721-Procurement Policy
- 700 Series: Non-Instructional Operations
721-Procurement Policy
| Rationale | Date Approved/Revised |
|---|---|
| The purpose of this policy is to ensure compliance with the requirements of the federal Uniform Grant Guidance regulations by establishing uniform administrative requirements, cost principles, and audit requirements for federal grant awards received by the school district |
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1. Definitions
A. “Compensation for personal services” includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the federal award, including, but not necessarily limited to, wages and salaries. Compensation for personal services may also include fringe benefits which are addressed in 2 Code of Federal Regulations, section 200.431 (Compensation - Fringe Benefits).
B. “Competitive procurement process” means a process for procurement by sealed bids or by proposals under Minnesota Statutes, section 471.345.
C. “Contract” means a legal instrument by which the school district purchases property or services needed to carry out the project or program under a federal award. The term, as used in 2 Code of Federal Regulations, Part 200, does not include a legal instrument, even if the school district considers it a contract, when the substance of the transaction meets the definition of a federal award or subaward.
D. “Direct costs” are those costs that can be identified specifically with a particular final cost objective, such as a federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy.
E. “Equipment” means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which exceeds the lesser of the capitalization level established by the school district for financial statement purposes, or $10,000.
F. “Federal award” has the meaning, depending on the context, in either paragraph 1. or 2. below:
1. a. The federal financial assistance that the school district receives directly from a federal awarding agency or indirectly from a pass-through entity, as described in 2 Code of Federal Regulations, section 200.101; or
b. The cost-reimbursement contract under the federal Acquisition Regulations that the school district receives directly from a federal awarding agency or indirectly from a pass-through entity, as described in 2 Code of Federal Regulations, section 200.101.
2. The instrument setting forth the terms and conditions. The instrument is the grant agreement, cooperative agreement, other agreement for assistance covered in paragraph (2) of the definition of Federal financial assistance in 2 Code of Federal Regulations 200, or the cost-reimbursement contract awarded under the federal Acquisition Regulations.
3. “Federal award” does not include other contracts that a federal agency uses to buy goods or services from a contractor or a contract to operate federal-government-owned, contractor-operated facilities.
G. Grants Includes
1. “State-administered grants” are those grants that pass through a state agency such as the Minnesota Department of Education (MDE).
2. “Direct grants” are those grants that do not pass through another agency such as MDE and are awarded directly by the federal awarding agency to the grantee organization. These grants are usually discretionary grants that are awarded by the U.S. Department of Education (DOE) or by another federal awarding agency.
H. “Non-federal entity” means a state, local government, Indian tribe, institution of higher education, or nonprofit organization that carries out a federal award as a recipient or subrecipient.
I. “Post-retirement health plans” refer to costs of health insurance or health services not included in a pension plan covered by 2 Code of Federal Regulations, section 200.431(g) for retirees and their spouses, dependents, and survivors.
J. “Severance pay” is a payment in addition to regular salaries and wages by the school district to workers whose employment is being terminated.
K. “Travel costs” are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business of the school district.
2. Procurement Method Options
A. “Procurement by micro-purchase”
The acquisition of supplies or services when, the aggregate dollar amount of the procurement transaction which does not exceed the micro-purchase threshold (generally $10,000, except as otherwise discussed in 48 Code of Federal Regulations, subpart 2.1 or as periodically adjusted for inflation).
B. Procurement by small purchase procedures
This procurement method may be used when the value of the procurement transaction does not exceed the federal simplified acquisition threshold and is within the state threshold of $175,000.are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than $175,000 (periodically adjusted for inflation). If a small purchase procedure is used, price or rate quotations must be obtained from an adequate number of qualified sources. Unless specified by the Federal agency, the school district may exercise judgment in determining what number is adequate.
C. Procurement by sealed bids (formal advertising)
This procurement method involves a publicly solicited and a firm, fixed-price contract (lump sum or unit price) awarded to the responsible bidder whose bid, conforming to all the material terms and conditions of the invitation for bids, is the lowest in price.
D. Procurement by competitive proposals
This procurement method is normally conducted with more than one source submitting an offer, and either a fixed-price or cost-reimbursement type contract is awarded. Competitive proposals are generally used when conditions are not appropriate for the use of sealed bids.
E. Procurement by noncompetitive proposals
This procurement method involves is procurement through solicitation of a proposal from only one source.
3. General Procurement Standards
A. The school district must use its own documented procurement procedures which that reflect applicable state laws, provided that the procurements conform to the applicable federal law and the standards identified in the Uniform Grant Guidance.
B. The school district must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.
C. The school district’s procedures must avoid acquisition of unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives and any other appropriate analysis to determine the most economical approach. Breaking up a procurement into smaller components to avoid the thresholds established in this policy is prohibited.
D. The school district must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.
E. The school district must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement; selection of the contract type; contractor selection or rejection; and the basis for the contract price.
F. The school district alone must be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the school district of any contractual responsibilities under its contracts.
G. The school district must take all necessary affirmative steps to assure that minority businesses, women’s business enterprises, veteran-owned businesses, and labor surplus area firms are considered.
H. Thresholds for Employee Purchases
The superintendent and/or (director of finance), in conjunction with the school board, is responsible for overseeing the procurement process, including establishment of procedures, internal controls, quality assurance, methods of greatest economy, and compliance with all applicable laws. To be valid, all contracts must be approved by the board, except as otherwise provided in this policy.
Individual school district employees may incur expenditures in the following amounts without prior board approval so long as such expenditures are consistent with the school board-approved budget, provided that in all cases the school board retains authority to disapprove any expenditure for any reason at its sole discretion:
1. Any school district employee may make a purchase for use in connection with school district operations when the expenditure is less than $1,000 and is consistent with this policy’s requirements.
2. In addition to the foregoing, the following school district employees may execute a purchase or procurement that requires the expenditure of up to the following amounts:
a. Superintendent: Up to ($15,000)
b. (Director of Finance): Up to ($15,000)
4) Procurement Methods When Using State Funds
The school district must use one of the following methods of procurement when using state funds:
A. Procurements for $25,000 or less
If the amount of the contract is estimated to be $25,000 or less, the contract may be made either upon quotation or in the open market, in the school district’s discretion. If the contract is made upon quotation it shall be based, so far as practicable, on at least two (2) quotations which shall be kept on file for a period of at least one (1) year after their receipt.
Alternatively, the school district may award a contract for construction, alteration, repair, or maintenance work to the vendor or contractor offering the best value under a request for proposals as described in Minnesota Statutes, section 16C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).
Procurements for $25,000 or less also may be conducted by micro-purchase.
B. Procurements Exceeding $25,000 but not $175,000
1. Sealed Bids or Direct Negotiation
If the amount of the contract is estimated to exceed $25,000 but not to exceed $175,000, the contract may be made either upon sealed bids or by direct negotiation, by obtaining two (2) or more quotations for the purchase or sale when possible, and without advertising for bids or otherwise complying with the requirements of competitive bidding. All quotations obtained shall be kept on file for a period of at least one (1) year after receipt thereof.
2. Best Value Alternative
As an alternative to the procurement method described in Subparagraph B.1 above, the school district may award a contract for construction, alteration, repair, or maintenance work to the vendor or contractor offering the best value under a request for proposals as described in Minnesota Statutes, section 16C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).
C. Procurements Exceeding $175,000
If the amount of the contract is estimated to exceed $175,000, sealed bids shall be solicited by public notice in the manner and subject to the requirements of the law governing school district contracts.
Procurement by Sealed Bids
Procurement by sealed bids means a process in which bids are publicly solicited and a firm fixed price contract by lump sum or unit price is awarded to the responsible bidder whose bid, conforming with all material terms and conditions of the invitation for bids, is the lowest in price. If sealed bids are used, the following requirements apply:
1. bids must be solicited from an adequate number of qualified sources, providing bidders sufficient response time prior to the date set for opening bids;
2. the invitation for bids, which includes any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond;
3. all bids will be opened at the time and place prescribed in the invitation for bids, and the bids must be opened publicly;
4. a firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that the discounts are usually taken advantage of;
5. any or all bids may be rejected if there is a sound documented reason; and
6. in order for a sealed bid to be feasible, the following conditions must be present:
a. a complete, adequate, and realistic specification or purchase description is available;
b. two (2) or more responsible bidders are willing and able to compete effectively for the business; and
c. the procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the price.
D. Procurement by Proposals
"Procurement by proposals" means a process in which either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. They are awarded in accordance with the following requirements:
1. requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from an adequate number of qualified offerors. Any response to publicized requests for proposals must be considered to the maximum extent practical;
2. the school district must have a written method for conducting technical evaluations of the proposals received and for making selections; and
3. contracts must be awarded to the responsible offeror whose proposal is most advantageous to the school district, with price and other factors considered.
5) Procurement Methods When Using Federal Funds
A. Procurement by Competitive Proposals
This is a procurement method used when conditions are not appropriate for using sealed bids. This procurement method may result in either a fixed-price or cost-reimbursement contract. If this method is used, the following requirements apply:
1. Requests for proposals require public notice, and all evaluation factors and their relative importance must be identified. Proposals must be solicited from multiple qualified entities. To the maximum extent practicable, any proposals submitted in response to the public notice must be considered;
2. Proposals must be solicited from an adequate number of qualified sources;
3. The school district must have a written method for conducting technical evaluations of the proposals received and for selecting recipients;
4. Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and
5. The school district may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby competitors’ qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method where price is not used as a selection factor can only be used in procurement of A/E professional services; it cannot be used to purchase other types of services, though A/E firms are a potential source to perform the proposed effort.
B. Procurement by Noncompetitive Proposals
Procurement by noncompetitive proposals may be used only when one (1) or more of the following circumstances apply:
1. The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold;
2. The item is available only from a single source;
3. The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;
4. The DOE or MDE expressly authorizes noncompetitive proposals in response to a written request from the school district; or
5. After solicitation of a number of sources, competition is determined inadequate.
C. Competition
1. All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition and is consistent with the standards of 2 Code of Federal Regulations, sections 200.319 and .320.
2. The school district must have written procedures for procurement transactions. These procedures must ensure that all solicitations:
a. are made in accordance with 2 Code of Federal Regulations, section 200.319(b);
b. incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product, or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When making a clear and accurate description of the technical requirements is impractical or uneconomical, a “brand name or equivalent” description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated; and
c. identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals.
D. The school district must ensure that all prequalified lists of persons, firms, or products used in procurement transactions are current and include enough qualified sources to ensure maximum open competition. When establishing or amending prequalified lists, the school district must consider objective factors that evaluate price and cost to maximize competition. The school must not preclude potential bidders from qualifying during the solicitation period.
E. The school district is prohibited from contracting with or making subawards under “covered transactions” to parties that are suspended or debarred or whose principals are suspended or debarred. “Covered transactions” include procurement contracts for goods and services awarded under a grant or cooperative agreement that are expected to equal or exceed $25,000.
F. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 Code of Federal Regulations, section 180.215.
G. Managing Property and Equipment and Safeguarding Assets
1. Property Standards
The school district must, at a minimum, provide the equivalent insurance coverage for real property and equipment acquired or improved with federal funds as provided to other property owned by the school district non-federal entity. Federally owned property need not be insured unless required by the terms and conditions of the federal award.
The school district must adhere to the requirements concerning real property, equipment, supplies, and intangible property set forth in 2 Code of Federal Regulations, sections 200.311, 200.314, and 200.315.
2. Managing Equipment
Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place will, at a minimum, meet the following requirements:
a. Property records must be maintained that include a description of the property; a serial number or other identification number; the source of the funding for the property (including the federal award identification number (FAIN)); who holds title; the acquisition date; the cost of the property; the percentage of the federal participation in the project costs for the federal award under which the property was acquired; the location, use, and condition of the property; and any ultimate disposition data, including the date of disposition and sale price of the property.
b. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two (2) years.
c. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated.
d. Adequate maintenance procedures must be developed to keep property in good condition.
e. If the school district is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return.
H. Cybersecurity
The school district must take reasonable cybersecurity and other measures to safeguard
1. Personally identifiable information;
2. Information that the federal agency or pass-through entity designates as sensitive; and
3. other information that the school district considers sensitive and is consistent with applicable federal, state, local, and tribal laws regarding privacy and responsibility over confidentiality.
6) Financial Management Requirements
A. Financial Management
The school district’s financial management systems, including records documenting compliance with federal statues, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracking of funds to a level of expenditures adequate to establish that such funds have been used in accordance with according to the federal statutes, regulations, and the terms and conditions of the federal award.
B. Payment
The school district must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement between the school district and the financial management systems that meet the standards for fund control and accountability.
Advance payments to the a school district must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the school district in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the school district non-federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The school district must make timely payment to contractors in accordance with the contract provisions.
C. Internal Controls
The school district must establish and maintain effective internal control over the federal award that provides reasonable assurance that the school district is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States, or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
The school district must comply with federal statutes, regulations, and the terms and conditions of the federal award.
The school district must evaluate and monitor the school district’s compliance with statutes, regulations, and the terms and conditions of the federal award.
The school district must take prompt action when instances of noncompliance are identified, including noncompliance identified in audit findings.
The school district must take reasonable measures to safeguard protected personally identifiable information and other information considered sensitive consistent with applicable federal and state laws regarding privacy and obligations of confidentiality.
7) Allowable Use Of Funds and Cost Principles
A. Allowable Use of Funds
The school district administration and school board will enforce appropriate procedures and penalties for program, compliance, and accounting staff responsible for the allocation of federal grant costs based on their allowability and their conformity with federal cost principles to determine the allowability of costs.
B. Definitions
1. “Advance payment” means a payment that a federal agency or pass-through entity makes by any appropriate payment mechanism, and payment method before the school district disburses the funds for program purposes.
2. “Allowable cost” means a cost that complies with all legal requirements that apply to a particular federal education program, including statutes, regulations, guidance, applications, and approved grant awards.
3. “Education Department General Administrative Regulations (EDGAR)” means a compilation of regulations that apply to federal education programs. These regulations contain important rules governing the administration of federal education programs and include rules affecting the allowable use of federal funds (including rules regarding allowable costs, the period of availability of federal awards, documentation requirements, and grants management requirements).
4. “Omni Circular” or “(also known as 2 Code of Federal Regulations, part 200s,” the or “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,” or the Uniform Grant Guidance) means federal cost principles that provide standards for determining whether costs may be charged to federal grants.
C. Allowable Costs
The following items are costs that may be allowable under the 2 Code of Federal Regulations, part 200, subpart Es under specific conditions (review the specific part of 2 Code of Federal Regulations 200, subpart E for allowability requirements for the specific cost):
1. Advertising and public relations;
2. Advisory councils;
3. Audit costs and related services;
4. Bonding costs;
5. Compensation - for personal services;
6. Compensation – fringe benefits;
7. Conferences;
8. Contingency provisions;
9. Depreciation and use allowances;
10. Employee morale, health, and welfare costs;
11. Equipment and other capital expenditures;
12. Gains and losses on disposition of depreciable property and other capital assets and substantial relocation of federal programs assets;
13. Insurance and indemnification;
14. Intellectual property;
15. Maintenance, operations, and repair costs;
16. Materials and supplies costs, including costs of computing devices;
17. Memberships, subscriptions, and professional activity costs;
18. Organization costs;
19. Participant costs;
20. Plant and security costs;
21. Pre-award costs;
22. Professional service costs;
23. Proposal costs;
24. Publication and printing costs;
25. Rearrangement and alteration reconversion costs;
26. Recruiting costs;
27. Relocation costs of employees;
28. Rental costs of buildings and equipment;
29. Scholarships, student aid costs, and tuition remission;
30. Specialized service facilities;
31. Taxes;
32. Telecommunication and video surveillance costs;
33. Termination and standard closeout costs;
34. Training and education costs; and
35. Transportation costs; and
36. Travel costs.
D. Costs Forbidden by Federal Law
2 Code of Federal Regulations, part 200s and EDGAR identify certain costs that may never be paid with federal funds. The following list below provides examples of such costs. If a cost is on this list, it may not be supported with federal funds unless an exception exists (review the specific part of 2 Code of Federal Regulations 200, subpart E for possible exceptions to unallowable costs). The fact that a cost is not on this list does not mean it is necessarily permissible. Other important restrictions apply to federal funds, such as those items detailed in the 2 Code of Federal Regulations, part 200, subpart E; thus, the following list is not exhaustive:
1. Alcoholic beverages;
2. Bad debts;
3. Contingency provisions (with limited exceptions);
4. Contributions and donations
5. Entertainment (with limited exception);
6. Fines, and penalties, damages, and other settlements;
7. Fundraising and investment management costs (with limited exceptions);
8. General costs of government (with limited exceptions pertaining to Indian tribal governments and Councils of Government (COGs));
9. Goods or services for personal use;
10. Interest, (except interest specifically stated in 2 Code of Federal Regulations, section 200.4491 as allowable);
11. Lobbying;
12. Losses on other Federal awards or contracts;
13. Selling and marketing;
14. Student activity costs;
15. Religious use;
16. The acquisition of real property (unless specifically permitted by programmatic statute or regulations, which is very rare in federal education programs);
17. Construction (unless specifically permitted by programmatic statute or regulations, which is very rare in federal education programs); and
18. Tuition charged or fees collected from students applied toward meeting matching, cost sharing, or maintenance of effort requirements of a program.
E. Program Allowability
1. Any cost paid with federal education funds must be permissible under the federal program that would support the cost.
2. Many federal education programs detail specific required and/or allowable uses of funds for that program. Issues such as eligibility, program beneficiaries, caps or restrictions on certain types of program expenses, other program expenses, and other program specific requirements must be considered when performing the programmatic analysis.
3. The two largest federal K-12 programs, Title I, Part A, and the Individuals with Disabilities Education Act (IDEA), do not contain a use of funds section delineating the allowable uses of funds under those programs. In those cases, costs must be consistent with the purposes of the program in order to be allowable.
F. Federal Cost Principles
The Omni Circular defines the parameters for the permissible uses of federal funds. While many requirements are contained in the Omni Circular, it includes five core principles that serve as an important guide for effective grant management. These core principles require all costs to be:
1. Necessary for the proper and efficient performance or administration of the program.
2. Reasonable. An outside observer should clearly understand why a decision to spend money on a specific cost made sense in light of the cost, needs, and requirements of the program.
3. Allocable to the federal program that paid for the cost. A program must benefit in proportion to the amount charged to the federal program – for example, if a teacher is paid 50% with Title I funds, the teacher must work with the Title I program/students at least 50% of the time. Recipients also need to be able to track items or services purchased with federal funds so they can prove they were used for federal program purposes.
4. Authorized under state and local rules. All actions carried out with federal funds must be authorized and not prohibited by state and local laws and policies.
5. Adequately documented. A recipient must maintain proper documentation so as to provide evidence to monitors, auditors, or other oversight entities of how the funds were spent over the lifecycle of the grant.
G. Program Specific Fiscal Rules
The Omni Circular also contains specific rules on selected items of costs. Costs must comply with these rules in order to be paid with federal funds.
1. All federal education programs have certain program specific fiscal rules that apply. Determining which rules apply depends on the program; however, rules such as supplement, not supplant, maintenance of effort, comparability, caps on certain uses of funds, etc., have an important impact when analyzing whether a particular cost is permissible.
2. Many state-administered programs require school districts to use federal program funds to supplement the amount of state, local, and, in some cases, other federal funds they spend on education costs and not to supplant (or replace) those funds. Generally, the “supplement, not supplant” provision means that federal funds must be used to supplement the level of funds from non-federal sources by providing additional services, staff, programs, or materials. In other words, federal funds normally cannot be used to pay for things that would otherwise be paid for with state or local funds (and, in some cases, with other federal funds).
3. Auditors generally presume supplanting has occurred in three (3) situations:
a. The school district uses federal funds to provide services that the school district is required to make available under other federal, state, or local laws.
b. The school district uses federal funds to provide services that the school district provided with state or local funds in the prior year.
c. The school district uses Title I, Part A, or Migrant Education Program funds to provide the same services to Title I or Migrant students that the school district provides with state or local funds to nonparticipating students.
4. These presumptions apply differently in different federal programs and also in schoolwide program schools. Staff should be familiar with the supplement not supplant provisions applicable to their program.
H. Approved Plans, Budgets, and Special Conditions
1. As required by the Omni Circular, all costs must be consistent with approved program plans and budgets.
2. Costs must also be consistent with all terms and conditions of federal awards, including any special conditions imposed on the school district’s grants.
I. Training
1. The school district will provide training on the allowable use of federal funds to all staff involved in federal programs.
2. The school district will promote coordination between all staff involved in federal programs through activities, such as routine staff meetings and training sessions.
J. Employee Sanctions
Any school district employee who violates this policy will be subject to discipline, as appropriate, up to and including the termination of employment.
K. Reduction in Aid
If the school district makes a purchase without a procurement policy adopted by the school board or makes a purchase not in conformity with the school district's procurement policy, the Commissioner may reduce that school district's state aid in an amount equal to the purchase.
L. Property, Financial Investments, and Contracting
The school district is subject to and must comply with Minnesota Statutes, sections 15.054 and 118A.01 to 118A.06 governing government property and financial investments and sections 471.38, 471.391, 471.392, and 471.425 governing municipal contracting.
M. Mandatory Disclosures
The school district must promptly disclose whenever, in connection with the federal award (including any activities or subawards thereunder), it has credible evidence of the commission of a violation of federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in 18 United States Code or a violation of the civil False Claims Act (31 United States Code, sections 3729–3733).
The disclosure must be made in writing to the DOE Federal agency, MDE, and the agency’s MDE Office of Inspector General, and pass-through entity (if applicable). School districts are also required to report matters related to recipient school district integrity and performance in accordance with Appendix XII of 2 Code of Federal Regulations, part 200 this part. Failure to make required disclosures can result in any of the remedies described in 2 Code of Federal Regulations, section 200.339.
8) Compensation - Personal Services Expenses And Reporting
A. Compensation – Personal Services
Costs of compensation are allowable to the extent that they satisfy the specific requirements of the Uniform Grant Guidance and that the total compensation for individual employees:
1. Is reasonable for the services rendered and conforms to the established written school district policy consistently applied to both federal and non-federal activities; and
2. Follows an appointment made in accordance with the school district’s written policies and meets the requirements of federal statute, where applicable.
Unless an arrangement is specifically authorized by a federal awarding agency, the a school district must follow its written non-federal, entity wide policies and practices concerning the permissible extent of professional services that can be provided outside the school district for non-organizational compensation.
B. Compensation – Fringe Benefits
1. During leave
The costs of fringe benefits in the form of regular compensation paid to employees during periods of authorized absences from the job, such as for annual leave, family-related leave, sick leave, holidays, court leave, military leave, administrative leave, and other similar benefits, are allowable if all of the following criteria are met:
a. They are provided under established written leave policies;
b. The costs are equitably allocated to all related activities, including federal awards; and
c. The accounting basis (cash or accrual) selected for costing each type of leave is consistently followed by the school district.
2. The costs of fringe benefits in the form of employer contributions or expenses for social security; employee life, health, unemployment, and worker’s compensation insurance (except as indicated in 2 Code of Federal Regulations, section 200.447(d)); pension plan costs; and other similar benefits are allowable, provided such benefits are granted under established written policies. Such benefits must be allocated to federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such federal awards and other activities and charged as direct or indirect costs in accordance with the school district’s accounting practices.
3. Actual claims paid to or on behalf of employees or former employees for workers’ compensation, unemployment compensation, severance pay, and similar employee benefits (e.g., post-retirement health benefits) are allowable in the year of payment provided that the school district follows a consistent costing policy.
4. Pension plan costs may be computed using a pay-as-you-go method or an acceptable actuarial cost method in accordance with the school district’s written policies.
5. Post-retirement costs may be computed using a pay-as-you-go method or an acceptable actuarial cost method in accordance with established school district written policies.
6. Costs of severance pay are allowable only to the extent that, in each case, severance pay is required by law; employer-employee agreement; established policy that constitutes, in effect, an implied agreement on the school district’s part; or circumstances of the particular employment.
C. Insurance and Indemnification
Types and extent and cost of coverage are in accordance with the school district’s policy and sound business practice.
D. Recruiting Costs
Short-term, travel visa costs (as opposed to longer-term, immigration visas) may be directly charged to a federal award, so long as they are:
1. Critical and necessary for the conduct of the project;
2. Allowable under the cost principles set forth in the Uniform Grant Guidance;
3. Consistent with the school district’s cost accounting practices and school district policy; and
4. Meeting the definition of “direct cost” in the applicable cost principles of the Uniform Grant Guidance.
Policy 721 continued on next post