Financial Affairs Policies

VIII-1.20(A)

UMB Policy on Disposal of Surplus Personal Property

Financial Affairs   |   Approved June 22, 2018

Responsible VP/AVP

Dawn M. Rhodes, DBA, MBA

Revision History

“Modified to address changes in X-99.08(A) on June 21, 2018”.

Purpose

To establish the UMB procedures for the disposition of surplus property and the reallocation of excess property, while it still has value.

Policy Statement

AUTHORITY

The authority for determining the appropriate disposal method for excess or surplus property is vested in the Office of the Senior Vice President for Administration and Finance and is administered by the Surplus Property Officer.

POLICY

It is the responsibility of each department to insure that university property is fully utilized, while it still has value. To facilitate serving UMB's best interest regarding the full and optimum utilization of university property, it is essential that university property considered in excess of a department's current requirements be recognized and declared excess. For equipment items that are determined to have no further benefit to the campus that equipment shall be deemed surplus and shall be appropriately disposed.

EXCESS PROPERTY

Excess property within a department or school shall be made available for transfer first to another department within the custodial department's school; and then to another department or school at UMB. If the property cannot be sold or transferred to any other UMB department, the property is declared surplus.

SURPLUS PROPERTY

Property that is declared surplus at UMB shall be disposed of in accordance with the appropriate process identified by the Surplus Property Officer.

IT & COMMUNICATION EQUIPMENT DISPOSAL

UMB is committed to ensuring that storage media that contains sensitive data is destroyed and/or sanitized upon its disposal.  The details of this program are outlined in X - 99.08(A) UMB Policy on Disposal of Media Containing Sensitive Data and related procedures.

DISPOSAL

In general, the acceptable method for the disposition of surplus property not covered by other policies:

  1. Sale to any campus of the University System of Maryland or another State agency.
  2. Trade-in on newly acquired equipment.
  3. Sale to the public.
  4. Trade or donation to any campus of the University of Maryland System or another State agency.
  5. Donation to public funded elementary and secondary schools in the State of Maryland.
  6. Donation to qualified non-profit, charitable organizations or local jurisdictions.
  7. Dismantling for recovery of useable parts;
  8. Disposal as scrap by means of recycling.
  9. Disposal as junk.

Capital equipment disposed of under any disposition alternative must be reported by the custodial department to the General Accounting Office in accordance with UMB Financial Services Policy No. 2131 Capital Asset Management.

A detailed description of each disposal process is contained within the "Disposal Types" section of this policy.

RESTRICTIONS

  1. State Law prohibits the preferential sale or gratuitous disposition of property to a university official or employee or to an organizations in which the employee or a close relative has a material financial interest.
  2. The State Ethics Law prohibits university officials and employees or their relatives from purchasing surplus property if the employee's official duties are directly connected with the disposal process. Also, other Ethics Law provisions generally applicable to surplus property sales could, in particular situations, limit the private activities of a university official or employee. For additional information or clarification, contact the Surplus Property Officer, University Counsel or Management Advisory Services.

DISPOSAL PROCESS

  1. Declaration
    The Property Officer for the custodial department shall list the excess property on an Excess Property Declaration/Capital Asset Deletion Form(available from the Office of Strategic Sourcing and Acquisition Services). The completed Declaration Form shall be forwarded for approval to the Department Head and Dean or Director. A Dean or Director (or their designee) shall authorize the disposal of excess property by signing the Declaration Form and submitting the Declaration Form to the Department of Financial Services, General Accounting Office.

    It is the responsibility of each departmental Property Officer with excess property to ascertain the existence of any restrictions or special conditions which may affect alternative utilization or disposal of the property. Particular attention should be given to property obtained through sponsored grants and contracts, gifts, bequests, or donations; and property which requires the approval of the Office of Environmental Health and Safety. The appropriate sections of the Declaration Form should reflect this information and contain the required approvals.

  2. General Requirements
    1. The Surplus Property Officer shall approve the classification of excess and surplus property and determine the method of property disposition.
    2. The Surplus Property Officer has the authority to reserve the right to execute the selected disposal process. The execution of all other disposal procedures shall be the responsibility of the custodial department.
    3. Excess property will be transferred to another department, whenever feasible, before other methods of disposal are considered.
    4. Surplus property sales to the public should be executed by competitive bids or public auctions.
    5. The Surplus Property Officer may delegate disposal activities to the custodial department, subject to the disposal procedures.
  3. Title and Safety Regulations
    1. Custodial responsibility for excess and surplus property resides with the custodial department until actual transfer is made to another department or until time of actual disposal. The custodial department is responsible for ensuring compliance with all fire and safety regulations when storing surplus property.
  4. Movement of Property
    1. The movement of property to a central location will be contingent upon the availability of storage space, the method that is most advantageous to the university and the approval of the Surplus Property Officer. In certain circumstances, the property will be disposed of at its present location.
    2. If the custodial department elects to place surplus property in storage, the department shall be responsible for the storage costs of such items. The initial move to storage will be provided without charge but any subsequent moves will be charged to the custodial department. The custodial department will retain all responsibilities for securing and accounting for surplus property in storage.
    3. Property moved, by the Surplus Property Officer, to a central location for disposal shall remain on the custodial department's inventory records until actual disposal has been completed. The initial move to a central location will be provided without charge; however, any subsequent moving costs and any storage costs shall be paid by the custodial department.
    4. The Surplus Property Officer shall maintain control records for property moved to a central location.
    5. The Surplus Property Officer will be the contact point for authorizing General Services to relocate surplus property. To ensure that the movement of property is managed properly, requests should be submitted at least five (5) business days prior to the desired move date. General Services will move items one time at no cost. Any and all subsequent moves will be at cost of the department that holds ownership to the property.

DISPOSAL TYPES

  1. Excess Property (Inter-department Transfers or Sales)
    1. Serviceable excess property which could be used by another department will be listed periodically on the UMB Trade List (Located on the Procurement Services Website under Surplus Property)
    2. To obtain excess property listed on the UMB Trade List a department shall:
      1. Submit a written request for excess items to the custodial department.
      2. If different departments request the same item, the written request received first will be honored, unless a more urgent need has been presented to the custodial department.
      3. If the department requires assistance to move the property, arrangements will be made with General Services, Operation and Maintenance Division of the Office of Facilities Management. The initial moving services will be provided without charge to the department.
      4. If the custodial department has identified an "asking price" The reasonableness of the "asking price" will be subject to the approval of the Surplus Property Officer. This approval will be based on verification that the "asking price" reflects the fair market value of the property.

    Note: When the transfer of excess property involves capital assets, reference should be made to UMB Financial Services Policy No. 2131 Capital Asset Management for the process to be followed and the forms to be completed to finalize the transfer of property. In the case of removable fixtures, contact should be made with the Financial Services General Accounting Office.

  2. Surplus Property
    1. Trade-ins on Newly Acquired Equipment
      • Custodial departments have the authority to utilize excess property for trade-in. When the requisitions are placed through the Office of Procurement Services, the item to be traded-in must be shown on the requisition, along with the trade-in allowance. If the item is a capital asset, an Excess Property Declaration/Capital Asset Deletion Form should accompany the requisition.
      • The Surplus Property Office will identify those property items that can be utilized as trade-ins for other than the custodial department, and will have the authority to select this method for property disposition.
    2. Sale to the Public
      • Surplus property will be offered for sale to the general public via the internet utilizing the GovDeals.com Auction Website.
      • Formal Competitive Bidding may be used if an item is considered unsuitable for an internet auction sale.
        • Formal bidding procedures shall include:
            • Solicitation of sealed bids from prospective bidders in the private business community;
            • Making the request for bids publicly available on bid boards or public bulletin boards in the soliciting department. Newspaper advertisement may also be utilized;
            • Public opening; and
            • Award to the highest bidder.
          • Requests for formal bids shall be solicited from at least three prospective bidders in the private sector. If it is not possible to obtain at least three private bids, the results of the solicitation shall be documented.
          • In a case where specialized property requires immediate disposal by means other than competitive bidding, such as hazardous materials, approval to deviate from this procedure shall be obtained from the Surplus Property Officer.
        • The preferential sale or transfer of property to a university official or employee is prohibited. In addition, university officials and employees whose duties are directly connected with the disposal process are prohibited from purchasing surplus property.
        • In a case where specialized property requires immediate disposal by means other than competitive bidding, such as hazardous materials, approval to deviate from this procedure shall be obtained from the Surplus Property Officer.
      • The preferential sale or transfer of property to a university official or employee is prohibited. In addition, university officials and employees whose duties are directly connected with the disposal process are prohibited from purchasing surplus property.
    3. Utilization by a Public Funded Elementary and Secondary Schools in the State of Maryland, Non- Profit or Charitable Organizations or Local Jurisdictions
      • Surplus Property no longer needed by the university may be either donated or sold without obtaining competitive bids, to a local jurisdiction or non-profit organization upon approval of the Surplus Property Officer.
      • A local jurisdiction or non-profit organization obtaining donated property shall be required to sign a Certification Statement form (available from the Office of Procurement Services or Financial Services) to indicate the intended use of the property in the recipient's program.
      • The Surplus Property Officer shall identify the appropriate procedures to be followed by the eligible organization to obtain receipt of the surplus property. These shall include, at least the following:
        • Declaration of the property as surplus.
        • The Surplus Property Officer should receive notification that an eligible organization has an interest in a surplus property item. This can be executed by identifying the organization on line seven (7) of the Excess Property Declaration/Capital Asset Deletion Form
        • The Surplus Property Officer must approve the sale or donation to the eligible organization as the selected disposal process.
        • The eligible organization must complete a Certification Statement which identifies the conditions for accepting the surplus property.
        • The Surplus Property Officer shall work with the custodial department to coordinate the transfer of the surplus property with the recipient organization.
    4. Dismantling for Recovery of Useable Parts
      • Custodial departments have the authority to dismantle property items for recovery of useable parts, but must complete an Excess Property Declaration/Capital Asset Deletion Form if the item is a capital asset.
      • Approval by the Surplus Property Officer must be obtained for any requests to dismantle property for repair parts, for any items listed in the surplus property bulletin.
      • A salvage component shall be controlled and accounted for as material and supply inventory items.
      • Components not salvaged, but having scrap value must be disposed of as scrap by completing an Excess Property Declaration/Capital Asset Deletion Form to ensure proper disposal by General Services.
    5. Scrap
      • Items having no market value, other than scrap, shall be sold to the highest bidder. Any proceeds from the sale will be returned to the custodial department less any appropriate administration fees/charges.
      • If the amount of surplus property is too small to attract bidding interest, scrap items may be discarded as junk, upon approval from the Surplus Property Officer.
      • Until scrap is either sold or discarded as junk, the custodial department shall maintain appropriate control lists of property items for audit purposes.
    6. Junk
      Items having no value whatsoever will be rendered unusable and discarded as junk at the department's expense, upon approval from the Surplus Property Officer.

CREDIT FOR SURPLUS PROPERTY

  1. Trade-ins
    If a department trades an excess item for a replacement item, credit is given to the supplier in the form of a reduced invoice cost for the replacement item. The cost of the replacement item, less allowance for the trade-in, should be shown on the requisition and the vendor's invoice.
  2. Sales
    Monies received from the sale of Excess and Surplus Property, where the custodial department has retained the title and custody, shall be credited to the appropriate departmental account. 

    Monies received from the sale of property that has been transferred to a central storage location by the Surplus Property Office, shall be deposited in a general Surplus Property Account if the original custodial department cannot be located. These funds will be utilized to offset the administrative costs associated with the removal and disposal of surplus property. 

    Monies received from property purchased from sponsored funding shall be disbursed in accordance with the governing regulations or guidelines for the respective property items, which are administered by the Department of Financial Services in coordination with Sponsored Programs Accounting and Compliance.

Definitions

To provide a uniform basis for implementing this policy, the following terms are defined below:

  1. University Property includes items purchased with the use of State, restricted, non-restricted, grant or sponsored funds. It also includes items acquired through the UM foundation and gifts, bequests or items donated to or transferred to the university, fabricated equipment and assets acquired through General Construction Loans, actions of the Board of Public Works, and bond funds.
  2. Department refers to any offices, both academic and administrative, within the University of Maryland Baltimore.
  3. Capital Equipment is any equipment or furnishings that have:
    • A unit cost of $5,000 or more at the time of acquisition (net invoice amount or fair market value for donated equipment); and
    • A useful life greater than one year; or
    • Any equipment, with individual components costing under $5,000, when combined with other similar components to form a single stand-alone equipment item with a net aggregate cost of $5,000 or more.
    Note: Equipment made predominantly of glass, rubber, or cloth are not capital assets. [Source: USM VIII-1.10 Policy for Capitalization and Inventory Control]
  4. Non-capital Equipment is defined as any equipment that has a probable useful life greater than one year and a net invoice cost or fair market value greater than or equal to $2,500 and less than $5,000.
  5. Equipment refers to both capital and non-capital assets (including sensitive equipment) and removable fixtures.
  6. Sensitive Equipment is defined as equipment which is susceptible to theft, is easily transferrable to personal use, must be controlled to meet external reporting requirements, and is:
    • Computer equipment with an acquisition cost greater than or equal to $750 and less than $5,000 per unit, or
    • Audiovisual equipment with an acquisition cost greater than or equal to $1,000 and less than $5,000 per unit, or
    • Firearms or motor vehicles that cost under $5,000.
  7. Removable Fixtures refers to capital equipment items in the possession of the custodial department which were originally acquired as part of the construction cost associated with a building construction or renovation.
  8. Excess Property refers to equipment that is no longer deemed necessary for a department's needs.
  9. Surplus Property refers to equipment that is considered in excess of UMB's current requirements. Excess property becomes surplus when it is no longer needed by the university.
  10. Property Officer refers to the individual in each school or department who has been authorized to declare equipment excess property. For internal control purposes, this person should be a senior administrative official.
  11. General Accounting Office refers to the office within Financial Services responsible for the maintenance of the capital assets inventory records and the coordination of physical inventories.
  12. Surplus Property Officer refers to the individual designated by the Senior Vice President for Administration and Finance with the responsibility for authorizing the disposal of surplus property.
  13. Surplus Property Office will reside within the Office of Strategic Sourcing and Acquisition Services.
  14. Custodial Department refers to the department that has title to the property item and is the department declaring the property item excess property.
  15. Serviceable means a property item is functional or operates satisfactorily "as is" without repairs or refurbishing. Obsolescence or age should not be factors in determining whether a property item is functional or operates satisfactorily. Serviceable items can be obsolete or very old.
  16. Scrap refers to property that is no longer useful and has no value other than the market value of its base material.
  17. Junk refers to property that has no economic, scrap or functional value.

Scope and Exceptions

The transfer and disposal of all university property shall be governed by this policy. University property includes: capital, non-capital and sensitive equipment items, removable fixtures, and significant quantities of materials and supplies.

Limitations:
Office of Research and Development - Reference should be made to the "Policy on Transfer of Equipment" issued by the Office of Research and Development, regarding the transfer of equipment purchased with external (sponsored) funds for faculty and staff members who are relocating to another institution, campus, or department within the university. 

Office of Environmental Health and Safety - The disposal of drugs, chemicals, toxic, hazardous and radioactive materials is administered by the Office of Environmental Health and Safety and its respective guidelines. This includes items utilized in the processing, handling and storage of the above items. In addition, all property with the potential of being either contaminated or causing harm must be approved for transfer or disposal by the Office of Environmental Health and Safety.

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