1. Capital Equipment or Not….that is the question!

2. Should I chose: Equipment Supply Services (svcs) or or
When choosing an expenditure type, make sure to choose the correct category. The most common categories are below.
Equipment
Supply
Services or or
(svcs)
Something you purchase that will be kept and used for longer than a year.
Something you purchase that will be used up and thrown away.
Someone, who is not an employee, completes a task.
Equipment - Something that you purchase that you will use over and over again
Supply – Something you purchase that you will use up and throw away
Service – Someone will come and provide you with a servicem jnj

3. Should I chose: Equipment Eq Capital Eq NonCapital or
When choosing an equipment, there are two choices, Capital Equipment and NonCapital Equipment.
Equipment
POs between up to$10K will still go to:
Approver – If you limit is under $10K – Everyone that had $ was automatically raised to $10K limit
Buyer – If it is a restricted expenditure type – like moving and relocation
Fixed Asset Accountant – If labeled Equipment, Capital
Eq Capital
Eq NonCapital or

4. What is Capital Equipment?
Eq Capital
Titled to or eventually titled to UVA
Sponsored owned equipment should be coded as well because we need to be able to track it for the sponsor – usually the sponsor will deed it back to us in the end.
Make sure to Write a req that is easy to process – separate lines as necessary (there should only be one expenditure type per PO line)
Training is NOT coded as capital equipment

5. What is Capital Equipment?
Eq Capital
Standalone piece of equipment over $5000*
Useful life greater than 1 year
Owned by UVA & remain in UVA’s possession
Shipping Cost & Installation associated with the Capital Equipment
Items that do NOT qualify as Capital Equipment:
Maintenance/Service Contracts
Vendor Training on Equipment
Annual Software Licenses
Back up components
T&E Card
Don’t purchase Capital Equipment using a T&E Card.
Standalone – or an essential integral component of larger UVA owned capital equipment systemTitled to or eventually titled to UVA
How does this work with Sponsored programs? Does NSF own the equipment if we use grant $? Sponsored owned equipment should be coded as well because we need to be able to track it for the sponsor – usually the sponsor will deed it back to us in the end.
Make sure to Write a req that is easy to process – separate lines as necessary (there should only be one expenditure type per PO line)
Training is NOT coded as capital equipment
*ETF (SE Awards)are different. They are over $500

6. Should this be Capital Equipment?
Line #
Description
Qty
Amount
Equipment 1
Microscope
30,000.00
Installation Charges 2
Service installation
7,000.00
Shipping 3
Shipping Charge
250.00
Training 4
On-Site Training
8,000.00
Total
45,250.00
Is this Capital Equipment?
Yes
Yes
Yes No
What would you code each line?
It is important, when creating a PO in the Marketplace from a Quote, to separate each line and code it to the correct expenditure type. Lines 1-3 should be coded Eq Capital, but Line 4 should be coded Svcs, Training Consultant.

7. Should this be Capital Equipment?
Line #
Description
Qty
Amount 1
Microscope 2
6,000.00
Box of 100 Test Tubes
550.00 3
Box of 10 Beakers
500.00 4
Microscope Table
1,000.00
Total
8,050.00
Is this Capital Equipment? No
What would you code each line? No
It is important to remember that the cost of the equipment should be $5, and above for capital equipment not the total amount of the line or PO. Line 1 is not Capital Equipment because the quantity is 2. Therefore, each microscope costs $3, and is under the $5, threshold. The total of this PO is over $5,000.00, but no one piece of equipment listed is. It is okay to code each line of a PO with a different expenditure type if necessary.
It is important to remember that the cost of the equipment should be $5, and above for capital equipment not the total amount of the line or PO. Line 1 is not Capital Equipment because the quantity is 2. Therefore, each microscope costs $3, and is under the $5, threshold. The total of this PO is over $5,000.00, but no one piece of equipment listed is. It is okay to code each line of a PO with a different expenditure type if necessary.

8. Why is it important chose the correct Expenditure Type
Procurement pulls reports on Expenditure Categories to help them seek contracts based on usage. The more contracts available the better the prices and the less you have complete Sole-source justifications.
F&A charges are currently at 62% for most sponsored projects. F&A is not charged on Capital Equipment. If you have a $10,000. piece of equipment and you incorrectly code it as a Supply, the cost for F&A would be $6,200.
F&A
Why Does this matter?
Procurement – Pull reports on Expenditure Types that helps them seek contracts
Effects Taxes & Reporting (to State and Sponsors)
Internal Controls – AAA Bond Rating
F&A – No F&A Charge When buying Equipment
It is important to be good Fiscal Stewards of the University’s funds.

9. New Small Dollar Purchase Limit
$5,000  $10,000
What changed:
The small dollar purchase limit was raised from $5,000 to $10,000. For purchases between $5,000 and $10,000, your PO will no longer automatically forwarded to a Buyer to approve.
What did NOT change:
$5,000 is still the Capital Equipment threshold! Anything over $5,000. should still be coded as Capital Equipment.
Means: A Procurement Buyer doesn’t get involved unless it is over $5K or restricted

10. New Small Dollar Purchase Limit
PO Workflow:
Approver
If your approval limit is lower than $10,000, your PO will be routed to your approver.
*All employees who had an approval limit of $4, before the small dollar limit change, were automatically changed to a $10,000 approval limit.
Buyer
If the PO has any line coded with a restricted Expenditure types (vehical, moving & relocation, etc.), the PO will be routed to a Procurement Buyer.
Your PO may go through all or none of these approvals.
If you did not receive a PO# automatically, you can check to see who your requisition is sitting with:
POs between up to$10K will still go to:
Approver – If you limit is under $10K – Everyone that had $ was automatically raised to $10K limit
Buyer – If it is a restricted expenditure type – like moving and relocation
Fixed Asset Accountant – If labeled Equipment, Capital
Fixed
Asset Accountant
If the PO is coded with Capital Equipment, the PO will be routed to a Fixed Asset Accountant.
Who has my Requisition?

11. Thank You for Helping Limit Expenditure Type Errors!
Fixed Asset (Capital Equipment) Questions:
Gary Young -
Fixed Asset Accounting Group
Finance Outreach and Compliance
Finance Training:
Presenter – Danielle Hancock: