Ohio Administrative Code
Title 5101:9 - ODJFS Practices
Chapter 5101:9-4 - Acquistion and Procurement
Section 5101:9-4-10 - Capital asset reimbursement methods for county family services agencies (CFSA) and Workforce Innovation and Opportunity Act (WIOA) areas
Universal Citation: OH Admin Code 5101:9-4-10
Current through all regulations passed and filed through September 16, 2024
(A) Definitions:
(1)
"Acquisition" means the cost of a capital asset that
includes the cost to ready the asset for its intended use.
(2)
"Capital Asset"
means:
(a)
An
acquisition that has a useful life of more than one year and the purchase price
that equals or exceeds the lesser of the capitalization level threshold
established at the local level or five thousand dollars; and
(b)
Tangible or
intangible assets used in operations; capital assets include:
(i)
Land, buildings
(facilities), equipment, and intellectual property, including software, whether
acquired by purchase, construction, manufacture, lease-purchase, exchange, or
through capital leases; and
(ii)
Additions,
improvements, modifications, replacements, rearrangements, installations,
renovations or alterations to capital assets that materially increase their
value or useful life, not ordinary repairs and maintenance.
(3)
"Capitalization" means the acquisition cost of a
capital asset that is expensed over the useful life of the asset by means of
depreciation.
(4)
"Depreciation" means the method of expensing the
acquisition cost of a capital asset to periods that benefit from the use of the
asset.
(5)
"Direct Charge" means the method of expensing the
acquisition cost of a capital asset to a federal program during the accounting
period the asset was purchased.
(B) Each CFSA and WIOA area shall develop a written policy for the reimbursement of the use of capital assets that complies with state, federal, and local requirements. The CFSA and WIOA area shall follow the state and federal requirements unless local requirements are more restrictive.
(1)
The policy shall include asset classification standards
and a useful life schedule based on the financial reporting of the
county;
(a)
When
the county uses generally accepted accounting principles (GAAP), the CFSA or
WIOA area will use the county's published asset classification and useful life
schedule published within the county's financial statement or;
(b)
When the county
uses the cash basis for their financial statements, the CFSA or WIOA area will
determine, document, and support asset classification and a useful life
schedule.
(2)
The policy shall be consistent with the practices that
meet requirements for reasonableness, allowability, and allocability as
outlined in office of management and budget (OMB) 2 C.F.R. part 200, "Uniform
Administrative Requirements, Cost Principles and Audit Requirements for Federal
Awards."
(3)
A CFSA or a WIOA area may adopt the written policy of
the county auditor when the county auditor's policy is, at a minimum, as
restrictive as the federal requirements.
(4)
When a WIOA area
is composed of more than one unit of general local government or more than one
political subdivision, the WIOA area shall follow the most restrictive of
state, federal, and local requirements when seeking federal or state
reimbursement for a capital asset.
(C) Acquisition of capital assets using federal funds.
(1)
A WIOA area may direct charge a capital asset with
prior written approval from the Ohio department of job and family services
(ODJFS).
(a)
A
local area shall request such approval by submitting a completed JFS 01994
"Request for Approval to Direct Charge Workforce Innovation and Opportunity Act
(WIOA) Area Funds for Equipment" (rev. 9/2020). The ODJFS review criteria
include the following items:
(i)
The existence of any local requirements, either at the
WIOA area or at the county level if the WIOA area is acting on behalf of a
county.
(ii)
The purchase of the equipment shall meet the standard
federal guidelines of reasonableness and allowability.
(iii)
The proposed
methodology of allocating the costs between the adult, dislocated, and youth
grants, and any administration costs shall ensure the grants are charged in
accordance with relative benefits received.
(iv)
All supporting
documentation required on the JFS 01994.
(2)
ODJFS will
provide additional guidance on a case-by-case basis, including to CFSAs, for
approved requests to expense and direct charge the cost of equipment, including
the timing of the direct charge and reporting of the
expenditure.
(D) Acquisition of capital assets using local funds.
(1)
The CFSA or WIOA
area may be reimbursed for capital assets that are capitalized in accordance
with GAAP provided they are used for allowable activities and properly
allocated to the proper federal awards according to the ODJFS cost allocation
plan (CAP) and federal cost principles established in 2 C.F.R. part
200.
(2)
The CFSA or WIOA area acquires capital assets using
local fund and recovers the cost of the use of the asset through
deprecation.
(E) Depreciation.
(1)
For an asset
donated to the CFSA or WIOA area by a third party, its fair market value at the
time of the donation shall be considered as the acquisition cost. Such assets
may be depreciated or claimed as matching, where allowable, but not both. The
calculation of depreciation shall exclude:
(a)
The cost of
land;
(b)
Any portion of the cost of buildings and equipment
borne or donated by the federal government irrespective of where the title was
originally vested or where it is presently located;
(c)
Any portion of
the cost of buildings and equipment contributed by or for the CFSA or WIOA area
or where law or agreement prohibits recovery; and
(d)
Any asset
acquired solely for the performance of a non-federal award.
(2)
In
addition to the provisions in paragraph (B) of this rule, in determining the
useful life of assets that may be claimed for federal reimbursement, the
following factors shall be considered:
(a)
Type of
construction;
(b)
Nature of the equipment used;
(c)
Technological
developments in the particular area;
(d)
Historical usage
data; and
(e)
The renewal and replacement policies followed for the
individual items or classes of assets involved.
(3)
The straight-line
method of depreciation is presumed to be the appropriate method of depreciation
unless the CFSA or WIOA area presents clear evidence indicating that the
expected consumption of the asset will be significantly greater in the early
portions than in the later portions of its useful life.
(4)
The CFSA or WIOA
area may not change depreciation methods unless approved in advance by ODJFS.
The CFSA or WIOA area shall submit all requests to change the method of
depreciation to the ODJFS fiscal supervisor. All requests shall include no less
than the following information:
(a)
The useful life of the item;
(b)
The history of
the method of costing that has been used for the life of the asset;
and
(c)
The reasoning behind the request to change the asset
reimbursement method.
(5)
The CSFA or WIOA
area has two options for reimbursement for building usage when the depreciation
method is used:
(a)
The entire building (i.e., the shell and all
components) may be treated as a single asset and depreciated over a single
useful life; or
(b)
The building may be divided into multiple components
and each component depreciated over its estimated useful life. The building
components shall be grouped into three general components of a building:
(i)
Building shell,
including construction and design costs;
(ii)
Building
services systems (e.g., elevators, HVAC and plumbing); and
(iii)
Fixed equipment
(e.g. casework, fume hoods, etc.).
(6)
The CFSA or WIOA
area may not depreciate any assets that have outlived their depreciable lives.
However, other related costs such as maintenance and insurance may be
allowable.
(7)
The CFSA or WIOA area shall ensure that charges for
depreciation are supported by adequate property records. The agency
shall:
(a)
Perform a physical inventory of assets at least once every
two years to ensure that the assets exist and are usable, used, and needed;
and
(b)
Maintain depreciation records indicating the amount of
depreciation taken each period.
(8)
When the CFSA or
WIOA area is converting to the depreciation method from the use allowance
method, depreciation shall be computed as if the asset had been depreciated
over its entire life (i.e., from the date the asset was acquired and ready for
use to the date of disposal or withdrawal from service). The total amount of
use allowance and depreciation for an asset (including imputed depreciation
applicable to periods prior to the conversion from the use allowance method as
well as depreciation after the conversion) may not exceed the total acquisition
cost of the asset.
(9)
The CFSA or the WIOA area shall report the appropriate
amount in accordance with rule
5101:9-7-29
of the Administrative Code in order to make depreciation claims for federal
reimbursement.
Replaces: 5101:9-4-10
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