EQUIPMENT 1.At the UW, items with a purchase value of $2,000 or more (including tax and other ancillary charges) are defined as Equipment (not Supplies). 2.Purchase of equipment requires written approval of federal sponsors, unless waived in the Award or allowed in sponsor Terms & Conditions. 3.Cost of Equipment should be allocated on the use basis at the time the equipment was purchased; the costs does not need to be re-allocated throughout the award period or life of the equipment based on actual usage 4.Purchases of equipment at award end (60 days or less left on award) are scrutinized by auditors as purchases appear to be made for budgetary convenience (e.g., use up remaining funds). 1

EQUIPMENT - INFORMATION 1. At the UW, items with a purchase value of $2,000 or more (including tax and other ancillary charges) are defined as Equipment (not Supplies). Federal definition of Equipment and Acquisition Costs: 2 CFR Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5, CFR Acquisition costs: “Ancillary charges, such as taxes, duty, protective in transit insurance, freight, and installation may be included in, or excluded from the acquisition cost in accordance with the institution's regular accounting practices” UW Equipment Office policies: Equipment Definition: Tangible property other than land, buildings, improvements other than buildings, or infrastructure with a unit cost (including ancillary costs) of $2,000 or more which is used in operations and with a useful life of more than one year. Equipment may be attached to a structure for purposes of securing the item, but unless it is permanently attached to, or an integral part of, the building or structure, it is to be classified as equipment and not buildings. FAQ: Tangible assets acquired through donation, gift, purchase, loan, capital lease, or self-construction, with a life expectancy of more than one year and a total acquisition cost of $2,000 or more (total purchase price including shipping, handling, tax, etc.) should be assigned an appropriate University equipment identification tag and inventoried. Source: In other words, UW’s capitalization threshold is $2,000 and its definition of equipment includes ancillary costs. So any purchases of $2,000 or more is defined as Equipment and should be treated as such within the Federal regulations. 2

EQUIPMENT - INFORMATION 2. Purchase of equipment requires written approval of federal sponsors, unless waived in the Award or sponsor Terms & Conditions. Federal Government defines computing devices with an acquisition cost greater than $2,000, as “General Purpose Equipment” (GPE) (2 CFR & ) GPE must have prior written approval of the sponsor (2 CFR ) Specific inclusion of the computing device in a proposal is considered prior written approval if funded If not in proposal, document how the computer benefitted in the award and why it was not included in the proposal budget 3

EQUIPMENT - INFORMATION 3. Cost of equipment should be allocated on the use basis at the time the Equipment was purchased; the costs does not need to be re-allocated throughout the award period or life of the equipment based on actual usage. Federal regulations allow for other use of the equipment in the following order of preference: – Award under which equipment was purchased – Sponsor (e.g., if the Award is NIH then other NIH programs) – Other Project/Programs supported by the Federal Government – Other non-federal projects/programs Source: 2 CFR Re-allocation of the cost of the equipment to other awards is also not necessary as it: increases the administrative burden on central business units and the department, creates an audit risk, and runs the risk of over-allocation. 4

EQUIPMENT - INFORMATION 4. Purchases of equipment at award end (60 days or less left on award) are scrutinized by auditors as purchases appear to be made for budgetary convenience (e.g., use up remaining funds). All Equipment purchases should indicate how the equipment benefits the Award. If the Equipment is purchased at the end of the Award it can be difficult to justify how it benefits the Award. Equipment purchased for the benefit of the overall project is not always determined as sufficient justification by auditors. 5