Equipment Threshold Change
With recent changes to the State Property Control Act and related State regulations, the State of Illinois and University of Illinois threshold for inventoried equipment has moved from $1,000 to $2,500, effective April 1, 2023. The only exceptions are vehicles and firearms which are inventoried regardless of cost. The State is providing this legislative relief to reduce the volume of tracked equipment at the University and other State Agencies so they can focus on higher value equipment.
Two Phase Implementation Plan
In order to implement the threshold change in an orderly manner, the University will use a two phase implementation plan as follows:
- Phase 1 – New acquisitions threshold (April 1, 2023)
- Phase 2 – “Dispose” standalone and non-capitalized records that have depreciated below the $2,500 threshold (April 13, 2023)
Phase 1 - New Acquisitions
Effective April 1, 2023 University units must use the new $2,500 threshold when account coding equipment purchases and when evaluating items to be added to inventory in FY23 and beyond. Banner equipment account code titles have been updated for the new threshold and these ranges should be used on all purchases moving forward. Units will continue to use the 127* and 163* range of account codes for purchasing equipment and for generating and completing equipment new acquisition records through FABweb.
Phase 2 - "Disposal" Standalone and Non-cap Depreciated Records < $2,500
- The University FABweb and Biennial Inventory applications will be unavailable April 13, 2023 to complete the bulk "disposal" of standalone equipment records less than $2,500 from Banner. A disposal code is added to the equipment record to remove the item for biennial inventory purpose.
Equipment listings of item records disposed will be sent to FABweb Unit Reps and Biennial Unit Contacts in April.
For the items removed from inventory, units must replace the Ptag with the unnumbered label identifying “Property of State of Illinois – University of Illinois.” Units are required to retag equipment by their next scheduled Biennial Inventory cycle and inventory certification date.
- The state law and regulations allow the University and state agencies to request removal of items with an acquisition cost of $2,500 and above that have depreciated below $2,500. The University will continue to inventory and retain all capitalized equipment records ($5,000 and above) until items are disposed, consistent with the historical treatment of capitalized items. Maintaining these capitalized records is required for financial reporting and Federal grants.
The University received pre-approval from CMS to remove the non-capitalized items from inventory that have depreciated below $2,500. Property Accounting analyzed all non-capitalized equipment and estimated the current Net Book Value based on a quasi-depreciation calculation. See section below titled “Quasi-Depreciation Calculation” for more information on how we determined the depreciated value of each item.
For items removed from inventory, units must replace the Ptag with the unnumbered label identifying "Property of State of Illinois – University of Illinois." Units are required to retag equipment by their next scheduled Biennial Inventory cycle and inventory certification date. The Unnumbered labels/stickers are to be purchased from iStores.
- UIUC units can place an order for labels/stickers either directly from iStores or by using the iStores catalog on iBuy Shopping Showcase.
- UIC and UIS units can place an order for the labels/stickers by using the iStores catalog in iBuy Shopping Showcase.
In iStores, search for "U OF I PROPERTY STICKERS" or by SKU# "11244000" and select ADD TO CART. Click the cart icon in the upper right-hand corner to view and edit. Once the desired quantity is entered, select CHECKOUT and then select Place Order.
If the order was placed using the iStores catalog in iBuy, the cart will transfer into iBuy for completion once Place Order is selected.
Quasi-Depreciation Calculation
Property Accounting determined a reasonable useful life (in years) based on the item’s commodity code and asset description. The acquisition cost was then divided by the useful life to arrive at an annual depreciation expense. The age of each Ptag was determined by counting the number of years that passed since the Ptag Date to April 1, 2023. Accumulated depreciation was then calculated by taking the number of years passed x annual depreciation expense. Net Book Value was then calculated by taking the Acquisition Cost – Accumulated Depreciation. If the Net Book Value was below $2,500, it was removal. Any asset that was older than its determined useful life did not have a calculation done as those were assumed to be fully depreciated. Additionally, any asset less than 3 years old was not included in the list for removal.
Data-wiping of Electronics & Equipment Disposals
University units must continue to data-wipe all electronics and include scrap labels on wiped electronics regardless of the item’s inventory tracking status. University units must continue to request disposal of all University equipment through FABweb and equipment must continue to be sent to the University surplus warehouse for scrap or surplus processing regardless of the item’s inventory tracking status.
Unit Tracked Equipment
University policy 12.1.6 Affix Property Labels prohibits the use of the University Ptag labels to identify items not tracked on the University Inventory. This is to avoid confusion on what items are actually required to be tracked. There may be individual items or categories of items that a University unit desires to track for internal control purposes. For units desiring to track equipment outside of Banner, units must create labels and identifiers that differentiate any unit tracked equipment from University tracked equipment. To assist, University best practice suggests tracking unit items starting with a “U” for Unit tracked; followed by your campus and org number “1641”; followed by your unit unique identifier. For example, the unit tag for item #1 for org 641 at UIUC would be “U1641000001”.
See "Unit tracked equipment label template" under "Related Links" on the right-hand side of this and other Equipment Management webpages.