Anchor: #i1002087

Section 3: Property Management

Anchor: #i1002092

Existing Requirements

OMB Circular A-87, Cost Principles for State and Local Governments, includes federal requirements applicable to the department and the MPO. The MPO is bound to comply with the requirements. They are referenced here in this manual to inform the district of the requirements, not to impose additional or new requirements on the MPOs.

Anchor: #i1002103

Capital Expenditures

OMB Circular A-87 requires approval by the grantor agency before a grantee incurs certain costs. One of these costs is capital expenditures. 49 CFR §18.32 also establishes acquisition, use and disposition requirements for equipment.

Anchor: #i1002115

Equipment Ownership

Title to equipment is vested with the MPO upon acquisition.

Anchor: #i1002127

Allowable Use

Regulations require the MPO must observe the following standards when using the equipment:

  • The equipment is used in the program for as long as needed, whether or not the program continues to be federally funded.
  • The equipment can be used in other federally funded activities when the equipment is no longer needed for the original program.
  • Other federally funded programs can be allowed to use the equipment (paying a user fee) if such use will not interfere with work on the original program.
  • Equipment is not to 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.
  • Equipment may be used as trade-in or it can be sold to offset the cost of replacement property subject to the approval of the federal agency.
Anchor: #i1002162

Records

The regulations further require the MPO to maintain property records that include but are not limited to the following information:

  • description of the property
  • a serial number or other identification number
  • the source of property
  • who holds title
  • acquisition date
  • acquisition cost and amount of federal participation
  • location, use, and condition
  • ultimate disposition date, including the disposal date and sale price.
Anchor: #i1002214

Inventory

This section focuses on MPO equipment inventory requirements.

49 CFR §18.32(d) states:

  1. Property records must be maintained.
  2. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.
  3. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft shall be investigated.

FHWA states that under the Federalism rule, individual states are given the authority on what requirements they want to impose on the MPOs. Thus local government subrecipients of state DOTs must follow the procedures specified by the state DOT.

Since FHWA gives the states the authority to decide on what rules and requirements to impose on the MPOs, it is up to the department to define inventory requirements. Having oversight of the metropolitan planning program, the department is fiscally responsible for inventory of equipment and property purchased by the MPOs with federal funds. Therefore, the MPO equipment inventory should not only include capital equipment >$5,000, but should also cover controlled assets (starting at a certain amount), as described in the TxDOT Property Management Manual and be consistent with TxDOT procedures.

The TxDOT Property Management Manual states:

  • Personal property is any possession of the State of Texas having sufficient value to warrant inclusion in the fixed asset portion of any official statement(s) of financial condition, or any possession of the State of Texas that, due to the nature of the asset, is required to have management controls placed upon it. [....]
  • Controlled assets are items that qualify as personal property, but do not meet the capitalization threshold of $5,000, but must be secured and tracked due to the nature of the items. Current controlled inventory assets are as follows: [...] microcomputers regardless of cost; items valued from $500 to $4,999.99 in the following groups: printers, personal data assistants (with PJS code), and cameras, video or television equipment.

Equipment is defined in federal regulations, 49 CFR §18.3 as follows: “Equipment means tangible, nonexpendable, personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. A grantee may use its own definition of equipment provided that such definition would at least include all equipment defined above.”

In order to better define and document operating policies and procedures concerning MPO equipment inventory, as well as to provide clearly written and communicable instructions, the department will develop a consensus policy regarding what equipment should be included in an inventory. This consensus effort will result in creation of a check-off list for the districts to ensure that they have addressed all inventory requirements.

During the consensus process, consideration will also be given to whether an independently conducted inventory obtained by the MPO is acceptable in lieu of the department performing the equipment inventory to avoid duplication of efforts.

Anchor: #i1002289

Additional Standards

The regulations also require the MPO to observe the following standards in its property management system as per 49 CFR §18.32:

  • Develop a control system that includes adequate safeguards to prevent loss, damage, or theft of property, and provides for the investigation of any loss, damage, or theft.
  • Use adequate maintenance procedures to keep the property in good condition.
  • Use proper sales procedures to ensure the highest possible return if property must be sold.
Anchor: #i1002317

Disposition

When equipment has exceeded its useful life or is no longer needed for the original program or for other activities, the regulations allow disposition in accordance with the following procedures:

  • If current per-unit fair market value is less than $5,000, it may be retained, sold, or otherwise disposed of with no further obligation to the federal agency.
  • If current per-unit fair market value is more than $5,000, it may be retained or sold, and the federal agency shall have a right to an amount calculated by multiplying the current market value or proceeds from the sale by the federal agency’s share of the acquisition cost of the equipment.

If the MPO fails to take appropriate disposition actions, the federal agency may direct TxDOT or MPO to take final disposition action, including remittance of proceeds of sale, assignment of equipment to another federal project, etc.

Previous page  Next page   Title page