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Plain-English guide · for nonprofits
2 CFR 200.313, explained in plain English
Updated September 2026
You own equipment bought with federal money, but on conditions. §200.313 says you must track it, count it at least every two years, maintain it, and settle with the agency if it is worth more than $10,000 per unit when you let it go.
First, is it even equipment?
§200.313 is the equipment section of the Uniform Guidance, and it leans on a definition elsewhere. §200.1 defines equipment as tangible personal property, including information technology systems, with a useful life of more than one year and a per-unit acquisition cost at or above the lesser of your own capitalization level or $10,000.
That “lesser of” is easy to miss. If your capitalization threshold is $2,500, then a $3,000 laptop is equipment for federal purposes even though it is nowhere near $10,000. Setting a low capitalization threshold in your accounting policy pulls more items into this section. Everything below the line is supplies, and supplies have lighter rules.
Conditional title
“Title to equipment acquired under the Federal award will vest upon acquisition in the recipient or subrecipient subject to the conditions of this section. This title must be a conditional title unless a Federal statute specifically authorizes the Federal agency to vest title in the recipient or subrecipient without further responsibility to the Federal Government (and the Federal agency elects to do so).”
In plain words: you own it, but on conditions, unless a federal statute lets the agency give you full title with no further duty to the government, and the agency chooses to do so. You do not own it freely. The conditions in the rest of the section travel with the asset, and they outlast the grant that paid for it. You must also insure it as you insure your own property, a duty that sits in §200.310 rather than here.
Use, in priority order
Under paragraph (c), equipment is used for the project it was bought for. Once that project no longer needs it, the regulation sets an order: first other federal awards from the same agency, then awards from other federal agencies. You may also use it for activities that are not federally funded, provided that does not interfere with the original purpose.
One rule on fees: you may not charge fees below private-company rates for services performed with federally funded equipment, unless a statute authorizes it. Undercutting the market with a grant-funded asset is not a favor the regulation permits.
The management requirements, which are the practical part
Paragraph (d) sets out what to keep. Your property records must include:
- A description of the equipment
- An identification number, including the serial number where there is one
- The funding source, including the federal award identification number
- Who holds title
- The acquisition date and cost
- The percentage of federal participation in the acquisition cost
- Location, use and condition
- Disposition data, including date and sale price, once disposed of
Plus four ongoing duties:
A physical inventory at least once every two years
And the results reconciled to the records. Not a desk exercise: someone walks around and confirms the thing exists.
A control system against loss, damage and theft
Any loss, damage or theft must be investigated. And there is a second half: you must notify the federal agency or pass-through entity of any loss, damage or theft that will have an impact on the program. Investigating is not the whole duty.
Adequate maintenance
To keep the equipment in good condition.
Proper sales procedures, if you are selling
Where you are authorized or required to sell the property, §200.313(d)(5) wants procedures that ensure the highest possible return. You cannot sell a grant-funded van to a board member's cousin for a nominal sum.
Disposition, and the $10,000 line
Paragraph (e) covers equipment no longer needed for any federally supported program. The first step: where the terms and conditions of your award require it, you must request disposition instructions from the federal agency or pass-through entity. What follows depends on value:
- Fair market value of $10,000 or less per unit: you may keep it, sell it or otherwise dispose of it with no further obligation to the federal agency.
- Above $10,000 per unit: the federal agency is entitled to an amount worked out by taking the federal percentage of the original purchase and applying it to the current market value or the sale proceeds. The percentage comes from what was paid originally; the amount it multiplies is what the item is worth now. Getting that backwards is expensive: a van bought outright with federal money for $30,000 and now worth $12,000 settles against $12,000, not $30,000.
On a sale, the agency or pass-through may permit you to retain $1,000 of the proceeds from the federal share to cover selling and handling. Two things to notice. It is a flat $1,000, not a percentage: the older "$500 or ten percent, whichever is less" formula was retired in the 2024 revision and any guide still quoting a percentage is out of date. And it is permissive, not automatic, so it belongs in your disposition request rather than in your arithmetic.
If you ask for disposition instructions and the agency does not answer within 120 days, the section lets you proceed to retain or sell. Note also that the test is fair market value at disposition, not what you paid. A $30,000 vehicle eight years later can be under the line.
Common slips, and the fix
- No property register at all. The easiest gap to fix.
- Never doing the physical inventory. Two years passes quickly. Put it in the compliance calendar the day you buy anything.
- A low capitalization threshold nobody thought about. It silently expands what counts as equipment.
- Disposing quietly. Selling or scrapping a grant-funded asset without recording value or notifying anyone.
- Assuming the obligation ended with the grant. It runs to disposition unless your award says otherwise. The exception is worth checking for: under §200.313(f), where the terms and conditions of the award say so, the federal agency may let you keep the equipment with no further obligation. Read your award before you assume either way.
This is general information, not legal or accounting advice. Federal grant rules change and are applied differently by different agencies and auditors. Check with your auditor, your grant officer, or an attorney before relying on any of it.
The Ember tool for thisEmber Compliance
Ember Compliance keeps your common filing deadlines in one calendar, and you can add your own dates, like the two-year equipment count. Email reminders start 30 days before each one. Unlimited users on every tier.
Sources: 2 CFR Part 200 (eCFR), §200.313 and the equipment and supplies definitions at §200.1. Read August 2026, re-checked against eCFR 1 September 2026. Read the sections themselves before relying on any summary.