X. Property and Equipment
Grant subrecipients are required to be prudent in the acquisition and management of property purchased with state or federal funds. Expenditure of funds for the acquisition of new property, when suitable property required for the successful execution of projects is already available within the organization will be considered an unnecessary expenditure.
o Real Property: typically includes land and buildings.
o Personal Property: includes both tangible personal property, which is classified as either equipment or supplies; and intangible personal property, which includes things having no physical existence, like trademarks, copyrights, and patents.
o Equipment: is a tangible non-expendable personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit.
o Sensitive Minor Equipment: is defined as moveable, high-risk, sensitive property items purchased with a cost between $500.00 and $5,000.00, such as computers (i.e., laptops, tablets), weapons, TVs, and cameras acquired, used and managed for criminal justice and victim services grant purposes.
o Intangible Property: includes trademarks, copyrights, and patents.
Careful screening should take place before acquiring property in order to ensure that it is needed with particular consideration given to whether equipment already in the possession of the organization can meet identified needs. Organizations should establish and maintain an effective property management system to avoid incurring property acquisition costs that are later disallowed by OCJP (e.g., acquiring unreasonable, duplicative, or unnecessary property). Recommended screening practices include:
o Take stock of the equipment that you have and see if it meets the identified needs.
o Consider establishing a screening committee to make decisions about purchases.
o Utilize effective management techniques for determining that property/equipment is needed.
o Initiate a screening process to ensure that effective controls are in place for property management.
If the OCJP determines that the grant subrecipient does not employ an adequate property management system, project costs associated with the acquisition of the property may be disallowed.
Receipts or invoices with order dates are required on all equipment items purchased with grant funds. Receipts should be approved and initialed by the Project Director or other authorized individual prior to payment. Invoices should be marked paid and should have the date, check number, grant number and initials of the Project Director on them. Documentation of equipment purchased and supporting receipts should also be maintained to provide for easier documentation on the annual Project Equipment Summary Report which requires a listing of all equipment purchased via grant funds during the year. Save a copy of the completed report in the grant file.
Subrecipients must retain records for equipment, nonexpendable personal property, and real property for a period of 5 years from the date of disposition, replacement, or transfer at the discretion of the awarding agency. If any litigation, claim, or audit is started before the expiration of the 5-year period, you must retain records until all litigations, claims, or audit findings involving the records have been resolved.
4. MANAGEMENT AND OVERSIGHT OF EQUIPMENT
Subrecipient procedures for managing equipment and “Sensitive Minor Equipment” (including replacement), whether acquired in whole or in part with project funds, shall, at a minimum, include the following requirements:
o Property records or equipment inventory records must be maintained which include:
1. Purchasing grant award number
2. Description of the property or equipment
3. Source of funding for the property or equipment (including the federal award identification number or FAIN, found on attachment B of the contract; any questions, contact your program manager)
4. Serial number or other identification number
5. Identification of who holds the title
6. Acquisition date
7. Cost of the property or equipment
8. Percentage of Federal participation in the cost of the property or equipment
9. Location of property or equipment
10. Use and condition of property or equipment
11. Disposition data including the date of disposal and sale price
o A physical inventory of the property or equipment must be taken and the results reconciled with the property or equipment records at least once every two years.
o A control system must exist to ensure adequate safeguards to prevent loss, damage or theft of property or equipment.
1. Subrecipients must notify their OCJP Program Manager within 10 days when there is loss, damage or theft of equipment or sensitive minor equipment.
2. Any loss, damage, or theft shall be investigated by the subrecipient, as appropriate. Subrecipients are responsible for replacing or repairing the property that is willfully or negligently lost, stolen, damaged, or destroyed. Any loss, damage, or theft of the property must be investigated and fully documented and made part of the official project records.
4. Adequate maintenance procedures must exist to keep the property or equipment in good condition.
5. If the subrecipient is authorized or required to sell the property or equipment, proper sales procedures must ensure the highest possible return. See the Disposition section below.
Equipment with a current per unit fair market value of $5,000 or less may be retained, sold or otherwise disposed of with no further obligation to the OCJP or Federal awarding agency. Equipment with a current per-unit fair-market value in excess of $5,000 may be sold with the proceeds of the sale being multiplied by the awarding agency’s share of the equipment, with that amount to be returned to the Office of Criminal Justice Programs. There is no time limit on this requirement. Contact your OCJP Program Manager for guidance when disposing of equipment purchased with grant funds.
In the event of the termination of an OCJP grant prior to the end of the grant term, OCJP subrecipients should contact OCJP for instructions regarding equipment disposition.
Grant subrecipients shall complete the Project Equipment Summary Report for all OCJP grants. This form is a list of all equipment including “Sensitive Minor Equipment” purchased during each fiscal year and is completed on an annual basis only if equipment is purchased with OCJP grant funds. Save a copy of the completed report in the grant file.
EQUIPMENT ACQUIRED WITH SPECIFIC FEDERAL FORMULA FUNDS
Additional information and requirements for equipment acquired with some federal formula funds can be found in the most current DOJ Financial Guide. Information on specific federal formula funds can be found in the fund source chapters.