page 16
Physical Inventory
• Frequency dependent on approved policies and procedures, State, or sponsor requirements
• OMB A-110 & A21• Biennial – you define schedule• Verification & reconciliation• Report
• Timing, content, distribution• University financials vs. sponsors• Missing items
• FAR• Periodically or per accepted procedures
• GASB• Annual, or based on asset category
Remember Property at
Subcontractor!
Transfers(Incoming or Outgoing)(Incoming or Outgoing)
Define items involved Award type & status Funding Source Method of acquisition Current title Retention requirements Cost or no-cost? Approvals Import-Export Issues
“It Depends” starts here...
Page 18
Subcontracting
Ensure your flow down addresses AT LEAST:AT LEAST:Confirm recipient’s property systemAcquisition and TitleIdentification and RecordsPhysical inventoryReports, including LDDTUseDispositionRisk and LiabilityStewardship responsibilities
Page 19
SubcontractsTitle Issues, cont.
The Prime needs to be careful not to give the sub greater title rights than the prime has been given; consider:
What type of instrument is the Prime?Is the sub an eligible recipient?Is the sub doing research or other professional services?Are there restrictions on the prime’s clear title?How is GP affected?At what point is title granted to sub?
Page 20
Reports
Agency Specific Management and Self Assessment Internal Audit Interim
Financial and/or Accountability Physical Inventory Loss, Damage, Destruction, Theft Corrective Action Final Closeout
Include Sub-award infoInclude Sub-award info
Other “Hot Spots” International and Collaborative Agreements Self-Assessments Import - Export controls Fabrications Journal Transfers P-Card Purchases Indirect Cost implications Multi-disciplinary projects Multi-source funding Data Security
Page 21
It’s about integration
Page 22
Rules andRequirements Orgs, Policies,
Procedures,People
Assets and TechInfrastructure Property
ProfessionalSkills