Title I Capital Expenditures

As of October 1, 2024, the Office of Management and Budget (OMB) increased the threshold per-item for capital expenditure for special use equipment from $5,000 to $10,000.

Background

The federal requirements found in the OMB guidance cited at Title 2, Code of Federal Regulations (CFR), section 200.407 and 200.439 (Cost Principles for Equipment and other capital expenditures), require a grantee or subgrantee to obtain prior written approval from its awarding agency before incurring the cost of a capital expenditure. Both the OMB guidance and generally accepted accounting principles identify equipment as a capital expenditure.

OMB guidance defines “equipment” as any item of nonexpendable personal property with a useful life of more than one year and an acquisition cost that equals or exceeds the federal per-item capitalization threshold of $10,000, or a lower threshold set by state or local-level regulations.

“Capital expenditures” means expenditures to acquire capital assets or expenditures to make additions, improvements, modifications, replacements, rearrangements, reinstallations, renovations, or alterations to capital assets that materially increase their value or useful life (Title 2, CFR Section 200.1).

Submitting a Capital Expenditure Request

The local educational agency (LEA) is required to obtain prior approval from the California Department of Education (CDE) prior to making a capital expenditure purchase with a unit cost of $10,000 or more from the following funding sources:

• Title I, Part A
• Title I, Part D funds.
  

Note: The requirement is per item, not the grand total. The $10,000 cost does not include taxes, shipping, fees, installation or other associated costs for the equipment.

If an item is priced $9,999.99 or less before taxes and other fees, no approval from the CDE is needed to make a purchase.

Capital expenditures for improvements, including replacement equipment, other capital assets, and improvements that materially increase the value or useful life of equipment or other capital assets, are allowable as a direct cost but only with the prior written approval of the awarding agency.

• A request for approval form should be signed by the authorized representative of the LEA and submitted to and approved by the CDE prior to making the purchase.
  
  
• The approval request must describe the justification for the capital expenditure as it relates to the requirements for the use of Title I funds for reasonableness and allocability.
  • Supporting bids or price quotations shall also be included.
    
• Approval from the CDE for proposed capital expenditures exceeding $10,000 per item must be obtained prior to the expenditure of federal Title I, Part A funds, or Title I, Part D funds.

Title I, Part A and Title I, Part D

Title I, Part A Capital Expenditure Request Form (PDF)
Please submit the completed and signed form to Rina DeRose via email at RDeRose@cde.ca.gov.

Title I, Part D Capital Expenditure Request Form (PDF)
Please submit the completed and signed form to Miguel Cordova via email at MCordova@cde.ca.gov.

Capital Outlay Expenditures for Title I Comprehensive Support and Improvement (CSI)

Title I CSI Capital Expenditures Form (PDF)
Helpful information is available on the CDE Title I ESSA CSI LEA Capital Outlay Expenditures web page.

Please contact the School Improvement and Support Office staff for all CSI Capital Expenditure requests via email at CSICapEx@cde.ca.gov.

Disposal of Equipment

Equipment items, with an acquisition cost/current per unit fair market value of less than $10,000, may be retained, sold, or disposed, with no further obligation to the awarding Federal agency. The disposition of such items should be noted on the equipment inventory maintained by the recipient (2 CFR 200.313[e]). 

If the current per unit fair market value is $10,000 or more, the equipment may be retained or sold and the awarding Federal agency shall have a right to an amount calculated by multiplying the current market value or proceeds from the sale by the awarding Federal agency’s share of the equipment. However, the recipient is permitted to deduct and retain from the Federal agency’s share $500 or 10 percent of the sales proceeds, whichever is less, for the recipient’s selling and handling expenses.

The disposition of items purchased with Title I, Part A or Title I, Part D funds should be noted on the equipment inventory maintained by the LEA. The LEA is also responsible for completing and submitting to the Title I Policy, Program, and Support Office a “Title I Equipment Removal Form” for approval before the equipment can be removed from inventory.

If the equipment listed on the equipment disposal form is reported as lost, stolen, damaged or missing the LEA must include either a police report of the reported incident and/or an administrator report of the incident, and include how the policies or procedures have been updated to prevent the loss of equipment in the future.

Title I Equipment Removal Form (PDF)

Title I, Part A Programs/Services

Please complete and submit the signed form to Rina DeRose via email at RDeRose@cde.ca.gov.

Title I, Part D Programs/Services

Please complete and submit the signed form to Miguel Cordova via email at MCordova@cde.ca.gov.