FY 2003

DATE:	August 16, 2002
SUBJECT:	Clarification of SB 517 Expenditure Restrictions on the Purchase of Office Furniture and Office Equipment and Personal Computers, Servers and Other Computer Equipment
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Jo Ann Remp	(785) 296-2277	(JoAnn.Remp@da.state.ks.us)
	Randy Kennedy	(785) 296-2125	(Randy.Kennedy@da.state.ks.us)
	Leroy Charbonneau	(785) 296-2255	(Leroy.Charbonneau@da.state.ks.us)
	Shirley Gilchrist	(785) 296-2882	(Shirley.Gilchrist@da.state.ks.us)
	Mark Handshy	(785) 296-7021	(Mark.Handshy@da.state.ks.us)
APPROVAL:
SUMMARY:	This information is intended to clarify and further define the expenditure restrictions imposed by Section 169 of Senate Bill 517.

Section 169 of 2002 Senate Bill 517 authorizes a number of restrictions on expenditures for FY 2003. Among those restrictions are those concerning the purchase of office furniture and office equipment, and also personal computers, servers, and other computer equipment, from monies appropriated from the State General Fund for FY 2003. Since our original informational circular (02-A-019) was issued, further discussions have occurred with staff in the Revisor of Statutes Office and the Division of Budget regarding the implementation of these particular restrictions. The following additional guidance is provided to assist your agency in complying with the provisions of SB 517.

Office Furniture and Equipment

No expenditures are allowed from monies appropriated from the State General Fund for any state agency during FY 2003 for purchase of office furniture and office equipment. This restriction is NOT limited to only those purchases coded as expenditure subobject code 403X. A list of items that are typically coded in the 3XXX series that are considered to be office furniture and office equipment is included as an attachment to this document. This list should not be considered all-inclusive. Generally, items consumed as they are used, or small office supplies, may continue to be purchased with State General Fund appropriations.

If your agency has ordered items included on the attached list that are to be paid from the State General Fund, and that have not been delivered, you should attempt to cancel the order if possible. If you are unable to cancel, then the face of the payment voucher must contain a statement indicating that the items were on order prior to the issuance of this informational circular.

If your agency is purchasing office equipment with State General Fund appropriations on a SOKI interfund, you must include a statement that the purchases included on the document are in compliance with Informational Circular 03-A-004.

Exceptions are allowed for purchases of office furniture and office equipment from the Correctional Industries program of the Department of Corrections. Purchases of office furniture and equipment from funds other than the State General Fund are not affected by this restriction.

Personal Computers, Servers and Other Computer Equipment

No expenditures are allowed from any monies appropriated from the State General Fund for any state agency during FY 2003 for purchases of personal computers, servers or any other computer equipment other than through existing statewide purchasing contracts entered into by the Director of Purchases. Exceptions are provided to this restriction if an agency has advised and consulted with the Joint Committee on Information Technology and upon approval of the State Finance Council. Purchases of personal computers, servers and other computer equipment from funds other than the State General Fund are not affected by this restriction. Vouchers submitted for purchase of these items from non-contract vendors without State Finance Council approval, regardless of dollar amount, will be returned to the agency unpaid.

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Attachment: Specific Items that Cannot be Purchased from BFY 2003 State General Fund Appropriations

DATE:	August 29, 2002
SUBJECT:	Treasurer's Receipt Vouchers
EFFECTIVE DATE:	October 1, 2002
STATE TREASURER CONTACT:	Carol Sprague	(785) 296-4151	(carol@treasurer.state.ks.us)
	Brenda Linder	(785) 296-4144	(Brenda@treasurer.state.ks.us)
A & R CONTACT:	Randy Kennedy	(785) 296-2125	(Randy.Kennedy@da.state.ks.us)
APPROVAL:
SUMMARY:	Use of the State of Kansas Interactive Internet Interfund System (SOKI3+) for all Treasurer's receipt transactions is mandatory effective October 1, 2002.

K.S.A. 75-3728 authorizes the Director of Accounts and Reports to "...design, revise and direct the use of accounting records and fiscal procedure..." Based on the successful implementation and ongoing operations of the SOKI³⁺ receipts module, and at the request of the State Treasurer's Office, effective October 1, 2002, we are requiring all Treasurer's receipt vouchers to be submitted via SOKI³⁺. Paper receipt vouchers, form DA-3, will be returned to the submitting agency unprocessed.

Questions regarding preparation of SOKI³⁺ receipt vouchers should be directed to the State Treasurer's office. The "Receipts Module Users Guide" is located in the SOKI³⁺ help section, https://www.interfunds.state.ks.us/intfunds/help/help_1.ihtml. <------- Broken link Questions on adding or modifying users to have receipt entry capability can be directed to Accounts and Reports.

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DATE:	November 26, 2002
SUBJECT:	State of Kansas Federal Employer Identification Number (FEIN)
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Don Beck	(785) 296-7291	(don.beck@da.state.ks.us)
APPROVAL:
SUMMARY:	Rescission of Informational Circular No. 03-A-009

Informational Circular 03-A-009 was issued November 15, 2002, to address a change in the use of the State of Kansas general purpose FEIN 48-6029925. Based on agency feedback and pending further review, that Informational Circular is rescinded, effective immediately.

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DATE:	December 19, 2002
SUBJECT:	Business Procurement Card Program
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Tim Hund	(785) 368-6347	(tim.hund@da.state.ks.us)
APPROVAL:
SUMMARY:	Enhancements and modifications to the State's BPC Program have been implemented to broaden the scope of the program and to enhance overall BPC security; updated BPC web information is available.

As the Business Procurement Card (BPC) Program has evolved over the past several years, several new uses and account options have been added. This circular is intended to outline current BPC Program parameters and account options.

• Basic BPC Cards

  • $2,000 per transaction limits

  • Includes commodities and most services, including 1099 reportable services

    • Reporting to A&R of 1099 reportable transactions required if vendor is not a corporation or a governmental entity

• Basic BPC Cards with conference registration option

  • Limited to cards of key individuals
  • Preapproval by A&R required
  • $2,000 per transaction limits

• Cardless Accounts for purchases from statewide open-end contracts

  • Limited to key purchasing staff
  • Higher transaction limits negotiated with UMB Bank

• Cardless Registration Accounts

  • Conference registration
  • Prepayment of one night's lodging when this is a condition for making lodging reservations
  • Issued at central office or key business unit levels
  • Higher transaction limits negotiated with UMB Bank

• Automotive Fuel Cards

  • For use with agency-owned vehicles only
  • Limited to fuel and minor automotive repairs
  • Preapproval by A&R required

The Division of Accounts and Reports has implemented an annual review of dormant and low-usage (less than 3 transactions per year) BPC cards and cardless accounts. Agencies will be notified of dormant accounts and requested to cancel those accounts. BPC cards and cardless accounts that are seldom or never used increase the agency's risk of inappropriate transactions being charged.

The Business Procurement Card Program section of our web site has been modified to reflect the current BPC program parameters. These updates are available at http://www.da.ks.gov/ar/genacct/Audit/BPC.htm <------- Broken link.

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DATE:	March 6, 2003
SUBJECT:	HIPAA Requirements for State Agencies
EFFECTIVE DATE:	April 14, 2003
A & R CONTACT:	Leroy Charbonneau	(785) 296-2255	(leroy.charbonneau@da.state.ks.us)
	Randy Kennedy	(785) 296-2125	(randy.kennedy@da.state.ks.us)
	Shirley Gilchrist	(785) 296-2882	(shirley.gilchrist@da.state.ks.us)
	Mark Handshy	(785) 296-7021	(mark.handshy@da.state.ks.us)
APPROVAL:
SUMMARY:	Health Insurance Portability and Accountability Act Privacy Rule

The Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule, as issued by the United States Department of Health & Human Services, limits the use and release of individually identifiable health information; gives patients the right to access their medical records; restricts most disclosure of health information to the minimum needed for the intended purpose; and establishes safeguards and restrictions regarding disclosure of records for certain public responsibilities, such as public health, research and law enforcement. Improper uses or disclosures under the rule are subject to criminal and civil sanctions prescribed in HIPAA. Compliance with the HIPAA Privacy Rule is required by April 14, 2003.

Any document that refers to an individual's individually identifiable (their name is on it) health information is subject to the Privacy Rule. We are requiring any payment vouchers subject to the HIPAA Privacy Rule to be stamped with the acronym HIPAA in 24 point (or larger) Helvetica green ink. The stamp should be in the area immediately below the payment voucher's current document number. Accounts and Reports will segregate payment vouchers stamped in this manner in a locked file cabinet.

In accordance with K.S.A. 75-3321, stamps should be obtained from the Training and Evaluation Center of Hutchinson, www.techinc.org, telephone toll free 1-(866) 663-1198, or refer to the 2003 State of Kansas Products and Services catalog. They are generally shipped within five business days of receiving the order.

A full copy of the HIPAA Privacy Rule can be found at http://www.hhs.gov/ocr/hipaa/. 

Accounts and Reports employees will be required to sign confidentiality agreements forbidding them to reveal any restricted information. Each agency should develop internal controls to ensure that access to information subject to the HIPAA Privacy Rule is appropriately restricted. SRS is making HIPAA training available to state agencies. Interested agencies may access the HIPAA compliance training instructions at http://www.srskansas.org.<------- Broken link

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DATE:	April 10, 2003
SUBJECT:	Imprest Fund Procedures, Petty Cash Procedures and Forms
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Imprest Fund Questions:
	Gail Barnhart	(785) 296-7217	(gail.barnhart@da.state.ks.us)
	IRS 1099 Questions:
	Don Beck	(785) 296-7291	(don.beck@da.state.ks.us)
	Petty Cash Questions:
	Shirley Gilchrist	(785) 296-2882	(shirley.gilchrist@da.state.ks.us)
APPROVAL:
SUMMARY:	Revised Petty Cash Policy and Procedure Manual File 10,752 and Imprest Fund Policy and Procedure Manual File 10,802

Policy and Procedure Manual Files 10,752 and 10,802 have been revised as follows:

Agencies that process any IRS 1099 reportable payment from a petty cash fund or imprest fund are responsible for submitting a SOKI³⁺ journal voucher to record the expenditure against the correct vendor record. The payment voucher should list the journal voucher number in the description with the statement "for 1099 purposes". An example is included in the revised PPM's. The new Journal Voucher Module Users' Guide located in the help section of SOKI³⁺ gives additional guidance on IRS 1099 reporting.

Please contact Don Beck to ensure that any reporting exemptions your agency may previously have been granted are still valid based on the current IRS reporting requirements.

In addition, Petty Cash Policy and Procedure Manual File 10,752 has the following form revisions:

1. The agency may use a Petty Cash Fund Log (DA-78) instead of multi-part disbursement forms. The DA-78 form is located at www.da.ks.gov/ar/forms.
2. Petty Cash Fund Maintenance (DA-71, formerly titled Application for Petty Cash Fund) has been revised so that the type of adjustment being made to the fund is more clear.

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DATE:	April 11, 2003
SUBJECT:	Expenditure Sub-object Code for reporting arbitrage rebate expense
EFFECTIVE DATE:	July 1, 2003
A & R CONTACT:	Financial Integrity Team:
	Brett Bauer	(785) 296-4903	(brett.bauer@da.state.ks.us)
APPROVAL:
SUMMARY:	Establishment of additional expenditure sub-object code for Arbitrage Rebate Expense on Revenue Bond Debt

The interest paid on most debt issued by state and local governments is exempt from federal income tax. As a result, purchasers of state and municipal debt are willing to accept lower interest rates than they would on taxable debt. When state and local governments temporarily reinvest the proceeds of such tax-exempt debt in materially higher-yielding taxable securities, the federal tax code refers to this practice as arbitrage. In certain specific situations known as "safe harbors", governments are permitted to keep the extra earnings that result from arbitrage. Otherwise, any excess earnings resulting from arbitrage must be rebated to the federal government. The following new expenditure sub-object code under the category of "Interest and Service Charges" has been established to record payments remitted (rebated) to the federal government:

• 6195    Arbitrage Rebate Expense on Revenue Bond Debt

Please note this new expenditure sub-object code should be used only for actual remittances to the federal government. It should not be used for transfers from the agency budgetary accounts into bond rebate accounts.

This revision will be reflected in the Uniform Expenditure Classification of Expenditure Sub-object Codes filing (PPM No 7,002) on the Division of Accounts and Reports web site http://www.da.ks.gov/ar/ppm/.

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DATE:	April 18, 2003
SUBJECT:	Cellular Phone Procedures
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Randy Kennedy	(785) 296-2125	(randy.kennedy@da.state.ks.us)
	Leroy Charbonneau	(785) 296-2255	(leroy.charbonneau@da.state.ks.us)
	Shirley Gilchrist	(785) 296-2882	(shirley.gilchrist@da.state.ks.us)
	Mark Handshy	(785) 296-7021	(mark.handshy@da.state.ks.us)
APPROVAL:
SUMMARY:	Cellular Phone Payment Procedures to comply with Executive Order 03-08

On March 26, 2003, Executive Order 03-08 was issued by the Governor to establish polices for cellular phone use (http://www.ksgovernor.org/docs/exec_order0308.html)<------- Broken link. It was effective on and after March 31, 2003. The guidelines below should be used to comply with the Executive Order and other State policies and regulations regarding cellular phones.

Agency Owned Cellular Phones:

Itemized invoices that detail each call are required. These should be attached to the agency's copy of the payment voucher. Agencies are not required to submit invoice copies to Accounts and Reports.

The agency accounts payable staff should ensure that users have reviewed the monthly statement for billing accuracy and to ensure that any additional charges resulting from personal calls are reimbursed to the agency. Users should indicate review of the monthly statement by signing the final page of the invoice.

More than de minimis personal use of a State-provided cellular phone without written authorization by the employee's agency head is not allowed. When personal calls/minutes cause the monthly plan minutes to be exceeded, reimbursement for those minutes must be made to the State. Additionally, all long distance and roaming charges incurred for personal calls must be reimbursed to the State. All reimbursements are to be made within 15 days of receipt and reconciliation of the monthly statement. If an employee reimburses the agency, note the receipt voucher number on the invoice copy retained with the payment voucher. The calculation of the reimbursement highlighting the calls for which reimbursement is made should also be attached to the payment voucher.

The State of Kansas is exempt from paying State and local sales taxes, and federal excise tax on agency owned phones. However, the State must pay the Universal Service charge and taxes that are passed through from other carriers such as taxes on roaming charges.

The State is self-insured so phone replacement or insurance provisions should not be a part of cellular phone agreements.

Agreements with cellular phone providers should allow for the provisions of the State's Prompt Payment Act.

The Division of Accounts and Reports will review selected payments annually for compliance with the order. In addition to the above, the appropriateness of the plan for the agency's needs will be reviewed.

Reimbursement of Personal Cellular Phone Costs:

The agency is responsible for ensuring that the agency head or designee has approved the reimbursement in writing.

In order for an employee to be reimbursed for business use of a personal cellular phone, an itemized billing listing all calls must be submitted. Any reimbursement will be for reasonable costs in excess of the base plan including additional fees such as roaming fees or other fees and taxes incurred as a direct result of the business use. In no instance will the employee be reimbursed more than the monthly cost to the employee. Employees are not permitted to receive a monthly allowance from a State agency for the business use of a personal cellular phone.

A copy of the itemized billing should be attached to the voucher that is submitted to Accounts and Reports. Business calls should be highlighted. If the voucher is processed under the agency's delegated audit authority, the copy should be retained and attached to the agency's copy of the payment voucher.

The State assumes no liability for loss or damage to an employee's personal cellular phone.

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DATE:	May 27, 2003
SUBJECT:	Administration of Agency Business Procurement Card (BPC) Programs
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Tim Hund	(785) 368-6347	(tim.hund@da.state.ks.us)
APPROVAL:
SUMMARY:	Updated Guidance for Administration of Agency BPC Programs

Due to the increased scrutiny of procurement card programs at governmental entities across the nation, the Division of Accounts and Reports has recently completed a review of account criteria maintained by UMB Bank for Business Procurement Cards (BPCs) throughout the State. Our observations and associated recommendations are summarized below:

• The billing cycle dollar limits for a number of accounts appeared to be high for a number of accounts.

  Billing cycle limits for new accounts should initially be set no higher than $5,000 for cards and $10,000 for cardless accounts (contract or registration), unless historical usage justifies higher limits. 

• Two regular BPCs were issued to a number of individuals.

  Only one regular BPC should be issued to an individual, unless the Division of Accounts and Reports has approved an exception.
   

• A number of accounts had no activity for more than one calendar year.

  BPCs with no activity for one calendar year should be cancelled (except for automotive BPCs).  

• Several cardless accounts were in the name of an agency, rather than in the name of an individual.

  BPCs should always be issued in the name of an individual. This enhances the internal control environment and identifies the person responsible for charges to the account.  

• Agencies frequently purchase items on-line from vendors that use PayPal as the payment vehicle. While there are benefits associated with purchasing items from vendors that use PayPal as the payment vehicle (items frequently are not available elsewhere and are often priced lower than at other sources), use of PayPal can result in using vendors that are normally blocked electronically by the transaction verification/approval process.

  PayPal transactions should always be approved in advance by the agency BPC Coordinator to ensure that the items to be purchased and vendors used are appropriate for official State business.  

These policy updates have been incorporated into the Business Procurement Card General Procedures, which can be found at http://www.da.ks.gov/ar/genacct/Audit/BPCprocedures.htm.

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DATE:	June 4, 2003
SUBJECT:	Increase of Contract Cover Sheet (DA-146) Threshold
EFFECTIVE DATE:	July 1, 2003
A & R CONTACT:	Gail Barnhart	(785) 296-7217	(Gail.Barnhart@da.state.ks.us)
	Gary Bond	(785) 296-2287	(Gary.Bond@da.state.ks.us)
APPROVAL:
SUMMARY:	Raising the threshold for contracts to $10,000 or the agency's current delegated purchasing authority, up to $25,000

In response to an agency's request, the Division of Accounts and Reports has reviewed the threshold for Contract Cover Sheet (Form DA-146) completion. Effective July 1, 2003, the threshold will be revised to be the greater of $10,000 or the amount of the agency's delegated purchasing authority, up to $25,000. These threshold amounts are based on the total contract commitment over the life of the contract.

This threshold revision does not change the requirement that the agency have a signed agreement on file with the vendor with a Contractual Provision Attachment (Form DA-146a), signatures of appropriate agency officials, and a review by legal counsel.

Form DA-146 may still be submitted for any agreement in which the agency believes it to be in their best interest. The Division of Accounts and Reports will update Policy and Procedure Manual Filing No. 10,107 to reflect this change.

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