PST120: Asset Management Purchasing and Acquisition of Assets

1. PST120: Asset ManagementPurchasing and Acquisition of Assets In partnership with the UF Asset Management Office Updated April 2013 myUF Market 13.1

2. Objectives After taking this class, you should be able to: • Explain what property and assets are at UF • Discuss security roles • Describe information specific to assets when completing a purchase requisition • Explain receiving assets in myUFL and list the information needed for assets • Describe vouchering an asset in myUFL • Explain how asset accounting works at UF • Describe how to lease equipment

3. Housekeeping • Break • Restrooms • Cell phones and electronic devices • Pagers • E-mail • Instant Messenger • Materials • Training Guide • Supplemental Materials • Please sign roster at end of class for credit

4. Today’s Focus • Today we will review creating a requisition, receiving, and vouchering – focusing on property procedures for assets • For in-depth information on purchasing and vouchering please attend: • PST073 Introduction to Purchasing in myUF Market • PST971 Paying Your Vendors

5. myUFL Environment • Financials • Vendor Relations • Accounts Payable • PCard • Travel/Expense • Asset Management

6. myUF Market • System for all purchasing requisitions • Creates and sends purchase orders to vendors • Sends a copy to myUFL for receiving and vouchering • Updated quarterly • For information, visit the myUF Market website http://purchasing.ufl.edu/departments/myufmarket/default.asp • For instruction guides and simulations, visit http://www.hr.ufl.edu/training/myUFL/toolkits/purchasing.asp

7. Capitalized Assets at UF • What are capitalized assets at UF? • Any physical thing (tangible) or right (intangible) that has a monetary value • UF has title (no rental agreement or operating lease) • Nonconsumable • Not held for sale or resale • Life greater than 1 year • Meets UF’s capitalization dollar amount • Use Account numbers beginning with 78 to purchase

8. Increased Threshold From DDD on June 21, 2011 from University Controller, Michael V. McKee: • The primary reasons for the change are • to reduce the administrative costs of recording and tracking items of equipment, and • to enhance overall stewardship and control of the University's assets by eliminating the requirement to record and track relatively low valued items, so more attention and effort can be given to safeguarding the remaining, higher valued items.

9. Why do Assets Get Special Treatment? • Assets get special treatment because • Good Accounting Practice • Good Stewards of resources • Fiscal Responsibility • Assets add to the net worth of the University

10. Asset Categories at UF

11. Moveable Assets • Moveable assets • Items often referred to as “Property” • Assigned Decal or Tag numbers • Subject to Annual Inventory • Five Asset Categories: • 1. Furniture & Equipment • 2. Software • 3. Artwork • 4. Library Resources • 5. Livestock

12. 1. Furniture & Equipment • Costs $5,000 or more per item • Easily moved, not permanently attached to a building • Encumbered purchase • Verify the accounts: • 784000, Vehicl & Transp – Capitalized • 781100, Equipment - Capitalized

13. 2. Software • Capitalization is $4 million • In rare situations, software will be treated as a capital asset (or something of value that cannot be touched) and will only be capitalized when the cost is $4 million or more • Encumbered purchase

14. 3. Artwork • Costs $5,000 or more per item • Encumbered purchase • Select Commodity Code 60120000 • Verify account 789100, Art & Museum Artifacts - Cap

15. Library resources with a value or cost of $250 or more Only to be used for items in UF’s library collection (Health Center, Law Library & Main Library, etc.) Encumbered purchase or PCard Select Commodity Code 55100000 Verify account 785000, Library Resources & Publicatns 4. Library Resources

16. 5. Livestock • All registered and non-registered livestock with a value of $5000 or more • Encumbered purchase • Select Commodity Code 10100000 Live Animals • Verify account 789400, Livestock - Capitalized

17. Fixed Assets • Fixed Assets • Not subject to annual university-wide Property Inventory • Item is a Real Estate Improvement • Asset Categories include: Land, Buildings and Improvements, Leasehold improvements, and Infrastructure • Contact Jamie King at 392-8251 or jking@ufl.edu for assistance

18. Buildings and Improvements • Original cost to construct new buildings • Renovation project which extends the useful life of a COMPONENT part (ie. roof, plumbing, electrical, etc.) of the building by two or more years, and meets one of the following criteria: • Project costs $250,000 or more • Greater than 25% of original building cost • Adds square footage • Encumbered purchase

19. Buildings & Improvements • Verify accounts: 783200, Modular buildings • 787000, Construction-Work-In-Progress (all other buildings & improvements)

20. Infrastructure & Improvements • Costs $250,000 or more per project • Improvements not directly associated with buildings and not as permanent as land (outdoor lightning systems, paved parking areas, fences) • Encumbered purchase • Select a Commodity Code • Verify account 787000, Construction-Work-In-Progress

21. Cost Includes • Freight • Installation • Trade-in value • Add values or upgrades

22. Do NOT Treat as an Asset • Extended warranty • Rent • *Repair or replacement cost • *Items permanently attached to a building • * Remember Special Building rules

23. Put On Your Thinking Caps • Time for the Million Dollar Question Game • Are these assets or non-assets? • Let’s begin!

24. Let’s Review Question 1 – Segway • Segway $4,900 with shipping cost of $200 • Capitalized asset or expense? Why? • Which account code should I use? • 732900, Attract Office Equipment (not Cap) • 781100, Equipment - Capitalized

25. Question 2 – Maintenance Agreement • Maintenance agreement on the Segway purchased above • Capitalized asset or expense? Why? • Which account code would you use? • 732100, Office Supplies, General • 742200, Maintenance Contracts – Equip • 781100, Equipment - Capitalized

26. Question 3 – Software Licenses • $750,000 paid to Microsoft for 30,000 licenses that cost $25 each • Capitalized asset or expense? Why?

27. Question 4 – Microscope Lens • $2,500 microscope lens purchased to go with existing decaled microscope • Capitalized asset or expense? Why? • Which account code would you use? • 732900, Attract Office Equipment (not Cap) • 781100, Equipment - Capitalized

28. Question 5 – Irrigation System 5. $20,000 irrigation system part of a $60,000 project • Capitalized asset or expense? Why? • Which account code would you use? • 733000, Building Maint and Supplies • 781100, Equipment - Capitalized • 787000, Construction Work in Progress

29. Information Needed Before You Buy an Asset

30. Security Roles • Roles • UF_N_MKT_Requestor • UF_PO_Receiver • UF_AP_VOUCHER_Processor • UF_FI_UNIVERSAL_INQUIRY • UF_SY_BUSUNIT_UFLOR • UF_N_FPC_STARS_VIEW • To request security, contact your Departmental Security Administrator (DSA) • To view your roles: My Accounts > My Roles

31. Before You Buy • Check for reusable surplus property • Web site: http://www.fa.ufl.edu/departments/asset-management/surplus-property/ • Scroll down and click on any of the links for Available Property • Remember sustainability at UF!

32. Gathering Information • Vendor • Description • Cost of item • Shipping cost • ChartField string • Person using the item • Location of the item • Decal number for trade-in or add-value • ECCN / USML numbers Add to Internal Notes on Requisition

33. ECCN & USML Numbers • ECCN & USML are classifications of equipment to determine if a license is required to export an item • "Export" includes • Taking something outside of the United States • The "use" of an item by a foreign national here

34. ECCN • ECCN is • Export Control Classification Number developed by the Department of Commerce • Deals with commercial use of items

35. USML • USML is • United States Munitions List • A list of articles, services, and related technology designated as defense-related by the United States federal government • Deals with military use of items • (Firearms, chemical agents, armaments, missiles, tanks, military vehicles, spacecraft and satellite technology)

36. USML • USML is • Sometimes referred to as ITAR (International Traffic in Arms Regulations) categories, the governing regulation • Lists are developed to protect United States security • Punishment for violating can be administrative as well as monetary and jail time

37. When To Use • When ordering technical equipment • Get the ECCN number (and/or ITAR classification) • Enter into the Comments field of a requisition • When ordering equipment to be used overseas • Best Practice: Have the vendor ship the item directly to the overseas destination • If vendor says this item is export controlled or has this language on a quote, bid or item description, contact Division of Sponsored Research and Asset Management

38. When To Use • Before traveling with equipment or shipping equipment outside of the US • Ask your Department Property Contact to complete the following in the myAssets system • Off-Campus certification • Foreign Travel Request

39. Laptop • Best practice for international travel with laptop • Use a laptop • With NO special software • With NO data or research that is restricted - this includes student or patient data • The ECCN and USML categories assigned are reviewed by Asset Management and forwarded to Division of Sponsored Research for licensing determination • For additional information on export controls, see the Division of Sponsored Research website: • http://www.research.ufl.edu/research/compliance.html

40. Purchasing Property Properly • Must Purchase Encumbered • Do NOT purchase unencumbered without prior permission • Do NOT purchase with a PCard • Purchasing property with a PCard is prohibited

41. From Requisition to Vendor • A requisition in myUF Market for an asset goes through • Requisition approval workflow • Purchase Order approval workflow • Where Asset Management approves purchase of asset • Purchase Order is dispatched to vendor or supplier • Let’s take a look at these workflows in myUF Market!

42. Purchase Order Workflow Overview of PO Workflow • Step 2 • Asset Management approval if • Account Codes with 78 used • Certain commodity codes and > $5000 per line • Certain account codes and > $5000 per line Step 3 System dispatches PO to vendor. Step 1 System revises PO format for dispatching . Step 4 PO Export into myUFL, Except PCard.

43. Creating a Requisition for an Asset in myUF Market

44. Requisition for an Asset • There are several ways to shop in myUF Market • Today we will use the Enabled Vendor Quote form to show information needed in a purchase order when buying an asset • Please take PST073 Introduction to Purchasing in myUF Market online or in the classroom

45. Example - Gas Chromatograph • Let’s help Joe buy a gas chromatograph and enter needed asset information using the Enabled Vendor Quote Form • Cost is $26,932.96 • Let’s go through the steps

46. Enabled Vendor Quote Form Click the Enabled Vendor Quote Form.

47. When Buying Assets When using the Enabled Vendor Quote Form, make sure you pay extra attention to the two features below when buying assets.

48. Select the Vendor Use the Supplier dropdown to select the vendor.

49. Search for Commodity Code Click the search link to search for the correct Commodity Code.

50. Enter Keyword Enter a keyword in the Description to search.