New Mexico Public Education Department
Special Education Bureau
Equipment and Inventory Policy and Procedure
Definition of Acquisition Cost (EDGAR § 80.3)
The definition of acquisition cost is the net invoice unit price of property, including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it was acquired. Other charges such as the cost of installation, transportation, taxes, duty or protective in-transit insurance, shall be included or excluded from the unit acquisition cost in accordance with the grantee’s regular accounting practices.
Definition of Equipment (EDGAR § 80.3)
For purposes of the New Mexico Public Education Department (NMPED) grants and reporting of equipment costs, the definition of equipment is tangible, nonexpendable, personal property having a useful life of more than one year and an acquisition cost of $5,000. or more per unit. A grantee may use its own definition of equipment provided that such definition would at least include all equipment defined above. Local Education Agencies (LEAs) and other grantee organizations should have a capitalization policy covering grant equipment that establishes the dollar value for capitalized equipment and other capital outlay materials.
Definition of Equipment (IDEA B 34 CFR § 300.14)
Equipment means
–
(a) Machinery, utilities, and built-in equipment, and any necessary enclosures or structures to house the machinery, utilities, or equipment; and
(b) All other items necessary for the functioning of a particular facility as a facility for the provision of educational services, including items such as instructional equipment and necessary furniture; printed, published and audiovisual instructional materials; telecommunications, sensory, and other technological aids and devices; and books, periodicals, documents, and other related materials.
Definition of Supplies (EDGAR § 80.3)
Supplies are defined as all tangible personal property other than “equipment” as defined above.
Supplies purchased with grant funds, as budgeted in the grant agreement, belong to the grantee.
Supplies are to be used for the originally authorized purposes as long as needed for that purpose.
(See EDGAR 80.33 regarding the disposition of supplies whose cumulative value are over
$5,000. when a grant is terminated).
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Guidelines for Purchasing Equipment
Purchasing
– Within the LEA sub-grant application, LEAs need to budget sufficient funds under objective one and the appropriate line item in the Uniform Chart of Accounts (UCOA) in the
Operating Budget Management System (OBMS) for planned purchases of any items to be considered to be equipment by the above definitions to be used in the public schools. The purchase of equipment for students with service plans who are parentally placed in private schools must be included under objective seven of the sub-grant application and the appropriate line item in the Uniform Chart of Accounts (UCOA) in the Operating Budget Management
System (OBMS). Prior to the purchase, the LEA must have written approval from the Special
Education Bureau (SEB), for items costing $5,000. or more, that the proposed purchase has been approved. The purchasing form is located on the SEB’s website at http://www.ped.state.nm.us/SEB/fiscal/index.html
. The LEA will maintain all supporting documentation: inventory records, purchase orders, receipts, and vendor contracts.
Allowable Equipment
– the LEA is responsible for assuring that only allowable equipment is purchased. If in doubt, please call SEB’s Business Operations Specialist.
A LEA can purchase or lease equipment with the Individuals with Disabilities Education Act
(IDEA) funds if:
1.
It is reasonable and necessary to operate its federal program effectively,
2.
Existing equipment will not be sufficient, and
3.
The costs are reasonable.
All items purchased as equipment, as well as materials and supplies must be accounted for in such a manner as to avoid fraud, waste, or abuse. These purchases will be reviewed as part of the regular monitoring process.
Property Management Requirements
The grantee (LEA) is required to manage property acquired in whole or in part with grant funds by establishing and using procedures that meet 34 CFR § 80.32, including the following requirements: a.
Maintain property records within a fixed asset inventory system that include:
1.
The description of the property;
2.
The serial number;
3.
The source of the property;
4.
The name of the entity that holds title;
5.
The acquisition date and cost;
6.
The percentage of federal/state participation in the cost of the property;
7.
The location and condition of the property; and
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8.
Any disposition data including data and sale price of the property. b.
Take annual physical inventory of grant acquired property and reconcile results with property records; c.
Develop control system to ensure adequate safeguards to prevent loss, damage, or theft of the property. Capital outlay items must be properly tagged in order to maintain control and inventory of such; d.
Develop maintenance procedures to keep property in good condition; and e.
Establish procedures to sell grant-acquired property when authorized or required) to ensure the highest possible return.
Equipment Requirements Concerning Private Schools (34 CFR § 300.144)
The LEA must control and administer funds used to provide special education and related services under 34 CFR §§ 300.137 – 300.139, and hold title to and administer materials, equipment, and property purchased with those funds for the uses and purposes provided in the
IDEA.
The LEA may place equipment and supplies in a private school for the period of time needed for the Part B program. The LEA must ensure that the equipment and supplies placed in a private school:
1.
Are used for only Part B purposes; and
2.
Can be removed from the private school without remodeling the private school facility.
The LEA must remove the equipment and supplies from a private school if:
1.
The equipment and supplies are no longer needed for Part B purposes; or
2.
Removal is necessary to avoid unauthorized use of equipment and supplies for other than
Part B purposes.
No funds under Part B can be used for repairs, minor remodeling, or construction of private school facilities.
Barcodes or secure codes must be put on equipment, and it must be labeled with the name of the
LEA, federal program purchased under, and the year of the purchase. An accurate inventory of this equipment must be maintained by the LEA.
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Use and Disposition of Equipment (EDGAR § 80.32)
When property acquired with grant funds is no longer needed for the original purpose or for other activities currently or previously supported by NMPED or the U.S. Department of
Education, disposition will be made as follows:
Items of equipment with a current per-unit fair market value of less than $5,000:
May be retained, sold or otherwise disposed of with no further obligation to NMPED, except that NMPED reserves the right to transfer furniture/equipment
(regardless of how it is classified) to another grantee after the grant period. or
Items of equipment with a current per-unit fair market value of $5,000. or more:
May be retained or sold and
NMPED has a right to an amount calculated by multiplying the current market value or proceeds from the sale by NMPED’s share of the equipment. The grantee must notify NMPED, in writing, of any equipment meeting these conditions to give NMPED the right to a refund or to transfer the items to another grantee.
Note: The accountability to the federal government is based on the share of acquisition costs. These costs must be kept.
Refer to EDGAR, 34 CFR § 80.32, Disposition of Equipment for further details.
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