All Property Accounting Policies
Process New Acquisitions
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Classifying property is an important first step of many Property Accounting procedures. However, placing a value on the property may need to be done simultaneously.
The University conforms with the Illinois State Property Control Act and the State Comptroller’s requirements for valuation of its property and equipment. The valuation of property is based on total cost, but which specific costs to include vary depending on a property’s classification and how that property was acquired. Therefore, classifying property is part of the valuation process.
All equipment records in Banner must have an equipment account code that reflects the equipment classification. Banner Fixed Assets uses the account code to create a skeletal equipment record that can be accessed and updated in FABweb.
The University complies with the State Property Control Act which requires all University-owned property to display identification. PTag numbers are assigned by University Property Accounting and Reporting. All property $100 and over in value that belongs to the University must have a "University of Illinois, State of Illinois" label on it.
Affix a PTag number label for:
- Any item purchased after July 1, 2005, that is valued at $500 or more
- Any item purchased before July 1, 2005, that is valued at $2,500 or more
- All art and firearms regardless of value
Affix an unnumbered "State of Illinois" label:
- Any item purchased after July 1, 2005 that is valued at $100 or more
- Any item purchased before July 1, 2005 that is valued at less than $2,500
Owners of personal property should clearly identify it as such. Do not assign a University PTag number to personal property brought onto University premises.
A non-cash addition is equipment that is not in Banner Fixed Assets and should be because it is owned by the University. This can happen when the item is found or acquired through donation, loan, or transfer from another institution. It will not automatically appear in your list of FABweb new acquisitions. Therefore, you must enter it in FABweb.
All equipment $500 or more must be recorded in FABweb, even if your unit did not purchase it. Because the reporting threshold changed July 1, 2005, if the item was purchased before that date for less than $2,500, it does not have to be recorded in Banner Fixed Assets using FABweb.
If the equipment is a gift, submit a Report of Gift Received Transmittal form to the University Foundation.
If the equipment has been permanently transferred from another institution, it will become property of the University/State of Illinois unless the research sponsor has mandated otherwise. Even if the equipment title will not pass to the University, the equipment must still be added to Banner Fixed Assets.
If the equipment is on loan from another institution, consult with University Property Accounting and Reporting for recording in Banner Fixed Assets.
The University capitalizes all property and equipment that, in general, have a useful life of more than one year and a unit value equal to or greater than the capitalization thresholds.
Software is capitalized if purchase or development costs are more than $100,000. Units must notify University Property Accounting and Reporting of software purchases or development so it can be entered into Banner Fixed Assets, capitalized, and depreciated over the life of the item.
Leases and Installment Purchases
All units must work with the Office of Capital Programs and Real Estate Services (OCPRES), which will develop, draft, and execute all leases and licenses for the use of real property. This includes both leasing off-campus space for University occupation and licensing on-campus space for use by third parties. All leases for real property must be in accordance with Article 40 (30 ILCS 500/40-5).
You MUST have a fully executed lease before you may occupy off-campus space or a fully-executed license before you may permit occupation of on-campus space by others.
Maintain Equipment Records
University and State regulations require each unit to complete and certify a physical inventory of University equipment at least once every two years. The original cost of equipment, not the depreciated value, determines whether the equipment is subject to State property control regulations and must be included in the physical inventory.
Make sure the unit contact has attended Biennial Physical Inventory of Equipment Training and that they train everyone involved in the biennial inventory.
No one may use any University property for any personal purposes.
Each unit must assign an individual to serve as a property accounting contact and liaison with University Property Accounting and Reporting (UPAR). When a person is designated to serve as contact, or when a new unit head has been appointed, the unit must submit a Property Accounting Contact Change form to UPAR.
UPAR strongly recommends that all unit property accounting contacts complete all 5 property accounting training courses. You may wish to take some of the courses more than once as changes in FABweb and reporting regulations can occur.
The University is subject to and complies with the State of Illinois Property Control Act. Under this Act, all University property, regardless of funding source, is considered State-owned and subject to the regulations of the Department of Central Management Services. Units may not use University funds to purchase items for personal use or ownership. No one may use any University property for any personal purpose.
Units do not have legal title to the property assigned to them for their use. Other units may use the property at the same time and for other purposes, as long as their use does not impede the original unit's activities.
Unit heads are responsible for all equipment owned or assigned to their unit.
The University is subject to and complies with the State Legislative Audit Commission Guidelines regarding the documentation of entities used in self-supporting activities. These guidelines require that all equipment used in self-supporting activities be classified by an entity code. The source of funding is not used to determine the correct entity code.
Tracking equipment used in those activities is also important because self-supporting activities are not included in the calculation of the Facilities and Administration Rate (F&A) charged to sponsored projects.
When the attributes of an asset change, its asset record in FABweb must be updated promptly. Before you can do this, you must have access to FABweb.
Employees must take reasonable care to minimize loss of and damage to University property, regardless of the cost of the property or whether it is recorded in Banner Fixed Assets.
If you are unclear on the best way to keep your unit’s property secure, contact your campus police.
Employees can be assessed for the loss of or damage to University property assigned to them by their unit under any of these circumstances:
- When the equipment is portable in nature and is for their sole and exclusive use in their work (for example, laptops, pagers, two-way radios, etc.).
- The employee and the unit have signed an Equipment Loan to Employees and Students form that is retained in the unit.
- The employee has used the property without explicit or implicit unit knowledge or authorization.
Transfers and Loans
All parties involved in the transfer must agree to the transfer before processing the transfer through FABweb. Ownership does not transfer to the receiving unit until the transaction has been completed. To avoid problems with your biennial inventory, process transfers quickly.
When equipment is transferred between University of Illinois units, an agreement can be made for the receiving unit to pay for that equipment. This "sale" transaction is usually accomplished by a budget transfer or journal voucher from the receiving unit to the originating unit. Only certain types of budget or funding transfers are allowed. If you have questions about allowable funding transfers, consult FABweb Transfers and Disposals Participant Guide—Appendix C.
Units are encouraged to share equipment. When equipment is loaned to another unit for more than one academic session, the unit must report this to University Property Accounting and Reporting.
Equipment purchased from sponsored research funds may be permanently transferred to another university or non-profit institution with the approval of the researcher, the unit head, college dean, the Vice Chancellor for Research (Chicago only), and the receiving institution.
Do not move any equipment until all these steps and approvals have been completed.
Equipment purchased from gift, state appropriations, or University self-supporting funds may be transferred to another university or non-profit institution with the approval of the unit head, college dean, the receiving institution, and University Property Accounting and Reporting (UPAR).
Do not move any equipment until all these steps and approvals have been completed.
Equipment acquired with restricted, sponsored project funds may be loaned to another institution for a limited period under the following circumstances:
- A former principal investigator of the University is employed by the other institution and his or her sponsored project is transferred, continued, or renewed at the other institution.
- The equipment was purchased with sponsored project funds.
- The equipment is essential to the continuation of the sponsored project.
Equipment that was purchased from other, non-restricted funding sources may also be loaned to another institution, regardless of whether a researcher accompanies the equipment.
Do not move any equipment until all these steps and approvals have been completed.
Equipment loans to faculty, staff, or student employees must be to further the unit's mission, not for the convenience of the employee. Employees who have been loaned equipment are responsible for its safe keeping. The unit head retains custodial responsibility for the equipment.
Disposals
If you believe equipment has been stolen, report the theft immediately to your campus Police. University Property Accounting and Reporting (UPAR) periodically reviews all reports of unlocatable and stolen equipment to identify potential weaknesses in internal control and security of campus assets. If the equipment was bought with sponsored project funds, the sponsoring agency may require restitution for unlocatable or damaged equipment.
If a computer was stolen, contact University Property Accounting and Reporting (UPAR) immediately to determine if personal identity information has been compromised and what steps to take.
If equipment has been destroyed or irreparably damaged through casualty loss such as fire, flood, or accident, the loss must be reported immediately to University Property Accounting and Reporting (UPAR). If the equipment was bought with sponsored project funds, the sponsoring agency may require restitution for unlocatable or damaged equipment.
No one is permitted to remove from the buildings and grounds any property belonging to the University without approval, even though the equipment may appear to be of no value, unless all relevant policies and procedures are followed. This includes removal of property designated as scrap or recycling and applies to all unneeded equipment regardless of historical cost, tagging status, or inclusion in Banner Fixed Assets. Units are responsible for paying any costs associated with the disposal of equipment.
Whenever possible, units should trade in firearms they no longer need for other firearms, provided they maintain documentation of acceptance of old weapons by the vendor.
The University is subject to and complies with the Data Security on State Computers Act which mandates elimination of data from electronic/magnetic storage devices when the device is disposed, transferred, or scrapped.
If an equipment item cannot be found after a thorough search, such as during the biennial inventory, it is considered unlocatable. Unlocatable equipment may be removed from Banner Fixed Assets if certain conditions are met. If the equipment was bought with sponsored project funds, the sponsoring agency may require restitution for unlocatable or damaged equipment.
Last Updated: June 1, 2011 | Approved: Senior Associate Vice President for Business and Finance - June 2011