Disposal of Surplus and Obsolete/Unserviceable Equipment Procedure

Document Number000499


Assets:

Contents of this page

1.      PROCESS

1.1.     Identify any surplus, obsolete or unserviceable equipment held in school/portfolio.

1.2.     Determine method of disposal in accordance with categories specified in section 2.

1.3.     Complete Equipment Write-off Form available from Lorraine Alley, Financial Accounting.

1.4.     Have Equipment Write-off form signed by person with appropriate delegation

1.5.     Forward completed form to Finance Officer - Assets, Finance Services-Business Services

1.6.     Follow instructions for disposal as determined by method of disposal.

2.      METHODS OF DISPOSAL

Disposal of equipment and furniture may be arranged by the following methods:

  • Internal Transfer
  • External Transfer
  • Sale by Internal Tender
  • Sale by Public Tender
  • Sale by Public Auction
  • Sale to Auctioneers
  • Sale at a Negotiated Price
  • Destruction/Dumping
  • Any other method approved by the Executive Executive Director, Business Services

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2.1.     Internal Transfer

2.1.1.       Transfer of equipment from one University School/portfolio to another may be arranged by agreement between Heads of School/portfolios within the same Faculty. The approval of the relevant Faculty Manager is required for Internal Transfers to another Faculty within the University.

2.1.2.       Internal transfers may be agreed on a "no cost" basis or at a negotiated price. An Equipment Write-off form must be forwarded to the Finance Services-Business Services to record the internal transfer of equipment valued in excess of $5000 so that assets can be traced for stocktake and accounting purposes. The equipment/asset number must be noted on the write-off form. Contact details of the receiving school/portfolio should also be noted.

2.1.3.       Equipment may be transferred in accordance with approved agreement.

2.2.     External Transfer

2.2.1.       Requests to transfer equipment to other institutions must be made in writing, signed by the Head of School/portfolio, endorsed by the Faculty Manager and submitted to the Deputy Vice-Chancellor for approval. The following details are required with each request:

  • Description of each item
  • Equipment Number of each item
  • Original Purchase Price
  • Account Code for Original Purchase
  • Suggested transfer price

2.2.2.       Requests to transfer equipment to other institutions will be considered on the basis of the following guidelines:

  • in accordance with the terms of the grant where equipment was purchased using external funds
  • the on-going equipment requirements of University Faculties and School/portfolios
  • whether some reimbursement may be required from the other institution.

2.2.3.       If a transfer is approved by the Deputy Vice-Chancellor an Equipment Write-off form is to be prepared and forwarded to the Finance Services-Business Services together with a copy of the approval.

2.2.4.       Equipment can be transferred in accordance with Deputy Vice-Chancellor's approval.

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2.3.     Sale by Internal Tender

2.3.1.       Where it is considered that the items being disposed by one school/portfolio may be useful to other school/portfolios in the University (ie. photocopiers, computers, etc) an internal tender process may be organised by Financial Accounting. Heads of School/portfolios will be notified via email of the availability of such items and invited to tender for them.

2.3.2.       A reserve price will be placed on all items listed for sale by internal tender. This price will be arrived at by consultation between the disposing school/portfolio, Financial Accounting and Supply & Payments staff.

2.3.3.       Items to be disposed of by tender must be maintained in the disposing school/portfolio, in working order, so that interested purchases can view them.

2.3.4.       Internal tenders will have a duration of 2 weeks.

2.3.5.       Successful tenderers will be notified in writing by Finance Services-Business Services staff and equipment can be transferred once a journal entry has been processed to record the transaction.

2.3.6.       Any items which do not reach the reserve price, or in which there is no internal interest, will be put up for external tender.

2.3.7.       Staff members will not be allowed to tender for goods for their own private use through this internal tender process.

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2.4.     Sale by External Tender

2.4.1.       Where it is considered that there would be minimal interest from school/portfolios within the University, Finance Services-Business Services staff will arrange for the item(s) to be publicly advertised for sale by tender. This process may be solely through the "WHAT'S ON CAMPUS LIFE" or extended to the Newcastle Herald. The disposing school/portfolio has discretion over this decision.

2.4.2.       The advertisement will include the following details: a clause that items are to be sold in "as is condition with all faults" and will be at the buyer's risk; a clause that the University reserves the right to reject any or all tenders; a closing time for tenders and a place for lodgement of tenders.

2.4.3.       Items to be disposed of by tender must be maintained in the disposing school/portfolio, in working order, so that interested purchasers can view them.

2.4.4.       The tenders are to be opened by two officers, date stamped and initialled by the opening officers. A summary of the tenders will be prepared and initialled by the opening officers, and referred to the Head of the disposing school/portfolio for recommendation.

2.4.5.       The tender which is the most beneficial to the University is to be accepted, provided it is considered to be reasonable.

2.4.6.       The successful tenderer is to be notified in writing, accompanied by an official University invoice. Payment is to be made to the University Cashier by cash or bank, credit union or building society cheque within fourteen days and prior to collection of the goods. The University's official receipt will be the buyer's authority to collect the goods.

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2.5.     Sale by Public Auction

2.5.1.       Sale by public auction often produces very little proceeds and is therefore not the preferred method of disposal. However, if it is perceived that there would be little response to a public tender or public auction is likely to produce greater proceeds, goods may be sent to auction.

2.5.2.       The University uses the Government contract auctioneer as its official auctioneer - currently Gamers Auctions.

2.5.3.       The procedure for arranging disposal of equipment and stores by public auction is as follows:

  • An Equipment Write-Off form showing all of the relevant details is to be prepared by the initiating school/portfolio and forwarded to the Finance Services-Business Services.
  • Finance Services-Business Services staff will obtain write-off approval from the Executive Director, Financial Services or an officer with the appropriate Council delegation.
  • The details of the items will be transferred to a Disposal by Auction form, copies of which will be distributed as follows:
    - one copy to the Senior Facilities Officer to arrange transport to the auctioneers premises;
    - two copies to the auctioneer, with one copy to be receipted by the auctioneer and returned to the Finance Services-Business Services;
    - one copy to be held in the Finance Services-Business Services pending return of the receipted copy.
  • The Senior Facilities Officer will arrange for the items listed to be collected from the relevant school/portfolio(s) and delivered to the auctioneer's premises. Acknowledgment of receipt will be obtained from the auctioneer on a copy of the Disposal by Auction form, which will be forwarded to the Supply & Payments Section.
  • A cheque for the proceeds of the items sold by auction (less commission), together with an itemised sale advice, will be forwarded by the auctioneer to the Finance Services-Business Services. The sale advice will be cross-checked to the relevant Disposal by Auction form(s), the amounts dissected for credit to the school/portfolioal appropriations and the cheque then lodged with the University cashier at the first opportunity.

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2.6.     Sale at a Negotiated Price

2.6.1.       In exceptional circumstances approval may be given by the Executive Director, Financial Services for an item to be sold at a negotiated price.

2.6.2.       Exceptional circumstances may include:

A piece of equipment is no longer required by the University, the application for use of the equipment is extremely rare and there is therefore no realistic market; costs of advertising on a broad basis will be extremely high, and an attractive offer is submitted by another institution/organisation involved in the same application. A formal written approach may be made to the University by a charitable, community service or educational organisation regarding the possibility of Supply & Payments particular surplus or obsolete equipment.

2.6.3.       The approving officer is to satisfy him/herself that the negotiated prices are reasonable and where possible equal to, or better than, recent prices obtained for similar goods by auction or tender.

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2.7.     Destruction/Dumping

2.7.1.       Any item deemed to have no value, or unserviceable stores and equipment beyond economical repair, may be destroyed or dumped in an appropriate manner.

2.7.2.       Unserviceable equipment beyond economical repair and having no scrap value should be certified as such by the Head of School/portfolio on an Equipment Write-Off form, which is to be submitted to the Executive Director, Financial Services for approval. After write-off approval is obtained, arrangements are to be made with the Senior Facilities Officer for the goods to be dumped in an appropriate manner.

2.7.3.       Items which are beyond economical repair and are dismantled and used for spare parts should be certified accordingly on the Equipment Write-Off form.

2.7.4.       Some items, such as electrical tools and equipment, white goods and furniture require certification by staff of the University Maintenance Section or other qualified tradesperson that they are beyond economical repair.

For further information, telephone the Finance Services on extension 15134.

IMPORTANT NOTE: Disposal of Computers
Any University computer disposed of must have all University software and user files removed from the hard drive prior to disposal. Windows 95/DOS operating system to remain on the computer with software discs/manuals supplied, if available.

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3.      EQUIPMENT WRITE-OFF FORM

3.1.     An Equipment Write Off Form must be completed for every item noted for disposal. An Asset number must be included for items originally purchased for an amount exceeding $5,000.

4.      GST AND THE SALE OF SECOND HAND GOODS

4.1.     When disposing surplus, obsolete and unserviceable equipment it should be noted that 10% of any sale proceeds must be paid to the government in Goods and Services Tax. Any invoices or receipts must use the GST code C.

5.      LEASED EQUIPMENT

5.1.     Leased equipment is not owned by the University and cannot be transferred, sold or dumped. Contact Supply & Payments Section (ext 15336) for information relating to leased equipment.

Approval AuthorityChief Financial Officer
Date for Review2 March 2010
Policy SponsorChief Financial Officer
Policy OwnerFinance Officer (Assets)
Policy ContactFinance Officer (Assets)
Amendment History

2 December 2009: contact information changed.