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Equipment purchased or built with sponsored project funds may be subject to a number of Federal and State of Illinois regulations, along with any related terms the sponsor includes in the award. Below are definitions for types of equipment.  Please keep in mind an item may fit multiple definitions due to the source of funds used to purchase the item.


Federal Equipment (Uniform Guidance)

Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000. 


  • General Purpose Equipment

Equipment which is not limited to research, medical, scientific or other technical activities. Examples include office equipment and furnishings, modular offices, telephone networks, information technology equipment and systems, air conditioning equipment, reproduction and printing equipment, and motor vehicles.

  1. Information Technology Systems computing devices, ancillary equipment, software, firmware, and similar procedures, services (including support services), and related resources.
  2. Computing Devices = machines used to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or "peripherals") for printing, transmitting and receiving, or storing electronic information
  • Special Purpose Equipment

Equipment which is used only for research, medical, scientific, or other technical activities. Examples of special purpose equipment include microscopes, x-ray machines, surgical instruments, and spectrometers.

Fabricated Equipment

An item that is fabricated or made within the University for which the components parts and labor directly associated (such as machine shop or F & S labor, 3rd party vendor labor if discernable) with the construction of the item that is not available elsewhere.  When the item is place into service, a total cost of $1,000-$4,999 will be controlled equipment.  Fabricated equipment and labor reaching the threshold of $5,000 will be capitalized per University policy. Salary and wages of; Principal Investigators, key personnel, Post-doctoral students and graduate student researchers who participate in the fabrication of the piece are not consider labor and should not be included with the value of the item.

  • Acquisition Cost

Per UG 200.1, the cost of the asset including the cost to ready the asset for its intended use. Acquisition cost for equipment, for example, means that net invoice price of the equipment, including the cost of any modifications, attachments, accessories, or auxiliary apparatus necessary to make it usable for the purpose for which it is acquired. Acquisition costs for software includes those development costs capitalized in accordance with generally accepted accounting principles (GAAP). Ancillary charges, such as taxes, duty, protective in transit insurance, freight, and installation may be included in or excluded from the acquisition cost in accordance with the non-Federal entity's regular accounting practices.

Non-Federal Sponsor Equipment 

Review agreement for guidance on value threshold, approval expectations and ownership after the project is complete.  If not defined specifically by the sponsor, the University definition should supersede.  Private sponsor titled equipment must be completely funded by the sponsor.

University Equipment

The University definition of equipment is a non-expendable, non-consumable, tangible item with a value of $1,000 or more or is an addition, improvement or modification to an existing piece of equipment which increases the productivity or the useful life of the equipment. All firearms, vehicles, antiques, and items of historic treasure must be inventoried and tracked as controlled equipment regardless of cost.  Equipment does not include nonexpendable, tangible property delivered to a sponsor under the terms of a sponsored agreement, repairs and maintenance or software.

Repairs and Maintenance of Equipment (UG200.452)

Costs incurred for utilities, insurance, security, necessary maintenance, janitorial services, repair, or upkeep of buildings and equipment (including Federal property unless otherwise provided for) which neither add to the permanent value of the property nor appreciably prolong its intended life, but keep it in an efficient operating condition, are allowable. Costs incurred for improvements which add to the permanent value of the buildings and equipment or appreciably prolong their intended life must be treated as capital expenditures (see §200.439). These costs are only allowable to the extent not paid through rental or other agreements.

Capital Expenditures (§200.439)

Capital expenditures for improvements to land, buildings, or equipment which materially increase their value or useful life are unallowable as a direct cost except with the prior written approval of the Federal awarding agency, or pass-through entity.


  • General Purpose Equipment

Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity.

  • Special Purpose Equipment

Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity.

For additional definitions and categories, please refer to


Know the Basics

Ownership – In most cases, title of the equipment will vest to the University (State of Illinois). However, Federal sponsors may require retaining ownership. *In general, equipment purchased on Department of Energy National Lab awards vests with the lab and/or funding agency. Departments are responsible for identifying these situations and contacting SPA to obtain a Federal Property tag.

Responsibility – At Illinois, the various colleges, departments and units are responsible for the custody and use of all assets.

Availability – The University encourages units to make equipment available for use on other sponsored projects as long as this doesn’t interfere with the work for which it was acquired. The sponsor award may include additional restrictions.

Record Keeping – Equipment records should be maintained to make sure assets are not lost, stolen or damaged. Accurate records also ensure proper accounting and reporting for both Federal and State regulations.

If equipment needed to perform the awarded work is destroyed or stolen during the period of performance, it must be replaced by the unit unless the sponsor grants specific approval to charge the replacement cost to the project. Please note that the University does not automatically insure either purchased or fabricated equipment.



Visit the following pages for more details on how to manage sponsored equipment:

  Equipment Compliance

  Equipment Purchasing

  Equipment Transfers and Loans

  Recording Equipment in Banner Fixed Asset



Can I use the equipment in my lab to generate revenue to support other initiatives? 

Equipment purchased with federal funds may not be used to provide services for a fee to compete unfairly with private companies that provide equivalent services, unless specifically permitted or contemplated by federal statute.

If my equipment was purchased on a Federal grant or cooperative agreement requiring title, can the University retain the equipment?  

Upon completion of a grant or cooperative agreement, requests to obtain title of government owned property should be routed to SPA.  SPA will contact Sponsor to provide justification and request title.  If the sponsor agrees to transfer title, unit and property accounting are notified.  Property Accounting will update title information in management system and a new control number (p-tag) is assigned.  Department will affix new control tag and remove “Property of U.S. Government” tag.

When the total value of Federally titled supplies and other expendable property exceeds $5,000 the item(s) may be retained if:

Property may be used on other federally supported activities If no longer needed or usable on other federally supported activities, the University may retain the property as long as the federal government is compensated for its share in the acquisition costs.


The amount of federal compensation is computed by applying the percentage of federal participation in the cost of the sponsored project to the sales proceeds. Per the UG, the awarding agency may permit the non-Federal entity to deduct and retain from the Federal share, $500 or 10% of the proceeds, whichever is less, for selling and handling expenses. The chart on the following page shows a sample calculation of federal compensation:


Line Item Percent Amount
Federal contribution 95% $95,000
University contribution 5% $5,000
Total cost of project 100% $100,000
Acquisition cost of supplies   $6,000
Proceeds from sale   $5,500
Federal compensation Proceeds w/95% federal participation rate applied $5,225
  Less selling and handling ($500)
Total federal compensation   $4,725


Upon completion of a grant or cooperative agreement, when the total value is $5,000 or less, the University may retain the property without further accountability to the federal government (unless specifically restricted by the grant or cooperative agreement). The University may dispose of the property only if it has been determined the property cannot be used by the unit or any other University unit.  Refer to Property Accounting Office for proper disposition procedures.

I found issues with my equipment account codes, can I make adjustments in period 14?

It is recommended that funds and account codes are reviewed on a monthly basis to encourage timely adjustments.  Expense adjustments during period 14 are discouraged.  Depending on the account code change, manual F & A adjustments may need to occur.

Can I purchase a piece of equipment on multiple sponsored project? 

Yes.  Equipment titled to the University may be purchased on split funding.  Allowable sources may be Federal and Non-Federal Sponsored funds and other University funds.  If multiple sources are used, proper cost allocation and justification should be documented for each project.

How do I know where title vests? 

Title to sponsor funded equipment generally vest with the University, however, sponsor policy or terms and conditions of the award may state that title vests with the sponsor.  Review your award documents to determine ownership.

May I dispose of Government-owned equipment that is no longer useful, idle or requires significant repair that is cost prohibitive?  

Government-owned equipment that is:

Idle - it has been determined the equipment is in excess of need; the equipment may be considered scrap or salvage

In instances when a significant amount of scrap or salvage material is accumulated under a government grant or contract, the unit should contact SPA.  SPA will reach out to sponsor for disposition instructions.  If permitted, such material is disposed of in accordance with the University's established procedures, and an appropriate credit, if any, given the contract or grant.

Unusable - the equipment has become worn or damaged beyond economical repair

The unit should contact SPA.   SPA will contact Sponsor for disposition instructions. Once instructions are received, the unit should work with property accounting for the University’s protocols in moving or destroying item and proper recording in accounting system. Please refer to Equipment Disposal Methods for additional information

What should I consider if my PI would like to trade-in a piece of sponsored equipment to purchase a new item?

If you are trading the equipment in to be used on the same project, per UG when acquiring replacement equipment, the non-Federal entity may use the equipment to be replaced as a trade-in or sell the property and use the proceeds to offset the cost of the replacement property subject to the approval of the sponsoring agency.

If you are trading in equipment purchased on one sponsored project to obtain equipment that will be used on different project or funded by another agency, please contact SPA for assistance with guidance on next steps.

A special laptop has been purchased for $3,000, however, it's useful life is greater than 1 year. How do I classify this device?

A computing device is a supply if the acquisition cost is less than the lesser of the capitalization level established by the non-Federal entity for financial statement purposes or $5,000, regardless of the length of it's useful life. The device is not considered equipment for Federal purposes; however, per University policy, the laptop is a controlled item that should be coded as an expense in the 127* account code range and recorded in Banner Fixed Asset for appropriate inventory tracking.

I need to purchase a warranty for a piece of equipment. Is a warranty an allowable expenditure?

Allowability of a warranty will be determined on a case-by-case basis. Equipment warranties on a sponsored project may be allowable if the pieces of equipment were purchased on the same project, the equipment is specifically mentioned in the scope of work and budget/budget justification, and/or other documentation can support the essential nature of the equipment for the project. Allocability should be determined in a manner appropriate for the relative benefit to the project (i.e., usage) and prorated to coincide with the award period. This charge may not be allowed by some sponsors per the terms and conditions of specific awards.


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