Section 9- Equipment (Capital Assets)

Federal and State Requirements

Equipment purchases must be permissible according to Perkins V, Section 135(b). Consortia must also follow policies set forth by Minnesota State Board policy 7.3.6 for postsecondary and MDE UFARS policy Chapter 5, section 500 for secondary. Allowable use, disposition, and record-keeping requirements as defined by the Education Department General Administrative Regulations (EDGAR) must be followed.

2 CFR 200.1 defines equipment as tangible, nonexpendable property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost that equals or exceeds the lesser of the capitalization level established by the recipient or subrecipient for financial statement purposes, or $10,000. “Sensitive equipment,” such as computers and specialized tools, may be less than $10,000, but follow the same property management standards. Minnesota requires pre-approval for secondary and postsecondary equipment purchases of $10,000 or more with Perkins funds.

Equipment must be necessary, reasonable, and allocable, and used to support CTE instruction. Perkins V funds may not supplant local or state funding, and purchases must reflect current industry standards and improve program quality.

Approval of the annual consortium plan establishes a fiduciary relationship between the consortium, Minnesota State, and MDE. Because of this relationship, all equipment purchases of $10,000 or more require pre-approval, and requests must be submitted by and approved through the consortium coordinator.

In accordance with 2 CFR 200.313(d)(1), the recipient's (consortium's) property management standards for equipment acquired with federal funds and federally-owned equipment shall include all of the following:

1. Equipment inventory 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 numbers
   • Source of the equipment, including the award number.
   • Whether title vests in the recipient or the Federal Government.
   • Acquisition date (or date received, if the equipment was furnished by the Federal Government) and cost.
   • Information from which one can calculate the percentage of federal participation in the cost of the equipment (not applicable to equipment furnished by the Federal Government).
   • 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 ED for its share.
2. Equipment owned by the Federal Government must be identified to indicate federal ownership.
3. A physical inventory of equipment must be taken, and the results reconciled with the equipment records at least once every two years. Any differences between quantities determined by the physical inspection and those shown in the accounting records must be investigated to determine the causes of the difference. The recipient shall, in connection with the inventory, verify the existence, current utilization, and continued need for the equipment.
4. A control system must be in effect to ensure adequate safeguards to prevent loss, damage, or theft of the equipment. Any loss, damage, or theft of equipment shall be investigated, fully documented, and reported.

   In accordance with CFR 200.313(d)(3), the recipient or subrecipient must notify the Federal Agency or pass-through entity of any loss, damage, or theft of equipment that will have an effect on the program. Notification must be made to Minnesota State Colleges & Universities and MDE.

5. Adequate maintenance procedures must be implemented to keep the equipment in good condition.
6. Where the recipient is authorized or required to sell the equipment, proper sales procedures must be established which provide for competition to the extent practicable and result in the highest possible return.