When federal dollars are used to purchase equipment or property, the government expects you to take care of those assets. This is a required component of showcasing robust internal controls. After all, they’re not just investments in your programs — they’re investments made with public funds. That’s why the Uniform Guidance spells out clear requirements for managing, tracking, and eventually disposing of grant-funded property.

For federal grants, “equipment” is defined as tangible personal property that has a useful life of more than one year and a per-unit acquisition cost of $10,000 or more, unless your organization has a lower threshold. Anything below that amount is generally considered supplies. Knowing where the line falls is important, because the rules for managing equipment are much stricter.

Once you’ve purchased equipment with federal funds, you’re responsible for more than just putting it to good use. You must keep detailed records that include things like a description, serial number, purchase date, cost, and condition. Physical inventory must be conducted at least once every two years to confirm the equipment is still on hand and being used properly. Maintenance is also part of the requirement — letting equipment fall into disrepair can be considered a compliance issue.

Disposal is another area that trips organizations up. When equipment is no longer needed, you can’t simply donate it or sell it off without following the proper steps. Depending on the item’s value and funding source, the federal agency may be entitled to a portion of the proceeds or have specific instructions for how it must be handled.

In practice, this means having a strong property management system in place. Even for smaller organizations, setting up a clear process for tracking equipment from purchase through final disposition can prevent big headaches later. Think of it not just as compliance, but as protecting the resources entrusted to you.

By treating equipment management as a priority rather than an afterthought, you not only stay on the right side of the rules but also demonstrate accountability to your funders — and that can pay off when you seek future grants.