Notice2022-21751
Lowering the Per-Unit Acquisition Cost for Equipment Acquired by State Licensing Agencies for the Benefit of the Randolph-Sheppard Vending Facility Program
Primary source
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Published
October 6, 2022
Issuing agencies
Education Department
Abstract
The Department of Education (Department) is implementing an exception, approved by the Office of Management and Budget (OMB), to lower the per-unit acquisition cost for equipment acquired by State licensing agencies (SLAs) for the benefit of the Randolph-Sheppard Vending Facility Program (RSVFP). The per unit acquisition cost is lowered from the current $5,000 or the capitalization level established by the non-Federal entity for financial statement purposes to "equal or exceed the lesser of $1,000 or the capitalization level established by the non-Federal entity for financial statement purposes."
Full Text
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<title>Federal Register, Volume 87 Issue 193 (Thursday, October 6, 2022)</title>
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[Federal Register Volume 87, Number 193 (Thursday, October 6, 2022)]
[Notices]
[Pages 60664-60665]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-21751]
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DEPARTMENT OF EDUCATION
Lowering the Per-Unit Acquisition Cost for Equipment Acquired by
State Licensing Agencies for the Benefit of the Randolph-Sheppard
Vending Facility Program
AGENCY: Office of Special Education and Rehabilitative Services,
Department of Education.
ACTION: Notice.
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SUMMARY: The Department of Education (Department) is implementing an
exception, approved by the Office of Management and Budget (OMB), to
lower the per-unit acquisition cost for equipment acquired by State
licensing agencies (SLAs) for the benefit of the Randolph-Sheppard
Vending Facility Program (RSVFP). The per unit acquisition cost is
lowered from the current $5,000 or the capitalization level established
by the non-Federal entity for financial statement purposes to ``equal
or exceed the lesser of $1,000 or the capitalization level established
by the non-Federal entity for financial statement purposes.''
DATES: Applicable date: October 1, 2022.
FOR FURTHER INFORMATION CONTACT: David Steele, U.S. Department of
Education, 400 Maryland Avenue SW, Room 5157, Potomac Center Plaza,
Washington, DC 20202-2800. Telephone: (202) 245-6520. Email:
<a href="/cdn-cgi/l/email-protection#3e7a5f48575a106d4a5b5b525b7e5b5a10595148"><span class="__cf_email__" data-cfemail="c98da8bfa0ade79abdacaca5ac89acade7aea6bf">[email protected]</span></a>.
If you are deaf, hard of hearing, or have a speech disability and
wish to access telecommunications relay services, please dial 7-1-1.
SUPPLEMENTARY INFORMATION:
Uniform Guidance Exception Granted
On July 27, 2022, the Department requested an exception from OMB
under 2 CFR 200.102(a) and (c) to adjust the requirements under the
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance) definition of
``equipment'' at 2 CFR 200.1 for a class of non-Federal entities.
Specifically, the Department requested the limited exception, solely
for equipment acquired by the SLA for the benefit of the RSVFP, to
lower the per-unit acquisition cost threshold from the current $5,000
or the capitalization level established by the non-Federal entity for
financial statement purposes to ``equal or exceed the lesser of $1,000
or the capitalization level established by the non-Federal entity for
financial statement purposes.'' On September 2, 2022, OMB approved the
exception and notified the Department. The exception is applicable only
to equipment the SLA acquires under section 3(3) and section 7(c) of
the Randolph-Sheppard (R-S Act) and under section 103(b)(1) of the
Rehabilitation Act of 1973 (Rehabilitation Act) for the benefit of the
RSVFP.
This notice announces the lowering of the per-unit acquisition cost
for equipment acquired by SLAs for the benefit of the RSVFP. This
change is effective for SLAs on October 1, 2022 and applies to all
equipment, acquired with either R-S Act set-aside funds under 34 CFR
395.9(b) or State Vocational Rehabilitation Services (VR) program funds
(both Federal and non-Federal) under section 103(b)(1) of the
Rehabilitation Act and 34 CFR 361.49(a)(5), satisfying the lower per-
unit acquisition cost on or after that date. VR agencies need to ensure
that prior approval is obtained for items meeting the revised equipment
threshold in accordance with 2 CFR 200.407. RSA will provide training
opportunities to States, as necessary, on the implementation of the
exception.
Background
The R-S Act, which authorizes the RSVFP, enhances employment
opportunities for individuals who are blind by designating SLAs to
train and license them to operate vending facilities (e.g., vending
machines, cafeterias, snack bars) on Federal and other property.
VR agencies that provide services to the blind serve as SLAs for
purposes of administering the R-S Act and the RSVFP. Pursuant to
section 103(b)(1) of the Rehabilitation Act, VR agencies may use
Federal VR program funds for the ongoing acquisition of equipment and
the purchase of initial stocks and supplies during the blind vendor's
first six months of operation (see also 34 CFR 361.49(a)(5)).
Specifically, Federal VR program funds, as well as some non-Federal
funds used for matching purposes, may be used to acquire equipment
throughout the operation of the vending facility. However, Federal VR
program funds, as well as non-Federal funds used for matching purposes
(except for set-aside and Federal vending machine income funds), may be
used on initial stocks and supplies only during the first six months of
a vending facility's operation (34 CFR 361.49(a)(5)(ii)). The VR agency
acting as the SLA under the R-S Act has the authority to spend the
Federal vending machine income and set-aside funds under 34 CFR
395.9(b) on the maintenance, replacement, and purchase of equipment;
however, there is no authority to spend these funds on supplies at any
point during the operation of the vending facility.
Based on the provisions in 2 CFR part 200, ``supplies'' are those
items that fall under the $5,000 per-unit capitalization threshold
identified in the definition of ``equipment'' (2 CFR 200.1). In the
absence of a statutory or regulatory definition of ``equipment'' in the
Rehabilitation Act or the R-S Act, RSA has relied on the definition in
the Uniform Guidance at 2 CFR 200.1, which requires equipment to have a
per-unit cost of either $5,000 or exceed the State's capitalization
threshold, whichever is lower.
The capitalization threshold has a direct effect on the
classification of items as ``equipment'' or as ``supplies,'' and thus,
what funds can be used for its purchase and when such funds may be
used.
The Uniform Guidance threshold of $5,000 became an issue as SLAs
and blind vendors initiated the process of reopening vending facilities
in the wake of extended closures caused by the COVID-19 pandemic and
identified the need to repair/replace or purchase new commercial
appliances. For blind vendors to operate a vending facility, SLAs are
required to purchase commercial appliances needed to operate that
vending facility, including, but not limited to, vending machines,
commercial coffee makers, freezers, beverage dispensers, and cash
registers, because these commercial appliances remain at the facility
regardless of the vendor placed by the State to operate the facility.
In many instances, these commercial appliances do not meet the Uniform
Guidance definition of ``equipment,'' because the per-unit cost is less
than $5,000. These items typically cost between $1,000 and $4,999 per
item. Under the current definition of ``equipment,'' these costs would
generally be considered supplies and would not be allowable purchases
for the RSVFP with VR Federal grant funds and non-Federal matching
funds, except during the first six months of the operation of any
vending facility, and Federal vending machine income and levied set-
aside funds can never be used
[[Page 60665]]
for the purchase of supplies. The inability of SLAs to provide
commercial appliances needed by blind vendors for the operation of
vending facilities as ``equipment'' prevents States from fulfilling one
of their crucial responsibilities under the RSVFP program and prevents
them from expending funds as Congress anticipated under the program.
Realizing the effect of the Uniform Guidance definition of
equipment on the SLA's ability to purchase needed commercial appliances
and supplies over $1,000 for blind vendors in the RSVFP, States brought
this issue to RSA's attention in 2021, asking for flexibility to
purchase such items with VR funds and Federal vending machine income
and levied set-aside funds that could be used as non-Federal match for
the VR funds. Blind vendors already had reduced income, or no income
due to facility closures because of the pandemic and were not able to
absorb these additional costs with their own income, nor was that the
intent of the RSVFP.
In response to the RSVFP blind vendor needs, the Department
requested an exception on July 27, 2022, from OMB, under 2 CFR
200.102(a) and (c), to adjust the requirements under the Uniform
Guidance definition of ``equipment'' at 2 CFR 200.1 for the benefit of
the RSVFP. Specifically, the Department requested the limited
exception, solely for equipment acquired by the SLA for the benefit of
the RSVFP, to reduce the per-unit acquisition cost threshold from the
current $5,000 or the capitalization level established by the non-
Federal entity for financial statement purposes to ``equal or exceed
the lesser of $1,000 or the capitalization level established by the
non-Federal entity for financial statement purposes.''
As stated above, OMB granted the exception on September 2, 2022,
and the exception will take effect October 1, 2022, for all equipment
satisfying the lower per-unit acquisition cost acquired by the SLA with
either RSVFP levied set-aside or Federal vending machine income funds
or VR program funds (both Federal and non-Federal).
Accessible Format: On request to the program contact person listed
under FOR FURTHER INFORMATION CONTACT, individuals with disabilities
can obtain this document in an accessible format. The Department will
provide the requestor with an accessible format that may include Rich
Text Format (RTF) or text format (txt), a thumb drive, an MP3 file,
braille, large print, audiotape, or compact disc, or other accessible
format.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. You may
access the official edition of the Federal Register and the Code of
Federal Regulations at <a href="http://www.govinfo.gov">www.govinfo.gov</a>. At this site you can view this
document, as well as all other documents of this Department published
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You may also access documents of the Department published in the
Federal Register by using the article search feature at
<a href="http://www.federalregister.gov">www.federalregister.gov</a>. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
Katherine Neas,
Deputy Assistant Secretary, Delegated the authority to Perform the
functions and duties Of the Assistant Secretary for the Office of
Special Education and Rehabilitative Services.
[FR Doc. 2022-21751 Filed 10-5-22; 8:45 am]
BILLING CODE 4000-01-P
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