2311 Equipment Leasing

Responsibility:

Generally, third party leases are not cost effective and, in the case of financing leases, create additional reporting requirements. Outright purchase is the most preferred method of acquiring equipment. 

Procurement Services has the responsibility to review and execute all lease agreements on behalf of the University.  

The Vice President for Finance/Treasurer is responsible for evaluating and approving all external third party lease agreements in excess of $25,000 for proper accounting and reporting treatment, including determining the most appropriate method of acquiring equipment, i.e., purchase or lease (operating and/or financing leases). Such methods may include referral to the University’s Equipment Purchase Loan Program (EPLP). Refer to Policy 1807 – Interfund Borrowing – Equipment Loan Borrowing Program for more information. 

External third party lease agreements are permitted only when the Vice President for Finance/Treasurer determines that economic benefits will be realized. Such benefits may include lower cash payments, beneficial financing terms, and/or decreased risk, e.g. obsolescence, assumed by the University. 

Authorization and approval: 

Procurement Services has the authority and responsibility to review and execute all external third-party lease agreements on behalf of the University. 

All external third-party equipment lease agreements in excess of $25,000 must receive written approval from the Vice President for Finance/Treasurer prior to execution. 

All external third-party equipment lease agreements in excess of $1,000,000 must receive written approval from the Trustees prior to execution. 

Compliance: 

Procurement of equipment via an external third party lease agreement with a total lease payment cost of $10,000 or more is subject to the University’s competitive bidding policy and request for equipment lease approval procedure.  

A University purchase order must be issued for lease payments for each fiscal year to cover the full term of the external third party lease agreement period.  

Procurement Services is responsible for maintaining copies of all fully executed external third party lease agreements.   

In the event of a department audit, the ordering department must be able to produce a copy of the original fiscal year purchase order with all supporting documents and all subsequent fiscal year purchase orders that cover the full term of the external third-party lease agreement.