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Fiscal Rules Training April 16, 2019 Fiscal Rules Training April 16, 2019

Fiscal Rules Training April 16, 2019 - PowerPoint Presentation

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Fiscal Rules Training April 16, 2019 - PPT Presentation

1 Topics amp Presenters from the OSC Commitment Vouchers POs Contracts Grants amp IAs Russ Wall Travel Jennifer Henry Accounting amp Budget Tom Gamache Karoline Clark ID: 794626

rule state amp fiscal state rule fiscal amp travel expenses contract osc employee policy construction contracts guidance reimbursement capital

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Slide1

Fiscal Rules TrainingApril 16, 2019

1

Slide2

Topics & Presenters from the OSC

Commitment Vouchers, POs, Contracts, Grants & IAs:

Russ Wall

Travel:

Jennifer Henry

Accounting & Budget:

Tom Gamache Karoline Clark Daniel Saint

2

Slide3

Changes to Fiscal Rule, Chapter 3Commitment Vouchers, POs, State Contracts, Grants, & Interagency Agreements

3

Slide4

Took Effect November 1, 2018Old: FR 2-2 & FR 3-1 

New: FR Chapter 3

Commitment Vouchers (“CV”) include:

Small Purchase Documentation – FR 3-1

Purchase Orders – FR 3-1 & FR 3-2

State Contracts – FR 3-1 & FR 3-3

Grants – FR 3-1 & FR 3-4

Interagency Agreements – FR 3-1 & FR 3-5Fiscal Rule Changes4

Slide5

When to Use – FR 3-1, § 5

No CV required for Interagency Agreements (See FR 3-5)

Fiscal Rule 3-1: Commitment Vouchers

CV Type

Threshold

Small Purchase Documentation

Goods, Services, and Grants $5,000 or less

Purchase Order

Goods over $5,000

Services between $5,000 and $150,000

Construction

up to $150,000 (FR 4-1)

State Contract

Services & Construction

over $150,000

Professional Services, any amount

Real Property leases/license, any amountSmall Dollar Grant AwardGrants between $5,000 and $150,000Grant AgreementGrants over $150,000

5

Slide6

Exempt Disbursements – FR 3-1, § 5.4Exemption only applies to the need for a PO/State ContractProhibited Contract Terms - FR 3-1, § 6

Vendors unwilling/unable to removeApprovals - FR 3-1, § 7

Statutory violations - FR 3-1, § 8

Ratification

Personal Liability

Fiscal Rule 3-1: Commitment Vouchers

6

Slide7

Advance Payments - FR 3-1, § 9Controller delegate may approve Advance Payment up to $10,000 Personal Services Commitment Vouchers - FR 3-1, § 10

CMS entry required for CVs over $100,000Emergencies – FR 3-1, § 11

Untimely Notice to OSC = Statutory Violation Vendor Agreements – FR 3-1, § 12

Independent Contractors - FR 3-1, § 13

Fiscal Rule 3-1: Commitment Vouchers

7

Slide8

PO Defined - FR 3-2, § 2Unilateral AgreementNot used for Grants

Rule - FR 3-2, § 3Required Content - FR 3-2, § 4

5 “P”s: Parties, P

roducts/Services,

P

ayment,

Period, & P

rovisionsApproved Forms & Modifications - FR 3-2, § 5No “Zombie” POsController Approval - FR 3-2, § 6In process of updating PO T&CsFiscal Rule 3-2: Purchase Orders8

Slide9

State Contract types defined - FR 3-3, § 2Definitions only apply to State Contracts, not other CV formsExpenditure/Non-Expenditure Ks – Liability, not Price, determines

State Contract Categories - FR 3-3, § 3

Rule – FR 3-3, § 4Required Content – FR 3-3, § 5

5 Ps and 4

Ss

-

Statutory Authority, S

OW, Special Provisions, & SignaturesSpecific additional contents based on State Contract Type.Fiscal Rule 3-3: State Contracts9

Slide10

State Contract Forms and Modifications - FR 3-3, § 6Model Contract Templates available on CCU’s Website

Legal Reviews – FR 3-3, § 7

At State Controller discretion

Approvals – FR 3-3, § 8

Must be signed by Controller to be effective

Accounting – FR 3-3, § 9

Outsource contracts – Record Revenues/Expenditures

Fiscal Rule 3-3: State Contracts10

Slide11

Monitoring – FR 3-3, § 10Independent Contractor – FR 3-3, § 11

Exceptions – FR 3-3, § 12

Special Provisions - FR 3-3, § 13Fiscal Rule 3-3: State Contracts

11

Slide12

Federal Intergovernmental ContractsAll Contracts with the Federal Government must be reviewed by the Office of State Controller or a Reviewing Attorney, except as otherwise described in policy.

Fiscal Rule 3-3: State Contracts

12

Slide13

KEEP IN MIND…Any Expenditure Contract not signed by Controller or delegate, is:Not binding;Null and Void; and

A Statutory ViolationSame applies for OIT signature for Major IT Projects.

Fiscal Rule 3-3: State Contracts

13

Slide14

Available on the CCU Website:https://www.colorado.gov/pacific/osc/contractsClick on the Templates & Tools dropdown

Templates include:Personal Services ContractIntergovernmental AgreementMaster Task Order Contract

Grant AgreementIntergovernmental Grant AgreementInformation Technology Contract

Real Property Lease

Modifications also available

Model Contract Resources

14

Slide15

Key points with templates…Always download template directly from CCU Website. Templates are updated periodically. Don’t use saved versions.Comments give contract drafters direction on what can be edited.

Comments easily deleted using delete all function.When a section is deleted. Use “RESERVED” to preserve the integrity of the contract’s internal references and TOC.

Model Contract Resources

15

Slide16

Grant Defined – FR 3-4, § 2Carries on Public PurposeNot a Contract (no direct benefit or use by Agency/IHE)Small Dollar Grant Award (“SDGA”) - FR 3-4, § 2.5

Unilateral CV

In processRule – FR 3-4, § 3

Fiscal Rule 3-4: Grants

16

Slide17

Required Content – FR 3-4, § 4Grant Agreement – 5 Ps and 4 Ss.

SDGA – 5 Ps and 3 Ss

(no signature)Additional attachments as needed (HIPAA, Grant required content,

etc

)

Grant Forms and Modifications - FR 3-4, § 5

Legal Review -

FR 3-4, § 6At State Controller’s discretionFiscal Rule 3-4: Grants17

Slide18

Approvals – FR 3-4, § 7Grants not signed by Controller or delegate, is:

Not binding;

Null and Void; and

A Statutory Violation

Fiscal Rule 3-4: Grants

18

Slide19

Interagency Agreements Defined - FR 3-5, § 2Rule - FR 3-5, § 3

Required Content - FR 3-5, § 4

5 PsEncumbrance

IA Forms and Modifications - FR 3-5, § 5

Approvals - FR 3-5, § 6

Resolution of Disputes - FR 3-5, § 7

State Controller determination is final.

Fiscal 3-5: Interagency Agreements19

Slide20

Collaborative effort by OSC and OITAgencies may use electronic signatures for grants and contracts

Optional

Agency-by-agency

Agencies subject to OIT’s authority must also comply with OIT’s Technical Standards

DocuSign

Pricing

Effective 3/8/19

DOLA was pilot agencyAll other fiscal rules and policies remain in placeElectronic Signatures Policy20

Slide21

Technical Guidance: OSC in collaboration with Office of Attorney General and Risk Management

Response to IRS Audit

Determine taxability of employment and tore settlement agreements

Apportion settlement payments

Prepare employee settlement payment paragraph

Reduce settlement amounts for debts owed to the State

Determine withholding for Medicare tax, PERA contributions, and benefits

Generally: Employee settlements will be paid by form W-2 rather than form 1099

Examples:

Included in the Technical Guidance

Employee Settlements

Technical Guidance

21

Slide22

QUESTIONS?Central Contracts Unit

Russ Wall, Managerruss.wall@state.co.us

303-866-4415

22

Slide23

Travel

23

Slide24

Today’s topic: Not:

Travel

24

Slide25

CRS 24-9-104(2) and 24-30-202(20.1) and (26)Shall be for the benefit of the StateIs only for the time period necessaryIs completed using the most economical means

Is approved by the approving authorityExpenses are reasonable under the circumstances

Traveler submits adequate documentationReimbursement requests/Travel advances settled

Travel

Rule 5-1

25

Slide26

Authoritative Guidance

IRS Regulations

State

Fiscal Rules & Policies

Department/IHE Policies

26

Slide27

Department/IHE Travel PoliciesEach department and IHE may develop its own policies regarding travel

Must be consistent with Fiscal RulesCan include items not mentioned in fiscal rules

Can be more restrictive

Must be followed

27

Slide28

Accountable Plan: IRS RequirementsTraveler must be traveling away from home

Expenses must have a business connection

Adequately account for the expenses within 60 days

Return excess advances within 60 days

28

Slide29

In-State - prior authorization may be required

Out-of-State – prior authorization by CEO, or delegate

Foreign

Depts

- prior authorization by Governor, Elective Officer, Commissioner of DOE or delegates,

and CEO or delegateCCHE & IHEs – prior authorization by CCHE’s CEO, or delegateNo Cost to the State - prior authorization by approving authorityRequired Authorizations 29

Slide30

Complete a Travel Advance FormShall not exceed the $2,500 statutory limit

Requires prior authorization from the Approving Authority and CFOSettled with the State within 60 days of completing travel

Travel

Advances

30

Slide31

Traveling Away From HomeTwo Requirements:Duties require traveler to be away from their

Regular Work Location substantially longer than an ordinary day’s work, and

Traveler needs to sleep or rest to meet the demands of their work while away

If both met you are considered “traveling away from home”

31

Slide32

Traveling Away From HomeTerms Defined

Regular Work Location: primary location where the traveler works, including the entire

Metropolitan Area of their regular work locationMetropolitan Area:

region including a city and the densely populated surrounding areas that are socially and economically integrated with it

Note:

If traveler travels within the Regular Work Location/Metropolitan Area, the traveler is

not traveling away from home. 32

Slide33

Centrally billed Commercial CardIndividually billed Travel CardPersonal Card (with reimbursement via EFT)Travel AdvanceUnallowable Use:

Procurement cards for travel expenses

Centrally billed Commercial Cards for meals or incidentals while Traveling Away from Home

Payment of Travel Expenses

33

Slide34

Reimbursement of Expenses

Item

Reimbursement

Receipts Required?

Lodging

(hotel, campsite, etc.)

Actual cost of reasonable accommodations

Y (if over $25)

Transportation (airfare, taxi, etc.)

Equivalent to the most cost beneficial method available

Y (if over $25)

Rental Vehicles

Actual

Y

Parking Fees

Actual

Y (for any single fee over $25)

34

Slide35

Reimbursement of Expenses

Item

Reimbursement

Receipts Required?

Meals & Incidentals

Per Diem

N

Tips - Transportation

Actual Cost

N (if under $25)

Tips - Others

Included in Per Diem

N

Personal Vehicle

Mileage Rate

N

Tolls

Actual Cost

N (if under $25)

35

Slide36

Traveler receives incidental rate only if:

1. Away from home and2. Staying overnight

36

Slide37

Two methods:

Percentage MethodDeparture day-75% of destination city’s per diem, including incidental expenses

Return day-75% of departing city’s per diem, including incidental expenses

Departure/Arrival Time Method

B

reakfast – departure is 5:00 AM or earlier

Lunch – departure is before 11:00 AM

Dinner – arrival is 8:00 PM or laterDepartment/IHE choses the method and must use the same method for all travel reimbursements by that departmentMeals & Incidentals for Days Traveler Departs and Returns37

Slide38

Alcoholic beverage or recreational marijuana expensesEntertainment expenses

Personal expenses incurred primarily for the benefit of the traveler and not related to State business

Political expenses

Traffic fines and parking tickets

Late fees for individually billed Travel Cards

Premium add-on airline costs, unless preapproved by department/IHE

Certain

insurance coverageUnallowable Reimbursements38

Slide39

Required for Advances and Reimbursement RequestsEmployee certifies that statements are true and correct

Fiscal Rule 5.8.1 contains the required certification language

Approving Authority also endorses

Certification and Approval

39

Slide40

Timing

40

Slide41

Special SituationsTravel within a Single DayTravel must be completed within a single day

Allowable ReimbursementMeals*

Breakfast – if employee leaves home by 5:00 AMLunch – None

Dinner – if employee arrives home after 8:00 PM

Transportation**

Personal vehicle – mileage rate

Taxi, etc. – actual cost

* Meal reimbursement is generally taxable unless exception applies, e.g., employer-provided team meals** Transportation reimbursement is nontaxable41

Slide42

Travel to Temporary Work LocationLocation where employment is expected to continue for 1 yr or less

Reimbursement of transportation expenses is allowable

Allowances for Members of Boards or Commissions

Paid in accordance with statute, if none, in accordance with

Dept

/IHE policy.

May include per diem or actual necessary expenses and childcare

Allowances for State Job ApplicantsED’s DiscretionInterview related travel expenses for job applicantsConsistent with expenses allowed for employeesSpecial Situations42

Slide43

Allowances for Travel not Solely for State Business

If employee obtains lower rates due to extended stay for personal reasons, the rates shall also apply to business portion

No reimbursement for personal travel costs for lodging, meals, or transportation (other than airfare)

Depts

/IHEs may develop a policy regarding allocation of airfare, if any

Allowance for Travel Paid Directly by a Non-State Entity

Approval by the appropriate Approving Authority

Must not violate statute, guidance from the Colorado Independent Ethics Commission, or constitutional provisionsAllowances for Travel with Spouse, Relatives or FriendsNo reimbursement for the cost of an employee’s spouse or other person(s) accompanying the employee, or associated incremental increases in costsSpecial Situations

43

Slide44

Allowances for Travel by Leased or Privately Owned AircraftLease approval by the Aircraft Section of the Colorado State Patrol, including lease of replacement aircraft

Use approval by the Office of Risk Management

Allowances for Travelers Furnishing Their Own Lodging

No reimbursement if an employee furnishes their own lodging

Special Situations

44

Slide45

The OSC in collaboration with State Fleet Management updated State Fleet Rules, Fiscal Rules, Technical Guidance, and Policy to ensure compliance with CRS 24-30-1113

Assigned Authorization form Updated from paper to a digital form utilizing Google Drive

This allows for more timely completion of the form itself,

reportability

, and streamlines the re-authorization process statute requires

Further Statutory Revisions – the OSC, in coordination with the Office of the State Auditor, will be requesting revisions to CRS 24-30-1113 to clarify who the assignment applies to and when taxable events occur

Commuter Vehicles Policy - Statutory Compliance

45

Slide46

Technical Guidance: OSC developed guidance to align with IRS Regulations

The OSC consulted directly with IRS auditor to address specific situations that occur at the State

This clarified who is taxable and when these commuting events occur

Commuting Reporting Form:

Developed by OSC to assist agencies to report events to their payroll and DPA central offices in a timely fashion

Commuter Vehicles Policy - Taxability

46

Slide47

Policy: OSC in collaboration with Governor’s Energy Office, developed policy

Designed to promote the use of Electric Vehicles and comport with the Governor’s Office executive order “Supporting Colorado’s Clean Energy Transition” by providing reporting guidance for State agencies and Institutions of Higher Education wishing to offer employees free use of electric vehicle charging station

Technical Guidance: OSC will develop to apply to all agencies.

Gather information to determine whether electronic vehicle charging stations can be considered a de

minimis

benefit

EV Charging Stations Policy

47

Slide48

Questions?

48

Slide49

Accounting & Budget

49

Slide50

GASB - Governmental Accounting Standards BoardGAAP – Generally Accepted Accounting PrinciplesEach state agency is to follow GAAP and statutesIf there is a conflict between GAAP and statute for financial reporting, follow GAAP

Rule 1-1 Accounting Principles & Standards

50

Slide51

Definition of “Donation”No donations, except permitted by statuteExpenditures shall be:For official state businessReasonable and necessaryAuthorizedFair and reasonableWithin available budget

In compliance with applicable statutes, EO, rules, and policiesFor goods & services within the fiscal year

Rule 2-1 Propriety of Expenditures

51

Slide52

Definition of “Official Function”Not for personal benefitDirect attendeesFood/drink kept to a minimumApproved by CEO or RepFR 2-1 appliesProhibited itemsDocumentationSee policy

Rule 2-4 Official/Training Function

52

Slide53

Definition:

1) Meeting, conference, training, or other function, 2) hosted by the state agency, 3) attended by guests and/or State employees, 4) official State business, 5) expenditure of funds

Prior approval:

By approving official. Include: 1) official State business purpose, 2) funding source, 3) detail for expenditures, and 4) attendees

Approving Official:

an official in the capacity to commit state funds

Permitted Functions:

Training, employee appreciation or recognition, business collaboration that includes the public, multi-unit eventUnallowable ExpensesOfficial Functions Policy53

Slide54

Policy

Frequency: Maximum of once per calendar quarter

Limit: Maximum of $100 in total per calendar year

Tax Reporting: In technical guidance

Technical Guidance

Separate from policy – based on IRS regulations

Applies to all agencies, institutions of higher education, branches of government

IRS De Minimis (not taxable to employee)

Value is so small in relation to the frequency with which it is provides that accounting for it is unreasonable or administratively impracticable

Not De Minimis (taxable to employee)

Cash and cash equivalent (gift cards)

De Minimus Employee Appreciation Items Policy

54

Slide55

Only applies to current state employees, excluding Elected OfficersDoes not apply to new hiresFor business, not personal reasonsTime and DistanceTwo types of moves

Relocation - 30 days max per diemNote: Any amounts paid for moving & relocation are taxable to the employee

Rule 2-6 Moving & Relocation

55

Slide56

Spend is greater than budget (OSC-009)Spend is greater than revenueSpend is greater than Fund Balance (OSC-024)Notification to OSC & OSPBYes there is a formLimitsRestrictionsCan be held personally liable for OEX amount

Rule 7-3 Overexpenditures

56

Slide57

Use of Capital Construction Funding:Must be used for the intended purposeNot used to reimburse State employees for Capital Construction and Controlled Maintenance ProjectsMay be used for personal services to independent contractors within the project scope

Rule 4-2 Capital Construction Projects

57

Slide58

Six Month Rule:State contracts for capital construction projects shall be executed and funds encumbered within 6 months after signature of Long BillIf this deadline cannot be met, a waiver recommendation may be requested from the Capital Development Committee to the OSC

Six Month Rule does not apply to IHE projects funded solely from cash funds held by the IHE, or otherwise exempted by statute

Rule 4-2 Capital Construction Projects

58

Slide59

Availability of Capital Construction Funds:Appropriated CC funds are available immediately upon signature of the Governor, in the year signedAppropriated funds must be initiated by the end of the fiscal year following the original appropriationAvailable for 3 years full fiscal years, or until completion of the project (if funds are properly encumbered). 3-year period re-starts for all appropriations for each new appropriation.

Rule 4-2 Capital Construction Projects

59

Slide60

Project Retainage:State Agency:Withhold retainage for all projects where a contract exceeds the limit established by Section 24-91-103, C.R.S., currently $150,000Institutions of Higher Education:Withhold retainage for all projects that are not cash funded

Form: Monies withheld from the contractor or any other form authorized by statute and acceptable to the State Agency or Institution

Does not apply to Professional Services Contracts

Rule 4-2 Capital Construction Projects

60

Slide61

Release of Retainage:Partial: Discrete portions of work are completed, accepted and advertised for partial settlement.Final: Contract has been satisfactorily completed and accepted, and State Agency or IHE has proof of publication of “Notice of Final Settlement” in accordance with Section 38-26-107, C.R.S., and

No outstanding claims against the project

Rule 4-2 Capital Construction Projects

61

Slide62

Unexpended budget is automatically carried forward for three fiscal yearsInitial year of appropriation and subsequent 2 yearsRestrictions, if in placeEnd of the 3rd year of an appropriation:Amount validly encumbered may be carried forward until fully liquidated

Any unexpended/unencumbered appropriation remaining must be reverted.

Rule 4-3 Capital Construction CF/Reversions

62

Slide63

Spending authority shall be subject to approval by the State ControllerDelegated authority from OSPB, unless State Agency is not subject to the authority of the OSPBMust be supported by law (statute or legislation), certain grant awards, or other authority determined by the State Controller – see Fiscal Procedures Manual

Does not apply to IHE expenditures not subject to appropriation by the General Assembly

Rule 7-1 Spending Authority

63

Slide64

Change funds – only to be used for making change when cash is accepted from publicNo expenditures of any kind allowedPetty cash – only to be used for payment of incidental expenses of a nominal amountExamples: Parking, postageAll expenditures still must follow applicable statutes, rules, regulations, executive orders, and policies

Must be approved by the State Controller or Controller delegate at the department

Rule 6-2 Change Funds and Petty Cash

64

Slide65

Bank account – bank account established by an agency at a financial institution to conduct State business

Imprest account – cash account established to pay operating expensesImprest accounts and external bank accounts must be approved by State Controller

External bank accounts also must be approved by State TreasurerAll expenditures still must follow applicable statutes, rules, regulations, executive orders, and policies

Rule 6-3

Imprest

and Bank Accounts

65

Slide66

Unless otherwise authorized by law, unexpended appropriations expire at the end of each fiscal yearLegal authorization may be in the form of:Long bill footnotes

Fund or program statutes Capital Construction – See Rule 4-3

Rule 7-2 Expiration and

Rollforward

of Appropriations

66

Slide67

Or the State Controller can authorize rollforward of spending authorityExtenuating circumstances – clearly beyond the control of the department and department must have mitigated it to the greatest extent possibleOrCorrectional industries – meet

CCi year end ordering deadlines

Rule 7-2 Expiration and Rollforward of Appropriations

67

Slide68

Each quarterly reporting period shall be regarded as an integral part of the fiscal year. Arbitrary assignment of revenues or expenses to a period shall not be allowed.Departments are required to submit quarterly reports to OSCChapter 5, Section 4 of the Fiscal Procedures ManualRule 8-2 Quarterly Reporting

68

Slide69

Questions?

69