A. Authority to Purchase Government Property
Prior to the purchase of equipment, the Project Director will screen
available equipment to ascertain whether existing equipment will meet the
requirements.
The authority to purchase equipment is determined by the contract or grant.
Project Directors and departmental purchasing personnel must be sufficiently
familiar with the provisions of the contract or grant to ensure that purchases
are not made until approval is obtained from the sponsoring Government agency.
An accountant from Contract and Grant Services monitors each Federal contract
and grant account. One of each accountant's specific duties is to ensure that
approval has been obtained from the Government agency prior to the purchase of
equipment.
B. Pricing
1. Contractor-Acquired Property
The unit price for contractor-acquired items is the basic cost, less any
discount, plus installation charges, building modifications, and the appropriate
shipping charges.
2. Government-Furnished Property
Normally, the unit price of Government-furnished property is provided on the
document covering the shipment of the property to UT Austin. However, if the
unit price is not stated on the document, it shall be brought to the attention
of Contract and Grant Services, where action will be taken to obtain this
information. Shipping and installation costs are not normally considered a part
of the unit price.
C. Discrepancies Incident to Shipping
1. Government-Furnished Property
When overages, shortages, or damages are discovered upon receipt of
Government-furnished property, the Project Director shall provide a written
report to Contract and Grant Services within ten days. This report must contain
sufficient facts and pertinent data to enable the Contract and Grant Services to
comply with the required reporting procedures of the sponsoring Government
agency.
2. Contractor-Acquired Property
The Project Director is responsible to take all actions necessary in the
adjustment of shortage, overages, or damages in shipment of contractor-acquired
property in accordance with local purchasing procedures and sound business
practices. This action must be taken in conjunction with UT Austin's Central
Receiving facility and as prescribed by their procedures.
D. Fabricated Equipment
1. Scope
This part prescribes the procedures for administratively controlling and
assigning costs for equipment that is fabricated or constructed by the research
department.
2. General
Generally, equipment acquired by UT Austin to support research under a
Government contract or grant is comprised of easily identifiable, stand-alone
items. The equipment items are assigned an inventory number, tagged (if
feasible) with a metal label, and have an invoiced unit cost that is charged to
an equipment subaccount. However, the nature of the project or research under
some contracts or, in others, the non-availability of suitable equipment to
perform the research, requires that equipment be fabricated by the department
assigned the contract. In these cases, and particularly if more than one item is
built, identifying the cost of the equipment becomes complex. Nevertheless,
equipment costs must be derived.
3. Reasoning
The intent herein is not to constrain or impede research efforts, but to
ensure that expenditures are properly allocated in keeping with good accounting
practices and in a manner that will withstand the scrutiny of the awarding
agencies. It is recognized that Project Directors need flexibility in managing
their research grants and contracts. Contract and Grant Services will assist and
support the Project Directors in that regard.
4. Subaccounts
To consolidate the various expenditures involved in fabricating items of
equipment, Contract and Grant Services has established fabrication subaccounts
for use in each agreement affected. The Project Director must advise the UT
Austin accountant of the particular contract or grant involved if an item of
equipment is going to be fabricated so they can jointly agree on the appropriate
subaccount number. It is then incumbent upon the Project Director to maintain a
record system that will reflect the significant costs directly related to the
construction of the fabricated item. If more than one piece is to be produced,
(for example, a production run of identical items), the total cost of the
operation may be divided by the number of items produced to obtain a unit
cost.
5. Cost of Materials
Costs of materials and supplies used in fabricating equipment shall be
assigned to the fabrication subaccount, to the extent to which they can be
identified by the department or center. The costs of contract labor directly
related to fabrication shall also be assigned, but not the cost of in-house (UT
Austin) labor. Those cumulative costs, as determined by the Project Director,
regardless of object class code, will become the cost of record for the
fabricated equipment item. When a fabrication subaccount has been established
for a particular contract, other subaccounts should not be used to purchase
materials, parts, etc. for the fabricated equipment, as to do so would conceal
costs properly chargeable to the fabrication. Further, if different equipment
items are going to be fabricated, the Project Director must keep the costs for
each segregated and properly allocated. To facilitate this segregation, a
limited number of different subaccounts can be established for the costs of the
different fabricated items. If, however, the different items being fabricated
will work as an integral unit or system when finished, the same subaccount
number may be used. The Project Director shall determine this; however, the
accountant for the contract must be kept apprised. If the Project Director uses
one subaccount for different fabricated items, a ledger detail should be
maintained by the department or center staff to show how the expenditures were
allocated. It is not possible for Contract and Grant Services to maintain this
detail.
6. Transfer of Cost
Departments/centers frequently maintain bench stocks of commonly used
components and replacement parts. Because these items are purchased in quantity,
they are more economical than special ordering similar items. Consequently,
researchers will use them in the interests of expediency and economy. Costs of
these items should be determined and transferred by Inter-departmental Transfer
Voucher (IDT) from a departmental revolving account to the fabrication
subaccount. In some cases, the use of these materials and supplies may be
minimal; therefore, it may be difficult or not feasible to ascertain their cost.
When such costs are insignificant or cannot be determined, they will not be
transferred to the fabrication subaccount. The Project Director shall determine
this. The basic policy, however, is to identify and properly assign the costs of
all materials and supplies used in the fabricated product.
E. Identification
1. Scope
This part establishes requirements and procedures for tagging U.S.
Government-owned equipment in possession of UT Austin.
2. Items to be Tagged
To facilitate inventory control and enhance security, all equipment items,
whether University- or U.S. Government-owned will have inventory tags attached.
All U.S. Government-owned property will be tagged in accordance with provisions
of this part.
3. Tagging Procedures
The Office of Accounting Inventory Services will tag the University- and U.S.
Government-owned equipment within 10 working days upon receipt of equipment.
Equipment that is contractor-acquired and determined to belong to the U.S.
Government will be tagged using the University of Texas at Austin bar-coded
property tag. A separate Property of U.S. Government tag will be placed on each
piece of equipment. This information will then be entered into the inventory
records as U.S. Government-owned property. U.S. Government-furnished equipment
will be tagged in the same manner and entered into the inventory system as U.S.
Government property. If the equipment cannot be tagged because of size,
configuration, use, etc., the number may be etched or painted on the item. If
this is not practical, a number will be assigned to the item and then entered
into the inventory system as U.S. Government property. The record will contain a
notation that the number is assigned and not on the item.
4. Fabricated Equipment
When the equipment item has reached an identifiable stage of construction (or
is complete), as determined by the Project Director, it will be tagged upon
notice from the Project Director. After notification, the Office of Accounting
Inventory Services will tag the equipment within 10 working days. The sponsoring
agency may have provided an inventory tag and number; if not, a UT Austin tag
and number will be assigned. If tagging is not possible or feasible, the
department/center shall keep the inventory tag on file along with the other
property records for the project. Normally, major fabricated equipment items or
diagnostics will be assigned one inventory number; fabricated subsystems that
become integral parts of existing items, as well as modifications to existing
ones, will be included under the single inventory number for the specific
item.
