The Lion Surplus Division of the Office of Business Services is responsible for the collection and disposal of University equipment and material considered obsolete, surplus or scrap to the needs of University departments. If no other department obtains the equipment or material, or it is impractical/uneconomical for further University use, the equipment or material may be disposed of in one of several ways: (1) sold on a first-come, first-serve basis through the Lion Surplus Sales Store, (2) sold periodically at public auction, (3) sold on online auction sites, (4) sold through a sealed bid process at the surplus sales store, (5) sold to approved contracted vendors such as electronic recycler(s), (6) employees purchasing equipment from their department or (7) hauled away (as is the case for certain scrap items).
A percentage of income derived from Lion Surplus sales of items valued at $500 or more is credited to University departments. No commissions will be paid on any item that sells for less than $500.
This procedure covers the processing, controls, reports, and accountability necessary for the acquisition/handling/disposal of items by the Lion Surplus Division, and how the income generated is credited to University departments.
The “DISP” function in the Integrated Business Information System (IBIS) is completed for the transfer of all equipment and large quantities of supplies and materials to Lion Surplus. Utilization of the DISP is the primary and preferred method for transferring equipment. However, if a department does not have access to the IBIS system, they may complete the paper version of the form, the Report of Disposition or Permanent Transfer of Equipment (Tangible Assets). The University department retains a copy of the Report of Disposition and forwards the original and a duplicate copy to the Property Inventory Department.
NOTE:Employees may obtain certain items from their department. These items, and the guidelines for their purchase, are discussed in "Employee Purchases of Equipment/Furniture From Their Department."
Upon receipt of the information, records of the location of the items listed on the DISP/Report of Disposition are adjusted on Property Inventory records. For any tagged item (regardless of its value) that was originally acquired by the University department, the item is electronically marked as a disposal in the Property Inventory database, with this data being electronically filed for annual reporting. The Property Inventory Department retains the original of the Report of Disposition and forwards the remaining copy to Lion Surplus (if the "DISP" function is used, this information is passed electronically).
NOTE: Equipment obtained through research funds may only be transferred or disposed of according to Policy BS15 - Disposal and Purchase of Obsolete, Surplus or Scrap University-Owned Equipment, Supplies and/or Materials.
Lion Surplus personnel are dispatched to pick up the items with a copy of the Report of Disposition/DISP. All items are then transported to the Lion Surplus warehouse.
For any listed items not available at the time of pickup, a representative of the University department disposing of the items must sign the Report of Disposition next to those items, indicating that the items were not picked up by Lion Surplus. This department contact person must also provide their name and phone number on the Report of Disposition/DISP for future contact by Lion Surplus, if/as needed. Additionally, Property Inventory must be notified of these changes, as well, so that accurate record keeping can be maintained.
Items a University department transports itself to the Lion Surplus warehouse must be accompanied by a Report of Disposition/DISP.
Credit for sales cannot be applied to any department unless that department submits a Report of Disposition/DISP. In the event that a Report of Disposition/DISP is not forwarded, Lion Surplus reserves the right to enter the items into their electronic tracking system and assign Lion Surplus with 100% credit for these items.
The Auxiliary & Business Services Clerk will forward the Report of Disposition (or DISP copy, as applicable) to Property Inventory.
The Manager of Lion Surplus (or designated personnel) examines the items received, separating them according to items usable in other areas of the University, scrap items, or items for sale or disposition through Lion Surplus.
The Manager or designated personnel then determine a method of sale (Lion Surplus Sales Store, auction, online auction, or contract vendor). For those items to be sold on the sales floor, a sales price will be established based on their condition, original cost, and current value.
For items valued at $75 or more – Each item is electronically logged into the Lion Surplus tracking system for inventory purposes. A sales tag with a unique number (Exhibit “A”) is generated with all the pertinent information and placed on each item.
Items will be available for sale for at least three days before the manager or designated personnel will lower the price. The original sales date is printed on the sales tag.
For items valued at less than $75 – A sales sticker is attached to the item. These items are not entered into the inventory system, but are entered at the point of sales individually or as a group (i.e. ’15 binders’ or ‘3 chairs’) to generate a receipt.
To prevent customers switching tags or stickers, the following security measures will be used:
- All tags will contain an item description. The Lion Surplus clerk will verify the tag matches the item being purchase at the time of customer check-out.
- Stickers contain a slit that causes the sticker to tear apart when removed.
Once tagged, the item is available for transfer to another University Department, for sale in the Lion Surplus Sales Store, or for sale via public auction site, or sale via a sealed bid, or sale to a contracted electronic recycling vendor who is responsible for sanitizing the machines in accordance with University privacy policies before recycling.
NOTE: Items unsuitable for sale are marked "scrap" on the Report of Disposition and dismantled or disposed of.
Automobiles - Vehicles to be sold are delivered by Fleet Operations to the Manager of Lion Surplus. Fleet Operations establishes the sales price using National Auto Research documents as guidelines and provides the price to the Lion Surplus Manager.
Buyers may then bid on these vehicles, completing a Vehicle Bid Sheet (Exhibit “B”). The buyer with the best bid will be awarded the vehicle. Automobiles may be released to a buyer only in exchange for cash, certified check or cashier’s check. $200 cash, non-refundable down payment is required to hold vehicles for 3 business days to allow successful bidders to secure financing.
EXCEPTION - When a vehicle has been deemed a “total loss” as a result of a vehicle accident, the process will be handled by the Office of Risk Management.
The University’s auto insurance carrier will confirm the damages. If the vehicle is deemed a total loss, the University’s carrier will advise Risk Management and will handle all bidding and salvage functions.
Periodically, the Manager of Lion Surplus visits the Bureau of Surplus Federal Property to select items which may be of use to University departments. After items are selected, the Manager of Lion Surplus signs a numbered Warehouse Receipt/ Invoice (Exhibit "C") for items received. The Manager is given a copy of the Warehouse Receipt/Invoice, which also serves as the invoice. The copy of the Warehouse Receipt/Invoice is forwarded to the Auxiliary & Business Services Clerk for processing.
The Manager of Lion Surplus (or designated Staff Assistant) determines a price for all items selected based on their condition, cost, current value, etc., and a Lion Surplus Tag (Exhibit "A") is generated with all the pertinent information and placed on each item acquired.
The Auxiliary & Business Services Clerk photocopies the Warehouse Receipt and files the copy in the department. The Clerk then prepares a Purchase Order, notes "confirming order" on the P.O., attaches the Warehouse Receipt/Invoice and forwards to Purchasing Services for payment.
Limitation - Federal surplus property items with an original acquisition value of less than $3,000 which cannot be sold to University departments are disposed of through the Sales Store, public auction, or by returning them to the Bureau of Surplus Federal Property. Items with an original acquisition value of $3,000 or more must be sold to University departments and put into use within twelve months of the date they are obtained from the Bureau of Surplus Federal Property. Additionally, these items may not be re-sold or dismantled by a University department for a period of 18 months without specific permission of the Bureau of Surplus.
Lion Surplus keeps a record of the location of these items for periodic inspection by the GSA Federal Auditors.
University departments can purchase items from Lion Surplus by completing an Interdepartmental Charge and Credit (IDCC) form in IBIS, or by using a Penn State Purchasing Card (the Penn State Purchasing Card is the authorized and preferred method of departmental payment). Regardless of the method of purchase, the Property Inventory department must be notified of such purchases so that accurate record keeping can be maintained, and for items being put back into service that were originally valued at $5,000 and over, PSU tag numbers should be included/recorded, and the Property Inventory department must be notified of such purchases so that accurate record keeping can be maintained.
Student organizations wishing to purchase materials from Lion Surplus need to submit an Associated Student Activities' Purchase Order (Exhibit "D").
IDCCs or Associated Student Activities' Purchase Orders must be received/processed within five (5) days of the visit, or the items will be put back for sale. Upon receipt, Lion Surplus will arrange for delivery, as needed.
Purchases over fifty dollars will be delivered to the department at no cost. Purchases less than fifty dollars will be assessed a handling charge, or the department can arrange their own pick-up within five days of purchase. Any item not picked up within five days will be reallocated.
The Auxiliary & Business Services Clerk will enter the sales in the computerized sales system when the IDCC or Purchase Order is received, or a Purchasing Card is presented. The tag number and price of each item purchased will be entered to the sales system and a Sales Invoice (Exhibit “E”) is printed. For Purchasing Card transactions, a copy of the credit card slip and the sales invoice will be given to the department. Lion Surplus will retain the original copy of the credit card sales slip. For IDCCs, the Auxiliary & Business Services Clerk will transfer the item information to an IDCC and complete the credit section of the IDCC. A copy of the IDCC and sales invoice are retained by Lion Surplus and filed numerically by month. For Associated Student Activity Purchase Order transactions, the Auxiliary & Business Services Clerk will attach the sales invoice to the PO, then prepare a University Invoice (Form GF1.4a; see the instructions in GURU) to collect such sales revenue for Student Organizations.
Lion Surplus Items that cannot be recycled to another area of the University can be disposed of through the Lion Surplus Sales Store, located in the Lion Surplus Warehouse. The store is open Monday through Friday.
The Manager of Lion Surplus (or designated personnel) sets the price listed on each item. Cash, check and Visa/Mastercard can be accepted as payment for items sold. Sales are credited to budget 06-033-25 UP, Fund 1005. All checks received must be made payable to the Pennsylvania State University and are immediately endorsed per Policy FN01. Additionally, sales tax will be computed for each purchase, unless the buyer presents a Pennsylvania Tax Exemption Certificate.
All sales from the Lion Surplus Sales Store to staff members employed in Auxiliary & Business Services must be approved in advance by the Director of Procurement Services for items over $200. The Manager of Lion Surplus will maintain a file of approved transactions.
Sales are entered into the computerized sales system. The following information is required: customer name, payment method, tag number, item description and the price of each item sold. When the sales person completes the sales entries, the Sales Invoice (Exhibit "E") will be printed and given to the customer.
At the end of the business day, the Auxiliary & Business Services clerk counts all the money in the cash drawer and records the amount of cash and checks on the Daily Sales Collection Form (Exhibit “F”). The total money is recorded on a bank deposit slip, secured in a sealed deposit bag and made ready for transport to the designated bank. The Auxiliary & Business Services clerk also performs daily settlement on the credit card terminal and records the total credit card sales to the applicable line on the Daily Sales Collection Form (Exhibit “F”).
Items may also be sold on approved online auction sites. Lion Surplus is the only University entity authorized to sell products through online auction sites for University departments. They will coordinate such sales with a department contact person. If the item is too large to move, it will be sold “on site,” with Lion Surplus setting up a time to take photographs.
Lion Surplus will work with the department to establish a minimum bid amount. Several photos will be taken of the item. Manuals or any other information (as applicable) will be gathered, and a description will be written for the item to accompany its posting. Once these details are completed, the item will be listed on online auction sites. Online terms and conditions of sale will include “All sales are as is and final. No returns.” The ad will be run for either 7 or 10 days. Questions will be answered via email or via phone from prospective bidders.
When the bidding ends, Lion Surplus will contact the high bidder, inquiring of the bidder how they would like the item shipped.
(NOTE: The bidder pays for all shipping and insurance costs). A shipping and insurance cost quote will be obtained, and the information provided to the bidder. The bidder may either mail a money order or cashier’s check, or call Lion Surplus to provide their credit card information. When the payment is received, the sale will be finalized and shipped to the bidder per the arrangements discussed above.
Once finalized, the online auction sites charges will be paid. Credit will be given to the department for the sale, less the online auction site and Lion Surplus charges for selling the item as discussed in “Crediting University Departments For Lion Surplus Sales.”
General Electronics and computers not suited for sale at auction or on the sales floor may be sold to a contracted electronic recycling vendor. Approved vendor(s) must meet all University privacy and security requirements including the sanitation of all data. In addition, they must meet all regulations and laws governing electronic recycling. Purchasing Services will establish form University contract(s) with the selected vendor(s).
All items are sold “as is, where is.” Credits and refunds are not issued unless under an approved exception. The manager of Lion Surplus must approve credits or refunds of less than $100. The Director of Procurement Services must approve all credits or refunds of $100 or greater. All approvals will be documented.
Normally, items that have been declared surplus and no longer needed by the University must be obtained through the Lion Surplus Sales Store process. However, an employee may purchase certain items from their department, within the guidelines specified below.
A fair market value will be established for these items by Lion Surplus. Lion Surplus personnel will examine the item to determine its age, condition, model, and other features helpful in establishing value. Likewise, they will see what the same or similar items are selling for on online auctions or in trade magazines. A fair market value will be determined as a result of the process, and the employee will be notified of its price.
All sales of this nature MUST be accompanied by an approved Report of Disposition or Permanent Transfer of Equipment or DISP (if done via IBIS).
A notation of the selling price quoted by Lion Surplus will be recorded on the Report of Disposition/DISP. Sales income will flow through Sales Store System in accordance with the process discussed in “Sales of Items in Surplus Sales Store.” A receipt will be issued to the employee, and the item may be removed from University property.
NOTE: Cardboard boxes, wooden skids, wooden crates and wooden spools are FREE for the taking at all locations. No receipt or note is necessary for the removal of these items from University property once they have been declared obsolete, scrapped, in excess or surplus, as determined by Lion Surplus.
Employees at University Park- employees at University Park may only purchase the following items from their department:
- Personal computers and accessories. This may occur only after fair market value has been established by Lion Surplus, and “sanitation” (erasure of University data) has been performed. Information validating both the purchase of such items, as well as the appropriate sanitation, must be evidenced via notation on the corresponding.
- Report of Disposition or Permanent Transfer of Equipment (or DISP if done via IBIS). Sanitation and validation will be done by the departmental IT person if the computer is going to be purchased on site; otherwise (i.e., if the computer is brought to Lion Surplus), it will be done by Lion Surplus personnel.
- Personal chairs and/or desks. These items will be available for personal purchase after Lion Surplus has established their fair market value. Information validating their purchase must be evidenced via notation on the corresponding Report of Disposition or Permanent Transfer of Equipment (or DISP if done via IBIS).
- Leftover construction/renovation/scrap materials that are USED/ PREVIOUSLY INSTALLED/ OBSOLETE. Such items can be purchased after written authorization has been provided to Lion Surplus by the OPP Project Manager (or someone of equivalent authority), affirming that the items are indeed used/ previously installed/ obsolete.
NOTE: Leftover materials that are “new” (i.e., material that was purchased for use on a particular project, could have been used for the project, but never was used, and can’t be used for another University project), MUST be brought to Lion Surplus and held overnight prior to their disposal through the Lion Surplus Sales Store, as documented in “Sale of Items in Surplus Sales Store.”
Employees at Non-University Park Locations- employees at non-University Park locations may purchase the same items from their department as those purchased by employees at University Park, with some minor differences. Just like University Park employees, they may purchase their personal computer/accessories and their personal chair/desk, in accordance with the same guidelines specified in “Employees at University Park,” above. The purchase of leftover materials, however, is handled as discussed below.
Employees at these locations do not have the same access to the Lion Surplus Sales Store that employees at University Park do, nor is it practical or efficient to transport items to the Lion Surplus Sales Store from a non-University Park location. As a result, special arrangements for the purchase of equipment and materials with a value of under $250 (as determined by Lion Surplus) can be arranged with the cooperation of the Manager of Lion Surplus (or Designee) and the campus Director of Business Services. The employee will submit their payment and approved Report of Disposition or Permanent Transfer of Equipment to the Director of Business Services, who will forward these documents to Lion Surplus. A receipt will be issued and returned to the campus Business Office, at which time the employee will be permitted to remove the item from University property. Sales income will flow through Sales Store System in accordance with the process discussed in “Sales of Items in Lion Surplus Sales Store.”
A Cash Sales Detail Report (Exhibit “G”) and Credit Card Sales Detail Report (Exhibit “H”) is generated from the computerized sales system for each business day. They are filed by month at Finance and Business Services.
The Daily Sales Summary Report (Exhibit “I”) is the reconciliation tool where the amounts reported on the Daily Sales Collection Form (Exhibit “F”) are posted and compared with the sales amount recorded in the computerized sales system. A Report of Cash Receipts (ROCR) is then prepared for each bank deposit and credit card settlement. Any shortage or overage is reported on the ROCR and notification will be sent to the Manager of Lion Surplus for review.
Preparation for Public Auction - During the year, the Manager of Lion Surplus reviews sales of items as recorded on Report of Disposition forms. When the Supervisor of Lion Surplus and the Director of Procurement Services determine it is necessary, unsold items determined to be of no further use to the University may be designated for sale at public auction.
A week before the auction date, Lion Surplus personnel remove the prices recorded on both copies of the attached Salvage Tags. If an item is sold to a University Department before the auction, Lion Surplus posts the sales price and the date sold to the appropriate document as previously discussed in "Sales of Items to University Department." Also, vehicles to be auctioned off are handled in the same manner as those sold through the Lion Surplus Sales Store.
Two days before the auction, items are placed outside, and the University Police are asked to make extra patrols at the location to safeguard the items.
Sale of Items at Public Auction - Anyone intending to bid on auction merchandise must be assigned a bidder number. The Auxiliary & Business Services Clerk will fill out a Buyer's Bid Paddle (Exhibit "J"), obtainable on the day of the auction. From the information entered on the Buyer's Bid Paddle, the Auxiliary & Business Services Clerk enters the bidder’s name, address, phone number and appropriate photo ID number into the computerized sales system. Once assigned a bidder number, the bidder is given the Buyer's Bid Paddle for use during the auction.
When an item is sold, the successful bidder shows his/her Bid Paddle (Exhibit "J") to the Auctioneer’s Clerk, who at that time records the price and bidder number on the Salvage Tag of the sold item.
A runner will collect the second copy of the Salvage Tag of items sold and return them frequently to the office area. Salvage Tags are filed in a rack by bidder number. When paying for merchandise, the buyer takes a list of items purchased to the Auxiliary & Business Services Clerk, presenting the list of items along with their Buyer’s Bid Paddle (Exhibit “J”). Using the bidder number on the Paddle, the clerk will pull up the Buyer’s information on the sales system. Additionally, they will check the bidder number on the Salvage Tags in the rack against the buyer's Bid Paddle number to insure that the buyer is entitled to the merchandise. For all payments received the date of the auction, a computer-generated receipt is created, recording the information from the accumulated Salvage Tags along with a description of the item and the amount received. A printout of the computer-generated receipt is given to the customer. All checks received are inspected for proper signature, amount, date, and customer address, and are endorsed per Policy FN01. Titles for automobiles sold are signed over to new owners only after verification of full payment either by cash, cashier’s check or certified check. If a successful bidder needs to secure financing, $200 cash, non-refundable deposit is required to hold the vehicle for 3 business days.
Merchandise cannot be taken by a customer until full payment is received.
Cash Handling after Auction- At the close of the auction, the cash register is rung off/cleared for the day’s activity. The cash is removed from the cash register and placed (uncounted) in a sealed bag and transported to the HFS Money Room. This process is logged/recorded on Accountability for Transport Log (Exhibit “K”). The next business day, HFS personnel count all the money in the cash drawer and record the amount of cash and checks on the Daily Sales Collection Form (Exhibit “F”). The total is recorded on a bank deposit slip, secured in a sealed deposit bag and transported to the designated bank. This information is forwarded to the Finance & Administrative Services Clerk for sales reconciliation and sales reporting.
Credit Card Processing After Auction - At the close of the auction, the Auxiliary & Business Services Clerk performs the credit card settlement for the credit card terminal and records the total credit card sale on the Daily Sales Collection Form (Exhibit “F”). The Daily Sales Collection Form (Exhibit “F”) is delivered to the Finance & Administrative Services Clerk for sales reconciliation and sales reporting.
Auction Sales Reconciliation and Reporting - The Auction Sales Detail Report (Exhibit “L”) is generated from the computerized sales system and filed at Finance & Administrative Services. The Daily Sales Summary Report (Exhibit “I”) is used to reconcile with the money reported on the Daily Sales Collection Form (Exhibit “F”). The Report of Cash Receipts (ROCR) is then prepared for the bank deposit and credit card settlement. Any shortage or overage is reported on the ROCR and notification will be sent to the Manager of Lion Surplus for review.
At the end of each month, the Manager of Lion Surplus will review a listing of all sales transactions in the Lion Surplus Tracking System. Items will be ‘selected’ in the system to generate credit to the department based on the account identified on the original Report of Disposition (DISP). The selected items will be reviewed by the Financial Officer of Auxiliary & Business Services’ delegate and the Director of Procurement Services. After the Director approves the selected list of items, a journal voucher will electronically be created that will debit Lion Surplus and credit the department that released the items.
The Director of Procurement Services will periodically review the appropriate reports from the Lion Surplus Tracking System reflecting price changes and refunds or credits to identify any irregularities or patterns. Reports may be requested by various criteria and will tie back to the individual sales transaction.
Using the information from the Disposal transmittal form, that is provided by Property Inventory, a department within the CCO, the income from the sale of the item(s) are then distributed the appropriate University Department according to BS 15 and to the account number provided on the disposal form.
Other percentage distributions identified in Policy BS15 are handled by IDCC. Salvage and Surplus prepares the IDCC charging 06-033-25, Sales Income (Fund 10050) for the appropriate amount, forwarding it to the department for them to enter the proper budget number for the credit.
Items sent to Lion Surplus as a result of the University’s Lost and Found Tracking System are handled as documented in Policy AD13 and procedure AD2001, Lost and Found Items.
Precious metal scraps are accumulated for sale at the annual public auction. Other scrap items are picked up by a contracted scrap dealer upon request by the Manager of Lion Surplus. Periodically, the contract for the scrap dealer is renegotiated. The Lion Surplus Department exchanges the services of hauling away the scraps for the value of the scraps.
Some equipment and material may not be appropriate for resale due to the presence of hazardous materials, characteristics, or regulatory constraints. As a result, they are not accepted for resale or disposal by Lion Surplus. Instead, departments are referred to the Department of Environmental Health and Safety (EHS) for proper disposition. Refer to the applicable Safety Policies in GURU, as well as the EHS website document entitled “Procedures for the Proper Disposition of Equipment and Materials through Lion Surplus” for guidance in handling such equipment and materials.
University equipment or contents damaged beyond repair or remediation, deemed a “total loss” will be handled by the Office of Risk Management. The University’s insurance carrier will confirm the damages and inform Risk Management if said insurance carrier will take possession of the damaged equipment or if the University will handle disposal functions.
See Procedure CR2002 - Processing Returned Checks.
TThe Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for working with Internal Audit when audits are being performed in the administrative area, as well as performing an annual audit that is submitted to the Assistant Controller.
Record retention must be managed in accordance with Policy AD35 - University Archives and Records Management, and records schedules approved by the Records Management Advisory Committee, Office of General Counsel, and Office of the President. These retention requirements are the University's retention criteria, either derived or based upon federal, state, and local statute or regulations, industry standards, and business needs. Retention beyond recommended time periods require justifiable reasons and warrant review by the Records Management Officer or designee. All documents must be maintained in such a manner so as to provide ease of access for review, and to provide a suitable audit trail for all transactions.
- Documents subject to a Legal Hold (see AD35, Legal Hold). A legal hold will remain in effect until it is released in writing by the Office of General Counsel.
- Documents under audit or review, either internally or externally. The retention period extends until released by the Corporate Controller's Office. The Financial Officer will be notified regarding any accounts which are under audit; the Financial Officer will be responsible for contacting the department.
Additional questions may be directed to the University Archivist or the Records Management Officer.
For questions, additional detail, or to request changes to this procedure, please contact the Manager of Lion Surplus.
Date Approved: 07/10/2015
Most recent changes:
- 7/10/2015 - updated to reflect current operations, including the use of multiple auction web sites
Revision History (and effective dates:)
- Revision 5 - 6/18/2008 - updated to reflet the departmental name change, the handling of demolished vehicles, and other minor changes needed to clarify the handling of current operations.
- Revision 4 - 3/7/2006 - minor revision to clarify and tighten controls for eBay sales
- Revision 3 - 8/18/2004
- Revision 2 - 8/12/1991
- Revision 1 - 3/4/1983
- Original - 1/25/1973