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Business and Financial Policies and Procedures

FAQs

1. Tracking our unit's equipment through Banner Fixed Assets and our biennial inventory is a lot of work. Why do we have to do this?
Yes, it is a lot of work, but it's extremely important for several reasons:

  • University policy requires that each unit be responsible for the equipment in its custody. State law (Illinois Property Control Act) also requires responsible equipment control.
  • Equipment records are part of the University overhead which is used in calculating the Facilities and Administrative (F & A) rate, the indirect cost we charge sponsored projects. If our calculation is wrong, it could cost the University money.
  • Tracking equipment is required under the Government Accounting Standards Board (GASB) and recommended by the Financial Accounting Standards Board (FASB).
  • It is part of University financial statements which are used to calculate our credit score which then affects our bond rating which affects our ability to raise money.

By following consistent accounting principles it is possible to compare one unit to another and our University to other universities. It helps us assess our general financial health.

2. We just bought a new computer and I'm trying to process it in FABweb, but FABweb isn't displaying the computer in the list of new acquisitions to be processed. What's wrong and how do I fix it?
If all information was not correctly entered when the item was purchased (for example, an incorrect equipment account code), Banner Fixed Assets will not recognize the purchase as equipment to be displayed in FABweb. Some additional common reasons the item may not display are:

  • Invoice not paid
  • Equipment was paid for from an organization code you do not have permission to view

For additional troubleshooting information, consult Lesson 3.4 of FA 102: FABweb Additions and Updates Participant Guide.

3. Who owns the equipment in our unit?
The equipment in your unit is owned by the State of Illinois because the University is an agency of the State. The only exceptions to this are equipment bought by and titled to an employee or project sponsor. If sponsored funds were used to purchase an item, the sponsor may choose to give title to the University or retain it themselves.

4. If equipment is owned by a project sponsor or loaned to us from another University, is it processed differently?
Once the equipment arrives on your campus, it must be entered into FABweb as a non-cash addition. From that point on, it will be treated no differently than University-owned equipment. It will be included in your monthly report and biennial inventory.

Equipment that is titled to an outside agency may not be attached to property not owned by the same sponsor. It must not be altered in such a way as to lose its "identity" or purpose. See Sponsor-Titled Equipment in Affix Property Labels.

5. I am the property accounting unit contact for a self-supporting activity that sells items. I'm overwhelmed at the thought of keeping track of our "for sale" inventory as part of our unit's biennial inventory of our equipment.
Your unit's resale inventory differs completely from the biennial inventory for equipment used to conduct your day-to-day business activities. Equipment is tracked in Banner Fixed Asset. Inventory for resale should never be in, nor should it be added to Banner Fixed Assets. For more information on inventory of merchandise for resale, consult Section 5, Receivables.

6. We have several pieces of equipment that are unneeded. However, they have been categorized as antiques. Is there a special process for disposing of antiques?
Contact University Property Accounting and Reporting before doing anything further. Special rules apply to disposing of antiques and works of art. The Director of the State Department of Central Management Services determines their final disposition.

7. We cannot locate some rather valuable equipment and suspect it has been stolen. What should we do?
If you know the item has gone missing recently, contact your campus police. Give the police a complete description of the equipment, including the manufacturer's serial number. If you are not sure how long the equipment has been missing, do a thorough search. Depending on whether the item was lost or stolen, consult the procedures in Process Unlocatable Equipment or Remove Stolen Equipment from Inventory.

8. What are some important differences about tracking equipment in sponsored projects?
Some common equipment procedures require additional steps when equipment is part of a sponsored project. You must know who holds the title for equipment in order to dispose of or transfer it properly. You can identify the title holder by viewing the Title To Field in the FFIMAST form in Banner Fixed Assets. Sponsored project equipment can be titled to the federal government (F), the State of Illinois (S), or a corporation or other institution (O). To dispose of federally-titled equipment, contact your campus Grants office. Transfer Sponsored Equipment to Another University, Loan Equipment to Another Institution, Dispose of Unneeded Equipment.

9. What should I do when sponsored equipment has been brought to our campus from another institution?
First, confirm that both the University and the other institution have approved the transfer. Even if the other institution retains title, that equipment is still the responsibility of the University. The items must be added to Banner Fixed Asset. Follow the procedure to Add Donated, Found, and Other Non-Cash Addition Equipment to FABweb.

10. We are working with Purchasing to enter into a lease agreement. They are asking for paperwork we've never had to submit before. Why is this transaction different?
The University follows the Financial Accounting Standards Board's (FASB) accounting practices guidelines for leases and installment purchases. Therefore, capital leases and operating leases are entered differently in Banner. University Property Accounting and Reporting (UPAR) capitalizes these agreements depending on the type of agreement as defined and required in FASB's standards.

The University is required to disclose its annual expenditures as well as the future payments in its annual financial statements. For more information about the differences between operating and capital leases, consult Financial Accounting Standards Board's (FASB) Original Pronouncements, Volume 1, Paragraphs 7(a), 7(b), 7(c), and 7(d).

Related Policies and Procedures

Affix Property Labels
Section 5, Receivables
Process Unlocatable Equipment
Remove Stolen Equipment from Inventory
Transfer Sponsored Equipment to Another University
Loan Equipment to Another Institution
Dispose of Unneeded Equipment
Add Donated, Found, and Other Non-Cash Addition Equipment

Additional Resources

Financial Accounting Standards Board's (FASB) Original Pronouncements, Volume 1, Paragraphs 7(a), 7(b), 7(c), and 7(d)
FA 102: FABweb Additions and Updates Participant Guide

Last Updated: June 1, 2011 | Approved: Senior Associate Vice President for Business and Finance | Effective: June 2011

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