A Property Management Primer Key Elements Affecting Equipment in Research Presented by: Ivonne Bachar, CPPM CF Director, Property Mgmt. Office Stanford University ibachar@stanford.edu Event: NCURA – Regions VI and VII Denver, CO April 4-6, 2011

Discussion Encouraged! Today’s Focal Points Property Life Cycles – A Birds Eye Look Key Terms Regulatory Context Pre-Award Post Award Close-outs and Audits Discussion Encouraged!

Terms & Concepts Accountability Stewardship Title Property Equipment Capital Depreciation Title Property Equipment Exempt Equipment Material Supplies Screening CAP GFP/GFM NOTES:

Property Life Cycle Close-out and Disposal Getting the Goods Property Rules & Business Needs Policies & Procedures Phase I Phase II Phase III Close-out and Disposal (Once item is excess) Getting the Goods (Need thru Acquisition) Property Control (In-use period) Tracking – Training – Awareness Reporting – Reconciliation – Adjustments Audits – Process Improvements

“Regulatory” Context Office of Management & Budget (OMB) Circulars Federal Acquisition Regulations (FAR) Agency-Specific Supplements State Regulations Accounting Standards (GASB, GAAP, FASB) IRS Guidelines Export Controls Other associated regulations (e.g. EPA) Data Security VCSs and ILPs Agreement-specific Terms & Conditions NOTES:

Contractor Outcomes (Property Mgmt. System Components) Acquisition Receipt Records Physical Inventory Sub-contractor control Reports Utilization Maintenance Contract close-out FAR 52.245-1 “Contractors shall develop property management plans and systems, at the contract, program, site or entity level that reflect their efforts to obtain best value” Notes: Imbedded Outcomes: Identification, Storage, Movement, Disposal, Management, and Audit

Regulatory Requirements (Grants) Code of Federal Regulation / OMB Circulars 2 CFR 220 ( OMB A-21) Cost Principles for Educational Institutions 2 CFR 215 (OMB A-110) Uniform Administrative Requirements for Grants and Cooperative Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations A-87 Cost Principles for State, Local, and Indian Tribal Governments A-123 Management’s Responsibility for Internal Control A-133 Audits of Institutions of Higher Education & Other Non-Profit Institutions NOTES:

FAR for Contracts Alternate II > > > Preferred Option Key Clauses: 52.245-1 52.245-1 Alternate II >>Government Property >>Property Plan NOTES: Alternate II > > > Preferred Option

52.245-1, Alternate II Gives title to recipient for equipment under $5,000, provided that the recipient obtained CO’s approval before each acquisition. Gives title to recipient for equipment $5,000 or greater, with CO’s permission. (Note: Sponsor holds title during life of contract) NOTES: Applies only to Contractor Acquired Property Beware of Tax Implications

Pre-Award Support SOW Property Plan for contract proposals Budget justifications Identify methods of acquisition Clearly define Fabrications Deliverables Acceptance and delivery criteria Negotiate appropriate clause

Acquisition Approved budget vs. authority to purchase Approvals & Screening Financial & Reporting Categorization Explicit listing of GFP needed Import & Export End of period purchases NOTES:

Methods of Acquisition and Lifecycle Changes Sponsor Furnished Or Loaned University (Contractor) Acquired Lease Rent Donation If Sponsor Title Considered GFP Incoming Transfers Title Transfers Purchases Fabrications

Equipment Title – Grants Sponsored GRANT University Title Purchases Taxable (OMB Circulars) 13⅞ Notes: In some cases granting agency may impose future use restrictions on equipment In rare cases when equipment is furnished on a grant or if specified in the terms of the grant, it is treated as sponsor owned. Some Federal Sponsors retain right to title, and may opt to reclaim to non-exempt property

Equipment Title – Contracts <$5K University Title F&A (aka IDC) Applies FAR 52.245-1 (Alt. II) $5K> Sponsor Title No F&A (aka IDC) Federal Sponsored CONTRACT Sponsor Title Non-Taxable No F&A (aka IDC) 14⅞ (FAR Clause) FAR 52.245-1 or per T&C Notes: Equipment furnished by Sponsor, remains sponsor-owned Non-Federal, Sponsor-Owned equipment may be taxable (e.g. State of California) May request title transfer to Sponsor-owned property upon completion of award

Property Title Driven by agreement type and T&Cs Affected by Acquisition Method Source of funding Title determines taxability May change throughout life of agreement Determines reporting Limits disposition options How might this affect Project Budgets or the Proposal Process? NOTES:

Remember Property at Subcontractor! Physical Inventory Frequency dependent on approved policies and procedures, State, or sponsor requirements OMB A-110 & A21 Biennial – you define schedule Verification & reconciliation Report Timing, content, distribution University financials vs. sponsors Missing items FAR Periodically or per accepted procedures GASB Annual, or based on asset category Remember Property at Subcontractor! NOTES:

Transfers (Incoming or Outgoing) Define items involved Award type & status Funding Source Method of acquisition Current title Retention requirements Cost or no-cost? Approvals Import-Export Issues NOTES: “It Depends” starts here...

Subcontracting Ensure your flow down addresses AT LEAST: Confirm recipient’s property system Acquisition and Title Identification and Records Physical inventory Reports, including LDDT Use Disposition Risk and Liability Stewardship responsibilities NOTES:

Subcontracts Title Issues, cont. The Prime needs to be careful not to give the sub greater title rights than the prime has been given; consider: What type of instrument is the Prime? Is the sub an eligible recipient? Is the sub doing research or other professional services? Are there restrictions on the prime’s clear title? How is GP affected? At what point is title granted to sub? NOTES:

Include Sub-award info Reports Agency Specific Management and Self Assessment Internal Audit Interim Financial and/or Accountability Physical Inventory Loss, Damage, Destruction, Theft Corrective Action Final Closeout NOTES: Include Sub-award info

Other “Hot Spots” International and Collaborative Agreements Self-Assessments Import - Export controls Fabrications Journal Transfers P-Card Purchases Indirect Cost implications Multi-disciplinary projects Multi-source funding Data Security

It’s about integration Rules and Requirements Orgs, Policies, Procedures, People Assets and Tech Infrastructure Notes: Property Professional Skills

Thank you for being here today!!! Questions??? Concerns??? NOTES: Thank you for being here today!!!