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Plain-English guide · for small nonprofits

2 CFR 200.313, explained in plain English

Updated August 2026

You bought a van with grant money. This is the section that says what you owe on it, for as long as you own it.

The short version

Title to equipment bought with federal money vests in you, but conditionally. You must track it, physically count it at least every two years, keep it insured and maintained, use it for the award first, and settle up with the federal agency when you dispose of it if it is still worth more than $10,000 per unit.

First, is it even equipment?

§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” catches people. 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 quietly pulls far more items into this section. Everything below the line is supplies, and supplies have much lighter rules.

Conditional title

§200.313(a)

“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).”

You own it. 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.

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 that surprises people: 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) is where most small organizations have a gap. 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 three 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
Including investigating any loss that occurs.
Adequate maintenance
To keep the equipment in good condition.

Disposition, and the $10,000 line

Under paragraph (e), when the equipment is no longer needed for any federally supported program:

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 compensation for its share, calculated on the federal percentage of the original acquisition cost. If you sell it, you may deduct up to $1,000, or 10% of the proceeds where that is lower, to cover selling and handling costs.

Note that the test is fair market value at disposition, not what you paid. A $30,000 vehicle eight years later is frequently under the line.

Where small organizations get caught

No property register at all. The most common finding in this section, and the easiest 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 does not. It ends at disposition.

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.

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Common questions

What counts as equipment under the Uniform Guidance?

Under 2 CFR 200.1, 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. Anything below that is supplies.

How often must we do a physical inventory of grant-funded equipment?

At least once every two years, with the results reconciled to the property records, under 2 CFR 200.313(d).

What happens when we no longer need equipment bought with a federal grant?

If the fair market value is $10,000 or less per unit you may retain, sell or dispose of it with no further obligation. Above that, the federal agency is entitled to compensation for its share of the original acquisition cost, and you may deduct up to $1,000 or 10% of proceeds, whichever is less, for selling costs.

Do we own equipment bought with federal money?

Title vests in you on acquisition, but conditionally. The use, management and disposition conditions in 200.313 travel with the asset and outlast the grant.

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Keep reading

Uniform Guidance explained 2 CFR 200.414 explained Nonprofit compliance calendar Common single audit findings Browse all guides

Sources: 2 CFR Part 200 (eCFR), §200.313 and the equipment and supplies definitions at §200.1. Verified August 2026. Read the sections themselves before relying on any summary.