Finance Administrative Policies and Procedures
Section: 4- Grants and Contracts Accounting
Policy Procedure: 4-3.09
Subject: Purchasing Equipment & Computers for a Sponsored Project
Effective Date: 1/1/2004
Responsible Department: Grants and Contracts Accounting

Overview This procedure explains how to determine allowability for Purchasing Equipment & Computers on a Sponsored Project.General Guidelines

A. Definitions:

Equipment is defined as an article of nonexpendable tangible personal property having a useful life of more than one year and an acquisition cost which equals or exceeds $5,000. Even though the capitalization threshold is $5,000, MUSC uses the 503XX and 506XX object codes described in Procedure 1-2.01.3: Frequently Used Expense Account Numbers to capture equipment expenditures under and over $5,000.

Note: Accounts 50385, 50386, 50624, and 50628 are designated for expenditures for equipment used in research and development; the vendor is not to charge sales tax on research and development equipment per Section 12-36-2120(56) of the South Carolina Code of Laws effective 7/01/2001.

  1. Types of Equipment and Allowability:

1. Special Purpose Equipment - Equipment which is used only for research, medical, scientific, or other technical activities. Expenditures for special purpose equipment are generally allowable as direct charges to Sponsored Projects if the item(s) were listed in the approved budget, or have been approved by the sponsor or by the Office of Research and Sponsored Programs (ORSP) under Federal "Expanded Authorities".

2. General Purpose Equipment - Equipment which is used for activities not limited to research, medical, scientific, or other technical activities. This type of equipment may support instruction, public service, clinical, and/or administrative activities in addition to research activities. Examples include office equipment and furnishings, air conditioning equipment, reproduction and printing equipment, motor vehicles, and automated data processing equipment.

Expenditures for general purpose equipment, including general use computers, normally should not be charged as a direct cost to Sponsored Projects. Instead, the purchase must be charged to a Non-Sponsored Project with an allocable portion of the depreciation on that equipment being charged indirectly through the University?s Facilities and Administrative (F&A) Cost Rates.

However, with the prior approval of the sponsor, general purpose equipment and computers may be allowable as a direct cost in limited special or "unlike" circumstances. If the purchase involves general purpose equipment, refer to Procedure 4-3.01: Determining Allowable and Unallowable Costs on Sponsored Agreements for guidelines and justification requirements.

Questions regarding purchasing equipment should be addressed to the appropriate Grants and Contracts Accounting Accountant based on departmental assignment (see Distribution of Grants by Administrator )or at 792-2850.

Procedures

1. Follow applicable purchasing requirements in Procedure 6-2.4: Competitive Price Requirements, Procedure 6-2.5: Sole Source Procurements , and/or Procedure 6-2.7: Purchases More Than $250,000 prior to initiating the purchase. If the purchase involves general purpose equipment, See Procedure 4-3.01.

2. Initiate and forward Purchase Requisitions or Intra-Institutional Transfers (IIT?s) for equipment being charged to Sponsored Projects to GCA for review. (Review by GCA is not required if the equipment item has been included in the awarded budget or if the award is a corporate-sponsored clinical study with no restrictions on equipment purchases. For these projects, GCA will have already established the specific equipment account object code in the accounting system for that Sponsored Project UDAK.)

3. GCA will review the request versus the sponsor?s guidelines, specific award terms and conditions, awarded budget, and research proposal within two (2) working days.

4. If the purchase is determined to be allowable, GCA will forward the approved request to Purchasing Services or Computer Connection for further processing.

5. If further information or clarification is needed, GCA will contact the department and request further justification, which must be provided by the department within two (2) working days. If the department does not provide adequate justification within that time period, the request will be returned to the department or Computer Connection marked "Not Approved".

6. If the request is determined by GCA to be unallowable because the item is not included in the award budget, proposal, or budget justification, then GCA will request that the Departmental Business Manager contact ORSP in order to initiate a request for sponsor approval or ORSP approval under Expanded Authorities.

7. If the Departmental Business Manager does not choose to initiate a request for sponsor approval, he/she must provide a Non-Sponsored UDAK for the purchase within two (2) working days. If the department does not provide another UDAK within that time period, the request will be returned to the department or Computer Connection marked "Not Approved".