Oregon State University

202: Purchases

Property Management Policy & Procedure Manual
Section 200: Equipment Acquisition
Effective: 03/01/1979
Revised: 11/15/2010

Purpose

To ensure that equipment purchases are made in accordance with applicable federal and state law; and Oregon University System and Oregon State University policies.

 

Applicability

All equipment (other than vehicles – see PRO 501: Vehicles) purchased with state, local, or sponsored funds for which title vests with OSU or the sponsor upon acquisition.

 

Policy

Equipment purchases using state, local, or sponsored funds must be made in accordance with applicable federal and state law and Oregon University System and OSU policies.   Equipment purchases over $5,000 must be made through the Purchasing department.  Use of the procurement card for purchases associated with account code 40199 Construction in Progress [Equipment] is allowable.

Departments may purchase equipment out of multiple indexes.  However, this practice is prohibited in two instances:

  1. Equipment purchased by Service Centers and Auxiliaries must be funded solely by the unit and must be used solely in support of the service department for which it was purchased.
  2. Equipment purchased on a grant or contract where the sponsor retains title, either fully or conditionally, must be purchased solely from that grant or contract.

Equipment Purchased with University or Sponsored Funds

Coding Requisitions
A departmental requisition must reflect the proper account code and must be used to classify purchases.  See GCG 204-02Cost Classification: Assigning Account Codes and GCG 205: Expenditure Account Codes in the Grant, Contract & Gift Accounting Manual because sponsors with grants and contracts may have a lower threshold for equipment purchases. 

Determination of Factors Affecting Installation or Use
The requesting department is responsible for determining all factors affecting the installation or use of equipment, including, but not limited to:

  • utilities availability
  • space requirements
  • floor loading capacity, and
  • building accessibility

Obtaining Approval for the Purchase of Used Equipment
Before purchasing used equipment, an individual must obtain approval from the department chair, dean, director, or designee. Approval may be given in a memo or as a statement on the requisition.

Capital Budget
Most purchases require equipment to be in an approved capital budget. If the equipment is not budgeted, the supervisor’s or sponsor’s approval may be necessary before purchasing.


Equipment Purchased with Sponsored Funds

See PRO 902-02: Ordering, Receiving & Tagging.

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Procedure

Equipment Costing $5,000 or More (General)

Responsible Party Action
Department:
  1. Prepare a departmental requisition, obtain necessary approvals and send the document to the Purchasing department using the appropriate transaction account code:
  • 40101  Equipment
  • 40102  Livestock
  • 40103  Art/Museum Collections
  • 40104  Vehicles
  • 40199  Asset under Construction
  • 40201  Vessels
Purchasing Department 
  1. Ensure document is prepared properly.
  2. Solicit bids or quotes on the item from vendors.
  3. Prepare purchase order in FIS Banner on commodity level accounting.
Department:
  1. After receiving equipment (see PRO 301), process the invoice in FIS Banner.
  2. Include appropriate information in the text field for the asset record.  See PRO-EX1: Creating an Asset Record from a Banner Invoice.
Property Management
  1. Create asset record from invoice information and sends department a bar code tag for equipment.


Equipment Costing $5,000 or More (Service Centers and Auxiliary)

Responsible Party Action
Department
  1. Equipment purchases are an exchange of a capital item (cash) for a capital item (equipment). 
  2. Prepare a departmental requisition, obtain necessary approvals and send the document to the Purchasing department.

Note: Process Purchase Orders and Invoices on an operating index using account code 40199, 'Asset Under Construction.'

Purchasing Department   
  1. Ensure document is prepared properly.
  2. Solicit bids or quotes on the item from vendors.
  3. Prepare purchase order in FIS Banner
Department
  1. Process payment for new asset on an operating index and capital account code 40199.
  2. A journal voucher is submitted simultaneously moving the expense from the operating index and 40199 to the unit’s fund code and using the appropriate capital asset account code:
  • A8011   Capital Equipment
  • A8012   Vehicles
  • A8015   Vessels
  • A8031   Collections
  • A8032   Works of Art and Historical Treasures
  • A8042   Library Books (General)
  1. The journal voucher number should be referenced on the invoice's text, and vice versa. The journal voucher should contain the necessary information to create the asset record. See PRO-Ex2: Completing a Journal Voucher.
Property Management
  1. Create asset record from journal voucher information and sends department a bar code tag for equipment.


NOTE:  See PRO 401: Depreciation of Equipment for additional information when replacing existing equipment.

Equipment Costing $5,000 or More Purchased with Agricultural Research Foundation (ARF) or OSU Foundation (OSUF) Funds

Responsible Party Action
Department
  1. Prepare a departmental requisition, identifying the funds to be used and appropriate transfer index, obtain necessary approvals and send the document to the Purchasing department.
Purchasing Department
  1. Ensure document is prepared properly.
  2. Solicit bids or quotes on the item from vendors.
  3. If applicable, prepare purchase order in FIS Banner.

Note: Departments do not have delegated authority to make purchases over $5,000 unless approved by the Purchasing Department, regardless of the source of funds.

Department
  1. After receiving equipment (see PRO 301), process the invoice in FIS Banner or submits check request to ARF or OSUF.
  2. If Banner is used, then include appropriate information in the text field for the asset record.  See PRO-EX1: Creating an Asset Record from a Banner Invoice.

If Banner is not used, then submit a Fixed Asset Data Entry (FADE) form to Property Management including a copy of the invoice and the check request.  FADE forms are available on the Inventory Control website.  See PRO-Ex3 for a sample FADE form.

Property Management
  1. Create asset record from invoice information and sends department a bar code tag for equipment.

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Cross Reference

See the Procurement and Contract Services (PaCS) Website for more information on purchasing requirements.

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Additional Information

Automatic-pay vendors
Due to a high volume of OSU purchases, certain vendors have been designated "automatic pay" by Accounts Payable. They submit invoices directly to Accounts Payable, where they are input and paid without routing to departments for approval. The expense is then distributed to departmental indexes using journal vouchers. Accounts Payable makes every effort not to use automatic payments for equipment expenditures-such invoices, when identified, are forwarded to department accounting personnel for payment through the regular Banner invoice process.

To assist Accounts Payable in making that identification, the person making the purchase should give the vendor the 40101 account code along with the Banner index code to be charged. Despite all efforts, we recognize that the information will not always get to the vendor, nor will it always get from the vendor to Accounts Payable. Department accountants should review automatic payments as they occur and enter journal vouchers to correct any incorrectly coded purchases.

Oregon State University VISA procurement card purchases
The VISA procurement cards may not be used for the purchase of equipment or equipment upgrades. VISA instructions detailing the restrictions on individual purchases, etc. are supplied with each card. Please refer to these for further information.

Wire Transfers
Wire transfers do not create an origination tag in the fixed asset module.  If a payment must be made via wire transfer, use account code 40199 and a journal voucher to redistribute to the appropriate transaction code.

Multiple Invoice Function in Banner
The multiple invoice function in FIS Banner under FAAINVE does not create an origination tag in the fixed asset module.  If a payment must be made via the multiple invoices function, use account code 40199 and a journal voucher to redistribute to the appropriate transaction code.

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