Federal Grant Equipment Inventory and Disposition

Equipment bought with federal grant funds creates a recordkeeping duty that lasts longer than the purchase.

The invoice is only the start. The organization needs property records, physical inventory, safeguards, use documentation, and a disposition record when the equipment is sold, transferred, traded in, or discarded.

This workflow is for grants managers and finance teams that need a simple control process.

Step 1: Identify equipment at purchase

Do not wait until closeout to decide whether something is equipment. At purchase, record whether the item meets the equipment definition under your policy, award terms, and applicable federal rules.

Keep the purchase support:

• approved budget or prior approval, if needed
• procurement support
• invoice
• proof of receipt
• serial or asset number
• location
• funding source
• federal participation percentage
• capitalization treatment

If equipment is bought with mixed funding, document the funding split.

Step 2: Create the property record

2 CFR 200.313 lists the property record details. Build the record when the asset arrives.

The record should include:

• description
• serial number or other identification number
• source of funding
• who holds title
• acquisition date
• cost
• federal participation percentage
• location
• use
• condition
• disposition date and sale price, when applicable

GrantPipe can keep equipment notes, grant documents, closeout tasks, and reporting deadlines tied to the grant record so the asset is not tracked in isolation from the award that paid for it.

Step 3: Protect and use the asset correctly

Equipment controls should cover where the item is kept, who can use it, how it is protected, and what happens if it is lost or damaged.

If the equipment is used across programs, document the use. If the award restricts use to a program, do not move the item to another use without checking terms.

Step 4: Run physical inventory

Federal rules require a physical inventory and reconciliation at least once every two years. Do not treat this as a casual walk-through.

For each item, confirm:

• the asset exists
• location matches the record
• condition is noted
• serial or tag number matches
• missing items are investigated
• obsolete or damaged items are flagged for disposition review

Keep the inventory date, reviewer, results, and follow-up notes.

Step 5: Check before disposition

Before selling, donating, transferring, trading in, or discarding equipment, check:

1. Current fair market value.
2. Award terms.
3. Federal participation percentage.
4. Funder instructions.
5. Whether the item is still needed for the original program.
6. Whether another federally funded program can use it.

Do not let staff dispose of equipment informally. A laptop, vehicle, camera, freezer, or medical device may still carry a federal interest.

Step 6: Close the record

The final disposition record should show what happened and why. Include the approval, date, method, sale price or transfer details, and any amount returned or retained under the rules.

Attach that record to the closed grant file. If a reviewer asks about the asset years later, the organization should be able to follow the path from purchase to final disposition.

Common mistakes

The most common mistakes are simple:

• no asset tag
• no location record
• no physical inventory
• equipment listed in accounting but not grant files
• grant files closed before disposition is addressed
• sale or disposal handled without checking federal rules

Equipment compliance is not complicated when the record is built at the start. It becomes painful when finance tries to reconstruct it after staff turnover, office moves, or closeout.

Add equipment to closeout review

Closeout should include an equipment question before the file is archived. Ask whether the award bought equipment, whether the record is complete, whether the item is still in use, and whether any disposition decision is pending.

If the equipment remains in service, keep the asset on the inventory schedule and note the next physical inventory date. If the item is no longer needed, resolve disposition before the responsible staff move on to the next grant. This is especially important for laptops, vehicles, medical equipment, kitchen equipment, cameras, and field devices that can move between programs.

The closeout file should make the future review easy. A person who was not on staff during the grant should be able to see what was bought, where it went, and why the organization handled it the way it did.

DEFINITION

Disposition

The final handling of equipment, such as sale, transfer, trade-in, or disposal.

DEFINITION

Federal participation

The federal share of the equipment cost or value that may affect disposition treatment.

DEFINITION

Physical inventory

A documented count and condition check that reconciles equipment records to actual assets.