[Code of Federal Regulations]
[Title 45, Volume 1]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR95.707]

[Page 488]
 
                        TITLE 45--PUBLIC WELFARE
 
                           AND HUMAN SERVICES
 
PART 95_GENERAL ADMINISTRATION_GRANT PROGRAMS (PUBLIC ASSISTANCE,
MEDICAL ASSISTANCE AND STATE CHILDREN'S HEALTH
 
      Subpart G_Equipment Acquired Under Public Assistance Programs
 
Sec. 95.707  Equipment management and disposition.

    (a) An item of equipment is subject to the property rules in subpart 
O of 45 CFR part 74 if the total cost of the item was claimed in the 
period acquired and if the item was accepted for Federal financial 
participation as a direct cost under a single program or program 
activity. These rules also apply to ADP equipment where the State agency 
was permitted under Subpart F of this part to claim the total cost of 
the equipment in the period acquired.
    (b) Other items of equipment whose costs are claimed for Federal 
financial participation (i.e., equipment that is capitalized and 
depreciated or is claimed in the period acquired and charged to more 
than one program) are not subject to the specific requirements in 
subpart O of 45 CFR part 74. However, the State agency is responsible 
for adequately managing the equipment, maintaining records on the 
equipment, and taking periodic physical inventories. Physical 
inventories may be made on the basis of statistical sampling. The 
following requirements apply to the disposition of this equipment:
    (1) If the cost of the equipment was claimed in the period acquired 
and the equipment is later sold, the proceeds of the sale shall be 
credited to current expenditures in approximate proportion to the 
distribution of the equipment's cost.
    (2) If the cost of the equipment was claimed in the period acquired 
and the equipment is later transferred to an activity which is not 
involved in the performance of programs currently or previously funded 
by the Federal Government, an amount equal to the fair market value of 
the equipment on the date of the transfer shall be credited to current 
expenditures in approximate proportion to the distribution of the 
equipment's costs.
    (3) If the cost of the equipment was claimed in the period acquired 
and the equipment is later traded in on other equipment claims for 
Federal financial participation in the costs of replacement equipment 
shall be limited to the additional outlay.
    (4) If the equipment was depreciated, any gain or loss on the 
disposition of the equipment shall be treated as a decrease or an 
increase to the depreciation expense of the period in which the 
disposition takes place. This provision does not apply to equipment 
whose costs were claimed for Federal financial participation through use 
allowances.