�̾�����Ƶ

A. SUMMARY ADMINISTRATIVE PROCEDURE

1. Purpose: This document explains how Property & Plant (P&P) acquisitions are tracked by �̾�����Ƶ.��These procedures are needed to ensure adherence with Generally Accepted Accounting Principles (GAAP), Governmental Accounting Standards Board (GASB) and other regulatory requirements, and to ensure consistent accounting treatment across the campuses.

2. Responsibility: All capital P&P assets acquired with �̾�����Ƶ funds, including grant funds, are recorded in the �̾�����Ƶ��general��ledger��or��related��subsystems��(carried��as��an��asset),��and��monitored��by���̾�����Ƶ��Property��Control staff.

3. Definition: P&P assets, also referred to as capital assets, include all assets acquired or constructed for use by the operations of �̾�����Ƶ with an expected period of use of more than one year. �̾�����Ƶ classifies its property and plant assets into the following categories for reporting purposes:

a. Land – Vacant parcels acquired by purchase or donation are capitalized at acquisition cost or appraised value.

i. Cost includes the purchase price paid, legal cost, title costs, broker’s fees and other costs incurred to obtain title to the land, or appraised values for donated land.

ii. All land acquisitions will be capitalized in the fiscal year of the purchase or gift.

iii. The value of land assets is not depreciated over time.

iv. The settlement cost for new land purchases should be recorded under the Real Estate Purchases account code (7404A1) and the related closing costs should be recorded under the Real Estate Closing Costs account code (7404A2).

b. Land Improvements – These include items such as landscaping, fencing or sodding for athletic uses that cost $50,000 or more and increase the value of the property.��These amounts are capitalized at the original cost.

c. Infrastructure – Land improvements that provide functionality such as roads, walkways, parking lots, streetlights, water drainage systems, and similar items are components of infrastructure.��These projects must cost at least $50,000 to qualify for capitalization.

d. Buildings and Building Improvements – Individual buildings are capitalized if they meet one of the following requirements:

i. an existing building is acquired at a cost of $50,000 or more

ii. a new building is constructed with a cost of $50,000 or more

iii. an addition or expansion with a cost of $50,000 or more is completed for an existing building.

iv. improvement of an existing building/infrastructure or a portion of an owned existing building/infrastructure, including upgrade of major systems at a cost of $50,000 or more which extends the building/ infrastructure’s usable capacity or useful life.

• The useful life of an asset is considered extended when the change to the asset is significant enough to cause the expected useful life to increase beyond the original estimation.��Some examples are:
  • Restoration of a building or building components occurring toward the end of the building estimated useful life
  • Reinforcement of floors or walls
  • Upgrade of plumbing and electrical wiring

v. Projects that improve multiple buildings will only be capitalized if the cost related to an individual building meets the $50,000 threshold.��In these cases, it is necessary to have a breakdown of cost per building so that the assets are capitalized appropriately.��If this is not easily done, then a % of the cost may be used. Square footage of each space being worked on can assist in determining this. This may result in portions of a project being expensed.

vi. Furniture and equipment when purchased as part of a major capital project (defined as an approved budget of total capital investment exceeding $2,000,000) may be capitalizable if the individual asset does not qualify as capital equipment (See Policy 11-020 Acquisition of Equipment section A.2) or��built-in equipment as described in section 3.f. below, and the value of the related assets is $50,000 or more.�� These assets have a shorter life than the structure where housed.��This necessitates that they must be tracked and depreciated separately in the Banner Fixed Assets module.

e. Leasehold Improvements – These are costs incurred to improve building space, leased by �̾�����Ƶ. These costs are capitalizable if the total is $50,000 or greater.

Note:��Furniture is never capitalizable as part of a leasehold improvement.��However, it may qualify as capital equipment.

f. Built-in equipment – This is equipment attached to a structure (building or infra-structure). The related costs are capitalizable if the cost is $50,000 or more. These assets typically have a shorter life than the structure where housed, are unlikely to be used in another location, and would remain as part of the structure if sold or abandoned by the institution. Typical examples are chillers, water heaters, ranges, hoods, central air units, furnaces, wireless access points, etc.

Note: Any equipment item not attached to a building or infrastructure, or not meeting the built-in equipment criteria above, does not qualify as capital plant. However, it may qualify as capital equipment.

g. Plant project costs that are not capitalizable include:

i. Pollution remediation costs (asbestos, lead, etc.) are not capitalizable per GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations, and should always be coded to a non-capital project account (account code 71NC series).

ii. Demolition/removal of buildings/other structures. Please notify �̾�����Ƶ Property Control��when this occurs so that the related asset inventory records can be adjusted accordingly.

iii. Expenditures that do not add value to the building/structure (i.e. paint, maintenance & repairs, etc.).

iv. Other examples can be found on the Capitalization Grid.

B. PROPERTY AND PLANT DETAILED OPERATING PROCEDURES

1. Work in Progress (WIP)

a. WIP tracks capitalizable projects costs before projects are completed and ready for use.

b. Capitalizable projects in progress should have a dedicated Chart of Accounts element, preferably a plant fund code. Campuses using Chart of Accounts elements other than a fund code to individually track capitalizable facilities projects should ensure that all capitalizable charges are tracked per project using an alternate FOAPAL element. Plant fund types X and N are dedicated to construction projects and are not to be used for any other type of projects. Only funds for construction, renovation, and acquisition of capital assets as defined in Section A.3 above may reside in Plant funds. Non-capitalizable expenditures, which may not be charged to Plant Funds, would include the following:

i. Expenditures related to maintaining an asset or returning the asset to��its original condition.

ii. Restoration of a facility so that it can be effectively used for its current purpose.

iii. Work to restore infrastructure to its original condition.

iv. Other repair and maintenance items.

v. Amounts budgeted annually for future renovation, deferred maintenance or purchases of assets.

c. �̾�����Ƶ labor costs must be identified with a specific capital project and appropriately tracked and documented to be eligible for capitalization. The work of our employees must be directly and exclusively related to the specific capital project and directly managed by the campus facilities department which must track hours by person and by project.

d. When an invoice related to a capital improvement project involves both capitalizable and non-capitalizable activity and those costs are not easily separable, the accounting treatment should be that of the predominant activity.

i. For example, re-painting is typically not capitalized. However, if a capital project does not break out the individual costs and repainting is included, �̾�����Ƶ does not require splitting of the costs to determine how much of the project is related to repainting. Instead, we will capitalize the full project costs in these cases.

e. Construction expenditures posted to plant funds (other than equipment account codes) are compiled annually by �̾�����Ƶ Property Control and reviewed with the campuses to determine what is capitalizable.���̾�����Ƶ Property Control records entries each yearend to move plant expenditures to WIP account codes until the projects are completed. Then a final determination is made related to the capitalization or expense status of the project.

f. Real estate account codes are reviewed throughout the year to record any new land and building purchases in the year they are purchased.�� During the annual WIP review, all other plant expenditures are reviewed to determine what is capitalizable as described below.

g. Projects are capitalized at the end of each calendar year if the space is in use or a Certificate of Occupancy has been issued. Some projects may have an open punch list at this point. The total remaining costs for the project will be expensed unless they meet the $50,000 threshold. Note that these costs may be accrued in advance of payment to facilitate the capitalization process.

h. See the Capitalization Grid for examples of capital and noncapital purchases and PPE Account Cheat Sheet for related account to use.

2. Useful Lives – Each asset is given an associated useful life based on what is being capitalized. �̾�����Ƶ uses a half year convention to record related depreciation. In other words, one half year of depreciation expense is recorded in the first year any plant expenditures are capitalized, regardless of the date the costs were incurred.

Useful Lives for Plant Capital Project Assets:

a. New Acquired or Constructed Buildings¹��– 30 or 40 years

b. Leasehold Improvements – related lease term

c. Infrastructure/Building Improvements – 25 years

d. Built-in Equipment/Furniture/Fixtures – 10 years

e. Network Wiring/Wireless Access Points – 4 years²

f. Componentized Buildings (specific UNH research facilities only) – 10 to 50 years

i. Shell (Foundation and major vertical, floor and roof structures and exterior cladding) – 50 years

ii. Building systems (HVAC, plumbing, electrical, elevator, fire protection) – 20 years

iii. Roofing and building outfitting, interior partitions, finishings – 15 years

3. Funding sources for capital projects.

a. Certain projects require funding from multiple sources. Unrestricted and restricted funds may be used for a single project. In these cases, funding should be applied in the order below. For restricted funds, time-limited restrictions should be taken into consideration when determining which source to use first.

i. Gift/grant funding

ii. State capital appropriations (available for educational and administrative facilities only)³

iii. NH-HEFA bond funding (available for self-supporting auxiliary facilities only)³

iv. Unrestricted campus transfers

b. Allowable costs for the select types of funding

i. State capital appropriations - Capital appropriations made to the University System are available for all costs incidental to the completion of related projects including the costs of the services of architects, engineers, and other consultants of such kind and capacity as the University System Board of Trustees may, in its discretion, wish to employ on such terms and conditions as the Board determines. These monies shall be spent under the direction of the University System Board of Trustees in accordance with BOT Policy VI.A.2.1.

ii. NH-HEFA funding is limited for spending on assets that will be incurred and capitalized in accordance with the �̾�����Ƶ bond indenture agreement which states that “obligations in the stated amounts have been incurred by the Authority or �̾�����Ƶ and are presently due and payable or are properly reimbursable to �̾�����Ƶ, and each item thereof is a necessary cost of the Project or of issuing the Bonds and is a proper charge against the Construction Fund.”

iii. Beginning with new construction approved on or after July 1, 2019, campuses should make every effort to have any capitalizable furnishings and equipment related to a HEFA bond project paid with available campus funds.��The related costs may be charged to the existing project fund using account codes in the 7404F series.��The campus must then transfer an equivalent amount from a non-HEFA fund to cover the costs.��The related purchases may be capitalized by �̾�����Ƶ Property Control��as equipment assets if an individual item costs is $5,000 or more.

¹��depending on the type of construction

²��per discussion with Campus IT offices

³��in certain instances, a project may involve both State capital appropriation and NH-HEFA funding. Please contact���̾�����Ƶ Property Control at 603-862-3127 for assistance with rules associated with these types of projects.

---

The official version of this information will only be maintained in an on-line web format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.��

A.��SUMMARY OF ADMINISTRATIVE PROCEDURE

��

The official version of this information will only be maintained in an on-line web format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.��

A. �̾�����Ƶ 11-020F: Furnished Equipment Form

��

B. Purpose of �̾�����Ƶ 11-020F: Furnished Equipment Form

Purpose of Form �̾�����Ƶ 11-020F: To provide information on items which are in the custody of �̾�����Ƶ personnel, but not owned/used by �̾�����Ƶ. These items are tracked by �̾�����Ƶ��but are not recorded by �̾�����Ƶ or barcoded by �̾�����Ƶ. Receipt of sponsored government furnished equipment should be reported to �̾�����Ƶ Property Control and STAR by the department receiving the equipment. Furnished equipment is titled to the government and reports must be filed concerning government-owned equipment.

C. Instructions for Completing �̾�����Ƶ 11-020F: Furnished Equipment Form

1. Required Custodial Information:��

2. Required Information about the Equipment:

A. SUMMARY OF ADMINISTRATIVE PROCEDURE

��

---

The official version of this information will only be maintained in an on-line web format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.��

a. SUMMARY OF ADMINISTRATIVE PROCEDURE

��

A. �̾�����Ƶ 11-022F: FABRICATION PROJECT REPORT FORM

B. PURPOSE OF THE FABRICATION PROJECT REPORT FORM (�̾�����Ƶ-11-022F)

Purpose of Form �̾�����Ƶ-11-022F: Documenting the beginning of an equipment fabrication project and documenting its subsequent completion. Project Directors constructing equipment must complete and submit �̾�����Ƶ-11-022F: Fabrication Project Report Form to���̾�����Ƶ Property Control at the beginning of the project and provide the necessary updated information to these areas at the completion of the project as described below.

C. INSTRUCTIONS FOR COMPLETING �̾�����Ƶ 11-022F: FABRICATION PROJECT REPORT FORM

1. Prior to beginning a fabricated project fill out Form �̾�����Ƶ 11-022F and submit it to �̾�����Ƶ Property Control. The following fields must be completed.

2. When the fabricated project has been completed, update the second half of the �̾�����Ƶ-11-022F. Be sure that both the top and bottom sections of the form have been completed and send a copy to �̾�����Ƶ Property Control. The following fields must be completed.

---

The official version of this information will only be maintained in an on-line web format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.��

A. �̾�����Ƶ 11-023F: OFF-CAMPUS LOCATION (OCL) FORM

A. SUMMARY OF ADMINISTRATIVE PROCEDURE

This policy explains the process involved in the disposal of �̾�����Ƶ surplus supplies and equipment. Supplies and equipment acquired through �̾�����Ƶ are the property of �̾�����Ƶ or a state, federal or other sponsor.

1. Definition of Surplus Property: Surplus property is supplies or equipment which are obsolete, damaged and unusable or in excess of need. This includes all tangible assets with the exception of real property. (The sale or disposal of real property is addressed in BOT, Section VI.C.e, Policy on the Disposal of Real Property.)

2. Why is a Disposal of Surplus Property Policy Necessary? Internal controls are necessary to meet the fiduciary responsibilities of the �̾�����Ƶ Trustees to protect and properly monitor �̾�����Ƶ resources. This policy facilitates the physical removal of surplus property, finds an alternative internal use, reduces the storage burden and maximizes �̾�����Ƶ's return on salable items. In addition, timely and proper recording of disposed property is important for maintaining an accurate financial system and safeguarding �̾�����Ƶ assets.

3. Responsibility: Each Equipment Custodian/Manager (see Procedure 11-010, Section A.3.c.) is responsible for all property under his/her control. �̾�����Ƶ Procurement is��responsible for determining the appropriate disposition of all surplus property not covered under the Safe Electronic Equipment Disposal (SEED) program, and for authorizing and accomplishing such disposition. �̾�����Ƶ Property Control is responsible for properly recording disposal of surplus property listed within the �̾�����Ƶ Equipment Inventory System including any proceeds received, if applicable. Transactional records should also be kept by �̾�����Ƶ Procurement/Surplus��and the department. Equipment Custodians/Managers, with the assistance of campus Facilities if needed, are responsible for removal and transportation of surplus property.

B. DETAILED OPERATING PROCEDURE

1. Preference for Disposition of Surplus Property: When disposing of property, the following priority should be used to determine preferred recipients of surplus property:

a. other departments on campus,
b.��other �̾�����Ƶ campuses/departments,
c.��State of New Hampshire,
d.��other interested parties.

2. Internal Transfers: The transferring department must complete the �̾�����Ƶ 11-010F - Equipment Location Form��and submit the form to���̾�����Ƶ Property Control to ensure the asset location is updated in the inventory records.

3. Special Considerations for Equipment Sales (See Procedure 11-020, Acquisition of Equipment, for definition)

a. An Equipment Custodian/Manager may not unilaterally dispose of �̾�����Ƶ or sponsor's property.
b.��Government-owned Equipment - For tagged equipment, if the Equipment Custodian/Manager is unsure of the funding for a piece of surplus equipment, he/she should contact �̾�����Ƶ Property Control for determination. For disposal of equipment purchased with federal grant or contract funds, �̾�����Ƶ Property Control must obtain all necessary written approvals from the applicable sponsor and/or the federal cognizant agency prior to advertisement or disposal.
c.��Other Equipment Items - If an Equipment Custodian/Manager is requesting an item(s) be scrapped, the Request to Scrap Form () must be completed. �̾�����Ƶ Procurement��will forward the request to���̾�����Ƶ Property Control for final approval if tagged/logged in inventory.
d.��File Updates - �̾�����Ƶ Property Control has update capability to the equipment inventory data in Banner Fixed Assets. This includes location, tag/barcode, serial number, Equipment Custodian/Manager, etc. Financial updates to Banner Fixed Assets, including cost, depreciation and related financial adjustments, are maintained by �̾�����Ƶ Property Control.

4. Proceeds from the Sale: Proceeds from external sales should be recorded in accordance with .

5. Sale to �̾�����Ƶ Employees: All sales to employees must be approved by the applicable �̾�����Ƶ Procurement Surplus Administrator prior to sale, even in cases where estimated current market value is $0. The sale price of all property sold to employees should approximate current market value, and associated receipts should be recorded as revenue to the selling departments.

6. Campus Specific Procedures:

a. UNHD, UNHF, UNHL and UNHM: The Equipment Custodian/Manager is responsible for the following actions in this sequence:

i. Contact �̾�����Ƶ Property Control and STAR if the property was purchased using government funds.
ii.��Notify �̾�����Ƶ Property Control in writing if the property being disposed is on the equipment inventory list. Items must be adequately identified; include tag/barcode number, description, etc.
iii.��Determine the estimated current market value of the property.
iv.��Determine if there are any hazardous substances/materials that may require special handling (e.g., refrigerants, chemicals, radioactive, etc.) For disposal of equipment that may contain hazardous materials, contact the Office of Environmental Health and Safety (OEHS) at: .
v.��The IT Safe Electronic Equipment Disposal (SEED) staff members are responsible for determining the appropriate disposition of equipment containing data storage as well equipment containing circuit boards and for authorizing and accomplishing such disposition. They may delegate authority for disposition as size, condition, value, location, etc., of the item dictates. To request disposal of electronic equipment use the Safe Electronic Equipment Disposal Form found on the UNH IT website at: .
vi.��For all other equipment, notify �̾�����Ƶ Procurement to determine proper disposition or complete the appropriate on-line form on the �̾�����Ƶ Procurement website at:��
vii.��The following thresholds should be used when determining the appropriate procedure for the actual disposal of surplus items:

1. Surplus item(s) that are obsolete or damaged, etc. do not have to be advertised if the property is to be scrapped.

a. After an Equipment Custodian/Manager has received permission to scrap/dispose of an item(s) via email from �̾�����Ƶ Procurement/Surplus, he/she may do so him/herself or call Maintenance Control directly for disposal arrangements.
b.��If disposing of the item(s) him/herself, he/she must make sure the property being disposed of is placed directly inside a dumpster and not left laying or sitting beside one.
c.��If an item to be disposed of is electronic or hazardous, SEED or OEHS staff, respectively, must approve all such scrap requests and notify �̾�����Ƶ Property Control.

i. For electronic items, after approval by SEED, the Equipment Custodian/Manager should work directly with SEED staff for removal/disposal.
ii.��For items containing hazardous substances/materials, the Equipment Custodian/Manager should work directly with OEHS staff for removal/disposal.

2. Surplus item(s) with an estimated current market value per unit of $1000 or greater, or vehicles of any type including boats, trailers, etc. (regardless of current market value) require �̾�����Ƶ Procurement/Surplus approval, and must be advertised for bid for up to 14 days by �̾�����Ƶ Procurement/Surplus. Items which receive bids at or above the advertised asking price, or items which are being requested by other UNH/�̾�����Ƶ departments, maybe be sold/transferred sooner.

a.��Departments may place ads at their own expense offering the item(s) for sale in local or regional newspapers or trade magazines.
b.��At the end of the 14-day advertising period, if no UNH or �̾�����Ƶ department has made an offer on the item(s), the goods can be:

i. Sold to the highest bidder or donated within the next category of preference under Section B.1. above, or
ii.��Relisted for additional 14-day periods if desired.

c.��If there are no bidders for the item(s), the department may send a Request to Scrap or a Request to Donate to �̾�����Ƶ Procurement/Surplus via the �̾�����Ƶ Procurement/Surplus website. Surplus items may be donated to a non-profit organization with �̾�����Ƶ Procurement/Surplus approval.
d.��Removal of Surplus items - If there are no acceptable offers for a surplus item(s) and no identified non-profit organization is interested in the item as a donation; the Equipment Custodian/Manager should contact the UNH Maintenance��Control Department for assistance with pickup if necessary.
e.��Safe Electronic Equipment Disposal (SEED) Removal - If there are no acceptable offers for an electronic item(s), the Equipment Custodian/Manager should contact the SEED program for disposal instructions.
f.��Environmental Health & Safety (OEHS) Removal - If there are no acceptable offers for a hazardous��item(s),��they��will��be��removed��by��OEHS��after��approval��by���̾�����Ƶ Procurement/Surplus.

b. �̾�����Ƶ Procurement - Email �̾�����Ƶ Procurement��with item(s) to be declared surplus. �̾�����Ƶ Procurement will promptly remove the surplus item from the department and handle the full disposition process from a central storage facility. If property being disposed is on the equipment inventory list, �̾�����Ƶ Procurement will notify �̾�����Ƶ Property Control to remove the item(s) from the inventory.

c. System Office - Each department is responsible for completing the appropriate on-line form at the �̾�����Ƶ Procurement/Surplus website at .

C. Contacts

�̾�����Ƶ Procurement Office
603-862-6187

�̾�����Ƶ Property Control
603-862-3760
foc.accounting@usnh.edu

---

The official version of this information will only be maintained in an on-line web format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.��

A. SUMMARY OF ADMINISTRATIVE PROCEDURE

---

The official version of this information will only be maintained in an on-line web format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.