Handbook for Principal Investigators
The property clause of your sponsored agreement or the applicable agency guidelines will specify the title-holder of equipment purchased with sponsored funds or equipment received from the sponsoring agency. When federal funds are used to acquire equipment, it is important that the principal investigator understand the approved use and accountability differences between federally-titled equipment and University-titled equipment purchased with federal funds. The principal investigator can contact the Property Administrator in Sponsored Projects Services for title information.
Most equipment purchased on grants and contracts is titled in the University’s name.
Restrictions on Use of University-titled Equipment Acquired with Federal Funds
The University must use the equipment on the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds and shall not encumber the property without approval of the Federal awarding agency. "Program" is defined in broad terms as the research program in which the investigator is engaged over a long period of time. When no longer needed for the original project or program, the recipient shall use the equipment in connection with its other Federally-sponsored activities, in the following order of priority: (i) activities sponsored by the Federal awarding agency which funded the original project, then (ii) activities sponsored by other Federal awarding agencies.
During the period of time equipment is used on the project or program for which it was acquired, the principal investigator and department head shall make it available for use on other projects or programs if such other use will not interfere with the work on the project or program for which the equipment was originally acquired. First preference for such other use shall be given to other projects or programs sponsored by the Federal awarding agency that financed the equipment; second preference shall be given to projects or programs sponsored by other Federal awarding agencies.
Disposition of University-titled Equipment Acquired with Federal Funds
When the University no longer needs the equipment for the project or program, the equipment may be used for other activities in accordance with the following standards. For equipment with a current per unit fair market value of $5,000 or more, the University may retain the equipment for other uses provided that compensation is made to the original Federal awarding agency or its successor. The amount of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to the current fair market value of the equipment. If the University has no need for items of equipment with a current per unit fair market value of $5,000 or more, the principal investigator should contact the Property Administrator in Sponsored Projects Services to begin the process of requesting disposition instructions from the Federal awarding agency.
Title to Federally-owned property remains vested in the Federal Government. Federally owned property can be used only on an open award(s) to which the equipment has been assigned by the awarding federal agency. Any use of equipment other than for the authorized project requires that the University request "disposition instructions" from the awarding agancy. It is imperative to contact the Sponsored Projects Property Administrator as soon as the equipment is no longer used on the authorized award.
The University is required to annually submit a listing of federally-owned property under the custody of the University to the awarding federal agency. The Property Administrator in Sponsored Projects is responsible for submitting these inventory reports.
Federally-owned property is acquired by either charging the cost of equipment directly to a Federal grant or contract with applicable Federal-title property clauses or by acquiring excess government equipment from a site outside the University. Federally-titled equipment transferred to the University from excess government property is referred to as "Government-Furnished Equipment (GFE)." Federally-titled equipment acquired on one University award and transferred to another is also treated as Government-Furnished Equipment.
Government-Furnished Equipment must be included in the University’s property record system. The principal investigator is responsible for notifying the Property Administrator of the receipt of Government-Furnished Equipment and requesting University property tags (A-tags) for each item from the Property Unit of the Financial Services Department.
Upon completion of the award or when the property is no longer needed for the project, the Sponsored Projects Property Administrator reports the property to the Federal awarding agency, requesting disposition instructions. The Federal awarding agency has the option of (i) approving use on another project, (ii) approving transfer of title to the University, (iii) requesting return of the equipment to the agency or a third party, or (iv) authorize sale of the equipment and reimbursement to the Federal awarding agency.
Property Records for Equipment:
Equipment records shall be maintained accurately and shall include the following information:
- A description of the equipment
- Manufacturer’s serial number, model number, Federal stock number, national stock number, or other identification number
- Funding source of the equipment, including the sponsor award number
- Whether title vests in the University or the Federal Government or other sponsor
- Acquisition date (or date received if the equipment was furnished by the Federal Government) and cost
- Split funding information, if more than one source of funding
- Location and condition of the equipment and the date the information was reported.
- Unit acquisition cost.
- Ultimate disposition data, including date of disposal and sales price or the method used to determine current fair market value where a recipient compensates for the Federal awarding agency for the Federal share.
A physical inventory of all equipment is taken every two years. The department head or designee will investigate and determine the cause for any differences between information determined by the physical inspection and that shown in the property records. The location, condition, current utilization, and continued need for the equipment will be verified as part of the physical inventory.
Adequate maintenance procedures shall be implemented to keep the equipment in good condition.
Replacement of Equipment
When acquiring replacement equipment, the investigator may use the equipment to be replaced as trade-in or sell the equipment and use the proceeds to offset the costs of the replacement equipment, subject to the approval of the Federal awarding agency. The principal investigator needs to inform the Property Administrator in Sponsored Projects when an item of federally-titled equipment is approved by the federal sponsor for trade-in or sale. The Property Administrator will issue instructions for the removal of the item from the University’s equipment records and retain a copy for the project’s property audit file.
Deliverables to Sponsor
When a contract provides for the acquisition, assembly or fabrication of equipment for delivery to the sponsor, the principal investigator must furnish the Property Administrator in Sponsored Projects copies of shipping documents as proof of the delivery of the equipment to the sponsor. The Property Administrator will issue instructions for the removal of the item from the University’s equipment records and retain a copy for the project’s property audit file.
Transfer of Equipment from a Former Institution
A principal investigator transferring to The University of Arizona from another institution is required to register equipment from the former institution in the University property system. This provides insurance coverage for these items. The principal investigator needs to provide his/her departmental business manager a list of these items, including the description, serial number, model number, and title holder. Any documents of loan, title holder, or approval of transfer from the former institution need to be attached to the list of inventory items. The business manager will forward the list of inventory and supporting documents to the Sponsored Projects Property Administrator.
Transfer of Equipment from the University of Arizona to a new Institution
If the UA principal investigator plans to transfer equipment funded by grants/contracts to another institution, refer to the following policies and procedures:
Equipment Transfer (FSO Property Management Manual)
SPS Guide to Grant Transfers
Use of University Equipment for Non-university Purposes
Equipment acquired with sponsored funds may not be used to provide services to nonfederal outside organizations for a fee that is less than private companies charge for equivalent services. The fee revenue is treated as program income. If the equipment is owned by the Federal Government, use on other activities not sponsored by the Federal government is permissible only if authorized by the Federal awarding agency.
Loss, Damage, or Theft of Equipment
Any loss, damage, or theft of equipment shall be investigated, fully documented and reported immediately to the Campus Police and the Office of Risk Management. A delay in reporting loss, damage, or theft may jeopardize insurance recovery. If the equipment is owned by the Federal Government, the principal investigator must promptly notify the Sponsored Projects property administrator and the Federal awarding agency. Property inventory records must be updated.
Property Control Systems Analysis
The Office of Naval Research (ONR) annually reviews the property system. Sponsored Projects will send each department a list of Federally-titled equipment a couple months before the review. The data should be checked for accuracy and the equipment should be inspected for proper location, use, and condition. The University takes the ONR review very seriously. An unsatisfactory rating of our Property Control System has serious implications for our Federal research program.
Reference: Property Managment Policies & Procedures Manual; OMB Circular A-110, Sections 33-34.