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Fiscal Rules Training April 16, 2019

Fiscal Rules Training April 16, 2019. Commitment Vouchers, POs, Contracts, Grants & IAs: Russ Wall Travel: Jennifer Henry Accounting & Budget: Tom Gamache Karoline Clark Daniel Saint. Topics & Presenters from the OSC. Changes to Fiscal Rule, Chapter 3

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Fiscal Rules Training April 16, 2019

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  1. Fiscal Rules TrainingApril 16, 2019

  2. Commitment Vouchers, POs, Contracts, Grants & IAs: Russ Wall Travel: Jennifer Henry Accounting & Budget: Tom Gamache Karoline Clark Daniel Saint Topics & Presenters from the OSC

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

  4. Fiscal Rule Changes • Took Effect November 1, 2018 • Old: 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 3-5

  5. Fiscal Rule 3-1: Commitment Vouchers • When to Use – FR 3-1, § 5 No CV required for Interagency Agreements (See FR 3-5)

  6. Fiscal Rule 3-1: Commitment Vouchers • Exempt Disbursements – FR 3-1, § 5.4 • Exemption only applies to the need for a PO/State Contract • Prohibited Contract Terms - FR 3-1, § 6 • Vendors unwilling/unable to remove • Approvals - FR 3-1, § 7 • Statutory violations - FR 3-1, § 8 • Ratification • Personal Liability

  7. Fiscal Rule 3-1: Commitment Vouchers • Advance Payments - FR 3-1, § 9 • Controller delegate may approve Advance Payment up to $10,000 • Personal Services Commitment Vouchers - FR 3-1, § 10 • CMS entry required for CVs over $100,000 • Emergencies – FR 3-1, § 11 • Untimely Notice to OSC = Statutory Violation • Vendor Agreements – FR 3-1, § 12 • Independent Contractors - FR 3-1, § 13

  8. Fiscal Rule 3-2: Purchase Orders • PO Defined - FR 3-2, § 2 • Unilateral Agreement • Not used for Grants • Rule - FR 3-2, § 3 • Required Content - FR 3-2, § 4 • 5 “P”s: Parties, Products/Services, Payment, Period, & Provisions • Approved Forms & Modifications - FR 3-2, § 5 • No “Zombie” POs • Controller Approval - FR 3-2, § 6 • In process of updating PO T&Cs

  9. Fiscal Rule 3-3: State Contracts • State Contract types defined - FR 3-3, § 2 • Definitions only apply to State Contracts, not other CV forms • Expenditure/Non-Expenditure Ks – Liability, not Price, determines • State Contract Categories - FR 3-3, § 3 • Rule – FR 3-3, § 4 • Required Content – FR 3-3, § 5 • 5 Ps and 4 Ss - Statutory Authority, SOW, Special Provisions, & Signatures • Specific additional contents based on State Contract Type.

  10. Fiscal Rule 3-3: State Contracts • State Contract Forms and Modifications - FR 3-3, § 6 • Model 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

  11. Fiscal Rule 3-3: State Contracts • Monitoring – FR 3-3, § 10 • Independent Contractor – FR 3-3, § 11 • Exceptions – FR 3-3, § 12 • Special Provisions - FR 3-3, § 13

  12. Fiscal Rule 3-3: State Contracts • Federal Intergovernmental Contracts • All Contracts with the Federal Government must be reviewed by the Office of State Controller or a Reviewing Attorney, except as otherwise described in policy.

  13. Fiscal Rule 3-3: State Contracts • KEEP IN MIND… • Any Expenditure Contract not signed by Controller or delegate, is: • Not binding; • Null and Void; and • A Statutory Violation • Same applies for OIT signature for Major IT Projects.

  14. Model Contract Resources • Available on the CCU Website: • https://www.colorado.gov/pacific/osc/contracts • Click on the Templates & Tools dropdown • Templates include: • Personal Services Contract • Intergovernmental Agreement • Master Task Order Contract • Grant Agreement • Intergovernmental Grant Agreement • Information Technology Contract • Real Property Lease • Modifications also available

  15. Model Contract Resources • 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.

  16. Fiscal Rule 3-4: Grants • Grant Defined – FR 3-4, § 2 • Carries on Public Purpose • Not a Contract (no direct benefit or use by Agency/IHE) • Small Dollar Grant Award (“SDGA”) - FR 3-4, § 2.5 • Unilateral CV • In process • Rule – FR 3-4, § 3

  17. Fiscal Rule 3-4: Grants • Required Content – FR 3-4, § 4 • Grant 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, § 6 • At State Controller’s discretion

  18. Fiscal Rule 3-4: Grants • Approvals – FR 3-4, § 7 • Grants not signed by Controller or delegate, is: • Not binding; • Null and Void; and • A Statutory Violation

  19. Fiscal 3-5: Interagency Agreements • Interagency Agreements Defined - FR 3-5, § 2 • Rule - FR 3-5, § 3 • Required Content - FR 3-5, § 4 • 5 Ps • Encumbrance • 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.

  20. Electronic Signatures Policy • Collaborative effort by OSC and OIT • Agencies 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 agency • All other fiscal rules and policies remain in place

  21. Employee Settlements Technical Guidance • 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

  22. QUESTIONS? Central Contracts Unit Russ Wall, Manager russ.wall@state.co.us 303-866-4415

  23. Travel

  24. Travel Today’s topic: Not:

  25. Travel Rule 5-1 • CRS 24-9-104(2) and 24-30-202(20.1) and (26) • Shall be for the benefit of the State • Is only for the time period necessary • Is completed using the most economical means • Is approved by the approving authority • Expenses are reasonable under the circumstances • Traveler submits adequate documentation • Reimbursement requests/Travel advances settled

  26. Authoritative Guidance Department/IHE Policies State Fiscal Rules & Policies IRS Regulations

  27. Department/IHE Travel Policies • Each department and IHE may develop its own policies regarding travel • Must be consistent with Fiscal Rules • Can include items not mentioned in fiscal rules • Can be more restrictive • Must be followed

  28. Accountable Plan: IRS Requirements • Traveler 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

  29. Required Authorizations • In-State - prior authorization may berequired • 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 delegate • CCHE & IHEs – prior authorization by CCHE’s CEO, or delegate • No Cost to the State - prior authorization by approving authority

  30. Travel Advances • Complete a Travel Advance Form • Shall not exceed the $2,500 statutory limit • Requires prior authorization from the Approving Authority and CFO • Settled with the State within 60 days of completing travel

  31. Traveling Away From Home Two 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”

  32. Traveling Away From Home Terms Defined • Regular Work Location: primary location where the traveler works, including the entire Metropolitan Area of their regular work location • Metropolitan 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.

  33. Payment of Travel Expenses • Centrally billed Commercial Card • Individually billed Travel Card • Personal Card (with reimbursement via EFT) • Travel Advance Unallowable Use: • Procurement cards for travel expenses • Centrally billed Commercial Cards for meals or incidentals while Traveling Away from Home

  34. Reimbursement of Expenses

  35. Reimbursement of Expenses

  36. Traveler receives incidental rate only if: 1. Away from home and 2. Staying overnight

  37. Meals & Incidentals for Days Traveler Departs and Returns Two methods: • Percentage Method • Departure 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 • Breakfast – departure is 5:00 AM or earlier • Lunch – departure is before 11:00 AM • Dinner – arrival is 8:00 PM or later Department/IHE choses the method and must use the same method for all travel reimbursements by that department

  38. Unallowable Reimbursements • Alcoholic beverage or recreational marijuana expenses • Entertainment 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 coverage

  39. Certification and Approval • Required for Advances and Reimbursement Requests • Employee certifies that statements are true and correct • Fiscal Rule 5.8.1 contains the required certification language • Approving Authority also endorses

  40. Timing

  41. Special Situations Travel within a Single Day • Travel must be completed within a single day • Allowable Reimbursement Meals* • Breakfast – if employee leaves home by 5:00 AM • Lunch – 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 nontaxable

  42. Special Situations • Travel to Temporary Work Location • Location 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 Applicants • ED’s Discretion • Interview related travel expenses for job applicants • Consistent with expenses allowed for employees

  43. Special Situations • 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 provisions • Allowances for Travel with Spouse, Relatives or Friends • No reimbursement for the cost of an employee’s spouse or other person(s) accompanying the employee, or associated incremental increases in costs

  44. Special Situations • Allowances for Travel by Leased or Privately Owned Aircraft • Lease 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

  45. Commuter Vehicles Policy - Statutory Compliance • 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

  46. Commuter Vehicles Policy - Taxability • 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

  47. EV Charging Stations Policy • 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

  48. Questions?

  49. Accounting & Budget

  50. Rule 1-1 Accounting Principles & Standards • GASB - Governmental Accounting Standards Board • GAAP – Generally Accepted Accounting Principles • Each state agency is to follow GAAP and statutes • If there is a conflict between GAAP and statute for financial reporting, follow GAAP

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