Adequate records must be maintained for assets acquired or constructed from grant funds and be made available for audit.
Recording original costs of buildings, improvements, and equipment is increasingly important because of the growing number of governmental grants which allow depreciation as a reimbursable cost. Depreciation methods must be generally accepted and consistently applied. Use allowances are an alternative to depreciation for calculating reimbursable costs. The annual use allowance for buildings is 2% of the acquisition cost. For equipment, the annual use allowance is 6 2/3%.
Alterations and other capital expenditures may be allowable costs, depending upon the circumstances. Interest and other financial costs may not be allowable.
Records for grant funded assets must include: (1) description, (2) identification number, (3) grant number, (4) owner, (5) acquisition date, (6) acquisition cost, (7) percentage of federal ownership, (8) location, use and condition, and, (9) disposition date.
A physical inventory of these assets should be taken every two years, at a minimum. Adequate controls must be maintained for ongoing accountability of grant funded assets. Furthermore, maintenance scheduled must be followed for such assets.
These requirements are further explained in the following publications that detail fixed asset federal grant regulations:
- IAMB Circular A-87
- OMB Circular A-102
- OMB Circular A-110
- OMB Circular A-21
- DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS), TITLE 45
- CODE OF FEDERAL REGULATION (CFR), PART 74, SUBPART 0