Property Management on Federal Contracts Key Issues within Functional Areas and Equipment Fabricatio

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Property Management on Federal ContractsKey
Issues within Functional Areas and Equipment
Fabrications
April 27 and May 4, 2004Collaborative
Development byProperty Management OfficeDean
of Research OfficeOffice of Sponsored
ResearchCost Management AnalysisRepresentative
s from SoE, HS, Independent Labs, ITSS
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Agenda

• Purpose and Scope
• Contract Property Management
• Key areas of potential risk and audit exposure
• Equipment Fabrications
• New requirements, policy, and processes
• Q A

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Purpose and Scope

• Purpose
• Highlight key property management areas for
  federal contracts
• Respond to audit findings
• Response to audit finding, change in process
  needed to retain approval of property procedures
  and system
• Enable complete reporting of fabrication costs
• Must be able to capture and report on all costs
  incurred to bring the fabricated asset to a form
  and location suitable for its intended use.

Historically reported only portion of costs

• Scope
• Required for property management on Federal
  Contracts
• Optional but may be used on Grants and other
  Sponsored Projects

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Functional Areas of theProperty Life Cycle
Control, Preserve, Protect and Maintain

• Property Management
• Acquisition
• Receiving
• Identification
• Records
• Movement
• Storage
• Physical Inventories

• Reports
• Consumption
• Utilization
• Maintenance
• Subcontractor Control
• Disposition
• Contract Close-out
• Audit

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Key issues for functional areas

• Acquisition
• Terms Conditions
• R.A.A.C.
• Approvals
• Pre-purchase screening
• Title Taxability
• Deliverables
• Correct use of Expenditure Types
• Unique task for each FAB

• Property Management
• Policies Procedures
• Staffing
• Training
• Communications
• Systems Access
• Error detection methods

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Acquisition of Property
Primary Methods of Acquisition
Stanford (Contractor) Acquired
Sponsor Furnished Or Loaned
Donated

• Incoming Transfers
• Title Transfers

• Purchases
• Fabrications

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Fabrications of Equipment

• Key issues driving implementation of changes
• Must collect and report TOTAL COST for each
  fabrication
• Equipment fabricated
• For use on project
• For delivery to Sponsor
• Ensure timely completion of fabrication and
  creation of asset record

Detail discussion during latter portion of
todays session
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Key issues cont.

• Receiving ID
• Timeliness
• ID denotes ownership
• ID maps to record
• Documentation
• Method to handle discrepancies

• Records
• Completeness of data elements
• Equipment Materials
• Timeliness
• Accuracy
• Access
• Meet Quality Assurance requirements for NASA

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Key issues cont.

• Movement
• Adequately safeguard assets
• Location tracked and authorized
• Facilitates inventories and closeouts
• Potential liability issues

• Storage
• Retention justification
• Adequate for type of property
• Safeguard assets
• Access given

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Key issues cont.

• Reports
• Financial
• Inventory
• Loss, Damage, Destruction
• Close-out
• Special

• Inventories
• Biennial
• Contract Close-out
• Special per sponsor requirements
• 100 accountability
• Accurate results certified and reported within 30
  days of completion
• Discrepancy trends noted

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Key issues cont.

• Consumption and Use
• R.A.A.C.
• Authorized
• Directly benefits project or university endeavors
• Timely declaration of excess
• Handling residual

• Maintenance
• Performed
• Documented
• Maximizes life of asset
• General overhead cost unless authorized in the
  contract or subsequently by Contracting Officer

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Key issues cont.

• Subcontractor Control
• Subcontracting process
• Clause flow-down
• Approvals
• Title
• Liability
• Declaring of excess
• Inventories
• Closeouts

• Scope of Work Subcontracts
• Must have unique task
• Stand-alone assets delivered as part of SOW
  subcontract may require journal adjustment

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Key issues cont.

• Disposition
• Timely determination of excess by program
  personnel
• DPA generate Excess Request
• PMO process and obtain sponsor directives
• DPA ensure disposal is completed
• Property records adjusted to reflect disposal

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The Last of the Key Issues

• Audit
• Verification of compliance
• Review of PP
• Review all costs for R.A.A.C.
• Affects certification or status of property
  system

• Contract Closeouts
• Final inventory required
• Zero balance on all accountable property
• Dispositions authorized and completed in timely
  manner
• Final property report issued

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Equipment Fabricationsaka FAB
S
B
4
0
A
F
0
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Implementation Date May 1, 2004
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FAB Agenda

• Definition and Policy
• Tasks and Expenditures
• Labor Charging and Reporting
• Identification, Completion, and Inventory
• Maintenance
• Sub-awards and Scope-of-Work Subcontracts
• Oracle GA Setup
• Process Flowchart

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FAB - Definition

• An equipment fabrication must meet all of the
  following criteria
• A unique, one-of-a-kind item, fabricated by
  Stanford, used to meet unique research or testing
  specifications
• Cost of materials and supplies must be 5,000 or
  greater and is included as part of acquisition
  cost
• Cost of associated labor is likely to exceed the
  cost of the supplies and is included as part of
  acquisition cost
• Upon completion, have a useful life of more than
  one (1) year or, if on a NASA contract, two(2)
  years

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FAB Policy

• Implementation May 1, 2004
• Must capture all costs required to bring the item
  to completion
• While work-in-process, will be accounted for in
  Oracle Grants Accounting
• Each fabrication will have two tasks
• Capital Project Task
• Burdened Fabrication Task
• Fab declared an asset upon completion for
  initial use
• Asset record created and tracked Sunflower Assets
  and Oracle Fixed Assets
• Modifications made after fabrication is an asset
  are accounted for as a separate task
• Ongoing maintenance or repair costs are not
  included as part of the acquisition cost of the
  fabrication
• Documentation shall be made available for audit
  upon request

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FAB Tasks and Associated Expenditures

• Each FAB will have two tasks established in
  Oracle Grants Accounting

• Fabrication Components
• Start-up supplies and parts incorporated or
  otherwise consumed in the research or fabrication
  process
• Freight and Handling
• Installation Charges

Capital Project Task

• Labor
• Engineering, architectural and other outside
  services for design, plans, specs, surveys, etc.
• Travel directly related to the FAB
• Acquisition and prep costs of structures and
  other facilities

Burdened Fabrication Task
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Other Charges

• Service Center
• Additional guidance forthcoming contact your
  research administrator for questions in the
  interim
• P-card purchases
• Not to be used on fabrications
• Alternative -- use an RPO in iProcurement

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FAB Labor Charging Guidance

• Charged to the Burdened Fabrication Task
• Yes -- Directly related and hands-on labor
• No -- PI oversight and general project
  supervision time
• Individuals typically charging time to FABS
• Research Assistants
• Professional and hourly technical staff
• Research Associates
• Post-Docs
• Department establishes procedures for
  time-keeping

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FAB Labor Charging Guidance, cont.

• Persons charging labor to FAB tasks
• Includes all direct, hands-on labor associated
  with fabricating the equipment Research Assoc.,
  Students
• Excludes project oversight time PI project
  oversight time
• Accuracy of charges verified
• During expenditure statement review
• Periodically throughout the life of the WIP for
  property reporting
• At completion of the fabrication, prior to
  creating asset record

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FAB Labor Charging Guidance, cont.

• Adjustments to Labor Charges
• PI request adjustment before the end of a pay
  period
• Labor Schedule adjusted
• PI request adjustment following review of monthly
  expenditure statement
• Journal transfer is processed
• PI request adjustment following quarterly
  expenditure statement certification review
• Journal transfer is processed

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Total Cost Reporting
Capital Project Task (reference FAB )
Costs collected for each of the two tasks
associated with a fabrication
Total Acquisition Cost derived for asset record,
Property and Sponsor Reports
Burdened Fabrication Task (reference FAB )
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Data Sources for User Reporting
Fabrication is Work-in-Process and Completion
Reconciliation
CEET Report Expenditure Statements
Fabrication is Completed Asset
Sunflower Assets Report Mart 2
Capital Equipment Expenditure Transaction
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FAB Identification numbers

• Two identifying numbers for equipment fabrication
• Four-digit FAB number
• Used as task number in Oracle GA setup
• Barcode tag number
• Used to create asset record when fabrication is
  complete
• Obtained by submitting a Fabrication Request Form
  to PMO
• See sample of form in the appendix

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FAB Completion, Task Closeout, and Inventory

• FAB complete when
• Assembly done and it is ready for use in the
  performance of the task/test for which it was
  designed
• Confirmed by program personnel
• Upon completion of FAB
• Final CEET reports prepared and reviewed
  adjustments completed
• Residual material is identified for potential
  re-assignment to another fabrication or is
  declared excess for final disposition
• Task closed in Oracle GA
• Equipment is capitalized and Sunflower record
  created
• Reportable as asset
• Included in physical inventory

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FABMaintenance, Enhancements and Modifications

• Maintenance or Repair
• Not included as part of the acquisition cost of
  the FAB
• Must not be charged to the FAB
• Enhancements or Modifications to completed FABS
  (assets)
• Considered as upgrades
• Identify separately in the Oracle system by a new
  PTA combination
• Completed modification separately identified,
  recorded as an asset, and if applicable
  associated with the original fabrication as a
  child asset

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Sub-award FABS

• Items FABRICATED BY sub-recipients
• Fabrications accountable to sub-awards will be
  identified by the sub-recipient and reported to
  Stanfords Property Management Office in
  accordance with the terms and conditions of the
  Stanford-issued sub-award
• Property PROVIDED TO sub-recipient by SU
• Documented on DD1149 by DPA
• If tagged asset, it is recorded in Sunflower and
  location updated
• If materials, may require record in Govt.
  Property Materials Database
• Contact your DPA or Max Canio for guidance
• Included in physical inventory reporting

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Oracle Grants Accounting Setup
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Closing reminders for FABS

• New process required for property management on
  Federal Contracts
• Optional but may be used on Grants and other
  Sponsored Projects
• Each FAB will have two tasks set up for
  collection of costs
• Capital Project Task
• Burdened Fabrication Task
• Check with your Department Administrator
  regarding labor charging instructions
• Completed FABS become reportable equipment and is
  also subject to physical inventory

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For questions Contact your Research Administrator
Thank you for your attendance and support
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Appendix

• Fabrication Request Form
• Labor Charging Guidance
• Fabrication Business Process Flow Chart