• We have approved a change to the University's equipment capitalization policy from $500 to $2,500 starting 07/01/05.

• Equipment and supplies cost must be claimed in accordance with capitalization threshold/useful life assumptions reflected in the organization's financial statements.

• Expenditures for equipment exceeding $2,499 must be claimed by use allowance or depreciation procedures, unless that equipment is specifically approved by the awarding agency (or permitted by expanded/supplemental authority granted by an awarding agency) as indirect cost.

• Grant proposal and contract budget submissions must be consistent with equipment capitalization threshold stipulated on the Rate Agreement

• Unamortized amounts will be written-off to benefiting activities over a period of 2 years (07/01/05 - 06/30/07). No further use allowance or depreciation may be claimed on existing equipment valued between $500 and $2,499 on any future indirect cost proposal. The effect of unamortized amounts related to the above assets has already been reflected in the Rate Agreement dated November 10, 2005.

• Raising equipment threshold does not alter accountability responsibilities (including acquisition and safeguarding of supplies).

• Must follow property management standards for equipment covered by new capitalization policy.

• Department will exercise its disposition rights for equipment with a fair market value of $5,000 or more [45 CFR 74.34 (g) and 92.32 (e)].

• Indirect rate* on campus 46%

• Indirect rate* off campus 16%

* Direct salaries and wages including all fringe benefits.