ACCOUNTING FOR PROPERTY ACQUISITIONS - GIFT - 8634-OCT-2020
Record capital assets/property acquired by gift from other than state agencies/departments at the fair market value plus related costs (i.e., the price that the agency/department could sell an equivalent capital asset/property) on the date the gift is received. Retain receipts, letters, stock received reports, or other documents as evidence of gifts.
Government Code sections 8647, 11005, and 16302 pertain to the state’s acceptance of gifts. Gifts are normally either real property and intangibles or personal property, such as equipment and cash. The following procedures apply to the acceptance of gifts.
1. Real Property and Intangibles
A gift of real property may be tangible (e.g., land or building) or intangible (e.g., easements, land use rights related to real property). A gift of real property must be approved by both the Department of General Services (DGS) and the Department of Finance (Finance) before it can be accepted. See SAM section 1323.12.
A. Agencies/departments must prepare and submit to the DGS the following materials as appropriate for real property:
1. Part I of DGS Form RES–212 Gift Deed Summary
2. Contract Transmittal STD. 15
3. Certificate of Acceptance
4. Environmental Document
5. Certificate of Inspection
6. Summary of title report exceptions
7. Copy of title report
8. Map of property or description of gift
B. The DGS will review material submitted by the agency/department. Based on this review, the DGS will prepare and submit the following to Finance:
1. Copies of information submitted by the agency/department
2. Cover memo requesting acceptance of the gift based on the findings of the review.
C. Finance will accept or reject the gift after reviewing all data submitted by the DGS and the requesting agency/department. The DGS will then forward to the requesting agency/department:
1. Copy of Finance’s acceptance or rejection of gift
2. Copy of deed, policy and invoice (for title policy) if gift is accepted
If the DGS rejects the proposed gift, the agency/department will be advised of the reason for the rejection. Finance will not be forwarded information unless the DGS recommends acceptance of the gift.
2. Personal Property
Gifts of personal property may include tangible items (e.g., vehicles, equipment, or cash) or intangible items (e.g., patents, copyrights, trademarks). Agencies/departments cannot accept gifts of personal property unless they have specific statutory authority to do so. If an agency/department is not permitted by law to accept a gift, the agency/department will notify Finance so that the Director of Finance can accept the gift on behalf of the state pursuant to authority by Government Code section 11005.1.
All agencies/departments authorized by law to accept gifts are required by Government Code section 11005 to secure the approval of the Director of Finance before a gift of personal property can be accepted, unless:
a. The gift is an unconditional gift of money (i.e., does not require a specific outcome or action to accept).
b. Statutes specifically provide that such approval is not necessary.
For example, a donation for the General Fund deficit would identify the purpose of the gift without a specific outcome or requirement to be conditional.
The Director of Finance’s approval has been given to accept gifts of money if the only condition of the gift is to specify that it is for an existing fund in the Treasury.
If agencies/departments need approval to accept a gift of personal property, they will notify their Finance Budget Analyst by letter. The Finance Budget Analyst will either approve or disapprove the acceptance of the gift. If Finance approves a gift of equipment or real property, it will be recorded in the property register and asset accounts.
When agencies/departments receive gifts of cash to be deposited in the Treasury, they will remit the money to the fund or appropriation specified by the donor.
If the money is for a specific purpose, but the donor did not specify a fund or appropriation, and no existing fund fulfills the purpose, then the money will be deposited in the Special Deposit Fund. See SAM section 18420.
If the money is donated, but the donor states no fund, appropriation or specific purpose, the money will be deposited in the State School Fund (Government Code section 16302).
The Director of Finance gives advance approval for the receipt of anticipated grants which will be included in the approved Governor’s Budget. Unbudgeted grants must have Finance approval before acceptance. See SAM section 0912.