Office of Sponsored Programs - 500.08 - Capitalized Equipment


Office of Sponsored Programs - 500.08 - Capitalized Equipment


The University offers this operating standard to provide clarification and guidance as to University practices regarding expenditure inquiries regarding equipment, in conjunction with Federal regulations governing allowability and allocability.

Policy Statement

The Office of Sponsored Programs (OSP) is responsible for establishing and maintaining accountability for capitalized equipment acquired under research grants, contracts, and subrecipient agreements in accordance with sponsoring agency directives, Federal guidelines defined in 2 CFR §200 Subpart E, 2 CFR §200.313, and University policy.

Equipment purchases are required to meet criteria for effective utilization as defined by the sponsoring agency, to prevent cost disallowances or exceptions by auditors. Also, to be considered "effectively utilized," purchases of authorized equipment must be made well in advance of the end date of the project period.

I. Principal Investigators' Responsibilities

Principal Investigators (PIs) are required to coordinate with the sponsoring agency, OSP, and Asset Management in obtaining, controlling, and managing equipment for their research projects.

The PI is also responsible for:

  • Ensuring the equipment is in good condition and as ordered upon receipt
  • Reporting discrepancies or damages to Procurement Services
  • Maintaining physical control of all equipment acquired
  • Safeguarding equipment against loss, damage, or unauthorized use
  • Notifying Asset Management of major changes in the location of equipment
  • Instructing subrecipients of compliance and requirements regarding equipment

II. Department Administrators' Responsibilities

Department Administrators are required to ensure that appropriate expense account codes are used to record the purchase of equipment. This allows for accurate application of indirect costs to the expense.

Department Administrators should also ensure that the equipment purchase complies with UNC Policy 601 – University of North Carolina at Chapel Hill Policy on Capital Assets, when applicable.

If the equipment purchase is allocated between multiple funding sources, the allocation method and calculation must be documented in accordance with 2 CFR 200.405. Adequate and appropriate justification must be provided to support the purchase.

III. Specialized/Fabricated Equipment

Requests to build or fabricate research-specific equipment must have been previously identified in the proposal budget. Additionally, justification for the request, along with sufficient documentation to identify the costs of individual components that make the capitalized functional piece of equipment, is required.

Costs associated with the fabrication process are incurred in a sub-Project ID established to capture them as direct costs. Upon completion of the fabrication, a description of the equipment is provided to Asset Management to provide for tagging and inclusion in the University's capitalization program.

While individual components composing a piece of fabricated equipment may cost less than $5,000, the finished piece as a whole is often worth more than the $5,000 capitalization threshold defining capitalized equipment, which is allowable as a direct cost. Therefore, all costs associated with the fabrication process must be transferred to the prime Project ID and coded as equipment within 30 days, or risk the possibility of component items valued below the $5,000 threshold being allocated as Indirect or Facilities and Administrative (F&A) costs.

Related Requirements

Unit Policies, Standards, & Procedures

Contact Information

For questions regarding this operating standard and its related procedure, please contact

For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Projects Specialist (SPS).

For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant. OSP Staff assignments are found in RAMSeS or on the OSP website.


History Table
Date Description
07/01/2022 Revised to reflect new office name.
12/18/2020 Revised to incorporate responsibilities for the department administrator.
05/15/2018 Revised to coincide with the release of the new OSP Website.

The operating standards in the Office of Sponsored Programs Operating Standards & Procedures Manual supersede any OSP operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.

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Article ID: 132312
Thu 4/8/21 9:28 PM
Fri 1/19/24 12:03 PM
Effective Date
If the date on which this document became/becomes enforceable differs from the Origination or Last Revision, this attribute reflects the date on which it is/was enforcable.
07/01/2022 12:00 AM
Issuing Officer
Name of the document Issuing Officer. This is the individual whose organizational authority covers the policy scope and who is primarily responsible for the policy.
Issuing Officer Title
Title of the person who is primarily responsible for issuing this policy.
Vice Chancellor
Last Review
Date on which the most recent document review was completed.
01/19/2024 12:00 AM
Last Revised
Date on which the most recent changes to this document were approved.
07/01/2022 12:00 AM
Next Review
Date on which the next document review is due.
01/19/2025 12:00 AM
Date on which the original version of this document was first made official.
07/01/2008 12:00 AM
Responsible Unit
School, Department, or other organizational unit issuing this document.
Research-Office of Sponsored Programs