Managing equipment bought with grant funds

Equipment bought with federal funds does not stop being the funder’s concern the day it is delivered. It comes with obligations that outlast the grant itself: a record for every item, a physical inventory on a schedule, and a disposition rule that decides who is owed money when you eventually sell it. None of it is difficult — it is just easy to forget once the purchase is made and the project moves on.

The records you must keep

For each piece of equipment (tangible property with a useful life over a year and a per-unit cost at or above the threshold defined in 2 CFR 200.1), 2 CFR 200.313 requires a property record holding a specific set of fields:

• a description, and a serial or other identification number;
• the source of funding, including the Federal Award Identification Number (FAIN);
• the title holder, the acquisition date, and the cost;
• the percentage of the Federal agency’s contribution toward the original purchase;
• the location, use and condition of the item;
• and, in time, the disposition data — the date of disposal and the sale price.

That federal-contribution percentage is the field people skip, and it is the one that decides the maths later.

A physical inventory every two years

This is the recurring obligation that quietly lapses: a physical inventory of the property must be conducted and reconciled with the records at least once every two years. Actually locating each item and checking it against the record — not just trusting that the spreadsheet is still right. It is a small task that becomes a finding only because nobody put it on a calendar.

Disposition: the $10,000 rule

When equipment is no longer needed for the original project, what happens next turns on its current per-unit fair market value:

• $10,000 or less: you may retain, sell, or otherwise dispose of it with no further responsibility to the Federal agency.
• More than $10,000: the Federal agency is entitled to a share — the percentage of its original contribution, applied to the current market value or the sale proceeds.

Until it is disposed of, equipment can still be put to work: 200.313 lets you use it on other federal awards, first from the agency that funded it and then from other agencies. The thread through all of this — the inventory date, the disposition check, the contribution percentage — is the kind of per-item, time-based obligation Grantwell keeps on the calendar alongside the reporting deadlines, so the two-year count and the eventual disposition are prompts rather than things an auditor finds first.

This guide is general information about how grant compliance work is commonly organised, not legal, audit or accounting advice. Grant rules change, and terms vary by funder and award — always check your own award documents and the current regulation, and talk to your auditor about your specific circumstances.

This guide is general information about how grant compliance work is commonly organised, not legal, audit or accounting advice. Grant rules change, and terms vary by funder and award — always check your own award documents and the current regulation, and talk to your auditor about your specific circumstances.