Equipment (Capital Assets)
This section describes purchases, inventory controls, and proper disposal of secondary and postsecondary equipment acquired with federal funds.
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.
In accordance with § 34 CFR 74.34, 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 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.
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 and fully documented; if the equipment was owned by the Federal Government, the recipient shall promptly notify the Secretary.
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.
Combined Consortium Equipment Inventory and Asset Tags
The consortium maintains a combined inventory of equipment purchased with federal Perkins funds, validated/reconciled at least every two years. All equipment purchased with federal dollars must have specially marked asset tags.
- A single consolidated inventory of secondary and postsecondary equipment is on file.
- Records for each item may include:
- Date of purchase
- School/teacher/program for which purchase was made
- Item description
- Cost
- Current location
- Records for each item may include:
- A process is in place to inventory and label equipment as property of Perkins CTE. Asset labels should identify the Perkins Federal Grant as the source of funding. Add other relevant details deemed necessary. This asset tag example was provided by the Saint Paul Perkins Consortium:
- A process is in place to update inventory if equipment is reassigned or disposed of.
- Equipment purchases have been pre-approved per MDE and Minnesota State requirements. See the Postsecondary Equipment and Secondary Equipment sections below for more information.
Documentation of equipment must comply with federal requirements, Minnesota State Colleges and Universities Board policy, and institutional policies.
- Minnesota State's policy requires purchases of $10,000 or more to be recorded as equipment; however, the federal government requires purchases for $5,000 or more to be recorded as equipment.
- Institutional policies determine sensitive equipment guidelines
- Equipment and capital assets are recorded and maintained in the equipment module within Minnesota State's ISRS program.
- Equipment of $10,000 or more is to be expensed with object code 4000 (equipment)
- Equipment purchased between $5,000.00 and $9,999.99 is to be expensed with object code 3006 (sensitive equipment)
- Equipment under $5,000, and determined to be classified as sensitive (e.g. computer equipment) is to be expensed with object code 3006
- Designate a unique department number in the equipment module to record equipment purchased with Perkins Grant funds
- All equipment purchased with federal dollars must have specially marked asset tags. See the Combined Consortium Inventory and Asset Tags section above for more information.
- Equipment purchased with federal funds requires a physical inventory at least every two years, with proof of the inventory process
- Record physical inventory date in the equipment module
- Perform equipment reconciliation at least annually, or more often, as determined by System Office recommendation and requirements
- Run a report filtered by object codes 4000 and 3006 and FPK appropriation
- Run equipment module report, filtered by the designated department number
- Compare to ensure all equipment purchased with Perkins Grant funds are listed in the equipment module with the unique department code
- Run fixed asset reconciliation equipment module report
Information in this section is taken from MDE’s Perkins V Legislation webpage.
For UFARS reporting, equipment or technology qualifies as a capital expenditure if the item meets all of the following criteria:
- It retains its original shape and appearance with use. It has a normal useful life extending beyond a single reporting period.
- It is nonexpendable, that is, if the article is damaged or some of its parts are lost or worn out, it is usually more feasible to repair it rather than replace it with an entirely new unit.
- It does not lose its identity through incorporation into a different or more complex unit or substance.
A more complete description may be found in Chapter 5 of the 2020 UFARS Manual.
The three components of the above definition of equipment must be followed by independent school districts throughout Minnesota. District policy may add additional components to the equipment definition, but all school district policies must support the three criteria listed above.
Criteria for Secondary Perkins Funded Purchases
- Classroom/lab equipment and curriculum/licensure funded through Perkins must be used to support courses within a state-approved CTE program
- The CTE course must be taught by a CTE-licensed teacher holding a current CTE license in that discipline (unless special permission has been granted)
- All Perkins-funding recipients must be licensed CTE teachers/administrators or counselors (unless special permission has been granted)
- All Perkins-funded purchases must support CTE students
- Perkins funding must not be used to supplant existing (non-federal) funding sources
- Equipment purchased through the Perkins Grant must have the priority of use dedicated to CTE students — however, incidental use by CTE-related students is allowable
- Funding for classroom/lab equipment and curriculum/ licensure may come from multiple sources (Perkins Grant used for any portion of this funding requires adherence to the above criteria)
Requirements for State Pre-Approval
Secondary equipment and curriculum purchases that equal $1,000 or more require pre-approval before the consortium authorizes the district to make the expenditure from Perkins Grant funds.
To obtain MDE pre-approval of these purchase requests, consortium leaders should complete and electronically submit the equipment request form found on MDE’s Perkins V Legislation webpage.
MDE approval of the annual Perkins consortium application establishes a fiduciary relationship between the Perkins consortium and MDE. Because of this relationship, all secondary equipment approval requests must be submitted from and granted to the secondary Perkins consortium coordinator of record.
All equipment and curriculum items purchased with Perkins funding must be identified (tagged) and included in the building inventory of the school district where it is located. See the Combined Consortium Inventory and Asset Tags section above for more information.
Inventory Control Requirements
The responsibility for maintaining inventory control of secondary equipment and curriculum purchased with Perkins funding remains with the Perkins consortium. Consortia are requested to have a single consolidated inventory which is validated/reconciled at least every two years. All secondary equipment and curriculum purchased, inclusive of those under the $1,000 threshold, must be included in the Perkins consortium's equipment inventory list.
Inventory control records should include the following:
- Equipment/curriculum description (serial numbers, model numbers, physical description, etc. as applicable)
- Date of acquisition
- Original expenditure/percent of grant funding
- Source of equipment/curriculum
- Location and condition of equipment/curriculum (school building, room location, CTE-approved program(s)
- Space for inventory record; Perkins equipment/curriculum inventory is required every two years (Inventory procedures may follow school district policy)
- Corresponding physical tag number when applicable
- Space for final disposition of equipment
- When possible, a physical tag should be permanently fastened to, or stamped on, each item of equipment/ curriculum indicating Perkins funded expenditure. This tag must be identifiable to the inventory record
Perkins Funding for Curriculum Software/License
- Acquisition and disposal of curriculum software/licenses follow the same guidelines as stated above for equipment
- Perkins funding is not a sustainable long-term funding source for secondary initiatives (Consequently, license and curriculum program funding are restricted to one or two years of support)
- Inventory control must be maintained in the same manner that was recommended for equipment
Equipment Disposal
Equipment that has been purchased with federal funds as part of a consortium’s Perkins plan should be disposed of using the following Postsecondary and Secondary Disposal procedures.
Before equipment is disposed of, the consortium must make an effort to repurpose the equipment to support a CTE program in another member district. Technical support for these efforts will be available through MDE.
Follow the college’s equipment disposition procedure based on the Minnesota State policy 7.3.6, Part 9(3), stating, When equipment purchased with Federal funds with a current per unit fair market value in excess of $5,000, is no longer needed for a Federal program, it may be retained or sold with the Federal agency having a right to a proportionate amount of the current fair market value. Before selling the equipment, consider donating it to another CTE program at the secondary or postsecondary level.
Document equipment disposed of in the combined consortium inventory, including date and disposal method.
Secondary equipment should be disposed of by using the following procedure:
- All equipment/curricula purchased through the Perkins consortium must be disposed of through the original assigning consortium.
- The original assigning consortium whose school districts are disposing of equipment with a current value of $5,000 or more must coordinate disposal with MDE and the United States Department of Education using general administrative regulations guidelines (34 C.F.R. 80.32(c)).
- Disposal of equipment that has a current value of $1,000 or more, but less than $5,000 must be coordinated with MDE. The original assigning consortium must provide to MDE a list of said equipment to allow support for repurposing this equipment to another consortium.
- Equipment that has a current value of less than $1,000 may be disposed of through the local Perkins consortium. (See note below.)
- All disposition of equipment must be reported on the annual CAR. The respective consortium inventory must reflect the disposal.
- Equipment disposal records including inventory documentation, disposal, salvage recovery funds and any transfer information need to be retained by the consortium for three years.
Note: Before equipment is disposed of, the consortium must make an effort to repurpose the equipment to support a CTE program in another member district. Technical support for these efforts will be available through MDE.