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Chapters:

3.7 Property Standards

Equipment Ownership, Use, Management, and Disposition

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Ownership of Equipment
Use of Equipment
Management of Equipment
Disposition of Equipment

DOJ recipients must follow the standards and procedures for ownership (title), use, management, and disposition of equipment set out below, with the exception of recipients and subrecipients of Byrne Justice Assistance Grant (JAG) Program formula grant funds from the Bureau of Justice Assistance. JAG award recipients must follow slightly different standards and procedures set out in 42 U.S.C. § 3789. (See the “Equipment and Supplies Acquired With Edward Byrne Memorial Justice Assistance Grant Program Funds” below). 

Ownership of Equipment

Unless more specific rules are identified for a particular grant program, title to equipment acquired under a Federal award will vest in the recipient organization (or, in the case of a subaward, in the subrecipient’s organization). The legal right of ownership and conditions for use, management, and disposal of equipment are set forth in 2 C.F.R. § 200.313, and are described below. 

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Use of Equipment

A State must use equipment acquired under a Federal award in accordance with State laws and procedures. DOJ encourages the States to follow the procedures that are in this Guide.

Recipients and subrecipients other than States must use equipment acquired under an award (or subaward) for the authorized program or project purposes for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When no longer needed for the original program or project, the equipment may be used in other activities currently or previously supported by a Federal agency.

  • Use for other Federal projects. Equipment must also be made available for use on other projects or programs currently or previously supported by the Federal government, provided the use does not interfere with the work on the projects or programs for which it was originally acquired. First preference for other use should be given to other programs or projects supported by the awarding agency.
  • User fees. User fees should be considered and treated as program income to the project, when appropriate. See 2 C.F.R. § 200.307 (Program Income). During the time the Federal government retains an interest in the equipment the non-Federal entities must not use equipment acquired with a Federal award to provide services for a fee that is less than private companies charge for equivalent services, unless doing so is specifically authorized by law. See 2 C.F.R. § 200.313(c)(3)
  • Replacement equipment. When acquiring replacement equipment, recipients or subrecipients may use the equipment to be replaced as a trade-in, or may sell the equipment and use the proceeds to offset the cost of the replacement equipment, subject to the written approval of the awarding agency.
  • Encumbrances. A non-federal entity must not encumber equipment acquired under aFederal award without approval of the awarding agency or pass-through entity. 

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Management of Equipment

A State should ensure equipment acquired under a Federal award to the State is managed in accordance with State laws and procedures for property.

Recipients and subrecipients other than States must use procedures for managing equipment (including replacement equipment) acquired in whole or in part under a Federal award, until disposition takes place, that, at a minimum, meet the following requirements:

  • Property records. Property records must be maintained to include all of the following information:
    • ✔  Description of the property
    • ✔  Serial number or other identification number
    • ✔  Source of the property, including the federal award identification number
    • ✔  Identification of the title holder
    • ✔  Acquisition date
    • ✔  Cost of the property
    • ✔  Percentage of Federal participation in the cost of the property
    • ✔  Location of the property
    • ✔  Use and condition of the property
    • ✔  Disposition data, including the date of disposal and sale price
  • Inventory. A physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years.
  • Maintenance procedures. Adequate maintenance procedures must be established and used to keep the property in good condition.
  • Control system. A control system must be in place with adequate safeguards to prevent loss, damage, and theft.
    • Promptly and properly investigate and fully document any loss, damage, or theft, and make the documentation part of the official project records. 2 C.F.R. § 200.313(d)(3).
    • Provide at a minimum, the equivalent insurance coverage for equipment acquired with Federal funds that the non-Federal entity owns.  Federally-owned equipment need not be insured unless required by the award. 2.C.F.R. § 200.310.
    • Non-federal entities are responsible for replacing or repairing property that is willfully or negligently lost, stolen, damaged, or destroyed. 
  • Proper sales procedures. If authorized or required to sell the property, the recipient or subrecipient must establish proper sales procedures to ensure the highest possible return.

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Disposition of Equipment

A State recipient must dispose of equipment acquired under the award in accordance with State laws and procedures.

Recipients and subrecipients other than States must dispose of the equipment when original or replacement equipment acquired under the award or subaward is no longer needed for the original project, or for other activities currently or previously supported by a Federal awarding agency, as follows:

  • If the item to be disposed of has a current per-unit fair market value of $5,000 or less, the item may be retained, sold, or otherwise disposed of with no further obligation to the awarding agency.
  • If the item has a current per-unit fair market value of more than $5,000, the item may be retained or sold, but the awarding agency will have a right to a specific dollar amount. Calculate this amount by multiplying the current market value or proceeds from the item sale by the awarding agency’s share of the equipment (i.e, the agency’s percentage of participation in the cost of the original purchase). The seller is also eligible for limited sale and handling costs of $500 or 10% of the proceeds, whichever is less.
  • In cases where the recipient or subrecipient fails to take appropriate disposition actions, the awarding agency may direct other disposition actions.

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