SUBJECT:

Inventorial Equipment Threshold-IDC assessment

Since July 1, 2004, the inventorial equipment threshold is $5,000. To ease the phase in of this new threshold, we established processing procedures to ensure that purchases of items funded by extramural/sponsored funds and previously defined as inventorial equipment (unit value equal to or greater than $1,500) were not assessed overhead through June 30, 2006. This notice is intended to inform the campus community that effective July 1, 2006, the waiver no longer applies and indirect costs are now assessed on expenditures for items with a unit value less than $5,000. Note that the assessment of indirect costs is determined by date the payment is processed, not necessarily the date of the purchase order.

Inventorial and capitalized equipment includes items owned by or in the custody of UCSD that:

- Are non-expendable (cannot be used up)

- Stand alone

- Have a normal useful life of one year or more

- Qualify as tangible personal property (can be appraised for value) with an acquisition cost of $5,000 or more

We will also continue to support UCOP Financial Management requirements to capture more detailed financial information for purchases of equipment items with a unit value equal to or greater than $1,500, but less than $5,000, regardless of fund source, by recording these purchases to a specific set of expenditure account codes designed to segregate these items.

At this time, our Low Value processes (Express Card and Department Order) are not designed to ensure the above objectives are satisfied; therefore restricting the use of these procurement tools for items with a unit value of $1,500 or more is necessary. However, we anticipate that in the near future the Express Card and Express Order programs may be expanded to support the purchase of such transactions.

Please consult http://blink.ucsd.edu/go/equipmentchange for more information.

If you have questions, please contact one of the following individuals:

- Purchasing: Linda Collins, lcollins@ucsd.edu, (858) 534-3082

- Disbursements: Susan Maciel, smaciel@ucsd.edu, (858) 534-6535

- OPAFS: Rachel Mercado, rmercado@ucsd.edu, (858) 534-0703

- General Accounting/Equipment Management: Steve Ste. Marie, sstemarie@ucsd.edu, (858) 534-4638

Linda Collins Director Procurement Services William McCarroll Director General Accounting/Equipment Management