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ESSA CSI LEA Capital Outlay Expenditures

Information pertaining to the Every Student Succeeds Act (ESSA) Comprehensive Support and Improvement (CSI) Local Educational Agency (LEA) subgrant capital outlay expenditures (CapEx).

Federal requirements located in the Office of Management and Budget (OMB) guidance pursuant to Title 2, Code of Federal Regulations (CFR), Part 200.439(b)(2) (Cost Principles for Equipment and other capital expenditures) require a subgrantee to obtain approval from the Federal awarding agency or from its awarding agency prior to incurring the cost of a CapEx. As a result, the LEA must obtain prior written approval from the California Department of Education (CDE) to make a CapEx purchase with ESSA, Section 1003 funds for CSI that have a unit cost of $5,000 or more. CDE approval is not required if the unit cost per item is $4,999.99 or less before taxes and other fees.

Capital Outlay Expenditures

CapEx for CSI

For the purpose and intent of the ESSA CSI LEA subgrant, the LEA shall use the Title I CSI Capital Outlay Expenditures Request Form to request approval from the CDE for the following proposed expenditures:

  • Object Code 6400-Equipment: Computer Systems Only
  • Object Code 6500-Equipment Replacement: Computer Systems Only

A Title I CSI CapEx Form is not required to request approval for Object Code 6700-Subscription Assets, which was developed in Standardized Accounting Structure, in accordance with the new Governmental Accounting Standards Board (GASB) Statement No. 96 External link opens in new window or tab., Subscription-Based Information Technology Arrangements, as capital outlays for financial reporting purpose.

Object Code 6700 is for intangible right-to-use assets, and for federal grant expenditure reporting purposes, it is not considered a capital asset. Per CFR Section 200 External link opens in new window or tab., subscription payments may be allowable where the LEAs are required to recognize an intangible right-to-use subscription asset.

Additional information about GASB 96 can be found in the November 8, 2022, Standardized Accounting Code Structure Forum Meeting Minutes.

In addition, the LEA must comply with the Public Contract Code Section 20111(a) that requires school district governing boards to competitively bid and award any contracts involving an expenditure of more than $50,000, adjusted for inflation, to the lowest responsible bidder. Please visit the CDE Correspondence web page for more information about Bid Thresholds for Contracts Awarded by School Districts.

More information about Capital Outlay guidelines, (Procedure 330) is located in the California School Accounting Manual (CSAM) (PDF).

CapEx for CSI have a very narrow focus, as all other Equipment expenditures are beyond the scope and purpose of the subgrant.

Object Code Description
6400 Equipment.
Record expenditures for computer systems that have both an estimated useful life over one year and an acquisition cost equal to or greater than the capitalization threshold established by the LEA. Acquisitions cost includes tax, freight or other types of delivery charges, and installation costs including labor. (For more detail, refer to Procedure 770.)
6500 Equipment Replacement.
Record expenditures for equipment replaced on a piece-for-piece basis. These expenditures must be identified for purposes of the calculation of the current expense of education (Education Code Section 41372).
Questions:   School Improvement and Support Office | SISO@cde.ca.gov | 916-319-0833
Last Reviewed: Monday, June 23, 2025
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