Equipment Threshold Change

With recent changes to the State Property Control Act and related State regulations, the State of Illinois and University of Illinois threshold for inventoried equipment has moved from $500 to $1,000, effective May 20, 2019. The only exceptions are vehicles and firearms which are inventoried regardless of cost. The State is providing this legislative relief to reduce the volume of tracked equipment at the University and other State Agencies so they can focus on higher value equipment.

Three Phase Implementation Plan

In order to implement the threshold change in an orderly manner, the University will use a three Phase implementation plan as follows:

• Phase 1 – New acquisitions threshold (Fiscal Year 2019 implementation – effective May 20, 2019). Completed and On-going!
• Phase 2 – Removal of “standalone” records below the $1,000 threshold (November 19/20, 2019 implementation). Completed!
• Phase 3 – Removal of non-capitalized records that have depreciated below the new $1,000 threshold (February 11, 2021 implementation). Completed!

Phase 1 – New Acquisitions

Effective May 20, 2019, University units must use the new $1,000 threshold when account coding equipment purchases and when evaluating items to be added to inventory in FY19 and beyond. Banner equipment account code titles have been updated for the new threshold and these ranges should be used on all purchases moving forward. Units will continue to use the 127* and 163* range of account codes for purchasing equipment and for generating and completing equipment new acquisition records through FABweb.

Phase 2 – Remove “standalone” records < $1,000

Equipment listings of item records to be disposed were sent to Unit Property Accounting Contacts and Unit Heads in October 2019 for review and confirmation of item records to be disposed.  The University FABweb and Biennial Inventory applications were unavailable for use on November 19 and 20, 2019 to accomplish the bulk disposal of these records in Banner.

For the items removed from inventory, units must replace the Ptag with the unnumbered label identifying “Property of State of Illinois – University of Illinois”.  Units are required to retag equipment by their next scheduled Biennial Inventory cycle and inventory certification date.

UIUC units can order unnumbered labels/stickers directly from iStores by clicking the following the link: iStores. Type "Property" in the Quick Find box on the left of the page. The product name is "U OF I PROPERTY STICKERS" and the SKU is "11244000". UIC and UIS units will need to create a punchout catalog order in iBuy as outlined on page 12 in the iBuy Training Guide.  Once a punchout catalog order and cart are ready, UIC and UIS units can open the iStores icon from the iBuy main page to shop and order labels.

Phase 3 – Remove items depreciated below $1,000

The new state law and regulations allow the University and state agencies to request removal of items with an acquisition cost of $1,000 and above that have depreciated below $1,000. The University will continue to inventory and retain all capitalized equipment records ($5,000 and above) until items are disposed, consistent with the historical treatment of capitalized items. Maintaining these capitalized records is required for financial reporting and Federal grants.

The University received pre-approval from CMS to remove the non-capitalized items from inventory that have depreciated below $1,000. Property Accounting analyzed all non-capitalized equipment and estimated the current Net Book Value based on a quasi-depreciation calculation.  See section below titled “Quasi-Depreciation Calculation” for more information on how we determined the depreciated value of each item.  

Each University unit received a list of equipment to be removed from inventory in December of 2020. Units had until the end of January 2021 to review and reply back to Property Accounting identifying any specific items believed to have a Fair Market Value of $1,000 or more, to remain on inventory. The University FABweb and Biennial Inventory applications were unavailable on February 11, 2021 to accomplish the bulk disposal of these records in Banner. The equipment records show as disposed in Banner, but the Ptag records are still be viewable in Banner form FFIMAST.

Just like in Phase II, for the items removed from inventory, units must replace the Ptag with the unnumbered label identifying “Property of State of Illinois – University of Illinois”.  Units are required to retag equipment by their next scheduled Biennial Inventory cycle and inventory certification date.

Quasi-Depreciation Calculation

Property Accounting determined a reasonable useful life (in years) based on the item’s commodity code and asset description. The acquisition cost was then divided by the useful life to arrive at an annual depreciation expense. The age of each Ptag was determined by counting the number of years that passed since the Ptag Date to December 31, 2020.  Accumulated depreciation was then calculated by taking the number of years passed x annual depreciation expense. Net Book Value was then calculated by taking the Acquisition Cost – Accumulated Depreciation. If the Net Book Value was below $1,000, it was included on the list for removal.  Any asset that was older than its determined useful life did not have a calculation done as those were assumed to be fully depreciated.  Additionally, any asset less than 5 years old was not included in the list for removal.

Data-wiping of Electronics & Equipment Disposals

University units must continue to data-wipe all electronics and include scrap labels on wiped electronics regardless of the item’s inventory tracking status. University units must continue to request disposal of all University equipment through FABweb and equipment must continue to be sent to the University surplus warehouse for scrap or surplus processing regardless of the item’s inventory tracking status.

Unit tracked equipment

University policy 12.1.6 Affix Property Labels prohibits the use of the University Ptag labels to identify items not tracked on the University Inventory. This is to avoid confusion on what items are actually required to be tracked. There may be individual items or categories of items that a University unit desires to track for internal control purposes. For units desiring to track equipment outside of Banner, units must create labels and identifiers that differentiate any unit tracked equipment from University tracked equipment. To assist, University best practice suggests tracking unit items starting with a “U” for Unit tracked; followed by your campus and org number “1641”; followed by your unit unique identifier. For example, the unit tag for item #1 for org 641 at UIUC would be “U1641000001”.

See “Unit tracked equipment label template” under “Helpful Documents” on the right-hand side of this and other Equipment Management webpages: Equipment Management - OBFS.

Questions

For questions specific to Phase 1, 2, or 3 implementation or questions about unit tracked equipment, please contact Magdalena Jach at mj20@uillinois.edu.

Last Updated: May 25, 2021