7 AAC 78.280. Property management

(a) If a grantee plans to acquire an interest in real property with grant money, the grantee must enter into a written agreement with the department on terms that secure the state's interest in the property before acquisition.

(b) Before the grantee may use grant money to purchase nonexpendable personal property, the acquisition cost of the property must be included in the budget, or in an amendment to the budget, of the grant project approved by the department. In this subsection, "acquisition cost" means

(1) the cost of the nonexpendable personal property and the cost of necessary accessories; and

(2) ancillary charges, such as duty, taxes, transportation, protective in-transit insurance, and installation fees if the inclusion of those charges is in accordance with the grantee's regular accounting practices.

(c) Title to property purchased under (b) of this section vests in the grantee upon acquisition, subject to the right of the department to require the grantee to transfer title to the property to the state or to another person or legal entity if

(1) the department did not waive its right to require transfer of title to property under this subsection under the terms of the grant;

(2) the grantee no longer has need for the property in the grant project for which it was acquired, or the grant project or that part of the grant project for which the property was acquired is being transferred to another grantee;

(3) no later than 120 days after the completion or termination of the grant or 120 days after the date of an appeal decision under 7 AAC 78.310, if applicable, whichever is later, the department provides written notice to the grantee of its intent to require transfer of the property, along with a list of the property subject to transfer; and

(4) the department reimburses the grantee for the property by

(A) calculating the amount that the grant project contributed to the purchase of the property, as a percentage of the total cost of that property;

(B) applying the percentage calculated under (A) of this subsection to the current fair market value of the property; and

(C) including reimbursement to the grantee for reasonable shipping and storage costs incurred in connection with the transfer of the property.

(d) Except when the department has exercised the right to transfer title under (c) of this section, a grantee shall retain property purchased under (b) of this section in the grant project as long as the property is needed for successful accomplishment of an objective of the grant project. During that time, the grantee shall make the property available for use in other activities conducted by the grantee that use financial assistance from the state if this use does not interfere with the grant project. Among the other activities, the grantee shall give priority to the use of the property in an activity receiving financial assistance from the department.

(e) If the grantee no longer needs property purchased under (b) of this section in the grant project, the grantee may retain the property if the grantee compensates the state, or may dispose of the property as instructed by the department. If the grantee wishes to retain the property, the grantee shall reimburse the department, computing the amount of compensation by calculating the amount that the grant project contributed to the purchase of the property, as a percentage of the total cost of that property, and applying that percentage to the current fair market value of the property. The grantee may deduct from the amount of compensation 10 percent of the proceeds of the sale or $100, whichever is greater. If the grantee does not wish to retain the property, the grantee shall request disposition instructions from the department. The department may instruct the grantee to ship the property elsewhere or sell it in accordance with procedures specified by the department.

(f) A grantee shall maintain accurate property records as well as effective inventory, control, and maintenance procedures for nonexpendable personal property purchased under (b) of this section. The department may require a property inventory of items valued at less than $1,000 by listing those items in the grant agreement. These records must include the following information:

(1) a description of the property and the manufacturer's serial number or other identification number;

(2) the grant program under which, and the grant project for which, the property was acquired;

(3) the acquisition date and cost of the property;

(4) the percentage of the total cost of the grant project contributed to the grant project by the department for the budget period in which the property was acquired;

(5) the location, use, and condition of the property, and the date on which that information was recorded;

(6) the disposition of the property, including the date of its disposal and its sales price or the method used to determine its current fair market value.

(g) A grantee shall take an inventory of nonexpendable personal property of the grant project and must reconcile the results of the inventory with the property records maintained under (f) of this section at the end of the grant period to verify the existence, current use, and continued need for the property.

(h) A grantee shall maintain a control system to ensure adequate safeguards to prevent loss, damage, or theft of nonexpendable personal property of the grant project. A grantee shall provide for the investigation and full documentation of the loss, damage, or theft of nonexpendable personal property of the grant project.

(i) A grantee may, with prior department approval, dispose of property acquired under (a) or (b) of this section that is unserviceable or unsafe or if it is no longer useful to the grant project or grant program.

History: Eff. 4/11/81, Register 78; am 7/21/2002, Register 163; am 6/24/2004, Register 170

Authority: AS 18.05.040

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