United States Department of Agriculture
Research, Education and Economics

ARS * CSREES * ERS * NASS

Bulletin

 

Title:  Assignment of Budget Object Codes for Personal and Real Property
Number: 02-312
Date: Septyember 18, 2002
Originating Office: Financial Management Division, AFM, ARS
Distribution: All REE Requisitioning Offices
Fundholders Administrative Officers
Budget and Fiscal Officers Procurement and Property Staff
Expires: September 18, 2003



    

This bulletin provides a quick reference for assigning Budget Object Codes when purchasing personal and real property.




During the last several months, considerable effort has been expended to cleanup and correct personal and real property records. This is very important as the accuracy of these records significantly impacts the Research, Education, and Economics (REE) agencies' ability to obtain a clean audit of their official financial statements. The accuracy of personal and real property transactions in the Foundation Financial Information System (FFIS), the Personal Property System (PROP), and the agency real property system is directly related to the assignment of the Budget Object Code (BOC) by the requisitioning office/fundholder. There have been many instances where BOC's pertaining only to capitalized and/or accountable personal and real property have been used for other types of purchases that are not capitalized or accountable property. This resulted in incorrect information being reflected in the official accounting system, the PROP system, and internal real property systems.

Fundholders are responsible for assigning the correct BOC for each line item on the procurement request (AD-700). However, in the event that the BOC has not been correctly assigned Finance, Procurement, and/or Property officials reserve the right to correct the inaccurate BOC's that will negatively impact the recording and reporting of personal and real property in the feeder systems, the General Ledger, or PROP.

To assist the requisitioning offices in selecting BOC's for personal and real property purchases, the following information has been summarized for a quick reference. Please make the widest distribution of this information to those in your organization that prepare procurement requests.

The critical budget object code groupings are summarized as follows:

     Personal Property                  Real Property
Capitalized Accountable Capitalized Accountable
3110 Series 3141 (Sensitive) 3210 Series 3280 Series
3120 Series 3150 Series * 3220 Series  
3130 Series   3230 Series  
3160 Series   3240 Series  
    3250 Series  
    3260 Series  

* Please note that the 3150 series has recently been added for accountable personal
property.

The acquisition cost threshold for capitalized personal property will be increased from $5,000 to $25,000 (non-software) effective October 1, 2002.

When purchasing personal and real property that is considered capitalized and/or accountable, please stop and take the time to review the BOC options to ensure that the appropriate BOC is selected.

Detailed descriptions of these BOC groupings are provided below:

PERSONAL PROPERTY

Personal property can be capitalized and accountable; noncapitalized and accountable; or noncapitalized and nonaccountable using the criteria provided below. The feeder systems at National Finance Center (NFC) automatically capture and pass capitalized or accountable personal property data to the PROP based on the BOC. Items that are non-accountable non- capitalized will not be distributed to PROP.

Capitalized personal property must meet the following criteria: (1) it must be of a durable nature, (2) it must have a useful life of two or more years once it is placed into service, and (3) its initial acquisition cost must be $5,000 or more through FY 2002. Effective FY 2003, the threshold increases to $25,000 or more. For internal use software the value is $100,000 or more. All other personal property not meeting the above criteria is classified as non-capitalized.

Accountable personal property is all leased personal property regardless of acquisition cost, and all owned personal property having an acquisition cost of $5,000 or more. Accountable property is also any item with an acquisition cost less than $5,000, but determined to be sensitive by the agency Property Management Officer. All other personal property is classified as non- accountable.

When purchasing personal property, use BOC's in the 31XX series. The following table summarizes the use of these BOC's based on the items per unit acquisition cost:


Guidelines for Using Budget Object Codes 3100

If the EQUIPMENT has a Per Unit......... Use Budget Object Code(s): Updates PROP?
acquisition cost of $25,000 or more 3110 - 3114, 3118, 3120 - 3130, 3165 Yes
acquisition cost is greater than or equal to $5,000 and less than $25,000 (not software) 3150, 3151, 3153 - 3155 Yes
acquisition cost less than $5,000 and is not considered high risk sensitive 3140 No
value of less than $5,000 and is considered high risk sensitive 3141 Yes
If the SOFTWARE has a Per Unit............ Use Budget Object Code(s): Updates PROP?
acquisition cost of $100,000 or more 3116, 3160 Yes
acquisition cost of greater than or equal to $5,000 and less than $100,000 3152 Yes
acquisition cost of less than $5,000 3140 No

3110    Capitalized Equipment _ Other

Use BOC 3110 for all capitalized equipment, except the following specific items or other specific sub-BOC otherwise described:

3111    Motor vehicles and Working Capital Fund (WCF) fleet equipment (excludes aircraft)
3112    Furniture and fixtures - Includes office and residential furniture and fixtures
3113    Aircraft
3114    Cooperative project assets (capitalized only)
3116    IT software - except personal computers; see BOC 3160
3118    Telephone equipment

3120    Machinery and Equipment (Including Heavy Vehicles) _ Capitalized

Use BOC 3120 for all capitalized machinery and equipment except for the following specific sub-BOC's or unless listed elsewhere under BOC 31XX.

3121    Agricultural
3121    Engineering equipment
3122    Laboratory
3123    Radio and communications
3124    IT equipment (except personal computers) capitalized
3125    Office machines and reproduction machinery and equipment [Includes office machines that are owned (not leased) by the Government.]

3130    Miscellaneous Motor Equipment - Capitalized

Use BOC 3130 unless specifically addressed elsewhere under 31XX.

3140    Non-accountable - Non-capitalized Equipment (except 3141 - accountable)

All personal property items with an initial acquisition cost of less than $5,000 should be charged to Object Class

3140    except for high risk sensitive property, as defined by the agency, which should be charged to BOC 3141.

3141    Sensitive property (This object class is for personal property determined to be accountable by the owning agency due to its sensitive nature as defined by the agency. The purpose of this classification is to capture and account for sensitive noncapitalized personal property valued less than $5,000 in PROP.

3150    Accountable, Noncapitalized Equipment - Other

3151    Machinery and Equipment
3152    IT Software
3153    IT Hardware
3154    Furniture and Fixtures
3155    Motor Vehicles

3160    IT Software (Personal Computers) _ Capitalized (initial acquisition cost of $100,000 or more)

3165    IT Equipment (Personal Computers) _ Capitalized

REAL PROPERTY

Capitalized real property must have an initial acquisition cost of $25,000 or more. All other real property is classified as noncapitalized. Accountable real property is all real property having an acquisition cost of $5,000 or more, but less than $25,000 with the exception of the following:

All land is accountable real property regardless of acquisition cost or current value.

All buildings with a useful life of two years or more are accountable real property regardless of cost.

Real property can be both capitalized and accountable, or noncapitalized and accountable, or noncapitalized and nonaccountable.

The BOC's in the 32XX series are to be used for purchase of real property. The following table summarizes the use of these BOC's by dollar value of the property:

            Guidelines for Using Object Class 3200

If the REAL PROPERTY has an....... Use Budget Object Code(s):
acquisition cost of $25,000 or more 3210, 3211, 3220 - 3222, 3230, 3240, 3250, 3260
acquisition cost greater than or equal to $5,000 and less than $25,000 3280
acquisition cost of less than $5,000 3290


3210    Land _ Capitalized

3211 Easements - WRP- Capitalized

3220    Buildings and Attached Fixtures _ Capitalized

3221 Fixed telephone equipment (voice) _ capitalized
3222 Fixed telephone equipment (data) _ capitalized

3230    Other Structures and Improvements _ Capitalized

NOTE: To distinguish buildings from structures, buildings are affixed to the ground, have a roof and usually four walls and a life expectancy of two years or more. Structures are everything else that is affixed to the ground such as wells, storage tanks, roads.

3240    Leasehold Improvements _ Capitalized

3250    Cooperative Project Assets - Capitalized

3260    Other Assets _ Capitalized (use for items not captured in other specific sub-BOC's)

3280    Accountable _ Non-capitalized Lands and Structures

3290    Non-accountable - Non-capitalized Structures

If you have any questions regarding the appropriate BOC to select, please contact your servicing funds control office or procurement and property office.

 


Carol I. Shelton, Acting Director
Financial Management Division