Can a department sell old equipment to staff?

No, that is not allowed according to UCOP Policy.

Relevant Text:

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PROHIBITION OF SALES TO CERTAIN EMPLOYEES AND THEIR NEAR RELATIVES:
1. No one employed in a department that reports to either the Surplus Administrator or the Equipment Administrator, or a near relative of such employee, may buy excess property directly from the University.
2. No one employed in a department that generates excess property, or a near relative of such employee, may buy excess property originating in that department directly from the University.

E. RESTRICTIONS

1. Personal Use of Excess Property
Regardless of value or condition (e.g., obsolete or broken items), in no case may a University employee remove, or cause to be removed, excess property from University premises for personal use, distribution to third parties, or sale.

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Q: A retiring faculty member would like to keep/purchase his old computer because it contains valuable and/or sensitive research material: is this allowable?
No. As indicated under Section III.E.1. of this Bulletin, “Regardless of value or condition (e.g., obsolete or broken items), in no case may a University employee remove, or cause to be removed, excess property from University premises for personal use, distribution to third parties, or sale.” Furthermore, as indicated under Section III.D.2., “No one employed in a department that generates excess property, or a near relative of such employee, may buy any excess property originating in that department directly from the University.”
The valuable and/or sensitive research material must be copied onto a portable storage device and then transferred to the retiring faculty member’s personal computer.
Additionally, the hard drive in the computer must be wiped of all sensitive information or removed and destroyed, or the entire computer sent to an authorized E-waste recycler, per the provisions of Section III.E.7. of this Bulletin.