Equipment Requirements for Federal Programs

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Equipment Requirements for Federal Programs

• November 2006

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Christie Lentz Director of Budgets Field
Services Office of Federal Programs
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Purpose of This Presentation

• To review the States revised equipment policies
  for all federal programs
• To explain the requirement of self-assessment of
  equipment for Title I as required in the
  corrective action plan with the USDOE, which
  includes requirements at the school level and
  district level
• To provide technical assistance in ensuring that
  LEAs comply with federal and state laws, rules,
  and regulations that govern equipment purchased
  with federal funds

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Recent Happenings in the State Re Federal
Programs Equipment

• May 2006 -- USDOE Monitoring of Title I in
  Tennessee
• September 2006 Compliance Update Re Revised
  Equipment Guidelines and Equipment Corrective
  Action Plan
• September-October 2006 --Technical assistance
  meetings for fiscal requirements for federal
  programs, including equipment requirements

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Federal Mandates that Address Equipment
Requirements

• Section 80.32 (b) of EDGAR-A State LEA will
  use, manage and dispose of equipment acquired
  under a grant by the State in accordance with
  State laws and procedures.
• Section 443(a) of the General Education
  Provisions Act (GEPA) requires each recipient of
  Federal funds, such as an LEA, to keep records,
  which fully disclose the amount and disposition
  of the funds, the total costs of the activity for
  which the funds are usedand such other records
  as will facilitate an effective financial or
  programmatic audit.

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Federal Mandates that Address Federal Equipment
Requirements--contd.

• USDOE Title I Monitoring Indicator 3.9Equipment
  and Real Property--The purpose of this critical
  element is to review the SEAs and LEAs controls
  over the procurement, recording, custody, use,
  and disposition of Title I equipment in
  accordance with the provisions of State policies
  and procedures, the No Child Left Behind Act
  (NCLB), the Improper Payments Information Act,
  standards of internal control, and any other
  relevant standards, circulars, or legislative
  mandates.

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Summary of Revisions to State Equipment
Guidelines

• Definition of Equipment page 1
• Addition of state definition of equipment
• Change from durable goods to state definition of
  sensitive minor equipment
• The Revised Equipment Guidelines are located on
  our website at this location
• http//www.tennessee.gov/education/fedprog/doc/ed5
  091.doc .

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Revisions--contd

• Guidelines for Equipment page 2
• Bar codes or other secure tagrequired and must
  have the following items unless the equipment is
  purchased as part of a schoolwide project under
  Title I LEA name, Title, and project year of
  purchase
• Schoolwide equipment barcodes or tags-- required
  and must have the following items LEA name,
  school name, project year of purchase, schoolwide

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Revisionscontd.

• Equipment Inventory page 2
• Inventory kept until disposition takes place
• Items in inventory records listed specifically as
  in EDGAR 80.32

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Questions about the Revisions to the Guidelines

• ?

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Self-Assessment for Title I Equipment

• As a part of the Corrective Action Plan with the
  USDOE, the TDE committed to require that each LEA
  will perform a self-assessment to determine its
  level of compliance with the state equipment
  procedures.
• By 12-31-06, each LEA must report the results of
  its self-assessment to the TDE via its assigned
  NCLB consultant and describe corrective action it
  will take if it is not in full compliance with
  the requirements.
• Please note Beginning with this years (06-07)
  on-site monitoring cycle, there will be a more
  thorough review of LEA compliance with these
  equipment requirements for all Titles, not just
  Title I.

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Self-Assessment for Title I Equipment Form ED-5336
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Self-Assessment for Title I Equipment Form
ED-5336 contd.
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Self-Assessment for Title I Equipment Form
ED-5336 contd.
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Questions about the Self-Assessment for Equipment

• ?

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Review of Revised Equipment and Inventory
Guidelines
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Definition of Equipment

• Every local educational agency (LEA) should have
  an approved definition of equipment.
• If there is none, the state of Tennessee
  definition of equipment applies as follows
  equipment is all items (machinery, implements,
  tools, furniture, livestock, vehicles, and other
  apparatus) purchased with an object code of 16
  with a unit cost of 5,000.00 or more and a
  minimum useful life expectancy of three years.
  Freight charges and installation cost should be
  included as cost of equipment.
• LEA definition for equipment can be more
  restrictive, but not less restrictive.
• LEA cannot apply a more stringent standard for
  federal programs.

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Definition of Equipment contd.

• Sensitive minor equipment is defined as items
  purchased with an object code of 099 with a cost
  between 100.00 and 5,000.00. It includes
  sensitive items such as computers, external
  computer peripherals, weapons, etc., as
  determined by the State Personal Property
  Section.
• Appendix B of the Post Manual located at
  http//www.intranet.state.tn.us/generalserv/fiscal
  /documents/postuserman.pdf pages 95-97 --
  listing with inclusions and exclusions

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Guidelines for Equipment

• Purchasing
• LEAs will budget in equipment line items for
  planned purchases of equipment.
• Supporting documentation of equipment purchases
  will be maintained.
• Prior written approval by NCLB consultant is
  required for equipment items that have a unit
  cost of 5, 000 or more. Title IV equipment
  purchases must also be approved by the SEA
  Project Director.
• LEA must follow their purchasing policies and
  statutes.
• Items purchased as equipment,sensitive items,
  materials, and supplies must be accounted for in
  a way to avoid fraud, waste, or abuse.
  Monitoring will review purchases of these items.

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Guidelines for Equipment contd.

• Allowable Equipment
• Determining whether equipment is allowable is an
  LEA responsibility. Submission of a list of
  proposed purchases to the field service
  consultant is recommended.
• Purchase/Lease of equipment must meet the
  following requirements
• 1) it is reasonable and necessary
  to operate the
• the federal program
  effectively,
• 2) existing equipment will not be
  sufficient,
• 3) and the costs are reasonable.
• Real property and equipment purchased with NCLB
  funds may be made available to other educational
  programs or projects, providing this use does not
  interfere with its use for the NCLB program or
  significantly shorten the equipments useful
  life.

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Guidelines for Equipment contd.

• Bar Codes
• Bar codes or other type of secure tagrequired
• Bar Code/Tag for equipment purchases that are not
  part of a schoolwide project
• 1) Name of LEA
• 2) Name of Title
• 3) Project Year of Purchase
• Bar Code/Tag for equipment bought for a
  schoolwide program
• 1) Name of LEA
• 2) Name of School
• 3) Project Year of Purchase
• 4) Schoolwide

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Equipment Inventory (EDGAR Section 80.32)

• The LEA must maintain an inventory of equipment
  purchased with federal grant funds until
  disposition takes place.
• Inventory Records must include the following
  items (See ED-5091.)
• Description of the property
• A serial number or other identification number
• The source of the property
• Who holds title
• The acquisition date
• Cost of the property
• Percentage of Federal participation in the cost
  of the property
• The location, use, and condition of the property,
  and
• Any ultimate disposition data including date of
  disposal and the sale price of the property.

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Spreadsheet for Maintaining Inventory
Documentation ED-5091(optional forminformation
must be kept)
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Equipment Inventory contd. (EDGAR Section 80.32)

• Physical inventory with reconciliationrequired
  at least once every 2 years
• Inventory control system required for loss,
  damage, theft prevention. Investigation of these
  is required.
• Adequate maintenance procedures must be in place.

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Equipment Requirements Concerning Private Schools

• LEA maintains title to and administrative control
  of all property and equipment and supplies.
• Equipment must have barcodes/secure labels with
  LEA name, Title purchased under, and year of
  purchase.
• An accurate equipment inventory must be
  maintained.

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Equipment Requirements Concerning Private Schools
contd.

• The LEA shall ensure that the equipment and
  supplies placed in a private school
• --Are used only for proper ESEA program purposes
  and
• Can be removed from the private school without
  remodeling the private school facility.

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Equipment Requirements Concerning Private Schools
contd.

• The LEA must remove equipment and supplies from a
  private school if
• The equipment and supplies are no longer needed
  for ESEA program purposes or
• Removal is necessary to avoid unauthorized use of
  the equipment or supplies for other than ESEA
  program purposes.
• No funds may be used for repairs, minor
  remodeling, or construction of private school
  facilities.

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Disposition of Equipment

• Equipment may be disposed of with no obligation
  to the federal government, if ALL of the
  following criteria are met
• Equipment is no longer needed in the current
  program.
• Equipment is not needed in other programs
  currently or previously funded by a federal
  agency.
• Equipment item has a current per-unit fair market
  value of less than 5,000.
• If the LEA disposes of equipment with a fair
  market value of less than 5,000, the proceeds
  must be used to support the program for which the
  equipment was purchased. No request for approval
  of equipment disposition is required.

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Disposition of Equipment contd.

• If the equipments fair market value is more that
  5,000, the LEA must submit a cover letter with
  supporting documentation as per the forms
  provided by the Office of Federal Programs to its
  NCLB field service consultant for review and
  submission to the Office of Federal Programs.
  (See sample cover letter.)
• Upon approval from the Executive Director of
  Federal Programs, the LEA may proceed with the
  disposition process.
• If items are to be sold after approval of the
  disposition, the proceeds must be used to support
  the program for which the equipment was
  purchased.
• Documentation of such sale and use for the
  program must be maintained.
• If authorized or required to sell property, the
  LEA must use proper sales procedures to ensure
  the highest possible return. (See sample letter
  requesting estimates of current market value and
  spreadsheet for summary of vendors estimates.)

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• Sample Cover Letter to Request Disposition of
  Equipment with Original Cost or Fair Market Value
  of 5,000 or More

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Sample Letter to Company to Request Estimates of
Current Market Value
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Summary of Vendors Estimates for Estimates of
Current Market Values (optional)
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Questions?

• Sample letters and summary form for vendors
  estimates are located on our website at
  http//www.tennessee.gov/education/fedprog/fpforms
  .shtml .
• Your assigned NCLB consultant will gladly provide
  you with additional technical assistance with
  equipment.

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THANK YOU

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