Can a School District Donate its Surplus Property?

by Kenneth McGovern, Staff Associate II

Posted on February 16, 2016

Every school district will eventually be faced with the task of disposing of surplus property. Approved disposal methods are listed in the Arizona Administrative Code R7-2-1131. Before any method is chosen, the district shall determine the fair market value of the surplus property in order to determine which disposal method is in the best interest of the district. Some of the more common methods are as follows:

  • Competitive sealed bidding
  • Auctions
  • Internet-based on-line sales
  • Trade-ins
  • Posted prices

A few lesser known methods available to Arizona school districts are outlined in the Arizona Revised Statutes (A.R.S.) 15-342:

  • (7) Sell or lease to the state, a county, a city, another school district or a tribal government agency any school property required for a public purpose, provided the sale or lease of the property will not affect the normal operations of a school within the school district
  • (35) Offer to sell outdated learning materials, educational equipment or furnishings at a posted price commensurate with the value of the items to pupils who are currently enrolled in that school district before those materials are offered for public sale

However, what disposal methods should be utilized for surplus property that is deemed worthless? Can your district gift the surplus property to students or members of the community? The short answer is no; however, there is one method found in the Arizona Revised Statutes that might be an option to your district:

  • A.R.S. 15-342(35): Donate surplus or outdated learning materials, educational equipment and furnishings to nonprofit community organizations where the governing board determines that the anticipated cost of selling the learning materials, educational equipment or furnishings equals or exceeds the estimated market value of the materials.

It is important to note that the this donation option only applies to outdated learning materials, educational equipment and furnishings. Further, the donation can only be made to a nonprofit community organization.

Having exhausted all of the approved disposal methods, what should the district do with its worthless surplus property? The district can contract with state surplus property or a scrap vendor as a final method of disposal. This method would typically involve either a bid or quote documentation.

Remember, the USFR Compliance Questionnaire specifically asks “Did the District follow R7-2-1131(C) when disposing of stewardship and capital asset items except as authorized by A.R.S. §15-342(7), (18), and (35)?” For compliance purposes, your district should review all available disposal methods and choose the method in the best interest of the district.

Even if the surplus property is difficult to dispose of, there is only one allowable method for school districts to donate surplus property, and your district should ensure that it follows the above donation restrictions regarding type of property and recipient of the donation.