Title I Capital Expenditures

As of October 1, 2024, the Office of Management and Budget (OMB) will be increasing the threshold per-item for capital expenditure for special use equipment from $5,000 currently to $10,000. This does not include taxes, shipping, fees, installation or other associated costs for the equipment. 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.

Background

The federal requirements found in the OMB guidance cited at Title 2, Code of Federal Regulations (CFR), Part 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.

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

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 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 proposed capital expenditures exceeding $10,000 per item must be obtained prior to the expenditure of federal Title I, Part A; Title I, Every Student Succeeds Act (ESSA) Section 1003 funds for Comprehensive Support and Improvement (CSI); or Title I, Part D funds.

Title I, Part A and Title I, Part D

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.

Title I, Part A Capital Expenditure Request Form (PDF)
Email signed form to Sherry Davis at SDavis@cde.ca.gov.

Title I, Part D Capital Expenditure Request Form (PDF)
Email signed form to Sherry Davis at SDavis@cde.ca.gov.

Title I for CSI

The Title I CSI Capital Outlay Expenditures Request Form can be found at the ESSA CSI Authorized Use of Funds web page.

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

Disposal of Equipment

If the 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 so 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)
Email signed form to Sherry Davis at SDavis@cde.ca.gov.