Federal Government Procedures Manual

(Revised- February 2026)

I. Purpose

A.

To establish general procedures for the management and control of Government Owned/Titled property (GP) in the custody of the Pennsylvania State University (hereinafter referred to as the “University” or “Penn State”).

The Property Manual contains policies and procedures regarding the acquisition, maintenance, reporting and disposition of Government titled equipment.

B. Definition of Government (GOVT) Owned Property

Government Owned Property is equipment or real property furnished or acquired by purchase on contracts or grants where the Government’s sponsoring agency retains ownership. 

C. Responsibility

Oversight of the management and control of GOVT property has been assigned to The Office of Budget and Finance (OB&F), Asset Management Department (hereinafter referred to as AMD).  Each Principal Investigator has the ultimate role in properly utilizing and safeguarding all GP on each of their respected Grants/Contracts. AMD uses the asset module in the System for Integrated Management, Budget, and Accounting (SIMBA) for recording government assets from acquisition to disposition.

AMD is accountable to designated departments, each of which is responsible for the day-to-day management, use, care, maintenance, record-keeping, and disposal of those assets. Shared equipment is accountable to a primary department for purposes of record-keeping.

Note: The Applied Research Lab (ARL) has a property office that supports OB&F.  This office prepares all of ARL’s property reports, with oversight and approval provided by AMD.  ARL has Classified Sponsors and ARL cleared Asset Management Specialist, who submits all required Property Reports.

II. Furnished or Acquired

A. Introduction

The University receives GOVT equipment through two methods:

  1. GOVT Furnished Property (GFE) or (GFP) – Property in the University’s custody that has been made available for use by a government agency.

  2. Contractor Acquired Property (CAP) – Property that is procured by the University’s procurement service offices or by departmental purchasing cards and the Government retains title.

CAP is defined in two ways:

  1. Non-deliverable Contractor-Acquired Property– Items not specified as contract deliverables that are bought on contract via university procurement methods.

  2. Deliverable Contractor-Acquired Property – Items that are specified as contract deliverables and will be shipped to the Sponsor before or at conclusion of the award.  These acquisitions are not recorded in the SIMBA fixed asset (FA) property module.  Expenditures are tracked using various general ledger numbers, internal orders, and work break down structure elements (WBSE) and can be reported on as needed. 

B. Preacquisition Screening

The University has policies and procedures for federally funded capital property preacquisition screening certification. See Federally-Funded Capital Equipment Preacquisition Screening Certification. See Procedure CR2055.

C. Acquisition of Non-Deliverable Property (CAP)

  1. Equipment may be purchased by the Office of Physical Plant (OPP) while building or renovating structures. When this project is billed to the appropriate budget, an OPP Billing Statement is produced. AMD personnel analyze these statements for capital expenditures. Equipment items identified are tagged and recorded in the SIMBA FA module.

  2. All CAP purchasing requisitions are reviewed by designated personnel in AMD for review and approval if item(s) meet the definition of equipment per 2 CFR 200.33 or FAR 52.245-1. After purchasing requisition approval, AMD personnel will be notified to follow up with tagging and obtaining additional information regarding the equipment purchased:

    • Most procurements are made in SAP Ariba (“PSUbuy”, the University’s procurement module). The system has a Workflow that automatically notifies AMD via email that a Purchasing Requisition (PR) needs reviewed and approved.

    • ARL PR’s are reviewed by the Manager or Assistant Manager in AMD.

    • The department issuing the requisition is responsible for ensuring that the Grant or Contract has approval language to procure; if not, a request to purchase will be sent to the Procurement Contracting Officer (PCO) or Administrative Contracting Officer (ACO).

  3. The financial records of the University include equipment administration data in the Federal Administrative Contracting Officer (FACO) field in the SIMBA “Grant Information” tile. See FACO Codes.

  4. Receipt – The University uses “Receipt and Issue” system to receive and issue CAP in lieu of a Material Requirements Planning system. The University’s financial records are maintained with appropriate “Goods Receipt” requirements to locate items.

  5. See University procedure FN 2019 for more detail.

D. Leases

CAP with GOVT retaining title will be analyzed using FASB Accounting Standards Codification (ASC) 840-10-25-1 to determine if the lease will be reported as an Operating or Finance lease.

E. Fabricated Equipment

A department, except ARL, wishing to fabricate capital equipment must first request a Penn State unique Fabrication number from AMD, using a Fabrication Equipment Questionnaire (FEQ). AMD will review the request verifying that equipment can be purchased on a specified Grant/Contract and will provide approval. A unique 37 Internal Order is then used to track applicable expenses.

ARL approves FEQ’s at the proposal stage and then utilizes a specific Work Breakdown Structure Element (WBSE) when an agreement has been awarded to track the applicable expenses. ARL requires additional management approvals. The University’s colleges require the PI and AMD delegate to approve the FEQ.

As with other acquired equipment, a unique bar code label with a readable tag number is assigned to the fabricated item and is physically placed on the equipment, when possible, for identification. 

See University procedure CR2020 for more detail.

F. Tagging or Identification

All GFP and GP titled non-deliverable CAP, regardless of value, is assigned a SIMBA asset number or sub number and physical inventory tag number. All CAP items are also assigned a SIMBA Asset number and inventory tag number according to the dollar value listed in the contract/grant. In most instances where the government is retaining title, this amount is $5,000 or greater with a one-year useful life.

The Office of Sponsored Programs (OSP) will notify AMD if the tagging threshold is different. AMD will forward this information to the respective administrative area’s Strategic Finance Partner (SFP) to notify them of the amended dollar threshold and that purchases from this contract/grant must be appropriately coded.

The SIMBA virtual asset number becomes the control number in the property financial system. When possible, a permanent physical tag, with a unique number is physically attached to the equipment for identification. Equipment that cannot be tagged (such as radioactive equipment, high temperature, magnetic, etc.) will only have a SIMBA identification number.

  1. Currently, there are two types of physical tags used by AMD for tagging GOVT owned equipment and one for GOVT owned Material. See Equipment Tag Examples.

    • Government Furnished Equipment Tag: A red and white tag with a black bar code and number is used for US Government owned equipment. The words, “PENN STATE-GOV’T” are printed on the tag in black within the red area of the tag. In addition to this tag, a red and white tag without a black bar code and number is available for use on accessory items needing identified as Government Owned.

Each SIMBA grant number is assigned to a business area (BA) which denotes the area of responsibility. Asset Management Specialist’s tagging responsibilities are assigned by business area, so departments are familiar with the same specialist on a consistent basis.

 Physical tag number sequence is eight numerical bytes and affixed to the tangible item. 

Virtual SIMBA Sub numbers are used to track:

  • Cost On – multiple funds used to purchase item

  • Upgrade – the main item was upgraded

  • Accessory – items that add value, usually purchased to aid in the usage of the item

Equipment located at ARL buildings is tagged and physically inventoried by ARL Asset Management Specialists, due to security requirements and/or location sites being off campus.

It is the responsibility of the Custodian/Principal Investigator (PI) to notify AMD when GFP is received. The PI should also forward all pertinent documentation including any GOVERNMENT shipping documents.

Department of Defense awards require either a DD 250 form (when End Item Deliverables (EID's) are built and are shipped to the sponsor at the conclusion of the award) or a WAWF RR to be completed, whichever is required per the contract. EID requirements can be found in sections E and F of a contract. NAVSEA awards require a Certification of Acceptance (COA) to be sent via email.

G. Government Property Maintenance Program

Government property shall be maintained in accordance with the manufacturer’s specifications for equipment. The Custodian or delegate, for whom the equipment is accountable, is responsible for keeping the maintenance history records for the equipment.

Preventative maintenance (PM) for real property will be tracked and maintained by the Office of Physical Plant, Engineering Services at the Applied Research Laboratory, Auxiliary & Business Services and by each Commonwealth Campus facility personnel.

  • Major repair or improvements to existing Government property can’t occur until the Administrative Contracting Officer’s approval has been received in writing.

Custodian Responsibilities: Equipment PM shall be performed in accordance with the following guidelines:

  • Identify those items requiring PM and inform property management whether PM is required or not

  • Know the manufacturer’s maintenance recommendations or requirements and have available documentation on the requirements for review during annual property inventory and government audits

  • If manufacturer’s maintenance recommendations or requirements are not known or available, document custodian determined maintenance requirements

  • For PSU fabricated property, document required maintenance, as appropriate

  • Perform PM and maintain the PSU Maintenance Log for each item requiring PM using the recommended University maintenance log

  • Disclose and report to property management the need for replacement and/or capital rehabilitation

Property Management Responsibilities: PM Shall be recorded in SIMBA in accordance with the following guidelines:

  • Document items requiring PM as provided by the Custodian by indicating “Yes” in the SIMBA Fixed Asset (FA) module in the PM required field

  • Review items needing PM annually and ensure each item’s maintenance log is being completed. Maintenance logs may be attached to the SIMBA FA module

  • Periodic spot checks of Government titled items to ensure the maintenance designation is accurate

  • Validate the existence of the completed PSU Maintenance Log and document in the SIMBA FA Module:

    • Last Validation: (date)
      Validated by: (user id)

III. Equipment Records

A. Computer Database

Equipment records are kept and maintained by AMD and ARL asset management specialists on a Penn State computerized database (SAP/SIMBA Fixed Asset Module). The system maintains a history of all changes made to a property record.

The SIMBA asset number is the control for the database. However, information can be searched by various other elements such as physical tag number, manufacturer name, building number, item description, etc.

Ad hoc reports can also be run against the database to generate listings in other formats as needed. The main SIMBA tile for these Ad hoc reports is “Asset Grant Report.”

GOVT Property records are also maintained in the Federal Procurement Integrated Enterprise Environment (PIEE) system. This system has a GFP Module for property records and various other modules to obtain Grant or Contract information.

B. Ownership and Location Source Data

Much of the information used to update the database comes from transfer forms. These forms are sent to AMD any time equipment is transferred from one University location to another University location for longer than 30 days. This is the same form used for University Owned equipment disposals. The electronic form can be found using the SIMBA Asset Transfer & Retirement Form tile.

Transfer of funding accounts on GOVT owned CAP, if allowed, can only be accomplished by also using the SIMBA Asset Transfer & Retirement Form tile.

At the end of each physical inventory, any changes discovered are updated on the database. These changes may involve room numbers, building numbers, custodians, etc.

C. Transfers

Transfers – GOVT owned equipment cannot be Transferred or Loaned to another University, entity or subcontractor or received by The Pennsylvania State University without prior written approval from the Government’s Procurement Contracting Officer (PCO) or Administrative Contracting Officer (ACO). A copy of all correspondence should be forwarded to the delegated Administrative Contracting Officer (ACO). Transfer requests are handled by the University’s Research Administration Personnel (RAP). ARL submits their requests directly to the applicable PCO or ACO with a copy to the Manager of AMD. Equipment should not leave the University until approval has been received from the PCO or ACO. AMD should be notified after receipt of the PCO or ACO approval, at which time the equipment can be shipped to the new University, entity, or subcontractor. DoD transfers are submitted using the PIEE system.

D. Custodians/Principal Investigators (PI)

The person who uses a particular piece of equipment is named the Custodian/PI on the database for that item. The Custodian /PI is verified/updated during physical inventory or when notified by the business area representative.

AMD also receives a monthly listing from SIMBA of personnel who have ended their employment with the University. The listing is compared with the equipment database. If items of equipment are assigned to an individual on the list, the business area is notified and asked to inform AMD as soon as a new equipment custodian is identified. AMD then updates the database.

Custodians are normally the person responsible for verifying the receipt of the purchase, the safe storage and use of the equipment, as well as making sure the item is being used and maintained properly.

E. Equipment Condition

There are two fields on the screen for condition code and appear on listings as COND. Condition Code 1 and 2 are both one-byte fields. Both are alphanumeric fields. See below. Most of the categories are self-explanatory:

  • 10 – New

  • 11 – New Reconditioned

  • 20 – Used excellent

  • 21 – Used Fair

  • 22 – Usable repairs required

  • 23 – Usable for Parts

  • 30 – Usable not being Used

Most of these condition codes can be used for CAP equipment. GFE received by the University are normally listed as Condition Code 21, Used Fair. The GOVT Disposal Condition Codes are used only by AMD when requesting disposition instructions through PIEE.

F. Subcontractor

Equipment items procured with GOVT title by the subcontractor are controlled by the subcontractor and submitted to the RAP upon request or at award close. The RAP submits this information to AMD. Approval should be obtained from responsible GOVT PCO/ACO prior to sending GFE and CAP to Subcontractors or by having appropriate language written in the award. Appropriate shipping documents are to be prepared to reflect the movement.

G. Disposals

AMD requests disposition instructions from the delegated PCO or their delegated ACO. The Custodian/PI sends a request to AMD requesting disposition by using Final Inventory Form, an internal form that details each equipment item using the Government’s Disposal Condition Codes. AMD will notify the Custodian/PI and the RAP when instructions are received. ONR awards must follow DoD PIEE reporting requirements.

H. Storage

While awaiting disposition instructions, Custodians are to store Federal government equipment separately from all other equipment per FAR 52.245-1(f)(vii)(b) and at the direction of the ACO.

IV. Physical Inventories

A. Purpose

Physical inventories are taken by AMD personnel to verify all pertinent equipment information such as location, serial and model numbers, custodians, etc. Inventories are also taken to verify the existence and use of equipment that is on the SIMBA equipment database. Due to the nature of movable assets, a physical check is needed to keep track of equipment and to verify that procedures are being followed.

At the Commonwealth Colleges and Campuses and Research areas not located near University Park, the physical inventory is completed by a designated employee located in that area. ARL Asset Management Specialist employees conduct their own inventories due to the classified/secure nature of these sites. Consistent with AMD processes, ARL employees located at University Park can utilize tablet readers or prepared listings. Commonwealth campus employees use prepared listings and tablet readers provided by AMD to conduct their inventories.

B. Frequency

A physical inventory is taken every two years of all Government Owned Equipment. Physical inventories can be more frequent based on specific contractual language per Sponsor.

C. Method

  1. A memo and a Pre-Inventory listing are sent to the Custodian/PI or with a copy of the memo only to the SFP or Facility Coordinator (FC) of the business area or college that is associated with the item approximately two weeks prior to the date the inventory is scheduled to begin. Departmental Contacts are encouraged to help AMD personnel locate the GOVT owned item(s).

  2. One week prior to the inventory, AMD personnel begin to contact by phone or email, the Custodian/PI/FC to set up an appointment to see the equipment item(s).

  3. AMD will visit the area to be inventoried and check all items against the listing. If an item is already tagged, the information on the listing is verified for accuracy. Any incorrect information is noted, and any missing data is added. AMD personnel will ask if the equipment is: not being used, broken, scrap, etc. If the Custodian/PI informs them of one of the mentioned scenarios, AMD will seek disposition instructions from the sponsor.

  4. Items not located will be noted and, at the end of the physical inventory, AMD will contact the Custodian/PI asking for an explanation. AMD will then request relief of accountability from the delegated PCO/ACO providing the explanation given and the Lost, Damaged, Destroyed, Theft (LDDT) report. Copies of this correspondence will also be provided to the department head and the RAP of the area involved.

D. Utilization of Property per FAR 52.245-1(f)(1)(viii)

While conducting the physical inventory, each principal investigator or custodian is requested to provide verbal communication that the item(s) are needed and/or are being used as authorized under the appropriate Grant/Contract/or other. Property no longer required will be reported to the sponsor’s administration in a timely fashion.

The SIMBA equipment record will be annotated with either a Yes or No in the “Utilization” field.

Yes is defined as, “Will be used in the next year”

No is defined as, “Will not be used in the next year”

V. Reports

A. Financial

Final Property Close-Out Reports are required by several agencies such as ONR, NASA and DOE. It is extremely important that Penn State closes programs in a timely manner. Delinquencies call into question the effectiveness of the University’s property control system. Penn State through AMD identifies contracts/grants that are closing through various agency websites that are made available to them by the Office of Sponsored Programs (OSP) and ONR. Also, SIMBA generates a listing of awards that will be expiring. Each PI receives an email, with a copy sent to the University’s central AMD. These reports identify contracts/grants that are closing within the next 60-day period. The Final Property Report is due to the respective ACO 90 days after the contract end date.

Annual Property Reports as of September 30 are due to the awarding agency or delegated ACO by October 15 or 31 if contractually required. Examples of such a report are NASA NF 1018 and SF 428.

Other sponsors requesting reports, either Government or Industrial, send a request to OSP requesting a Final Property Close-Out Report. OSP forwards these requests to Property Inventory for completion.

PSU compliance with the FAR 52.245-1, Alternate II, requirement: 
“The Contractor shall furnish the Contracting Officer a list of all property to which title is vested in the Contractor under this paragraph within 10 days following the end of the calendar quarter during which it was received.”

Penn State’s central AMD, with the support of the Applied Research Laboratory accounting office, submits this required report to the cognizant Federal ACO in a timely manner via an MS Excel Spreadsheet.

B. Department Listings

Many departments request listings of the equipment assigned to them. Our current computer system, SIMBA, allows such listings to be generated utilizing the Asset Grant Report tile. AMD can provide many requested listings to the departments electronically. Additionally, departments may view browse screens within SIMBA, using SIMBA tile “Display Asset” or create their own reports using the “Asset Grant Report” tile.

C. Subcontracts

Subcontracts will have the appropriate terms and conditions placed on their sub-award to comply with the base contract/grant. Subcontractors will be required to send detailed property reports upon request, annually and at the end of the award.

The University guideline for subrecipient monitoring is outlined in RAG80.

ARL’s contract department ensures that final property reports are received for their awards.

“The Office of Sponsored Programs (OSP) manages subawards for all business areas outside of College of Medicine and the Applied Research Lab. If the final invoice indicates that equipment was acquired by the subrecipient, and the subaward includes a requirement to prepare a final property report, OSP will insist upon receiving a copy of that final property report prior to releasing final payment.

In situations where the subcontractors are not reporting to the University in a timely manner, we have been instructed by our current ACO to email the subcontractor’s representative with copies to our ACO and PLCO (Plant Contracting Officer).

D. Property Closeout Process

AMD is responsible for monitoring awards and notifying Principal Investigators or department personnel of their property closeout responsibilities. The Principal Investigator is required to review and sign the “Property Closeout Certification Form.” After receiving directions from the department or Principal Investigator, the following will occur:

  1. If there is accountable property remaining on award:

    • Disposition requests will be sent to sponsors by AMD

    • Transfer requests will be sent from the department’s contracts office with a copy going to AMD, non-DoD. For ONR awards, those will be sent to the DoD PIEE system, using the DSM module.

    • Final sponsor forms will be completed by AMD or ARL

    • AMD will review all forms for accuracy and sign off

    • Forms will be submitted to sponsors by AMD or ARL for classified awards

    • Official University and Sponsor databases (IUID Registry or GFP Module) will be updated by AMD and/or ARL Asset Specialists

VI. Property Audits

Property management systems, policies, and processes are routinely reviewed and audited to determine whether performance standards and acceptable levels of compliance are being met. 

Audits provide a systemic check or assessment, review, and evaluation of PSU’s property control system. Results serve as a basis to confirm effectiveness and identify areas for potential improvement and risk management. The key to an acceptable property management system and a successful audit is timely, verifiable, accurate, and complete record keeping that complies with all established policies, procedures, and standards.

Satisfactory audit results are critical. Compliance with University and Sponsor requirements help ensure ongoing availability of property and maximize the benefits and support to university instruction, research, and administration. Departments are responsible for facilitating ongoing property awareness and enabling compliance with established policies and procedures.

A. Key Policy Statements

  1. AMD is the primary liaison for property related audits.

  2. Departments are responsible for facilitating ongoing property awareness and enabling compliance with established policies and procedures.

  3. Departments should notify AMD if they are directly contacted by an external auditor for a property related audit.

  4. Departments are responsible for providing and maintaining documentation as necessary for audit support.

  5. A Department Property Contact (DPC) should attend all relevant ongoing training to remain aware of property compliance requirements.

B. Auditing Organizations

Various organizations, both internal and external, perform or participate in the performance of property audits at Penn State. These include but are not limited to:

  1. PSU’s Office of Internal Audit (OOIA)

  2. Office of Naval Research (ONR)

  3. Defense Contract Audit Agency (DCAA)

  4. Defense Contract Management Agency, Special Programs (DCMAS) – Classified awards

  5. Plante Moran, Penn State’s independent auditor

    • Financial

    • Single Audit

  6. Penn State Self-Assessment (normally conducted by OOIA, ARL and AMD personnel)

AMD assumes the role of primary liaison between the University and the departments for property-related audits. If an outside agency contacts DPC or other department personnel directly regarding an audit, refer the auditor to AMD. When audits are scheduled, AMD will give as much advance notification to the departments as possible. The DPC should be actively involved and may be requested to participate as an escort. They must be able to locate and identify property as requested by auditors and provide supporting documentation upon request. If the DPC cannot provide these services, it is important that they inform the audit liaison of someone that can, such as the Property Custodian.

C. External Audits

The government and Penn State’s independent auditor, Plante Moran, conduct broad, procedural audits on a regular basis. These audits may be property-specific or include property-related transactions as part of other system audits.

The ONR is delegated administrative and contractual oversight for most federal awards received by PSU. They are the primary external auditing agency which conducts the Property Management Systems Analysis (PMSA) and Contractor Purchasing System Review (CPSR) reviews on behalf of the government at PSU. In addition, there may be other sponsors, such as Department of Energy (DoE) and National Institute of Health (NIH), which also conduct property audits. The DCAA also performs audits involving property management. Plante Moran is responsible for the single audits per OMB uniform guidance.

The purpose of these audits is to determine whether the policies and procedures which reflect government, other sponsor, and PSU requirements are documented and established standards are met. Successful completion of these audits is critical to ensure appropriate systems controls are in place to mitigate financial or compliance risk as well as continued approval of PSU’s property management system.

D. Internal Audit By PSU/Self-Assessment

As a proactive measure, Penn State’s OOIA is responsible for conducting audits to ensure system-wide database integrity and training efficacy as well as to confirm that detailed transactions are accurate and timely. OOIA, from an institutional compliance perspective, ensures that laws, regulations and contractual requirements are being met at all levels within the University.

AMD and ARL may periodically conduct self-assessments. Self-assessments are necessary to determine whether AMD and the departments meet established standards for management of property; results are provided as part of the supporting documentation requested by external auditors.

E. Property Audit Scope

Property management audits cover business processes associated with all the facets of the asset life cycle. The scope and audit methodology are determined by the auditing team and is dependent on the purpose for which the audit is being performed. Within the scope of an audit, compliance with any or all the following areas may be examined:

  1. Property management policies and procedures

  2. Property awareness and compliance with procedures and standards

  3. Pre-purchase screening and approvals

  4. Acquisition and procurement practices

  5. Receiving and identification

  6. Record completeness, accuracy, and timeliness

  7. Subcontract management

  8. Physical inventory

  9. Utilization of property

  10. Property reports

  11. Excess property disposal process

  12. Award closeout

  13. Availability and completeness of supporting documentation and records retention

  14. Other facets of property management (i.e. maintenance of equipment and subcontractor property control, system, Item Unique Identification, and property security)

F. Audit Results

Throughout an audit, close interaction should occur between the auditor(s) and the designated Penn State liaison. Audit results should be provided in writing and include a detailed report on the audit activity.

OOIA audit activities are coordinated directly with department management, usually with a courtesy copy to the AMD. OOIA also provides copies to AMD of audit results and requests for implementation of corrective actions that are related to property.

Audit findings and recommendations may require changes in policies and procedures or departmental practices. Responses are prepared by AMD. A copy is provided to the OOIA. Creation and oversight of corrective action plans, where needed, are the responsibility of AMD. Departments having audit findings are notified and participation by key personnel is required to ensure identification and implementation of corrective actions.

Key personnel and their supervisors are informed of general changes via Property Forums; Email notifications and information posted on the AMD Website.

G. Record Retention

It is important that physical or electronic copies of essential property documents are saved and readily available to support audits and self-assessment or other types of reviews.

H. Audit Impact

Satisfactory audit results are critical. Compliance with University and Sponsor requirements facilitate the ongoing availability of assets for instruction, research, and administration. Effective property controls and management processes help ensure that new proposals and on-going research continue unimpeded, and that the potential liability associated with risk of loss is minimized.

Reference Policies and Procedures