2 CFR 200,
UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS
FOR FEDERAL AWARDS, Part 439 (Equipment and other capital expenditures)
requires that a School Food Authority (SFA) obtain prior written approval from the State Agency (SA - Child Nutrition
Unit (CNU), Division of Elementary and Secondary Education, Arkansas Department
of Education) before incurring the cost of a capital expenditure, including
equipment. According to 2 CFR 200.33, equipment means
tangible personal property (including information technology systems)
having a useful life of more than one year and a per-unit acquisition
cost which equals or exceeds the lesser
of the capitalization level established by the non-Federal entity for financial statement purposes, or
$5,000.
Any equipment purchase
valued under $5,000 must follow proper federal, state, or local procurement
policies, as applicable, without submitting a prior written request to CNU for
approval.
Any equipment
purchase valued above $5,000 that is included on the Arkansas Approved
Equipment List will receive automatic SA approval. Therefore, the SFA may
purchase those equipment items, following proper federal, state, or local
procurement policies, as applicable, without submitting a prior written request
to CNU for approval.
Any equipment
purchase valued over $5,000 that is NOT on the Arkansas Approved Equipment
List, must have written approval before purchase. The district must submit a written request for
approval to the CNU Director, prior to purchasing the item. Please use the attached Prior Approval Equipment
Request Form.
If the SFA
chooses to use sole source purchasing for ANY equipment purchase (including
those on the pre-approved list and those under $5,000), the district must
submit a written request for approval to the CNU Director prior to purchasing the
item. Sole source purchasing, in the Child Nutrition Program, occurs when the
goods or services are available from only one manufacturer and through only one
distributor or supplier. In a sole source purchase, the SFA must first obtain
CNU approval, and then go directly to the sole source provider to negotiate
terms, conditions, and prices. See attached Equipment Purchase Flow Chart and
Prior Approval Equipment Request Form for more information.
During local
administrative reviews and audits, CNU must ensure appropriate equipment
purchases were made based on the Arkansas Approved Equipment List or the prior
approval process. Any equipment purchases of $5,000 or more that are
identified as not being listed on the Arkansas Approved Equipment List or not
having received prior written approval will be considered an unallowable
expense for the Child Nutrition Program and must be paid with some other funds
than the non-profit food service account.
This
memo does not apply to the Fresh Fruit and Vegetable Program (FFVP) equipment
purchases. Schools participating in the FFVP wishing to make equipment
purchases should contact the FFVP Coordinator with questions.
If you have any
questions, please contact your Area Specialist at 501-324-9502.