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
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Slide1
Fiscal Rules TrainingApril 16, 2019
1
Slide2Topics & Presenters from the OSC
Commitment Vouchers, POs, Contracts, Grants & IAs:
Russ Wall
Travel:
Jennifer Henry
Accounting & Budget:
Tom Gamache Karoline Clark Daniel Saint
2
Slide3Changes to Fiscal Rule, Chapter 3Commitment Vouchers, POs, State Contracts, Grants, & Interagency Agreements
3
Slide4Took 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
Slide5When 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
Slide6Exempt 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
Slide7Advance 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
Slide8PO 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
Slide9State 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
Slide10State 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
Slide11Monitoring – 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
Slide12Federal 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
Slide13KEEP 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
Slide14Available 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
Slide15Key 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
Slide16Grant 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
Slide17Required 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
Slide18Approvals – 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
Slide19Interagency 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
Slide20Collaborative 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
Slide21Technical 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
Slide22QUESTIONS?Central Contracts Unit
Russ Wall, Managerruss.wall@state.co.us
303-866-4415
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Slide23Travel
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Slide24Today’s topic: Not:
Travel
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Slide25CRS 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
Slide26Authoritative Guidance
IRS Regulations
State
Fiscal Rules & Policies
Department/IHE Policies
26
Slide27Department/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
Slide28Accountable 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
Slide29In-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
Slide30Complete 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
Slide31Traveling 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
Slide32Traveling 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
Slide33Centrally 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
Slide34Reimbursement 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
Slide35Reimbursement 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
Slide36Traveler receives incidental rate only if:
1. Away from home and2. Staying overnight
36
Slide37Two 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
Slide38Alcoholic 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
Slide39Required 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
Slide40Timing
40
Slide41Special 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
Slide42Travel 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
Slide43Allowances 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
Slide44Allowances 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
Slide45The 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
Slide46Technical 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
Slide47Policy: 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
Slide48Questions?
48
Slide49Accounting & Budget
49
Slide50GASB - 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
Slide51Definition 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
Slide52Definition 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
Slide53Definition:
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
Slide54Policy
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
Slide55Only 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
Slide56Spend 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
Slide57Use 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
Slide58Six 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
Slide59Availability 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
Slide60Project 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
Slide61Release 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
Slide62Unexpended 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
Slide63Spending 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
Slide64Change 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
Slide65Bank 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
Slide66Unless 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
Slide67Or 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
Slide68Each 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
Slide69Questions?
69