Fiscal Rules Training

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University of Colorado at Boulder

• Fiscal Rules Training

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Boulders Contact at the SCO

• Roger A. Cusworth - 303.866.3891
• roger.cusworth_at_state.co.us

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Objective

• To introduce the Fiscal Rules
• Find areas of concern
• Provide subject area contacts
• Website State Controllers Office -
  www.colorado.gov/dpa/dfp/sco/rules /rules.htm
  

4
Introduction

• Purpose To set forth policies for state
  agencies concerning
  
• Internal controls
• Accounting policies
• Financial reporting

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Statutory Authority CRS 24-30-202

• (13a) The State Controller shall promulgate
  fiscal rules to carry out the functions assigned
  and the procedures prescribed in this section.
  Such rules relating to the forms, records, and
  procedures involved in financial administration
  shall be binding upon the several departments,
  institutions, including institutions of higher
  education, and other agencies of the State and
  upon their several officers and employees.

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Overview of the Fiscal Rules

• Applicability To all state agencies and
  institutions of higher education, all employees
  of the state to all funds in the executive
  branch of state government.
• Responsibility The chief executive officer of
  each state agency is responsible for compliance
  
• Administrative hardship Written requests for
  exemption submitted by agency CFO to the state
  controller.

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Overview of the Fiscal Rules

• Hearing on December 2, 2003 on proposed changes
  to Rules
  
• Rules adopted as a result of hearing should be
  effective April 1.
  
• Visit SCO website to see proposed changes and
  adopted Rules.

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Fiscal Rule Chapters

• 1 Accounting
• 2. Disbursement
• 3. Contracts
• 4. Capital Construction Projects
• 5 Travel
• 6 Cash
• 7 Budget
• 8 Reporting
• 9 Payroll

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Accounting

• Rule 1-1 Accounting Principles and Standards
  CRS 24-30-202 (12)
  
• State follows Generally Accepted Accounting
  Principles (GAAP) adopted by Governmental
  Accounting Standards Board (GASB)
  
• All applicable statutory provisions shall be met
• CEO shall annually certified the system of
  internal controls to the State Controller

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Accounting

• Rule 1-2 Use of the States Financial System
• COFRS is the official financial records of the
  State
  
• Higher Education Institutions Approved stand
  alone financial systems

11
Accounting

• Rule 1-3 Access to the States Financial System
  CRS 24-30-201
  
• Rule 1-5 System Security
• Controlled at Campus level for CU

12
Accounting

• Rule 1-4 Automated Interfaces With the State
  Financial System
  
• Must be approved by the State Controller
• PeopleSoft uses an automated interface to
  transmit financial data to COFRS.

13
Accounting

• Rule 1-6 Agency Accounting Systems
• New or replacement of stand alone financial
  systems, developed or purchased, must be approved
  by the State Controller

14
Accounting

• Rule 1-7 Delegated Signature Authority
• State agencies identify and submit list of
  persons authorized to sign or approve documents.
  Mainly involves contracts and purchase orders
  

15
Accounting

• Rule 1-8 Pre-Audit Responsibility CRS
  24-30-201(1)(h)
  
• All accounting documents must be reviewed
  (pre-audit) before they are recorded on State
  Financial System (Includes PeopleSoft)
  
• Requires system of controls to reasonably ensure
  transactions are accurate and conform to State
  Fiscal Rules

16
Accounting

• Rule 1-9 Reporting Theft or Embezzlement CRS
  18-8-407
  
• Any suspected theft or embezzlement must be
  reported to CEO
  
• Suspected theft or embezzlement in excess of
  5,000 must be reported to SCO

17
Accounting

• Rule 1-10 Capitalization of Equipment CRS
  24-30-201 (k)
  
• Currently--useful life of more than 1 year and in
  excess of 5,000
  
• For control purposes, agencies may capitalize
  purchases less than 5,000.
  
• 5,000 threshold does not apply to other types of
  fixed assets

18
Disbursements

• Rule 2-1 Propriety of Expenditures CRS
  24-30-202 (2)(14)
  
• Standards of Propriety
• Official state business only
• Reasonable and necessary under the circumstances

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Disbursements

• Rule 2-2 Commitment Vouchers
• No disbursement of state funds unless supported
  by commitment voucher
  
• Purchase orders or contracts shall be used as
  commitment vouchers to support disbursement of
  funds for goods or services costing more than
  5,000
• Must be encumbered

20
Disbursements

• 2-2 Continued
• Approved Commitment Vouchers
• State contract
• Purchase Order
• Approved travel authorization
• Advice of employment, or
• Any other transactional document prescribed by
  the State Controller

21
Disbursements

• 2-2 Continued
• Items not requiring a purchase order
• Payroll
• Financial aid or tuition assistance programs
• Water, gas, electric local/long distance
  telephone service including pagers and cell
  phones
  
• Dues, membership fees, subscriptions, conference
  registration
  
• Postal, delivery charges, messenger charges
• Routine internal services provided by state agency

22
Disbursements

• 2-2 Continued
• Items not requiring a purchase order
• Intra-agency or intra-institution purchases
• Payments from a state program to qualified
  individuals
  
• Reimbursements to state employees for moving
  expenses
  
• Or any other specific situation as determined by
  the State Controller to be exempt
  
• Payments on copier rentals if based on per copy
  charge

23
Disbursements

• 2-2 Continued
• Vendor Agreements
• May have contradictory terms and conditions
• should never be used in lieu of a state contract
  or purchase order.
  
• May be used as an attachment or exhibit to a
  state contract or purchase order.
  
• Order of precedence clause always define state
  terms and conditions as controlling first, body
  of state agreement second, and attachments and
  exhibits last
• State employees do not sign vendor agreements
  when they are used as an exhibit to a purchase
  order or state contract

24
Disbursements

• Vendor Agreements
• Individuals authorized by the CFO or the
  procurement officer may execute vendor agreements
  not exceeding 5,000 if all of the conditions
  outlined in this fiscal rule are applied to the
  agreement
• On-line vendor agreements are subject to the same
  reviews and approvals that are required for other
  state commitment vouchers
  
• Purchase order terms and conditions are subject
  to the rules contained in this chapter of the
  fiscal rules

25
Disbursements

• Rule 2-2 Continued
• Encumbering of Commitments
• An amount reserved on the state financial
  system or an approved state agency accounting
  system to meet a formal obligation of the state,
  which should precede the recording of the
  expenditure and the actual disbursement of funds.

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Disbursements

• Rule 2-3 Receiving reports
• Prepared for all goods services
• Exceptions Personal services /or adequate
  system of controls
  
• Rule 2-4 Purchase discounts
• Timely payment to take advantage of purchase
  discounts

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Disbursements

• Rule 2-5 Interest Payment on Delinquent
  Payables
  
• Delinquent payable assessed interest as required
  by CRS 24-30-202(24)
  
• 45 days if no other written agreement

28
Disbursements

• Rule 2-6 Interagency Purchases Payments
• Payment within 30 days
• Pay with ITs in lieu of warrants
• Disputed charges and payments

29
Disbursements

• Rule 2-7 Official functions and training
  functions
  
• Official function Function hosted by the CEO or
  representative, attended by guests and/or
  employees and held for official state business.
  
• Training function Meeting, conference hosted by
  a state agency, attended by customers or
  employees and held to enhance staff knowledge or
  educate customers. Written agendas, study
  materials and presenters are involved.
• Limited to reasonable and actual cost

30
Disbursements

• Rule 2-8 Miscellaneous Compensation and Other
  Benefits CRS 24-2-103
  
• Benefits Defined Any pecuniary or material
  advantage provided by the state to an employee
  other than salary, incentives, awards, retirement
  benefits, insurance benefits and travel and
  non-travel reimbursements

31
Disbursements

• Rule 2-8 Continued
• Employees should not receive any benefit unless
  it is provided by statute or fiscal rule
  
• Monetary allowances may not be given in lieu of
  benefits except by statute or approval of the
  state controller
  
• When statutes provide allowances, the CEO of each
  agency establishes the specific expenses covered
  
• Incentive awards not deemed a benefit

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Disbursements

• Honorariums
• During working hours remit to State
• Own time with no cost to state may keep
• Other Benefits
• Clean air transit benefit
• Events sponsored by state agencies
• Meals

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Disbursements

• Other Benefits
• Instructional courses/Job related training
• State owned housing/Temporary housing
• Uniforms
• Bookstore discounts
• Exception - Higher Education
• Housing for CEO
• Voluntary separation agreements for exempt
  positions

34
Disbursements

• Rule 2-9 Moving Relocation
• CRS 24-50-134
• Not reimbursed when solely for personal reasons
• Only applicable to employees in State Personnel
  System
  
• Moving expenses shall be authorized by the CEO if
  the move of residence is caused by a change in
  assignment, a promotion or another reason related
  to employee duties.
• Not applicable to new hires

35
Disbursements

• Rule 2-10 Procurement Card
• Enrollment required for all state agencies and
  institutions
  
• Used for goods and services
• May be used for purchases greater then 5,000
  CU limit of 4,999
  
• Commitment vouchers still required
• Preaudit still required

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Disbursements

• Rule 2-10 Continued
• All instances of suspected fraud or abuse must be
  reported to the State Controller
  
• Used in place of open charge accounts
• Proposed Rule Change - 500 threshold on
  reporting fraud or abuse

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Contracts

• Rule 3-1 State Contracts
• State agencies must determine that the contract
  is within the intent of the appropriation, the
  contract is necessary, and most economical,
  efficient means used
• State agencies are responsible for assuring that
  all constitutional and statutory requirements
  have been met
  
• Accepted business practices generally do not
  allow for advance payments

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Brain Teasers

• house
• prairie

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• Hi way
• pass
  

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(No Transcript)
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What should we pack?

• issue issue
• issue issue
• issue issue
• issue issue
• issue issue
• JJJJJOOOOHHHHNNNNNSSSS

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Travel

• Rule 5-1 Travel CRS 24-30-202 (26)
• Benefit to the State
• Most economical means
• Authorized by approving authority

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Travel

• Required Authorizations
• In-state--prior authorization may be required
• Out-of-State--prior authorization by chief
  executive officer or delegate is required
  
• International--prior OK by CEO and Governor or
  delegate except for Higher Ed, then CCHE
  
• No Cost to the State--prior authorization by
  approving authority

44
Travel

• Advances - Current
• Approved by approving authority and CFO or
  delegate
  
• Travel card 500 or less
• From the state if more than 500 or no travel
  card
  
• Maximum 1,500 CRS 24-30-202 (20.1)
• Repayment within 60 days of authorized travel
• Advances Proposed Changes
• Advance limits being taken out of Rule

45
Travel

• Reimbursement
• Only for period of time to accomplish state
  business
  
• Not for expenses included in other fees paid by
  the state i.e. conference meals
  
• Exception airline meal not adequate and
  additional meal costs incurred

46
Travel

• Reimbursement Rates - Lodging
• Actual cost of reasonable accommodations
  documented by receipts
  
• Limited to cost of commercial lodging
• May be required to use approved or designated
  lodging

47
Travel

• Reimbursement Rates - Transportation
• Cost equivalent of the most cost beneficial
  method to accomplish state business
  
• Drive in lieu of flying
• Cost benefit analysis
• Receipts required for airline tickets not
  purchased directly by the state

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Travel

• Reimbursement Rates - Meals
• Per diem based on federal rates
• May claim less based on actual cost, but not
  more
  
• Updated annually, use Fiscal Rules not federal
  website
  
• Calculation of international rates
• Percentage based on base rate
• Quarters of the day
• 50/50 or 75 on day of travel
• What best suits your agency needs?

49
Travel

• Proposed Fiscal Rule Rate Changess
• Base rate increasing from 30 to 31. Breakfast
  and lunch increased by .50.
  
• High cost rates increasing by 1 for each level

50
Travel

• Reimbursement Rates Meals
• Are receipts required? Executive Order
• Current Rule No Receipts required
• Proposed Rule Possibilities
• Receipts for reimbursements greater than 25.
• Only for the amount greater than 25
• Receipts for full reimbursement amount
• No change to current rule

51
Travel

• Other Reimbursable Travel Expenses
• Tips other than for meals
• Commercial transportation--receipts required over
  25
  
• Camping site fees--receipts required over 25
• Parking fees--receipt required for single fees
  over 25
  
• Registration fees--receipts required
• Rental car--receipt required

52
Travel

• Other Reimbursable Travel Expenses
• Telephone, fax, etc. (Business use)
• Toll road charges
• Travelers checks or State Travel Card transaction
  charges--receipt required over 25
  
• One personal phone call per day not to exceed 1

53
Travel

• Non-Reimbursable Travel Expenses
• Alcoholic beverages
• Entertainment expenses
• Personal expenses for the benefit of the
  traveler
  
• Political expenses
• Travel insurance
• Traffic fines and traffic tickets

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Travel

• Exceptions
• Allowances for members of statutory boards or
  commissions
  
• In accordance with statutory provisions
• May be paid actual and necessary expenses
• Child care to non-family members may be paid
• Allowances for state job applicants
• At the discretion of the CEO, may be reimbursed
  the same as employees

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Travel

• Exceptions
• Allowances for travel by the Governor
• Allowances for travel not solely for state
  business
  
• Expenses allocated between official business and
  personal/political reasons
  
• If lower rates are obtained because of the
  personal addition to the trip, they apply to the
  business portion, too
  
• Documentation of the allocation must accompany
  the reimbursement request

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Travel

• Exceptions
• Allowances for travel not paid by the state
• Invitations may be accepted if approved by the
  approving authority
  
• Allowances for travel w/ spouse, friends, etc.
• No reimbursement for person traveling with a
  state employee
  
• No benefit for lower rates received because of
  companions
  
• Documentation of the official business portion
  must accompany the travel voucher

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Travel

• Exceptions
• Allowances for travel within a single day
• No lunch is allowed
• Approving authority may allow breakfast/dinner
• Departure before 500AM return after 800 PM
• Meals are taxable
• Allowances for travel by leased or privately
  owned aircraft
  
• Leased aircraft need authorization of Colorado
  State Patrol
  
• Private aircraft need authorization of Risk
  Management

58
Travel

• Exceptions
• Allowances for travel by private automobile
• Reimbursed for business miles when authorized by
  approving authority
  
• Reimbursement rate - .28/.32 CRS 24-9-104 (2)
• Four wheel drive only allowed when required by
  weather, terrain, etc.
  
• Travel to temporary work location

59
Travel

• Allowances for travelers furnishing their own
  lodging and meals
  
• Special per diem rate may be negotiated
• Cannot exceed the normal per diem rate

60
Cash

• Rule 6-1 Cash Receipts and Deposits CRS
  24-36-103
  
• Deposits must be timely
• If not before, on the last working day of the
  month

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Cash

• Rule 6-2 Change Funds and Petty Cash Funds CRS
  24-30-202 (20.1)
  
• Petty Cash
• Cannot exceed 2,500
• Incidental expense

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Cash

• Rule 6-2 continued
• Change funds
• Making change
• No expenditures may be made from a change fund
• Written approval required from the State
  Controller
  
• May be delegated to the department controller

63
Cash

• Rule 6-3 Imprest Cash Accounts and Bank
  Accounts CRS 24-75-202 and 24-36-103
  
• Doesnt apply to University of Colorado
• CU Policy Approval of CU Treasurer and Board of
  Regents
  

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Cash

• Rule 6-4 Entertainment Expense Bank Accounts
  (Higher Ed only)
  
• Provides for the entertainment of officials and
  dignitaries by a higher education institution
  
• Governing Board authorized to create
• All Expenditures for the benefit of the state
• Only deposits to reimburse the account
• No other types of expenditures.

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Cash

• Rule 6-5 State Treasury Loans and Advances
• Applies to CU, but monitored at the Governing
  Board level

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Cash

• Rule 6-6 Refunds and Reimbursements CRS
  24-30-202 (12)
  
• Incidental and non-recurring refunds may be
  credit to the object code it was charge if it is
  received in the same year
  
• Refunds received in subsequent fiscal year are
  recorded as miscellaneous revenue
  
• Exceptions Capital construction, Federal funds,
  contracts grants

67
Cash

• Rule 6-6 continued
• CU Policy Credit expenses for all refunds
  regardless of year because of federal cost
  principles

68
Cash

• Rule 6-7 Checks Returned for Insufficient Funds
  CRS 24-30-202 (25)
  
• Reasonable charges for NSF checks

69
Cash

• Rule 6-8 Federal Cash Management CRS
  24-22-107(6), CRS 24-30-201, CRF Part 205
  
• Draw federal funds as near to their use as
  possible

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Budget

• Rule 7-1 Cash and Custodial Funds
• Doesnt apply to Higher Education
• Rule 7-3 Budget Rollforwards
• Rule 7-4 Overexpenditures
• Monitored at System Level not at Campus level

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Reporting

• Rule 8-1 Financial Statements CRS 24-30-201(d)
• Approval by the SCO
• Reconciled to COFRS
• Must follow GAAP

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Reporting

• Rule 8-2 Quarterly Financial Reporting
• Requires revenue and expenditure accruals
• Clearing suspense accounts

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Reporting

• RULE 8-3 Cost Allocation Plans
• Establishes State of Colorado requirements for
  preparing indirect cost rate proposals indirect
  cost plans and accounting for indirect costs.
  
• Two levels of plans
• Institution indirect cost plan
• Statewide indirect cost plan

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Payroll

• Rule 9-1 State Payroll System
• Rule 9-2 Direct deposit
• Dont apply to CU

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Payroll

• Rule 9-3 Pay for terminating employees
• Rule 9-4 Overpayments
• Work with campus HR department

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A parting thought

• What is the beginning of eternity, the end of
  time and space the beginning of every end and
  the end of every place?