PPM Section 350-80

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Policy and Procedure Manual

Chapter 350, Supplies and Equipment
Section 80, Disposition of Excess and Surplus Property
Approved: 1/10/05, rev. 12/12/06, 1/17/07, 1/19/07
Supersedes: 3/30/94

Responsible Department: Materiel Management
Source Document: Business and Finance Bulletin BUS-29, Management and Control of University Equipment

I. Purpose

This section describes how to dispose of property, including furniture, equipment, and supplies, that is unserviceable or no longer needed.

II. Definitions

A. University property--all property, equipment, and expendable supplies, title to which is vested in The Regents of the University of California.

B. Government property--all property, equipment, and expendable supplies, title to which is vested in a Federal government agency. Such property may be made available to the University for use under specific contracts or grants, but title to it remains with the government unless otherwise specified or authorized by the agency.

C. Excess property--property, including inventorial equipment and supplies, no longer needed by the department to which it is assigned.

D. Surplus property--property, including inventorial equipment and supplies, not needed by any unit within the University of California system.

E. Bargain Barn--the campus's self-supporting excess and surplus unit that operates under the direction of Materiel Management, set up for the purpose of returning into circulation equipment, furniture, and supplies excess to the campus, including remote locations and UCDMC; determining when property becomes surplus to University needs; and ensuring compliance with the State mandate for unbiased disposal of State property. Sale through the Bargain Barn allows University units to dispose of excess items, to generate funds for purchase of new items, and to purchase needed items at a cost savings.

F. R-4--campus unit operating under the direction of Facilities Operations & Maintenance that recycles paper, cardboard, aluminum cans, metals, etc., and donates to approved nonprofit organizations nonfunctional or outdated property that has been determined, through the Bargain Barn process, to have no market value.

G. Department--unless otherwise noted, organizational unit that has custodial responsibility for property, including inventorial equipment, furniture and supplies. For UCDMC, this would be the Excess Property Warehouse unless otherwise noted.

H. Excess Property Warehouse--UCDMC's clearinghouse for all excess property from any Hospital chart of accounts cost center. Unless otherwise noted, the Excess Property Warehouse is considered the "department" for UCDMC. School of Medicine excess property will be accepted by pre-approved exception only. (Refer to UCDHS Plant Operations & Maintenance Policy 4002 for UCDMC specific procedures.)

I. Supply item--noninventorial items including, but not limited to, furniture, office and laboratory supplies, and building materials.

J. Salvage Operations--self-supporting unit within the Materiel Management Division that picks up excess and surplus property.

III. Policy

A. Excess property

1. University property

Department heads have the authority to declare items of University property assigned to their custody as excess to departmental needs. Departments cannot give away excess property to individuals or external sources. Campus departments are responsible for clearing computer hard drives of all data and, as required, commercial software before disposal. (See Section 210-74.) At UCDMC, Information Services is responsible for this task.

The department head may authorize the following methods of disposition for inventorial equipment. The department must provide a minimum of 10 business days advance notice to process and remove excess property when using methods c and d. Exceptions may be granted provided the department pays for handling and storage costs. Departments may not throw away or salvage inventorial equipment.

Supply items may also be disposed of using the following methods or through R-4 (see IV.G) after the Bargain Barn has determined they are unusable, unrepairable, and/or have no market value. (See also Section 360-30.)

a. Trade-in on new equipment. The department must be compensated or credited with a trade-in allowance.

b. Direct transfer of the item to another department. An amount mutually agreeable to the departments involved may be charged to the department receiving the property and credited to the department releasing the property.

c. Selling through the Bargain Barn. The department is credited less a service charge assessed by the Bargain Barn. (A central account is credited to UCDMC unless otherwise specified.)

d. Transferring ownership of the item to the Bargain Barn. The Bargain Barn will prepare, at no cost to the department, an Asset Transfer document in DaFIS Capital Asset Management System (CAMS) to secure required approvals and accept the item.

e. Parting out or cannibalizing parts or pieces of inventorial equipment to construct a new asset or make an existing asset serviceable. (See IV.F.)

2. Government property

When government property becomes excess to the contract or grant for which it was provided, it must be screened against needs of other government contracts or grants prior to being declared excess. Disposition instructions must then be obtained from the sponsoring agency and forwarded to the appropriate office as stated in IV.A.2.

B. Surplus property

Departments shall not give away surplus property to individuals or external sources, including vendors. Only the Campus Director of Materiel Management or his/her designee has the authority to declare an item of University property as surplus after the Bargain Barn has unsuccessfully advertised it for sale or transfer to other units within the University system, or it has otherwise been determined to be surplus.

Surplus property may be disposed of in one of the following ways, whichever is considered by the Campus Director of Materiel Management or his/her designee to bring the highest net return or benefit to the University. Special one-time alternatives to the usual Bargain Barn sales process may be considered provided such arrangement is financially advantageous to the University. These arrangements must be approved, in advance, by the Campus Director of Materiel Management or his/her designee and shall recoup all expenses incurred by the Bargain Barn to process the sale.

1. Sale to outside educational institutions through the Bargain Barn.

2. Public sale through the Bargain Barn on a first-come, first-served basis. The availability and price of the item is made known to the general public through advertising at http://bargainbarn.ucdavis.edu/ and/or other announcements.

3. Private sale to an individual through the Bargain Barn, when the cost and effort involved in arranging for a public sale would be disproportionate to the return expected and the Director of Materiel Management or his/her designee has determined that the sale price is reasonable.

4. Disposing through R-4 after it has been documented through the Bargain Barn sales process that the market value of the property is below the costs required for handling, record keeping, storage, and other costs associated with trade or sale. Departments are responsible for any transportation costs and/or hazardous waste fees incurred to dispose of property.

C. Restrictions on sales to employees

University policy prohibits the purchase or gifting of University property, either directly or through public or private sale, by an employee of the department releasing the property; by an employee of Materiel Management, Equipment Management, R-4, or UCDMC PO&M; in the sale of a University-owned motor vehicle, by its principal driver; or by a near relative (defined in Section 380-13) of any such employee. The aforementioned employees shall not have anyone else acquire surplus property on their behalf.

IV. Procedures

Note: For items with original acquisition value of $10,000 or more, the department must obtain approval of the appropriate dean, vice chancellor, or hospital administrator or his/her designee in all instances below.

A. Declaration of government property as excess

Responsibility

Action

Department head/ chair/principal investigator (including UCDMC)

1. Requests written permission from the sponsoring agency to declare the item as excess.

2. If the item is needed by another government project on campus, initiates Asset Transfer document in CAMS and sends copy of the agency's approval to Equipment Management, as appropriate.

If the item is no longer needed by another contract project on campus, initiates Bargain Barn Excess/Surplus Property form (Calcode 71461-230) and attaches copy of the agency's approval.

B. Trade-in on new equipment

Responsibility	Action
Department (including UCDMC)	1. Prepares Requisition (PR) in DaFIS for new equipment or supplies. (UCDMC departments are to initiate supply transactions in Eclipsys, or an Area Form and Purchase Requisition for equipment.) a. If inventorial equipment, inserts a separate line item citing the TRADEEQ commodity code for each equipment item that is available for trade-in; specifies the asset number and any other relevant information on the corresponding Equipment Certification Screen. b. If supplies, inserts a separate line item citing the TRADESU commodity code for each group of supplies that is available for trade-in; provides sufficient detail in the description field to describe what is included in the supply group.
Purchasing Department	2. Processes purchase order.
Equipment Management	3. Reviews purchase order and initiates Asset Retirement document in CAMS for inventorial equipment traded in.
Department	4. Approves Asset Retirement document in CAMS once the vendor has picked up the item.

C. Direct interdepartmental transfer

Responsibility	Action
Department (includes UCDMC)	1. Arranges for direct transfer of excess equipment item to another department and initiates an Asset Transfer document in CAMS. If cash compensation is involved, initiates a Restricted Error Correction (REC) document in DaFIS for the amount that was mutually agreed upon by the departments.
Equipment Management	2. Reviews, approves (when appropriate), and ad hoc routes the Asset Transfer document to the acquiring department for approval.

D. Sale through Bargain Barn of items that have market value, with proceeds credited to department

Responsibility	Action
Department	1. If unsure of an item's marketability, consults with the Bargain Barn via email at bargainbarn@ucdavis.edu; includes the asset number if inventorial equipment, a brief description of the item, and condition. (For disposal of items with no market value, see IV.G.) 2. Completes Bargain Barn Excess/Surplus Property form (Calcode 71461-230) for EACH item, whether inventorial or not. One form, with attached itemized list, is acceptable if all items are to be sold as a lot at one price. 3. Forwards form to Bargain Barn. UCDMC departments initiate Asset Transfer documents in CAMS for inventorial items and ad hoc routes them for approval to the Excess Property Warehouse. The Excess Property Warehouse will then initiate the appropriate action consistent with this policy as the custodial department.
Bargain Barn	4. If item is inventorial, sends Bargain Barn Excess/Surplus Property form to Equipment Management.
Equipment Management	5. Reviews Bargain Barn Excess/Surplus Property form for title, obtains necessary approvals (when missing), and returns form to Bargain Barn.
Bargain Barn	6. Arranges for transportation of items to Bargain Barn, when necessary, at no charge to the selling department. (Generally, items that weigh 250 pounds or more, or that are larger than a pickup truck bed, will not be moved, but will be advertised "as is, where is.") 7. Changes the custody code in CAMS for inventorial equipment on display in Bargain Barn. (Refer to http://bargainbarn.ucdavis.edu/ for Bargain Barn's internal procedures.) 8. When item is sold, credits releasing department with sales proceeds LESS approved service charge to cover costs of advertising, transportation, and handling. 9. Initiates Asset Retirement or Asset Transfer document in CAMS as appropriate, for sales of inventorial equipment. 10. Provides copy of Bargain Barn Excess/Surplus Property form to selling departments. The copy itemizes, by account number, Bargain Barn sale (credit) and purchase (debit) transactions, which are recorded in the General Ledger.

E. Transfer to Bargain Barn at no cost to the department

Responsibility

Action

Department

1. Emails Bargain Barn at bargainbarn@ucdavis.edu with the item(s) to transfer; includes the asset number (if inventorial equipment), brief description of the item, and condition.

Bargain Barn

2. For equipment, verifies ownership with Equipment Management.

3. Determines whether the item has a market value, replies to department via email, and copies Equipment Management if inventorial equipment.

If the item has market value, initiates Asset Transfer document in CAMS if inventorial equipment. When the Asset Transfer document is fully approved in CAMS, arranges for item to be picked up.
If the item does not have market value, follows procedures in IV.G.

F. Cannibalization of inventorial equipment

Responsibility	Action
Department	1. Identifies equipment with cannibalization potential. 2. Emails Bargain Barn (bargainbarn@ucdavis.edu) with the asset(s), asset number(s) and part(s) to be cannibalized, and the asset number(s) of the item(s) to which the cannibalized parts will be added.
Bargain Barn	3. Verifies ownership of equipment with Equipment Management. 4. Replies to the department with approval or disapproval of cannibalization request and marketability of remaining parts. If marketable, refer to IV.C, D, or E. 5. Initiates an Asset Retirement document in CAMS. 6. Arranges for pickup of remaining parts through Salvage Operations.
Salvage Operations	7. Picks up the remaining parts, transports them to R-4, and recharges department; notifies Bargain Barn of disposal.
Bargain Barn	8. Completes Asset Retirement document in CAMS, describing the disposition of cannibalized parts in the document notes (i.e., the asset number assigned to the recipient property, description of supply item into which cannibalized parts were installed, or interim storage location).

G. Salvage items that have no market value

Responsibility	Action
Department	1. Consults with Bargain Barn via email at bargainbarn@ucdavis.edu to determine whether the market value of excess property is below the costs required for handling, record keeping, storage, and other costs associated with trade or sale.
Bargain Barn	2. If no market value, initiates an Asset retirement document in CAMS for inventorial equipment. If the item has market value, follows procedures in IV.D or IV.E as appropriate. 3. Arranges for pickup through Salvage Operations.
Salvage Operations	4. Picks up and verifies items to be salvaged, recharges department, and delivers items to R-4.
R-4	5. Disposes of items using one of the following methods. Donate item to an approved nonprofit organization if the Bargain Barn has documented that the item has no market value. R-4 employs a process that ensures equitable access to all approved nonprofit organizations, usually on a "first come, first served" basis. When applicable, ensures completion of "Acceptance of University Property Donation" form by the organization receiving the property and retains a copy for auditing purposes. Recycle. Send to landfill.

V. References

UC Business & Finance Bulletins:

A. A-51, Application of Proceeds from the Sale, Trade-In, or Transfer of University Property, 11/1/74.

B. BUS-29, Management and Control of University Equipment, 9/3/02.

C. BUS-38, Disposal of Excess Materiel and Transfer of Federally Funded University-Owned Materiel, 6/14/91.