Title I Capital ExpendituresInformation pertaining to capital expenditures purchases and disposal of equipment with Title I, Part A and Title I, Part D Funds.
For purposes of this federal prior approval requirement, the Office of Management and Budget (OMB) guidance define “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-unit capitalization threshold of $5,000, or a lower threshold set by state or local-level regulations.
The federal requirements found in the OMB guidance cited at Title 2, Code of Federal Regulations (CFR), Part 200.313 (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.
Submitting a Capital Expenditure Request
The local educational agency (LEA) will need prior approval to make a capital expenditure purchase with Title I, Part A or Title I, Part D funds of $5,000 or more. Including replacement equipment, other capital assets, and improvements which materially increase the value or useful life of equipment or other capital assets are allowable as a direct cost when approved by the awarding agency.
- A request for approval form should be signed by the authorized representative of the LEA and submitted to the California Department of Education (CDE) prior to purchasing the equipment.
- The approval request must describe the justification for the capital expenditure as it relates to the requirements for the use of Title I funds along with supporting bids or price quotations.
- Approval from the CDE for capital expenditures exceeding $5,000 must be obtained prior to the expenditure of federal Title I, Part A or Title I, Part D funds.
Disposal of Equipment
If the equipment items with an acquisition cost/current per unit fair market value of less than $5,000 may be retained, sold, or disposed, with no further obligation to the awarding Federal agency. The disposition of such items should be so noted on the equipment inventory maintained by the recipient (2 CFR 200.313).
If the current per unit fair market value is $5,000 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% 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 and Program Guidance Office a “Title I Equipment Removal Form” for approval before the equipment can be removed from the inventory.