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Business and Financial Policies and Procedures

16.1.4 Equipment, Equipment Leases, and Expendable Supplies

Urbana-Champaign Campus Supplement


University Definition Of Equipment

(UFAS object codes 2700-2799, 4970-4990, 6300-6499, 6800-6899, and 6950-6990). (See Section 12.)

Equipment is an article of nonexpendable, non-consumable, tangible property which:

  • Is not permanently attached to any of the University's buildings or grounds,
  • Has a life expectancy of more than one year,


  • Costs $1,000 or more, 


  • Is an addition, improvement, or modification of an existing piece of equipment which increases its productivity or useful life.

Equipment does not include:

  • Nonexpendable tangible property delivered to a sponsor under the terms of a sponsored agreement (UFAS object codes 8790-8799).
  • Repairs and maintenance
  • Software

Equipment Funded by the Federal Government

Effective July 1, 1995, the Office of Naval Research (as the University's cognizant federal agency) authorized the University to increase the equipment cost threshold for capitalization in accordance with an OMB waiver dated June 29, 1995. The equipment definition for U. S. Government purposes is tangible nonexpendable personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit.

Special purpose equipment means equipment which is used only for research, medical, scientific, or other technical activities.

General purpose equipment means equipment, the use of which is not limited only to research, medical, scientific, or other technical activities (for example, office equipment and furnishings, air conditioning equipment, reproduction and printing equipment, motor vehicles, and automatic data processing equipment).

Equipment Funded By Other Sponsors

The U. S. Government's definition of equipment is applicable to equipment funded by non-federal sponsors unless the terms and conditions of the sponsored agreement provide a different definition.

Supplies (Sponsored Projects and Federal Appropriations) - Capitalized Equipment (State)

To account for differing definitions, all purchases of equipment on sponsored projects and federal appropriations with a useful life of more than a year, and costing $1,000 or more, but less than $5,000 should be recorded in Banner using the 27XX series of expenditure object codes. These codes became effective July 1, 1995.

Use the following codes for supplies on state inventory:

Minor Detail User Description of Ledger 5 Sponsored Project Supplies on State Inventory




Office furniture




Passenger auto




Other motor vehicles








Machinery/major tools




Scientific/laboratory instruments












Data processing/other

Fabricated equipment - An item fabricated, or made, within the University for which the:

  • Total cost of component parts and materials/supplies (not labor) is $1,000 or more,
  • Costs are documented and accounted for by the unit,


  • Items otherwise satisfies the University's definition of equipment (see "University Definition of Equipment" in this section).

Exempt property - Federal regulations define exempt property as "tangible personal property acquired for research in whole or in part with federal funds, where the federal awarding agency has statutory authority to vest title in the recipient without further obligation to the federal government." This includes:

  • Expensed equipment ($1,000-$4,999) and supplies
  • Equipment as defined by the federal government ($5,000 or greater) if the awarding agency does not establish conditions for which the title remains with the federal government

Supplies and other expendable property - Federal regulations define supplies and other expendable property as items which:

  • Are consumable


  • Do not satisfy the government's criteria for equipment:
    not permanently attached to any of University's buildings or grounds
    a life expectancy of one year or less
    an acquisition cost of less than $5,000, OR
    not an addition, improvement, or modification of an existing piece of equipment which increases its productivity or useful life

Non-exempt property - Federal regulations define non-exempt property as property to which the University has conditional title as stipulated by the federal awarding agency. This includes:

  • Equipment ($5,000 or greater) when purchased with non-research federal funds
  • Residual inventory of supplies greater than $5,000 when purchased with non-research federal funds
  • OR Equipment ($5,000 or greater) when purchased with federal research funds and when stipulated as non-exempt by the awarding agency

The University has title to supplies upon acquisition. The University compensates the federal government for its share of supplies only if purchased with non-research federal funds and if there is a residual inventory exceeding $5,000 upon termination/completion and the supplies are not needed for other federally sponsored projects and the awarding agency has stipulated conditional title.

Acquisition of Equipment

Equipment may be acquired by purchase or fabrication.

Existing available equipment should be used when possible. The University encourages units to make equipment available for use on other sponsored projects provided such other use does not interfere with the project work for which the equipment was acquired (see sponsor award for restrictions).

Equipment purchases should be timed for delivery and used before the project termination date.

Federal titled or other sponsor-titled equipment must be completely funded by the sponsor. Partial funding from University accounts is permitted if title to the equipment vests in the University without further obligation to the sponsor.

Equipment (or replacement obtained using the old equipment as a trade-in) is maintained in good condition and available for as long as it is needed for the sponsored project which funded its purchase.

Units are to have appropriate safeguards in place to prevent loss, damage, and/or theft of equipment. Any loss, damage, or theft is investigated, fully documented, and reported to the Accounting Division, Property Accounting Section. Equipment stolen or destroyed during the term of a sponsored agreement for which it was purchased must be replaced by the unit if it is needed to complete the performance of work, unless specific approval is obtained from the sponsor to charge the replacement cost to the sponsored agreement. It should be noted that the University does not automatically insure equipment, either acquired by purchase or fabrication. If a unit desires to insure equipment contact the University Office of Risk Management at 217-333-3113 for information.

Equipment purchased with federal funds may not be used to provide services for a fee to compete unfairly with private companies that provide equivalent services unless specifically permitted or contemplated by federal statute.

Operating and Capital Leases Of Equipment

Leases are classified as either operating or capital leases (see Section 12.) Units may acquire the use of equipment through an operating or capital lease arrangement if processed in accordance with University policy. Any internal funding charged to Ledger 5 accounts must be reviewed and approved by the Grants and Contracts Office (GCO) to ensure costs are allowable in accordance with sponsor policy.

When funding is from external sources, it must be determined whether money is in the budget for future years; what documented commitments are in place to show that the University receives these funds; and if funding is not available for future years, what is being done to secure it. The requesting unit must show how the lease or lease purchase is paid if the anticipated funds do not materialize.

Interest on a federally-funded capital lease or lease-purchase of equipment is allowable if:

  • The cost of equipment (lease payments less imputed interest) is $10,000 or more


  • The prior written approval is obtained from the sponsor, through the Grants and Contracts Office

Grants And Contracts Office Approval For Sponsored Project Acquisitions

Except as provided below in this section) GCO approves the following expenditures of sponsored project funds whether the requisition is issued to an internal storeroom or to an external vendor:

  • Equipment leases, whether defined as equipment lease-purchases (capital leases) or equipment rentals


  • Equipment acquisitions of $5,000 or more on all sponsored projects except for Public Health Service (PHS) and National Science Foundation (NSF) which are $10,000 or more, State of Illinois sponsored projects which are $1,000 or more, and fabrications which are $1,000 or more. PHS and NSF research grants and cooperative agreements are identified by the first three characters of the UFAS account title.

Federal Requirements For Procurement Of Equipment And Supplies

Purchase or fabrication of general purpose equipment used exclusively or primarily on a federally sponsored project, special purpose equipment, and supplies is allowable as a direct charge subject to the following conditions:

  • University policies regarding conflict of interest and gratuities in purchase related matters must be followed (see "Conflict of Interest" in Section 7.2, Purchase of Goods and Services).
  • Each procurement transaction is conducted in a manner to provide, to the maximum extent practical, open, and free competition. Competition should not be restricted by requesting a particular name brand or features particular to a name brand when needs can be met by other vendors. Instead, an effort should be made to identify a bid/offer which is most advantageous, price and other factors considered. Efforts are made to utilize small business and minority-owned business sources. Contracts are made only with responsible contractors. Units should consult with the Purchasing Division, as needed, in selecting contractors. Materials and supplies (not equipment or software) procured through Central Stores and unit storerooms are competitively bid and thus have met the requirement for competition.
  • The requisition/request for prices form documents that the acquisition of equipment complies with the requirement to avoid purchasing unnecessary items.
  • Federal procurement standards prohibit the cost-plus-a-percentage-of-cost method of contracting for federally sponsored projects.
  • Some form of price or cost analysis should be made in connection with every procurement action. Price analysis may be accomplished in various ways, including the comparison of price quotations submitted, market prices and similar indicia, together with discounts. Cost analysis is the review and evaluation of each element of cost to determine reasonableness, allocability, and allowability. On the DPO and stores requisition (for items from Central Stores Computer Stores), the unit certifies that a price and cost analysis was performed, items procured through storerooms other than Computer Stores were competitively bid, and the price/cost analysis was documented on the requisition by Purchasing Division buyers. The buyers' notations on requisitions serve as documentation of price/cost analysis and no further documentation by the unit is required. The Purchasing Pricing Memorandum (attached) is used by the Purchasing Division to document price analyses for federally funded purchases $25,000 or over.
  • A system should be maintained to ensure contractor conformance with terms, conditions, and to ensure there is timely and accurate follow-up on purchases. This is accomplished through the receiving procedures (see Section 7.2, Purchase of Goods and Services, Section 8, Payments and Reimbursements, and Section 6, Insurance).
  • All proposed federally funded sole source procurements, whether from a supplier or a University storeroom, in which the total expenditure (within 30 days) is expected to be $25,000 or greater, must be approved by the Purchasing Division and must be in accordance with federal policy. Costs are disallowed if there is a "stringing" of purchases to avoid this limitation. Units may justify the sole source purchase by completing and submitting to the Purchasing Division a sole source justification letter with their requisition or the Justification for Sole Source Purchases (from Computer Stores) with an Acquisition Cost of $25,000 or More From Ledger 5 and 6 Federal Accounts form.
  • The "Justification for Sole Source Purchases (from Computer Stores) with an Acquisition Cost of $25,000 or More From sponsored projects form is at the end of this section and should be reproduced by the unit. Central Stores supplies the form for their procurements.
  • Procurement records and files for purchases in excess of $25,000 are maintained by the Purchasing Division or University storeroom and includes the following:
    • Basis for contractor selection;
    • Justification for lack of competition when competitive bids or offers are not obtained; AND
    • Basis for award cost or price.
  • Equipment acquisitions of $5,000 or more per unit must have prior approval of the federal sponsor. Such approvals may be provided in the grant or contract award document, approved budget, or in correspondence from the grants/contracting officer. Note, however, that the federal agencies listed below have authorized the University to approve these equipment acquisitions charged to research grants or cooperative agreements (see grants or cooperative agreements terms and conditions):
    • Department of Agriculture
    • Department of Commerce (NOAA)
    • Department of Energy
    • Department of Navy
    • National Science Foundation
    • Public Health Service

The Urbana-Champaign campus has in turn delegated this approval authority to Principal Investigators and unit heads.

  • Special Department of Defense (DOD) screening of federal government equipment listings is required for an equipment acquisition funded by DOD contracts (not grants or cooperative agreements) when the acquisition cost is:

    $15,000 or more for industrial plant equipment as defined in subpart 245.301 of DOD Federal Acquisition Regulations


  • $25,000 or more for automatic data processing equipment

DOD screening is required regardless of whether or not the equipment was approved by the sponsor for purchase. These approvals are obtained by the Purchasing Division as part of the procurement process.

Recording Equipment in Property Accounting System (PAS)

All items defined as equipment are recorded in PAS. Although defined as optional by PAS, the name of the manufacturer, the model number, and the serial number are required for equipment purchased with Ledger 5 sponsored project funds.

If the equipment is fabricated by the University, the vendor should be listed as "Fabricated by: (Name of unit)"

Purchased equipment - Purchased equipment is recorded in PAS when payment is issued.

Fabricated equipment - Fabricated equipment is recorded in PAS:

  • Upon request of the unit to the Property Accounting Section of the Accounting Division with GCO concurrence


  • By Property Accounting Section and GCO as part of fiscal year-end closing by transferring all expenditures recorded in object codes 6500-6529 to the appropriate equipment object code(s) (see "Fabricated Equipment" below).

Lease/purchase - Equipment acquired under a lease/purchase (capital lease) option and using 69XX object codes is recorded in PAS by the Accounting Division, Property Accounting Section at the inception of the lease period.

Valuation of Equipment

Purchased equipment - Valued at the net amount paid (invoice price less all discounts) plus trade-in allowances. If purchases are made from University storerooms, costs should include the applicable storeroom overhead charges. Costs also include the cost of any installation, modifications, attachments, accessories, or auxiliary apparatus necessary to make the equipment usable. Freight charges, if shown on the invoice, or if readily available, should be included in the equipment cost.

Fabricated equipment - Usually valued at the total of all readily identifiable direct costs of component parts, materials, and supplies (not labor) used in construction. The cost of component parts, materials, and supplies used to fabricate equipment must be documented and maintained by the unit.

The source of the documentation may be:

  • Unit accounting system
  • Fabricated equipment object codes 6500-6529
  • Manual cost ledger
  • Separate UFAS account number
  • Service account records
  • Other systems which provide comparable information

Object codes for recording fabricated equipment in process are 6500-6529 and the following criteria must be met:

  • These object codes are used only when the aggregate sum of component parts, materials, and supplies used to fabricate equipment total $1,000 or more,
  • A separate object code number is used for each item of equipment,


  • The description of the object code must include the University property control number assigned to the item.

Additions, improvements, or modifications are defined as equipment if they increase the productivity or useful life of the equipment.

Gifts of equipment - Recorded at fair market value when received. Fair market value is defined as the amount the University would have paid to purchase the equipment. If this amount cannot be determined, fair market value is based upon an appraisal by qualified University personnel or by an appraiser external to the University.

Title to Equipment

Title to equipment purchased with sponsored project funds generally vests in the University. Unless the sponsored project agreement terms or sponsor policy indicate that title to equipment may not vest in the University, the equipment becomes the property of the State of Illinois and is accounted for in the same manner as all state property (see Section 12).

Federal Projects

Federal sponsors may reserve the right to have the equipment title transferred to the funding agency or a third party if the acquisition cost is $5,000 or more. "U.S. Government Property Control System" at the end of this section describes the management of property whose title vests in the federal government.

For research grants and cooperative agreements, the right to transfer title is reserved in the award document or made known to the University in writing. This is considered non-exempt equipment. The federal sponsor issues disposition instructions to the University within 120 days after termination of the grant.

For contracts, title to equipment is vested as set forth in the contract. The short form federal research contract includes the Federal Acquisition Regulations clause Title to Contractor-Acquired Property (FEB 1989) which vests title in the University unless the government specifically elects to retain title and the election is set forth in the schedule of the contract.

Sponsor-Owned Property

When a sponsored agreement indicates that title to equipment does not transfer to the University but vests in the sponsor, the equipment is recorded in PAS as sponsor-titled and is monitored by GCO. Guidelines for inventory control for this type of equipment are issued by GCO.

Transfer of Equipment to Another University

Equipment purchased from sponsored project funds may, with the approval of the unit head, college dean, and GCO, be transferred to another University when the:

  • Equipment is needed in the continuation of the individual's research
  • Equipment was purchased with sponsored research funds
  • Equipment was used for sponsored research
  • Funds were paid by the sponsor for the purpose of facilitating research by an identified principal investigator or faculty member employed by the University
  • Principal investigator is leaving the University of Illinois and that individual's research is to continue at another not-for-profit University


  • Other University is willing to accept responsibility for the equipment

These transfer procedures apply to equipment purchased from gift-financed sponsored projects; however, this requires approval of the Accounting Division rather than GCO.

A "Request To Permanently Transfer Sponsored Project Equipment With Researcher" form should be forwarded to the Accounting Division, Property Accounting Section and must be approved by the unit head, college dean, and GCO (Accounting Division for gift-financed equipment). Upon approval, the unit initiating transfer should contact the recipient institution to acknowledge acceptance of the sponsored project research equipment. Acceptance should be acknowledged by an authorized official of the recipient institution on the bottom of the request form. (See "Request To Permanently Transfer Sponsored Project Equipment With Researcher" form at the end of this section which should be photocopied for use by the unit.)

Loan of Equipment to Another Institution of Higher Education

Equipment may be loaned to another institution of higher education for a limited period if all the following conditions are met:

  • University's former Principal Investigator is employed by the other institution and a sponsored project is transferred, continued, or renewed at the other institution
  • Equipment was purchased with sponsored project funds available to that Principal Investigator
  • Equipment is essential to the continuation of the sponsored project
  • Written request, approved by the unit head and college dean, is forwarded to Property Accounting Section
  • Property Accounting Section verifies that the funding sources of the equipment were sponsored projects and the loan is approved by GCO
  • Formal Equipment Loan Agreement is entered into between the University and the other institution (see "Equipment Loan Agreement" at the end of this section)
  • The following changes are made in PAS:
  • Availability code to "L" for loaned equipment
  • Building location to "5150" for off-campus
  • Description line #4 to "Loan to (Name of Institution) "

The duration of the loan agreement is limited to the period of performance of the sponsored agreement including continuations or renewals, or the termination of employment of the University's former Principal Investigator at the other institution, whichever is earlier. The loaning unit is responsible for verifying that the property has been returned to the University and reported to the Property Accounting Section.

These loan procedures apply to equipment purchased from gift-financed sponsored projects; however, this requires approval of the Accounting Division rather than GCO. (See "Equipment Loan Agreement" at the end of this section which should be photocopied for use by the unit.)

Disposition of Supplies and Other Expendable Property

Federal Grants And Cooperative Agreements

Upon completion of a grant or cooperative agreement, when the total value of non-exempt supplies and other expendable property exceeds $5,000 (see "Supplies and Other Expendable Property" in this section) the following apply:

  • Property may be used on other federally-supported activities
  • If no longer needed or usable on other federally supported activities, the University may retain the property as long as the federal government is compensated for its share in the acquisition costs


  • If no longer needed or usable on other federally supported activities and it is determined the property cannot be used within any other University unit, the property may be disposed of by the unit with approval of GCO as long as the federal government is compensated for its share of the acquisition costs. The accounting for disposition is administered by the Accounting Division with concurrence of the unit and GCO.

The amount of federal compensation is computed by applying the percentage of federal participation in the cost of the sponsored project to the sales proceeds. The University may deduct $500 or 10% of the proceeds, whichever is less, for selling and handling expenses. The chart on the following page shows a sample calculation of federal compensation:

Line Item



Federal contribution



University contribution



Total cost of project



Acquisition cost of supplies



Proceeds from sale



Federal compensation

Proceeds with 95% federal participation rate applied



Less selling and handling

$ 500

Total federal compensation



Upon completion of a grant or cooperative agreement, when the total value is $5,000 or less, the University may retain the property without further accountability to the federal government (unless specifically restricted by the grant or cooperative agreement). The University may dispose of the property only if it has been determined the property cannot be used by the unit or any other University unit. If sold to a third party, the accounting for disposition is administered by the Accounting Division with concurrence of the unit and GCO.

Federal Cost Reimbursement Contracts

Upon completion of a cost reimbursement contract, excess materials, and supplies purchased from any University storeroom should be returned, if possible, and the project account credited with the proceeds.

Other excess materials and supplies are used, when possible, on other federally-sponsored projects.

Non-Federal Sponsored Projects

Upon completion of a non-federal sponsored project, excess expendable materials and supplies may be used as follows:

  • For unit purposes


  • If no longer usable by the unit and it is determined that the property cannot be used by any other University unit, the property may be disposed of by the unit with approval of GCO. If sold to a third party, the accounting for disposition is administered by the Accounting Division with concurrence of the unit and GCO.

University of Illinois at Urbana-Champaign

U.S. Government Property Control System

Revised March 1, 1995


A. Government property - All property owned by or leased to the U. S. government or acquired for the government under the terms of a sponsored agreement. Such property includes both University of Illinois (University) acquired and government-furnished property as defined below:

  1. University-acquired property - Property acquired for the performance of a sponsored agreement by the University and titled in the government.
  2. Government-furnished property - Property in the possession of or directly acquired by the government and subsequently made available to the University.
  3. Property - As defined in Federal Acquisition Regulations (FAR) 45.101, property that is both real and personal. It includes facilities, material, special tooling, special test equipment, and agency-peculiar property.

B. Government Property Administrator - Government representative responsible for reviewing and approving the University's property control system, examining property records, inspecting property, and conducting periodic surveys to determine the efficiency and effectiveness of the University's control system, including compliance with the latest responsibilities imposed by new or modified property terms and conditions in contracts or grants.

C. University Government Property Administrator - Grants and Contracts Office (GCO) employee member responsible for government property control system.

D. Unit representative - Individual within a University unit delegated the responsibility for control over the location, usage, maintenance, repair, protection, and preservation of government property.

E. Property Accounting Office - Section of the University's Accounting Division responsible for the day to day operation of the Property Accounting System.

F. Property Accounting System (PAS) - Subsystem of the University Financial and Administrative System (UFAS) that is used to record both fixed and movable assets of the University. It is also used to record equipment not owned by the University, but for which the University is accountable.


The University's government property control system is monitored by GCO in accordance with Office of Management and Budget (OMB) Circular A-110, FAR 45.000, and sponsored project terms and conditions.

  1. GCO University Government Property Administrator maintains government property control records. This responsibility includes: 1) requesting University property control numbers and distributing property control number tags to units; 2) monitoring government titled inventories; 3) responding to government inquiries; 4) reporting lost, damaged, or destroyed property; 5) requesting disposition instructions for property no longer usable or excess to the needs of the University; and 6) requesting transfer of government titled property to University.
  2. Unit representative affixes University property control number tags furnished by the University Government Property Administrator on government titled property, and advises the University Government Property Administrator when: 1) government-furnished property is received; 2) government property becomes excess to current or reasonable future needs; 3) government property is lost, damaged, or destroyed; or 4) government property becomes worn out or uneconomical to repair.

  3. Property Accounting Section records property in PAS, monitors physical inventories, and maintains current records for all University property.

  4. Government property is acquired, maintained, controlled, and disposed of in accordance with Business and Financial Policies and Procedures, Sections 12.1 through 12.5, and the Property Accounting System Manual.


A. Unit obtains sponsor approval as required by the terms of the sponsored agreement before the acquisition of equipment.

B. Equipment may be acquired as follows on a:

  1. Departmental purchase order (DPO), up to $5,000; (Equipment ordered on a DPO is paid for under the University's "Direct Pay" procedures without a receiving report.)
  2. Stores voucher from a University storeroom; or
  3. Purchase order by submitting a purchase requisition to the Purchasing Division (Purchasing).

    a. Upon receipt of a purchase requisition, Purchasing obtains bids from prospective vendors on items over $25,000 in accordance with Section 12.

    b. For acquisitions requiring government screening, Purchasing forwards DD Form 1419 "DOD Industrial Plant Equipment Requisition", or DD Form 1851 "Automation Equipment Requirement" to the Department of Defense contracting officer for clearance.

    c. Purchasing Division orders equipment from the appropriate vendor.

    d. Upon receipt of the equipment, the authorized individual within the unit signs and forwards a receiving report to Accounting Division for payment.

    (Government titled equipment must be funded in total from a federal sponsored agreement. Partial funding from University accounts is permitted if title to the equipment is vested in the University without further obligation to the sponsor.)

C. When the payment transaction (DPO, stores voucher or purchase order) is entered into the UFAS accounting system, a property record is automatically established in PAS through the PAS working file.


Government-furnished equipment may be provided by the government in accordance with the terms of the sponsored agreement.

When government-furnished equipment is received by the unit, a copy of the Standard Form 122 "Transfer Order Excess Personal Property" is sent to the University Government Property Administrator, who completes PAS Forms 11 and 50 and sends them to Property Accounting Section to record the government-titled equipment in PAS. The property is tagged and accounted for in the same manner as government titled property purchased with University funds.

The unit may request "excess" government equipment for use on government projects, as described on excess property lists published by the U. S. General Service Administration, by submitting Standard Form 122 through the Purchasing Division. Upon receipt of this equipment, it is titled in the University with no further accountability to the government.


A. University property control number tag includes a six-character sequential control number and identifies the item as "Property of the U.S. Government" (see Section 12).

B. A different colored tag is used to distinguish government titled from University-owned property.

C. All property is tagged except where the nature, size, or use of the item makes tagging impractical. Such items are assigned a University property control number, and a card, or other record, is maintained within the unit listing the University property control number and other descriptive information, including location of the item.


Property owned or used by the University is recorded in PAS. PAS is a transaction oriented system. All accounting transactions which affect property are automatically captured by PAS from the UFAS accounting system. This transaction detail is recorded and available for review in the PAS property record.

PAS property record includes manufacturer, description, model number, and serial number, when available, as required by FAR 45.505-1 and 45.505-5; acquisition cost by source of funds; and contract to which property is assigned.

PAS ownership code is "S" for University titled property, "G" for U. S. Government titled property, and "O" for Other. This PAS ownership code is initially determined by the UFAS attribute FS592 (blank for state, G for federal government and O for Other).

The government-furnished equipment description includes the previously assigned government inventory number.


  1. Units are required to take a physical inventory of all property including government titled property and complete an inventory reconciliation on a cyclical basis every two years.

  2. Upon completion of the physical inventory, the inventory media are returned to Property Accounting Section where the information is processed and the PAS record for each item of property is updated to indicate the current location and condition.

  3. Any government property that is unusable, surplus, or has not been located is reported to the University Government Property Administrator by representative.


  1. GCO Management Control Reports are produced periodically for each sponsored agreement to which government property is assigned.

  2. GCO monthly reports detail items of government titled equipment added to or deleted from PAS during the prior month.

  3. Government property management reports are prepared periodically by the University Government Property Administrator for each federal agency by sponsored agreement, showing the dollar amount of government-owned property as follows:

    1. Department of Defense reports are submitted on DD Form 1662 for the period 1 October - 30 September.
    2. National Aeronautics and Space Administration reports are submitted on Form 1018 for the period 1 July - 30 June.
    3. Department of Energy reports are submitted on Form F4300.3 semi-annually for the periods of 1 March-31 August, and 1 September-28 February.
  4. University Government Property Administrator prepares special reports upon request.


  1. The University Government Property Administrator oversees maintenance programs for government-owned property.

  2. The physical maintenance, repair, protection, and preservation of property is performed by unit storekeepers, instrument makers, or machinists.

  3. Biennially, and at the time of the final inventory, equipment is inspected by unit personnel for general physical condition, missing parts, and proper storage by storekeepers.

  4. The unit safeguards government equipment as detailed in Section 12 and any damage or shortage of property is reported to the University Government Property Administrator for proper action.

  5. The unit reports surplus property to the University Government Property Administrator, and adequately protects and maintains property pending disposition instructions.

  6. University Government Property Administrator reminds unit representative every 6 months that excess, missing, or unusable equipment must be reported promptly.


Commingling of property is permitted where necessary, provided the items are clearly identifiable as government property and supported by appropriate property control records.


  1. FAR 52.245-5 (alternate 1) provides for vesting of title in the University for equipment having a unit cost of less than $5,000. A quarterly listing by contract number of all such acquisitions is forwarded by GCO to the Government Property Administrator. Acquisitions of $5,000 or more are vested as set forth in the federal contract.

  2. Requests to obtain title to other items of equipment may be submitted from time-to-time by GCO to the Government Property Administrator.

  3. Upon expiration of a sponsored agreement, a request, with adequate justification, may be submitted by GCO to the Government Property Administrator to transfer title to the University, or accountability of the equipment to a successor or related sponsored agreement.

  4. When transfer of title has been granted on equipment, the University Property Administrator:

    1. Advises Property Accounting Section to update PAS records to indicate that title to equipment has been transferred to the University, and to issue a new University property control number tag; and
    2. Notifies unit that title now vests in the University, and that the government tag should be removed and University property control number tag attached.
  5. Idle equipment - All equipment is utilized to the maximum extent possible. However, any equipment determined idle or excess to the needs of a government project is reported by GCO within thirty (30) days of such determination, on DD Form 1342, to the Government Property Administrator for disposition instructions.

  6. Unusable equipment - Equipment that has become worn or damaged beyond economical repair is reported by GCO to the Government Property Administrator for disposition instructions.

  7. Scrap and salvage - When a significant amount of scrap or salvage material is accumulated under a government grant or contract, such material is disposed of in accordance with the University's established procedures, and an appropriate credit, if any, given the contract or grant under which the scrap or salvage material was accumulated.


  1. Off-campus use of equipment - For federally-owned property moved to an off-campus location, an Inventory Loan Agreement form must be completed in accordance with Section 16.1.4 - Equipment, Equipment Leases, and Expendable Supplies.

  2. On-campus - When equipment is transferred permanently from one unit to another, a report is sent to Property Accounting Section by the unit originally charged. A change of location of equipment is reported to the Property Accounting Section to update the PAS records.


This procedure constitutes the official Property Control System for Government Property in the custody of the University of Illinois at Urbana-Champaign. It is reviewed and updated as may be mutually agreed to by a representative of GCO and the Government Property Administrator.

Such reviews are for the purpose of continued approval of this procedure or to implement any material change brought about by the most recent revision of the University's policy and guidelines, Federal Acquisition Regulations, other pertinent U. S. Government directives or regulations, or the terms or requirements of a sponsored agreement.


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Last Updated: May 20, 2019 | Approved: Senior Associate Vice President for Business and Finance | Effective: August 2003

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