A.  SUMMARY OF ADMINISTRATIVE PROCEDURE

This policy explains the way in which equipment fabricated by USNH is handled.

1.      Definition of Fabricated Equipment:  USNH fabricated equipment is self-constructed equipment having a useful life of more than one year and a total cost of $5,000 or more upon completion.  Fabricated equipment can not be purchased off the shelf.  Fabricated equipment does not include upgrades to existing equipment and refers only to the construction of a new piece of equipment.

2.      Why is a Fabricated Equipment Policy Necessary?  A fabricated equipment policy is needed to ensure that all items purchased for the construction of a single piece of new equipment are captured for capitalization.  This policy allows the charging of components to equipment object codes, even when the acquisition cost does not meet the capitalization threshold.

3.      Responsibility:  The department constructing a piece of fabricated equipment is responsible for notifying Property Control that an item is being fabricated, maintaining supporting documentation, and letting Property Control know when it is completed.  Property Control is responsible for maintaining a system to track acquisitions relating to fabrication projects.

B. Detailed Operating procedure

Administration of a Fabrication Project:    In addition to the following, see Preparation of Fabrication Project Report Form, USNH 11-022P

1.      Beginning the Fabrication Project:

a.       Complete the top of the Fabrication Project Report Form, USNH 11-022F prior to beginning the equipment construction and send a copy to Property Control.  The form will let Property Control know that a fabricated project is in progress and provides an approximate beginning and end date.  It will also give Property Control the information needed to properly capitalize and tag the equipment once it has been completed.

b.      Procurement transactions related to the fabrication of equipment must include: 1) the phrase “Fabricated Equipment”, 2) the project name or the name of the item being built, and 3) the name of the responsible person.  Please insert this information in the document text section of the Banner Requisition Form (FPAREQN).  The text will then be brought forward into the Banner Purchase Order document text (FPAPURR) automatically.  This information lets Property Control staff know that charging this item to fabricated equipment account code, 740005, is appropriate, regardless of cost.

2.      Completing the Fabrication Project:

a.       Fill out the bottom of the Fabrication Project Report Form, USNH 11-022F when construction is completed and send the form to Property Control. 

b.      Fabricated equipment is considered complete when it becomes useable for its intended purpose.

c.       Fabricated equipment is added to the equipment inventory upon completion with a value equal to the sum of the cost of components.