1. Business and Finance Bulletin

   BUS-38	Disposal of Excess Material
   A-51	Application of Proceeds from the Sale, Trade-In, or Transfer of University Property

2. UCSD Policy and Procedure Manual (PPM)

   300-20	Sub-Cashiering and Change Funds
   522-1	Property Inventory Control System Operating Procedures

3. Accounting Manual

   R-216-62

   Recording Proceeds from the Sale, Trade-In or Transfer of University Property

POLICY

1.  This policy provides guidelines to departments or operating units concerning the reutilization/disposal of property owned by The Regents of the University of California. It does not apply to federally-owned property in the control of The Regents (See PPM 522-1, paragraph XIII, concerning federally-owned materiel.)

   Departments or operating units having excess/surplus equipment and materials are encouraged to declare them excess and permit the Materiel Management Department-Inventory Division to relocate the items in one of the following ways:

   1. Relocate equipment and material within another campus department at no cost.

   2. Sell the equipment or material to another campus department.

   3. Sell the equipment or material to another UC campus.

   4. Sell the equipment or material by public sale.

   This policy is not concerned with the trade-in of equipment or material to a vendor for credit on a new purchase. This area is covered in PPM 522-1 Section XII.A.

DEFINITIONS

1.  For the purpose of this policy, the following terms have special meaning:

   1. University Material: Equipment or material unconditionally owned by The Regents.

   2. Sale: The conveyance of property between departments or campuses with an exchange of funds, or to an individual or organization outside the University for cash or money equivalent.

   3. Condition Code: See attached listing. (Exhibit A)

PROCEDURES

1. Determination and Reporting of Excess Material

   1. Department

      1. Department chair or head shall determine when University material has no further value to the department and can be disposed of as excess material.

      2. The department or operating unit declaring material excess will complete a Disposal Request (Exhibit B) and forward it to the Inventory Division of Materiel Management. The Disposal Request must indicate the condition of the equipment or material and include the suggested selling price. No sale will be consummated without the prior approval of the Materiel Management Department.

         If the material to be sold is inventorial, e.g. a property number has been assigned, the Disposal Request form must be accompanied by an Equipment Inventory Modification Request form (EIMR), see Exhibit C. An EIMR is the only way an inventorial item may be deleted from departmental inventory records after it has been sold.

      3. If the department or operating unit declaring equipment or material excess is aware of potential users or buyers, this information should be forwarded with the Disposal Request.

   2. Materiel Management, Inventory Division

      1. The Inventory Division of Materiel management shall regularly circulate lists of excess material to prospective users. If the excess material has an individual or per lot value currently estimated at $5,000 or more, all other campuses must be given an opportunity to purchase it before it is placed on public sale. This requirement, however, does not apply to the disposal of automotive equipment.

      2. Usable equipment and materials will be heal for 90 days by the Inventory Division which will advertise the availability of the items via Newsletter or other means. Each notice of property availability will provide the location of the property for inspection, hours of inspection, general condition of the property, and the established selling price.

      3. Items not sold within 90 days will be disposed of by methods deemed appropriate by the Materiel Management department.

2. Methods of Disposal to the Public

   Disposal may be made by the following methods:

   1. Public sale to the highest bidder.

   2. Public sale on a "first come, first served" basis if a fair market value has been established by the Materiel Manager and the availability and price of the item(s) are made known to the general public through newspaper advertising and/or other announcement.

   3. Private sale to an individual when the cost and effort involved in arranging for a sale by methods 1. or 2. would be disproportionate to the return expected, and the Materiel Manager has determined that the sale price is reasonable.

   4. Donation of excess material to an organization outside the University if the market value of the excess material is below the costs required for handling, record keeping, storage, and other costs associated with trade or sale; and either the specific prior review and approval of the General Counsel has been secured, or the General Counsel has given blanket approval for donation of specific categories of excess material to educational institutions, other government bodies, or non-profit organizations.

   5. Disposal of firearms requires special handling based on the code of Federal regulations, part 178 of 27CFR.

3. Application of Proceeds from the Sale of Assets

   1. Sale to another department on campus of excess/salvage material will be accomplished through the use of a Non-Payroll Expenditure Adjustment Request Form (Exhibit D). The department selling the asset will receive a credit to its account in the amount agreed upon as the sales price. Conversely, the department acquiring the asset will be debited for that same amount. The Non-Payroll Expenditure Adjustment Request is prepared by the buying department and routed through both the using department and materiel Management-Inventory Division before being sent to the Accounting Office for recording in the General Ledgers.

   2. Sale to another campus of excess/salvage material will be accomplished when the Inventory Division notifies the Accounting Office of the sale and its terms. The Accounting Office will prepare the necessary financial documents to credit the selling department on the San Diego campus and to transfer the charge to the buying department on another campus.

   3. Sale to an individual or organization outside the University is processed as follows:

      1. If the sale is accomplished within a 90 day period and the sale represents the disposal of property held by a non self-sustaining enterprise (e.g., academic department or administrative units, usually funded by general funds, endowments, etc.), the proceeds of the sale will be credited to "Income from the Sale of Surplus Property" (t-268310-68310-0). The Inventory Division will deposit the proceeds of the sale to the "Income from the Sale of Surplus Property" account and notify the department in writing (Exhibit E) of the net appropriation accruing to the department.

         Funds appropriated from this source may be carried forward for one fiscal year. Funds unexpended or unemcumbered at the end of the fiscal year (following the carry-forward) will be transferred to General Funds and lapsed.

      2. For items not sold within a 90 day period, the Materiel Manager will either return the items to the originating department or dispose of the assets as he sees fit. Any revenue received will be credited to the "Income from the Sale of Surplus Property" account.

      3. If the sale to an outside organization represents the sale of a self-sustaining activity, (e.g., garage, storehouse, UNEX, resident halls, parking, etc.), the proceeds of the sale will be credited directly to a miscellaneous income acount of the self-sustaining activity regardless of the length of time needed to make the sale.

   4. The Materiel Management Department will have the right to recover from the proceeds of any sale the administrative and other direct operating costs in an amount not to exceed 10% of the sale of excess equipment and material originating in Instructional and Research departments will be allocated to the Comittee on Research for use in the furtherance of internal research efforts.

RESTRICTION

Special procedures are required to sell property to which the University holds conditional title. (Conditional title reserves to the transferor (title holder) the right to revoke transfer of title, to receive the proceeds of any subsequent sale, or to acquire an interest in replacement.) Generally, departments should obtain unrestricted title to property before it is declared excess for disposal.

LIMITATION OF SALES TO CERTAIN EMPLOYEES AND THEIR NEAR RELATIVES

1.  No one employed in a Materiel Management department, or a near relative of such employee, may buy excess material either directly or through a public sale.

2.  No one employed in a department originating excess material, or a near relative of such employee, may but excess material originating in that department either directly or through a public sale.

3.  The principal driver of a University-owned motor vehicle, or a near relative of such employee, may not buy such motor vehicle either directly or through public sale.

Near relative is defined as husband, wife, mother, father, daughter, son, sister, brother, and step-relatives and in-laws in the same relationships. Exceptions to this provision must be approved by the Associate Vice Chancellor-Business Management.

RESPONSIBILITIES

1.  Department Chair or Head

   Determine those items which will be declared excess and direct preparation of proper forms. Supply all agency approvals for the sale of equipment/material not owned by the University as required.

2.  Material Management

   1. Determine that the University can legally sell the equipment/material declared excess.

   2. Make arrangements for pick-up of equipment or material declared excess.

   3. Publicize the availability of the equipment and material declared excess.

   4. Process all necessary paperwork to relocate or dispose of the equipment/material declared excess.

3.  Accounting

   Review and ascertain the correctnes of the disposal entries.

Exhibit B

Exhibit B is available for printing/viewing in Acrobat Adobe PDF Format.

Exhibit C

Exhibit D

Exhibit D is available for printing/viewing in Acrobat Adobe PDF Format.

Exhibit E

Exhibit E is available for printing/viewing in Acrobat Adobe PDF Format.