1000 series

The Standards of Practice covering 1000 Series, Office of Fiscal Services, are

still in review — with the exception of the SPs governing the Student Activities

Fund, represented by the 1500 series.

In the meantime, this document provides relevant guidance for policies and

regulations impacting Fiscal Services.

Please note that the linked materials include relevant Board of Education

policies, although some policies and numbers may have changed as a result of

the Board's update of its policies.

OFFICE OF FISCAL SERVICES

Standard Practices Series 1000

PAGES

SP 1000: Office of Fiscal Services; Overview of 1

SP 1101: Position Control Procedures—Non-WSF Programs 3

SP 1102: FMS Reports; School/Offices 4

SP 1103: FMS Reports; Monitoring by Program Managers 10

SP 1104: FMS Processing Schedule 13

SP 1105: FMS Corrections to Accounting Codes and/or Amounts 14

SP 1106: Revenue/Cash Receipt Collections 16

SP 1120: Non-Appropriated Local School Fund; Description of and Chart 22

of Accounts and General Purpose

SP 1121: Non-Appropriated Local School Fund; Administrator’s Checklist/ 25

Internal Controls

SP 1122: Non-Appropriated Local School Fund; Preparation for Financial Audit 26

SP 1123: Non-Appropriated Local School Fund; Collection and Deposit 28

Procedures

SP 1124: Non-Appropriated Local School Fund Bank Reconciliations; 31

Procedures for

SP 1125: Non-Appropriated Local School Fund; Expenditure of Funds 34

SP 1126: Non-Appropriated Local School Fund; Investing Idle Cash 36

SP 1127: Non-Appropriated Local School Fund; Financial Reporting 38

Requirements

SP 1128: Non-Appropriated Local School Fund; School Clubs 40

SP 1129: Non-Appropriated Local School Fund; Field Trips 41

SP 1130: Non-Appropriated Local School Fund; Gifts, Grants and 43

Requests (Donations)

SP 1131: Non-Appropriated Local School Fund; Fundraising Activities 44

SP 1132: Non-Appropriated Local School Fund: School Stores, Sale 46

of PE/School Uniforms

SP 1133: Non-Appropriated Local School Fund; Independent Organizations 47

(PTSA, PTA, Boosters, etc.)

PAGES

SP 1134: Non-Appropriated Local School Fund: Bank Account Set Up 49

and Maintenance

SP 1135: Non-Appropriated Local School Fund; Processing Invoices 50

for Payment

SP 1136: Non-Appropriated Local School Fund; Refund and Reimbursements 52

SP 1200: Payroll Calculations for Salaried

Employees—Ten (10) 53

Month Employees

SP 1201: Payroll Calculations for Salaried Employees—Twelve (12) 56

Month Employees

SP 1202: Casual Employees; Casual Payroll System; Processing 59

SP 1203: Teacher Substitute Employee Automated System (TSEAS); 61

Processing

SP 1205: Individual Time Sheet; Form D-55 63

SP 1206: Employee Organizational Timesheet; Form D-56 64

SP 1207: Notification of Temporary Assignment (Form SF-10) 65

SP 1208: Request for Overtime; Form BP-2 65

SP 1209: Claim for Lost Check/Non-Received Check; Procedures for 66

SP 1209.1: Claim for Escheated Check/Voided Check 67

SP 1210: Wage and Tax Statement (Form W-2); Request for Duplicate 68

SP 1211: Tax Withholding Exemption Changes (Federal W-4, State HW-4) 69

SP 1212: Salary Assignment/Cancellation Form D-60 for Bank Assignment (BA) 70

SP 1213: Salary Assignment/Cancellation Form D-60 for Credit Union Deduction 72

SP 1214: Savings Bond Authorization (State Accounting Form D-68) 74

SP 1235: Change of Leave Code Request (Form BLA-01) 75

SP 1240: Payment Processing; Introduction 77

SP 1241: Payment Processing: Supporting Documentation Required 78

SP 1242: Credit

Memos; Definitions and Procedures 79

SP 1243: Approval to Pay (ATP) Types; Descriptions 80

SP 1244: Direct Payments; Supplemental, Split, Advance, and Employee 82

Reimbursements

SP 1245: Blanket Purchase Orders; Guidelines 83

PAGES

SP 1246: Petty Cash Replenishment; Procedures 84

SP 1247: Monitoring Status of Payments; Procedure 85

SP 1248: Interest Charges on Late Payments; Procedures 86

SP 1249: Contract Payments; Required Documents 88

SP 1250: Procurement Card; Overview 89

SP 1251: Procurement Card Purchasing and Payment Process 91

SP 1252: Procurement Card Controls 93

SP 1253: Procurement Card Change of Accounting Codes 94

SP 1254: Procurement Card Reports 95

SP 1261: Inter/Intra-Island Travel Procedures 96

SP 1262: Inter/Intra Island Travel Procedural Flow 99

SP 1263: Inter/Intra Island Travel Frequently Asked Questions 103

SP 1264: Out-of-State Travel Policies 106

SP 1265: Out-of-State Travel Procedures 109

SP 1266: Out-of-State Travel

Required Supporting Documents 114

SP 1267 Out-of-State Travel Completed Report 119

SP 1268: Out-of-State Travel Procedural Flow 121

SP 1270: Automobile Allowances 125

SP 1280: Inter/Intra Island Travel Policies 127

SP 1281: Decaling; Guidelines for 130

SP 1282: Annual Physical Inventory Verification—Reports and Deadlines 131

SP 1284: Disposal of Property—Procedures and Process Flowchart 133

SP 1286: Transfers of State Property 138

SP 1287: Off-Site Use of Property Form 140

SP 1288:

Motor Vehicles—Registration, Junking and Other Procedures 141

SP 1289: Inventory Forms 144

SP 1301: Local School Account Audits (Non-Appropriated); Description of 145

SP 1310: Procurement of Goods 147

SP 1320: Procurement and Contracting for Construction 152

SP 1330: Procurement of Services 152

SP 1340: Procurement of Professional Services 158

SP 1350: Procurement of Health and Human Services 160

PAGES

SP 1370: 162

SP 1602:

SP 1603:

SP 1604:

SP 1605:

Risk Management Services

Budget Branch Introduc

tion

Operating Budget Preparation Process

Budget Execution Process

Budget Policies of the Board of Education; Compliance With

SP 1611: Budg

et, Weighted Student Formula 189

SP 1622: Budget Request Database; Instructions for 192

SP 1623: Budget Execution; Introduction to Procedures and Manuals 195

SP 1623.1: Budget Allocation Process; Description of 196

SP 1623.2: Financial Systems; Description of 199

SP 1623.3: Expenditure Plans; Description of Process 203

SP 1623.4: Budget—Carryover Funds; Guidelines and Procedures for 205

SP 1623.5: Deficit Spending: Prohibition and Procedures for Clearing 208

SP 1623.6 School-Based Budgeting: Teacher Participation 210

SP 1624: Federal Budget Execution Procedures; Introduction to 211

SP 1624.1: Federal Fund Allocation Process 212

SP 1624.2: Federal Fund Allocations; Description of Flexibility 214

SP 1624.3 Federal Fund Position; Process for Creating 215

SP 1624.4: Federally Funded Personnel; Description of Actual Payroll Costs 219

SP 1624.5: Federal Fund Fringe Benefit Costs; Actual vs Estimated 220

SP 1624.6: Federal Fund Lapse Date 221

SP 1624.7: Federal Fund Carryover Allocation Year 222

SP 1625: Selling

EDN 100 Categorical Positions 223

SP 1626: Budget: Chapter 42F, HRS; Guidelines and Procedures 225

SP 1627: Unbudgeted Needs; Procedure to Request 228

SP 1629: Budget; Buying or Selling Indexed Complex Area Allocation 230

Positions

180

181

185

187

PAGES

1631: Internal Financial Controls; Description of 234

SP 1633: Position Control Procedures for WSF Positions 235

SP 1634: Fiscal Implementation of Approved Reorganizations 237

SP 1000: Office of Fiscal Services; Overview of

1. Purpose

To provide an overview of this SP Manual.

2. Effective

Immediately.

3. Applies to

Users of SPs (teachers, administrators, personnel in the Office of Fiscal Services, and

other DOE employees).

4. Mission

Personnel in the Office of Fiscal Services will provide “customer service”-oriented

financial expertise and timely, accurate information to internal and external customers in

order to ensure transparency, sound fiscal management, and accountability at all levels

of the DOE—from the schools to the state office.

5. Vision

The Office of Fiscal Services personnel will be exemplary stewards of all our resources

to earn and maintain the public trust for effective use of state and federal taxpayer funds

and donor resources to improve student achievement.

6. “Our Pledge”

We will process financial transactions with accuracy, integrity, and sense of urgency

to meet our customers’ needs.

We will report timely, accurate results to our stakeholders.

We will conduct our business ethically and be responsible for our actions and

behavior, with respect for each other and all stakeholders.

We will be technologically proficient and seek ways to continually improve our

processes and methods of conducting business to create a productive and efficient

work environment.

We will partner with our internal and external customers to add value through

financial analyses and pro-active solutions rather than just being the “accounting

police.”

We will strive to make the DOE the preferred-employer department within state

government by providing opportunities for career development, a challenging work

environment, and a safe workplace that result in employee satisfaction and well

being.

7. Organization

A. The Office of Fiscal Services is led by an Assistant Superintendent, who also

serves as the DOE’s Chief Financial Officer (CFO). The Office includes the

Administrative Services Branch (including accounting, vendor payment, payroll,

inventory, and school support services), the Budget Branch (including budget

preparation and budget execution), the Procurement & Contracts Branch, and

the Internal Audit Section. See Reference (i), Organization of Office of Fiscal

Services

B. Budget Branch: The Budget Branch prepares and executes the DOE’s

operating budget. It consists of two sections:

1) Budget Preparation Section – Administers the preparation,

development and documentation of the DOE’s biennial and supplemental

operating budgets.

2) Budget Execution Section – Administers the implementation of the

DOE’s operating budget, monitors adherence to policies and procedures,

and makes adjustments to meet anticipated needs or restrictions.

C. Procurement and Contracts Branch: The Procurement and Contracts Branch

provides procurement and contract guidance and assistance to personnel in all

levels of the DOE regarding the procurement of goods and supplies, professional

services, construction-related services, and health and human services. The

Branch drafts contract agreements, reviews non-standard internal/external

agreements, and coordinates the approval of these agreements with the attorney

general’s office. This Branch consists of two sections:

1) Procurement Section – Provides departmental procurement direction,

oversight and expertise in compliance with the procurement code.

2) School-Based Behavioral Health Services Section – Performs

management support and fiscal support services to the Complex Areas in

the delivery of school-based behavioral health services to children eligible

for such services through IDEIA and Section 504.

D. Administrative Services Branch: The Administrative Services Branch provides

accounting, payroll, vendor payment, fixed-assets inventory, and business-

related operational support in the public school system. The Administrative

Branch consists of three sections:

1) Accounting Section – Administers and accounts for all funds,

expenditures, and financial commitments incurred by the DOE through a

centralized accounting system, in conformance with the state

comptroller’s rules and regulations;

2) Operations Section – Administers and performs the DOE’s payroll, vendor

payment, and inventory functions; and

3) School Support Section – Supports and assists the schools, complex

areas, and state offices in business-related matters.

E. Internal Audit Section: The Internal Audit section conducts examinations and

evaluations of the DOE’s fiscal activities and coordinates all external and internal

audits. The internal auditor provides information as to the adequacy and

effectiveness of the DOE’s system of internal controls. In addition, the Internal

Auditor serves as the Superintendent’s liaison with external CPA firm auditors

and audit sections of other governmental agencies (federal and state).

8. SP Maintenance Responsibility

The Assistant Superintendent/Chief Financial Officer in the Office of Fiscal Services is

responsible for maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone.

9. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1000

(b) OFS Organization Chart

SP 1101: Position Control Procedures

Non-WSF Programs

1. Purpose

To ensure that the number of positions established does not exceed the number of

authorized positions for each Program ID.

2. Effective

Immediately.

3. Applies to

Assistant Superintendents, Directors in the Superintendent’s Office, Complex Area

Superintendents.

4. Authorized Positions

A. Authorization of positions funded by non-WSF Program IDs is the legislative

appropriations act.

B. Adjustments to positions (such as adding a temporary position by moving

Character “A1” or “B” funds to Character “A”) can be made if approved in writing

by the Superintendent or designee per HRS, Section 302A-1116. Such

authorization is only valid until June 30

of the fiscal year in which the approval

was obtained.

C. If a temporary position, created with the approval of the Superintendent or

designee, is to be extended to the following fiscal year, the approval must be

obtained in writing before the new fiscal year.

5. Position Control for Certificated Positions Funded by Non-WSF Programs

A. For position control issues related to certificated positions, please contact OHR.

6. Position Control for Classified/SSP Positions Funded by Non-WSF Programs

A. The Legislative Appropriations Act sets the ceiling for permanent and temporary

full time equivalent (FTE) positions for each Program ID. The allocation of

positions for the upcoming fiscal year is reflected in each Program ID’s initial

allocation document which is issued around summer by the Budget Execution

Section.

B. Programs may request to establish new positions up to the allocation ceiling by

submitting DOE-v1a forms to the Budget Preparation Section.

C. A program must obtain the Superintendent’s or designee’s approval in writing to

establish a temporary position(s) that is in excess of the allocation ceiling. After

the approval is obtained, the program may submit a DOE-v1a form to the Budget

Preparation Section to establish a new position, attaching a copy of the approval

document(s) to the DOE-v1a. If a transfer of funds between Characters (i.e.

moving funds from Character B to Character A) is required to fund the new

temporary position the school or office must initiate a request to transfer funds to

be approved by the Superintendent or designee. After approval is granted, the

Budget Execution section will generate a subsequent allocation notice

documenting the transfer of funds.

D. A program may establish a position with a different occupational group code than

what that position was allocated as. However, approval of the Superintendent

may be required if this change will also mean a change in bargaining unit for the

position (i.e. establishing a clerk typist with an FTE that was allocated as a bus

driver), or if a certificated position will be established when a classified/SSP FTE

is allocated. Please consult with OHR if these types of changes will be

requested. If these changes result in changes to the offices’ organizational

charts, the charts must be updated by coordinating with OHR.

E. A DOE-v1 must be submitted to the Budget Preparation Section to make

changes to the Uniform Accounting Code (UAC) for established classified and/or

SSP positions.

F. A DOE-v1 must be submitted to the Budget Preparation Section to abolish an

established classified/SSP position.

7. SP Maintenance Responsibility

The Budget Director in the Office of Fiscal Services is responsible for maintenance,

administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) reference page for this SP may provide

standard responses to common questions. Please review this resource before inquiring

via telephone.

8. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) HRS, Section 302A-1116, Authority for the DOE to create temporary positions

(b) HRS, Section 37-0074, Authority for the Superintendent to approve transfer of

funds among cost categories (Characters of Expenditure)

SP 1102: FMS Reports; School/Offices

1. Purpose

To describe the purpose of the various FMS reports that are designed to help schools

and offices monitor their accounts.

2. Effective

Immediately.

3. Applies to

All Schools and Offices.

4. Background

Various FMS reports are available to assist schools and offices either in WINFMS, on

the FMS website, or hardcopy. These reports are designed in different formats to

provide users with detailed information based on their needs. WINFMS reports reflect

real time balances that are updated as soon as financial adjustments are posted in FMS.

These reports can be printed on demand. FMS website reports are monthly and/or

cumulative that provide financial information through the end of a particular month.

These reports can be found at the FMS website under “DOE School/Office Reports” or

“DOE Grant Managers Reports” and can be searched, viewed on-line, printed, or worked

with in Excel/Word documents. Only payroll reports are provided to schools and offices

in hard copy. This is because they contain confidential personal information.

5. Allotment Reports

Allotment reports are designed to help users monitor their encumbrances, expenditures,

and allotment balances. These reports provide a detailed listing of transactions that

affect the schools or offices available allotment balances. Federal, general, and special

funds have allotment balances that can be found in these reports.

DAFM482 – Allotment Status for all Prog IDs (WINFMS)

This report lists the user’s Program IDs with allotments. Payroll (character 10 and

11) and other (character 20) allotments, expenditures, encumbrances, and available

allotment balances are provided for each Program ID. This report helps users to

monitor their Program IDs and can be used to identify deficits.

DAFM437 – Allotment Status for Specific Prog ID (WINFMS)

This report lists all of the user’s Organization IDs which includes sub-Organization

IDs for a specific Program ID. Payroll (character 10 and 11) and other (character 20)

allotments, expenditures, encumbrances, and available allotment balances are

provided for each Organization ID. This report is categorized by character (10, 11, or

20) and by BFY.

DAFM438 – Allotment Status for Specific Org ID (WINFMS)

This report lists all of the user’s Program IDs for a specific Organization ID which

includes Sub-Organization IDs. Payroll (character 10 and 11) and other (character

20) allotments, expenditures, encumbrances, and available allotment balances are

provided for each Organization ID. This report is categorized by character (10, 11, or

20) and by BFY.

The DAFX4480-A – Allotment Control Status for School Level by Prog ID and

Org ID (DOE School/Office Reports website)

This report provides the same information as the WINFMS DAFM482; however, it is

a monthly versus real time report. This report provides monthly payroll (character 10

and 11) and other (character 20) allotments, expenditures, encumbrances, and

available allotment balances are provided for each Program ID. This report also

helps users to monitor their Program IDs and can be used to identify deficits.

The DAFR4470 – School/Unit Allotment Register (DOE School/Office Reports

website)

This report provides detailed information only for other (character 20) expenditures.

This report combines the allotments, encumbrances, payments, and direct payments

onto one report to show the calculation of the available allotment balance for an

Organization ID/Program ID account. The Approval to Pay (ATP) report number and

the check number for a specific purchase order payment can also be found on this

report. This report is divided into current year and prior year. The current year

report shows encumbrances, payments, and direct payments that were created

during the current fiscal year. The prior year report shows encumbrances,

payments, and direct payments that were created during the current fiscal year for

carryover Program IDs. This report also shows payments for purchase orders or

contracts that were encumbered and still outstanding as of the end of the prior fiscal

year.

6. Cash Reports

Cash reports are designed to help users monitor their encumbrances, expenditures, and

cash balances. These reports provide a detailed listing of transactions that affect the

schools or offices available cash balances. Special and trust funds have cash balances

that can be found in these reports.

The DAFM484 – Cash Status for all Prog IDs (WINFMS)

This report provides summary information for the user’s Program IDs with cash

balances. Payroll (character 10 and 11) and other (character 20) allotments,

expenditures, encumbrances, and available cash balances are provided for each

Program ID. This report helps users to monitor their Program IDs and can be used

to identify deficits.

The DAFMR451 – School/Unit Cash Control Register (DOE School/Office

Reports website)

This report provides detailed information on a monthly basis as compared to the

WINFMS DAFM484 which is a real time report. Payroll (character 10 and 11) and

other (character 20) allotments, expenditures, encumbrances, and available cash

balances are provided for each Program ID. This report also helps users to monitor

their Program IDs and can be used to identify deficits.

7. Expenditure Reports

Expenditure reports are designed to help users monitor their expenditures by Object

code. These reports provide a detailed listing of expenditures and encumbrances that

affect the available allotment balances for schools or offices. Federal, general, special,

and trust funds have allotment balances for Characters 11 and 20 that can be found in

these reports. These reports show expenditures for salaries. For general funds, the

salary allotments are in the central salary account, so school reports do not include

allotments for character 10. Therefore, although the reports appear to show a deficit for

Object codes in character 10, the Allotment Status reports should be used to monitor for

deficits. The receipts for special and trust funds are not shown on these reports,

therefore the Cash Control reports should be used to monitor for deficits in special and

trust funds.

The DAFR 385A – Expenditure Status by Program – School View by Program

ID (DOE School/Office Reports website)

This report provides the schools or offices with encumbrances, expenditures, and

allotment balances by object code for each Program ID. The schools or offices can

refer to this report when planning for the expenditures for the following fiscal year. .

The DAFR 385B – Expenditure Status for Program Managers (DOE Grant

Managers Reports website)

This report helps program managers monitor their program(s). This report provides

financial information for all of the schools that received funding for a particular

program. It also helps to ensure that the funds are being expended appropriately

and supports the various objectives of the program. The financial information on this

report is sorted by grant #, BFY, fund, appropriation, and Program ID which is then

sorted by school(s) within each district. The expenditures for each school are

categorized by payroll (character 10 and 11) and other (character 20) object codes.

8. Payroll Reports

Payroll reports are designed to help users monitor expenditures that are not posted to

central salary. These reports provide payroll expenditure information for federal,

general, special, and trust funds on a monthly or cumulative basis.

DAFMZ032 – Payroll Detail Transaction Report (Hardcopy)

This report is a monthly, non-cumulative report that provides payroll detail for

programs not charged to central salary. Character 10 (salaried payroll) and/or

character 11 (hourly payroll) expenditures are listed with payroll date, last four digits

of the social security number, payroll number, and Batch ID. Expenditures are

categorized by Program ID first and then object code. This report is only available to

schools and offices in hard copy because of the sensitive nature of its contents.

Besides payroll expenditures, this report also shows payroll adjustments that have

been processed through an FMS-AC4.

DAFR 385B – Expenditure Status for Program Managers (DOE School/Office

Reports website)

This can be used to provide this information, but it will be categorized by character

10 and 11 object codes. Also, this report does not provide the sensitive type of

information that can be found on the DAFMZ032. This report is available on a

monthly basis and can be found at the FMS website under “DOE Grant Managers

Report.”

9. Adjustments

The reports that include journal voucher (JV) and other adjustments are designed to help

users view the adjustments that have been made to their accounts. These reports

provide adjustment information for federal, general, special, and trust funds on a monthly

or cumulative basis.

Most Current AC4 Report (DOE School/Office Reports website)

This report lists all FMS-AC4 adjustments that have been processed by the

Accounting Section, Information System Services Branch, or mass JVs (i.e.

automated General Fund Carryover Program). This report is organized by district

office, Organization ID, BFY, fund, appropriation, and Program ID.

DAFMZ011 – JV/Adjustment List (DOE School/Office Reports website)

This report provides a detailed listing of the JVs entered by the Accounting Section

and other adjustments (cash, allotment, etc.) entered by the schools and offices

during the fiscal year.

10. FMS Web Report Tools

The FMS website reports usually consist of an index frame on the left and a report data

frame on the right. To search the index frame you must click within the index frame

first. In Internet Explorer press Ctrl-F or select Edit from the menu and then Find. Type

in the text you are looking for and then click on the "Find Next" button. The text in the

index frame will be highlighted if it is found. Click on the found text to be taken to your

section of the report.

Below are brief explanations for the web report tools icons:

- "Work With" Button. This button opens the FMS website report in a separate

window. Inside this window, highlight the section you want to print then select File,

Print. In the Print window click on Selection under the Print Range section then click on

OK.

- “Print” Button. This button allows the schools and offices to print within the report

data frame which will be printed in landscape mode. The right side of the report will not

be cut off and the report headings will be at the top of each page. Each school/office is

contained within a single frame wherever. In some instances, it may be a very large

report, but the print program will let you know how many pages will be printed before

printing.

- “Search” Button. If this is the first time you have tried out the search feature you

will be warned by your browser that a plug-in or ActiveX control has been

requested. You will be taken through a set of dialog boxes asking if it is OK to install the

software from Forest Computer. Then you will be able to type your search criteria in the

"Look for:" box and then click the "Find Now" button.

Additional functions that are available in the "Search Results" window are listed below.

- Flags to select one or more pages for the "Print" or "Work With" operation. If you

click on the "Print" button all of the selected pages will be printed. If you select "Work

With" all of the selected pages will be brought into an edit window. You can then edit

and/or print part or all of the report.

- "Print" and "Work With" buttons operate on selected pages (select them by

clicking on the flag to the left of the page). These buttons will be active as soon as you

click on the flag for one or more pages.

- Dynamically change font size of search results in "List View" or "Browse".

- Select or Deselect all pages

- Page through results or go to first or last page.

- Go forward or backward to each search occurrence within the current page.

11. SP Maintenance Responsibility

The Accounting Section in the Office of Fiscal Services is responsible for maintenance,

administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) for this SP may provide standard responses to

common questions. Please review the FAQ section below before inquiring via

telephone.

Frequently Asked Questions (FAQ)

(1) Q: Is there a guide available that provides an overview on how to use the

various FMS reports? If so, where is it located?

A: There is a guide that provides an overview of the FMS reports which is

located on the FMS website (http://fms.k12.hi.us/fmsreportsguide/). This

guide will provide general information for all schools and state offices on

how to use the various FMS reports.

(2) Q: How do I print out an FMS report from WINFMS?

A: There is a guide on the FMS website that provides a walk through on how

to print out FMS reports from WINFMS (http://ists.k12.hi.us/fms2/).

(3) Q: What do I do if there is a payroll deficit in one of the Program IDs?

A: If this is a payroll deficit, you will need to look at the DAFMZ032 (Payroll

Detail Transaction Report) to determine if payroll is being erroneously

charged to this Program ID. Please refer to Section #8 for further

information on how to use this report. Once the error is identified, an

FMS-AC4 with appropriate supporting documentation will need to be

submitted to the Accounting Section to correct the error. Please refer to

the SP on Error Corrections for further information.

(4) Q: When I printed out the DAFM484 (Cash Status) from WINFMS, there is

an expenditure credit for one of the Program IDs. How did this occur and

do I need to correct this?

A: You will need to look at the DAFMR451 (School/Unit Cash Control

to Section #6 for further information. If the expenditure credit is caused

by an erroneously deposited cash receipt, an FMS-AC4 with appropriate

supporting documentation will need to be submitted to the Accounting

Section. Please refer to the SP on Error Corrections for further

information.

(5) Q: When I printed out the DAFM482 (Allotment Status for all Prog IDs) from

WINFMS, I thought I paid all of the encumbrances for one of the Program

IDs?

A: If there is an encumbrance balance even though you thought that all of it

was paid for, you will need to look at the DAFR4470 (School/Unit

Allotment Register). Please refer to Section #5 for further information.

Once the encumbrances are identified, they will need to either be paid or

liquidated.

(6) Q: How do I print out an FMS report under “DOE School/Office Reports” at

the FMS website?

A: You will need to click on the printer icon on the upper left corner of the

FMS report. Then you will be able to print the selected page(s) of the

FMS report that you need to use. Please refer to Section #10 for further

information.

(7) Q: How can I find out if the schools are expending the funds that they have

received?

A: The Grant Manager’s Report (DAFR 385B – Expenditure Status for

Program Managers) provides financial information for all schools

that received funding for a particular program. Please refer to Section #8

for further information.

(8) Q: The DAFMZ032 (Payroll Detail Transaction Report) provides payroll

details on a monthly, non-cumulative basis. Is there a report that

provides cumulative payroll information?

A: The Grant Manager’s Report (DAFR 385B – Expenditure Status for

Program Managers) can provide cumulative payroll expenditures based

on character 10 and 11 object codes. However, this report will not

provide you with specific information that the DAFMZ032 will provide like

the last four digits of the Social Security Number. Please refer to Section

#7 and 8 for further information.

12. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

FMS Reports

a) The FMS reports that are available for schools and offices to use are located on

the FMS website. Please refer to the following link (http://fms-

reports.k12.hi.us/school-reports.htm).

Grant Managers Report

b) The Grant Managers report is located at (http://fms-reports.k12.hi.us/grant-

reports.htm).

FMS Reports Guide

c) The FMS reports guide is located at http://fms.k12.hi.us/fmsreportsguide/.

WINFMS Report Guide

d) The WINFMS reports guide is located at (http://ists.k12.hi.us/fms2/).

SP 1103: FMS Reports; Monitoring by Program

Managers

1. Purpose

To provide helpful tools in monitoring grant awards. This SP is written specifically for

grant awards received from the Federal Government.

2. Effective

Immediately.

3. Applies to

Department of Education (DOE) State, Complex Area, and District Program Managers

and Accountants.

4. Background

The Program Manager is responsible in monitoring the overall financial as well as

programmatic requirements of a grant. The funds must be expended in accordance with

approved grant application and budget. Compliance with applicable statutes, provisions,

regulations and guidelines should be strictly enforced. The Financial Management

System (FMS) User Policy and Process Flow Guide is another tool to help program

managers monitor the expenditure of funds.

5. The Grant Award

The grant application and budget, supporting documents and write up submitted in

support of the approved grant application determines how to use the funds.

The grant award notification provides certain requirements including the budget and

performance period when the funds will be used, the authorized amount of the grant,

matching requirements, terms and conditions, and other provisions specified by the

grantor (See Grant Award Notification and explanation of Blocks for more information).

6. Program ID/Grant No/FY

When a new grant is received, a program identification (Program ID) and grant number

with the fiscal year are assigned by Accounting Section (Refer to SP 1101 – FMS

Codes). The Program ID will be used by recipients of the grant to credit allotment and

charge expenditures. The grant number and fiscal year maintains records of all

expenditures, contract encumbrances, claims encumbrances and revenue.

The Program Manager prepares an expenditure plan to distribute the funds to

school/units. This plan is submitted to Budget Office for allocation (Refer to SP 1604 -

Budget Execution Process for more information on this subject). Once the schools/units

receive their allocation, they prepare and enter their own expenditure plans in the budget

system. An interface is done between Budget System and the Financial Management

System (FMS) creating an allocation in the latter.

7. Expenditure Monitoring

Monitoring of expenditures is just as important as obtaining the grant award. The

Program Manager should always be in control of where and when the funds are

expended. Proper monitoring prevents lapsing of funds and ensures appropriate and

timely expenditures of funds that support project objectives.

8. Tools in Monitoring

There are various tools in monitoring expenditures whether hard copy reports, live view

of FMS data or downloads from the internet. Some reports can be viewed or printed on

line by central accountants, user support technicians, complex area program mangers,

and district program managers, to get the most current status of the account.

The following FMS reports are available every month and can be downloaded from the

following FMS website address (Refer to “How to View FMS Reports on the Web

http://fms.k12.hi.us/fmsreports/).

http://fms-reports.k12.hi.us/school-reports.htm

a. DAFR385A Expenditure Status By Program – School View by Program

ID – Current and Claims.

b. DAFR4470 School Unit Allotment Register

c. DAFMR451 School Unit Cash Control Register

d. DAFMZ011 Journal Voucher (JV) Adjustment List

e. DAFMC015 Posted Purchase Order Log

http://fms-reports.k12.hi.us/accounting-reports.htm

a. DAFR3811 Expenditure Status by Program ID – District Office View

b. DAFR3831 Expenditure Status by Program ID – Department Wide

View

c. DAFR385B Expenditure Status for Program Managers – Current and

Claims.

d. DAFR385C Expenditure Status for District Program Managers

Helpful hints on how to use the reports are available through this website:

http://fms-reports.k12.hi.us/fmsreportsguide/

9. Perusing the Reports

Negative amounts whether expenditure, encumbrances or account balance should

always raise a red flag when browsing an FMS report. The expenditure or encumbrance

becomes negative when an incorrect credit adjustment is made; a negative account

balance is the result of over-expending the allotment, incorrect charge, or the fund may

still be sitting in the Budget System.

Unusually big account balances should also be a concern for Program Managers

especially when the grant is nearing the lapse date.

10. Identifying the Problems

The Program Manager identifies the school/unit with deficits by going through the DAFR

385B report. This report provides the grant/fiscal year and Program ID by school/office

and the status of the account. The grant/fiscal year determines when the will grant

lapse, therefore, it is necessary to check where the funds come from. The lapse date

can also be verified per the allocation notice.

The Program Manager should be able to view print the most current allotment status of a

Program ID in FMS. This will facilitate immediate resolution of deficits. The problem

should be relayed to the school/office if it cannot be resolved by the Program Manager.

The school/office will examine the account in deficit and initiate corrective actions. Refer

to SP 1102 – FMS Reports; School/Offices and/or SP 1105 – School/Office/Program

FMS Error Corrections)

Unresolved deficits may result in locking out other school/office from paying bills or

encumbering purchase orders because the grant ceiling may have been overspent.

11. SP Maintenance Responsibility

The Accounting Section in the Office of Fiscal Services is responsible for maintenance,

administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

12. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1103.

Q: Who is responsible in correcting an erroneous charge to a school/office?

A: The school/office where the incorrect charge was made should initiate the

correction by completing and submitting the Form AC4 “Request For Change of

Accounting Codes and/or Amounts”

(b) US Education Department General Administrative Regulations (EDGAR)

http://www2.ed.gov/policy/fund/reg/edgarReg/edgar.pdf

(d) SP 1101 – FMS Codes

(e) SP 1604 – Budget Execution Process

(f) SP 1102 – FMS Reports; School/Offices

(g) SP 1105 – School/Office/Program FMS Expenditure Error Corrections

Forms

(h) Form AC-4, Request For Change of Accounting and/or Amounts

http://fms.k12.hi.us/forms/fms-ac4/fms-ac4.pdf

SP 1104: FMS Processing Schedule

1. Purpose

To outline the Financial Management System (FMS) and Budget plans and processing

requirements for the end of the current fiscal year and the start of the new school fiscal

year.

2. Effective

Immediately.

3. Applies to

All State, complex area, district offices and schools.

4. Background

The FMS/Budget processing schedule identifies key dates as we close the current fiscal

year and start the new fiscal year.

5. Processing Schedule

The FMS processing schedule can be found on the FMS website (http://fms.k12.hi.us/)

under the FMS Year-End Close Information section.

The FMS/Budget processing schedule establishes the following key deadlines:

Planned budget carryovers to become available.

First and last days to post purchase orders, pay purchase orders and make direct

payments using current and carryover funds.

Form FMS AC-4 deadlines for the first and second half of the year.

Form BUD-3 deadlines for Budget System.

Planned carryover transfer program.

When FMS will temporarily close for year-end processing.

Identifies the new purchase order prefixes for the new fiscal year.

Also refer to the following:

SP 1105 – Error Corrections for details and instructions on AC4.

Budget Branch Standard Practices at SP 1600s.

6. SP Maintenance Responsibility

The Accounting Section in the Office of Fiscal Services is responsible for maintenance,

administration, and questions regarding this SP.

7. References, Resources, and Forms

FMS processing schedule: http://fms.k12.hi.us

SP 1105: FMS Corrections to Accounting Codes

and/or Amounts

1. Purpose

To provide instructions for requesting corrections or changes related to revenue and

expenditure transactions posted in Financial Management System (FMS).

2. Effective

Immediately.

3. Applies to

All DOE offices and schools.

4. Background

Schools/offices may make corrections/changes to revenue and expenditure transactions

posted in FMS. For example, changes may be made to the following transaction detail:

Organization ID, Program ID, Object Code, Budget Fiscal Year (BFY), Source Code,

and/or Amount. To request this change, schools/offices should complete a Form FMS-

AC4, Request for Change of Accounting Codes and/or Amounts. The FMS-AC4 should

be sent to DOE Accounting Section with appropriate supporting documentation. DOE

Accounting will process the FMS-AC4 by posting a correcting journal voucher (JV) to

FMS.

5. Completing FMS-AC4

The FMS-AC4 and related instructions to complete the Form is provided below at

Section 11 - References, Resources and Forms.

A few important notes regarding the FMS-AC4:

 Form FMS-AC4s should not be used to clear deficits unless they were caused by

legitimate errors. Examples of legitimate errors include using an erroneous Program

ID to purchase supplies or equipment, or an erroneous Organization ID or Program

ID to incur substitute teacher charges.

 Error corrections must be processed timely. Refer to Section 9 below for deadlines.

 There is no dollar threshold amount for processing a Form FMS-AC4

Q: Can error corrections be processed for errors that were made in a prior

fiscal year?

A: No. Error corrections need to be corrected in the fiscal year in which the

errors occur. Refer to the Deadlines section below.

Q: Is there a dollar threshold amount for processing FMS-AC4s?

A: No. There is no dollar threshold amount for processing a Form FMS-AC4.

6. Acceptable Supporting Documentation

The type of supporting documentation that should be submitted with the FMS-AC4

depends on the type of correction/change that is being requested, such as follows:

Payroll Expenditures (Character 10):

 Payroll Detail Transaction Report (DAFMZ032), or

 Principal Report

AND

 Form 5, Personal Action Form .

Payroll Expenditures (Character 11):

 Payroll Detail Transaction Report (DAFMZ032), or

 Principal Report

Non-Payroll Expenditures (Character 20):

 Approval To Pay Report (ATP), or

 DAFR447, School/Unit Allotment Register, or

 ERFPC100-C, P-Card Transactions Posted Report

Revenue Receipts:

 Collection Activity Report (CAR), or

 Treasury Deposit Receipt (TDR), or

 DAFMR451, School/Unit Cash Control Register

Cash Transfer:

 DAFMR451, School/Unit Cash Control Register

 Formal memo/letter initiating or authorizing the cash transfer and/or calculation of

cash transfer amounts (if applicable)

7. Submission Process

One copy of the FMS-AC4 should be submitted to DOE Accounting Section via intra-

departmental mail. A second copy should be maintained by the school/office as a

suspense copy until the “validated” FMS-AC4 is returned.

For rush requests, the FMS-AC4 may be faxed to DOE Accounting Section @ (808)

586-3374. Rush request should be only be used in extreme cases such as to prevent

the lapsing of funds.

**Please do not submit the FMS-AC4 more than once. Submitting duplicate forms

may result in double-postings.

8. Completion Process

After DOE Accounting processes the FMS-AC4, the Accountant will write the DOE

Journal Voucher (JV) number on the bottom of the FMS-AC4, and send a copy of the

processed or “validated” FMS-AC4 back to the school/office.

Schools/offices should review the processed or “validated” FMS-AC4 against what was

posted on FMS to verify the correction/change was posted properly. Schools/offices can

see the FMS-AC4s transactions posted in FMS in the current fiscal year at the “Most

Current AC4 Report” link at the FMS website: http://fms-reports.k12.hi.us/school-

reports.htm.

Schools/offices should keep on file a copy of the processed FMS-AC4 for their records.

9. Deadlines

There are two deadlines during each fiscal year to submit Form FMS-AC4s—the mid-

year close for July – Dec transactions and year-end close for January – June

transactions. For further information regarding the deadlines, please refer to SP 1104 -

FMS Processing Schedule.

**Please be mindful of the deadline schedules. FMS-AC4 corrections/changes

cannot be posted for the period after the deadlines have passed.

10. SP Maintenance Responsibility

The Accounting Section in the Office of Fiscal Services is responsible for maintenance,

administration, and questions regarding this SP.

11. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Form FMS-AC4, Request for Change of Accounting Codes and/or Amount

(b) Instructions for Form FMS-AC4

SP 1106: Revenue/Cash Receipt Collections

1. Purpose

To describe the Department’s revenue/cash receipts processes.

2. Effective

Immediately.

3. Applies to

All State, District and school level personnel responsible for revenue/cash collections.

4. Background Information

Revenue/cash receipt collections include any monies collected by a school or office.

Monies collected fall into two major groups.

 Non-Appropriated Funds (also known as Local School Funds or “LSF”)

Monies collected from and for students which do not require deposit into the State

Treasury pursuant to HRS section 302A-1130. Examples include: class dues,

student association dues, yearbook, newspaper, school club dues, money-raising

funds, and excursions.

 Appropriated Funds 

Monies collected for the following:

Central Checking (used for collections of items not falling within the other

appropriated funds categories, such as: use of facilities fees, summer school,

adult education, athletic events, lost textbooks/equipment, returned check fees,

donations)

School Lunch

Student Transportation

A-Plus Program

*This SP 1106 covers appropriated fund collections only. Please refer to SP

1120 for more information on LSF Funds.

5. Billings

Schools and offices are responsible for billing and collecting amounts due from

individuals and organizations which are due to the DOE or State.

DOE Billing Collection Forms

Form 440A, Bill for Lost Textbooks  Used for charges/fees related to lost textbooks.

Form 440B, Outstanding School Obligation  Used for various charges/fees.

A404, Form 99, Bill for Collection  Used to bill external organizations or individuals.

6. Deposits from Schools

Ordering Deposit Slips

Deposit slips for all appropriated fund checking accounts must be ordered through DOE

Accounting. The DOE uses special micro-encoded deposit slips to route deposits to the

appropriate checking account and org code (i.e. school).

IMPORTANT: DO NOT USE PHOTOCOPIES OF DEPOSIT SLIPS TO MAKE BANK

DEPOSITS. BANK SCANNERS ARE UNABLE TO READ THE MICRO-ENCODED

ACCOUNT NUMBERS FROM PHOTOCOPIES. USING PHOTOCOPIES WILL

CAUSE ERRORS AND DELAYS.

Each school is responsible for maintaining a sufficient supply of deposit slips. Re-orders

should be done timely. Orders take a minimum of 10 business days to be received from

the day the order is placed. Deposit slip order forms can be found on the FMS website.

Forms should be faxed to DOE Accounting at 586-3374.

Schools should verify all micro-encoded data on the bottom of the deposit slips when

received. The deposit slips should have the org code, bank routing number, and

checking account number. Do not use incorrect deposit slips or make manual

corrections, instead call DOE Accounting at 586-3371.

Checking Accounts

The checking account numbers for the four appropriated fund accounts are:

Central Checking Account #0001-075160

School Lunch Collection Account #0001-063367

Student Transportation Account #0002-374161

A-Plus Program Account #0003-414680

Preparing and Processing Deposit Slips

At least three (3) deposit slips should be prepared for each deposit. One (1) copy

should be retained by the school as a suspense copy until the deposit is validated. The

other two (2) copies should be sent to the bank for validation.

After the bank validates the deposit slips, the bank will retain one copy, and the

remaining copy should be retained by the school. Schools may prepare additional

deposit slips for validation or recordkeeping as necessary.

Deposit Transaction Limits

Schools are limited to ten (10) deposit transactions per day per checking account. Any

deposits above this limit will cause errors and delays.

Other

See Sections 9 – 11 for more information on deposits from Schools.

7. Deposits from Offices

A Treasury Deposit Receipt (“TDR”), SAFORM B-13 4P, should be used by DOE offices

to process revenue/cash collections.

Accessing the TDR

Offices can access the most recent version of the TDR on the State of Hawaii Forms

website: http://www.state.hi.us/forms/, via the “View Internal Forms in the Database” link.

The TDR must be completed on the computer and printed out on specific NCR paper

which can be obtained from DOE Accounting.

Preparing and Processing the TDR

Instructions on how to work with and print out the TDR can be found on the State of

Hawaii Forms website.

Instructions on how to complete the TDR are as follows:

FUND

Enter full name of fund type (i.e. “General”, “Special” or “Trust”)

FUND OR

APPROPRIATION

Enter descriptive title of appropriation (i.e. OCISS – Advanced Technology Research)

or school name

DETAIL DATE

Enter current date in following format “XX/XX/XXXX”

SFX

Enter consecutive line number beginning with “01”

Enter transaction code “011” for revenue receipts (i.e. fees, donations, grants, etc.)

Enter transaction code “122” for expenditure reimbursements

Enter first letter of the Fund type (i.e. “G”, “S”, “T”)

Enter last two digits of current fiscal year (i.e. “11” for 2011)

APP

Enter three digit appropriation code (refer to FMS website for listing). Appropriation

code should be applicable/related to the program code (PROJECT NUMBER).

Enter “E” for Education

SOURCE/OBJECT

Enter four digit source or object code (refer to FMS website for listing).

Revenue receipt transaction code (TC) of “011” should use a source codes.

Expenditure reimbursement transaction code (TC) of “122” should use an object code.

COST CENTER

Enter your three digit org code

PROJECT NUMBER

Enter your five digit program code

Enter two digit District code

AMOUNT

Enter deposit amount

DEPARTMENT

Enter “EDUCATION”

REMARKS

Enter pertinent check information

DEPOSITORY NO.

Do not enter anything. TDR to be validated by Budget & Finance. Validated copy will

be sent to DOE Accounting who will route copy to you.

After completing the TDR, click on the yellow button at the top of the page labeled

“PRINT”, and four (4) copies of the TDR will print. One (1) copy should be retained by

the office as a suspense copy until the deposit is validated. The other three (3) copies

should be sent DOE Accounting with the monies collected.

DOE Accounting will process the deposit and return one (1) copy of the validated TDR to

the office. Please allow 1 week for processing.

Deposit Transaction Limits

Offices are limited to ten (10) deposit transactions per day. Any deposits above this limit

will cause errors and delays.

Wire Transfers

Offices should contact DOE Accounting for instructions on setting up wire transfers for

specific programs.

Other

See Sections 9 – 11 for more information on deposits from Offices.

8. Dishonored Checks

Procedures for dishonored checks being deposited in central checking account are as

follows:

DOE Accounting will send the school/office a Dishonored Check Notice with a

copy of the related check.

The school/office should contact the maker of the dishonored check, and request

cash, cashier’s check or money order to replace the dishonored check. The

school/office should also collect a non-refundable service charge of $25.00 for

each dishonored check, as required by State law. This service charge cannot be

waived under any circumstance.

Collections for the dishonored check may be included with the regular deposits.

No separate deposit slip is required.

A separate Collection Activity Report (CAR) will be generated for the debit memo

related to the dishonored check. Refer to Section 10 for further procedures for

CARs.

Schools/offices should consider requiring payments in cash or cashier check for

individuals or organizations with frequent incidents of dishonored checks.

9. Collection Activity Report (CAR)

CARs are generated for any central checking account transaction. No CARs are

generated for school lunch, student transportation, and A-Plus program checking

accounts, as all monies are routed to the respective program IDs automatically.

The CAR allows the schools/offices to designate where collections, refunds, etc. will be

debited and credited to. CARs are uploaded automatically onto the WINFMS website.

CARs should be viewed and released on a regular basis.

There are four (4) types of CARs, as follows:

 Cash Receipts (batch number range: 200-209)  One Collection Activity Report

(CAR) is generated for each central checking account deposit transaction. The

school/office should input the transaction code, source/object code, and program ID

for each deposit transaction.

 Debit Memo (batch number range: 620-625)  Debit memos.

 Bad Check (batch number range: 640-645)  The school/office should adjust the

original CAR by inputting into FMS the appropriate organization ID, program ID,

object/source, the dishonored check amount and the maker’s name.

 Credit Memo (batch number range: 720-725).

School/office will adjust the original CAR by inputting into FMS the appropriate

organization ID, program ID, object/source, the dishonored check amount and

the maker’s name.

10. Error Corrections

Schools

If a deposit is made in the wrong checking account, schools should call DOE Accounting

to resolve the issue.

If a deposit is made in the central checking but coded incorrectly during the CAR

process, the school should request a correction using Form FMS-AC4, Request for

Change of Accounting Codes and/or Amounts. Refer to SP 1105 – Error Corrections for

more information.

Offices

Corrections to the coding of TDRs should be requested by the office using Form FMS-

AC4, Request for Change of Accounting Codes and/or Amounts. Refer to SP 1105 –

Error Corrections for more information.

11. Write-off of Uncollectible Accounts

Definition of Uncollectible Account

1. The debtor or party causing damage to property, belonging to the State, is no

longer within the jurisdiction of the State;

2. The debtor or party causing damage to property, belonging to the State, cannot

be located;

3. The party causing damage to property, belonging to the State, is unknown or

cannot be identified;

4. The debtor has filed bankruptcy and has listed the State a creditor; or

5. Such other account as may be deemed by the Attorney General to be

uneconomical or impractical to collect.

Write-off Request

The approval request to write off obligations that have been outstanding for two

consecutive years should identify one of the five definitions (see above box) as a

reason to write-off outstanding obligations as uncollectible.

Review of Write-off Request

Request should be reviewed by the Complex Area Superintendent and the Chief

Financial Officer, and then forwarded to the Attorney General for permission to write-off

the accounts.

Write-off Approval

Once permission from the Attorney General is received, school/office should maintain a

permanent record of the uncollectible accounts that have been written off. Uncollectible

obligations that are written off can be reinstated if the account has become collectible or

the facts presented to the Attorney General were misstated.

12. SP Maintenance Responsibility

The Accounting Section in the Office of Fiscal Services is responsible for maintenance,

administration, and questions regarding this SP.

13. References, Resources, and Forms

(a) Form 440, Outstanding School Obligation

(b) Form A404, Form 99, Bill for Collection

http://fms.k12.hi.us/forms/form-99/A404-form-99.pdf

http://fms.k12.hi.us/forms/fms-ac4/fms-ac4.pdf

(d) Form FMS-C1, Revenue Refund

http://fms.k12.hi.us/forms/fms-c1/fms-c1.pdf

SP 1120: Non-Appropriated Local School Fund;

Description of and Chart of Accounts and

General Purpose

1. Purpose

Provide an overview of the purpose of the Non-Appropriated Local School Fund.

2. Effective

Immediately.

3. Applies to

All schools.

4. Overview Non-Appropriated Local School Fund

The purpose of the Non-Appropriated Local School Fund is to collect and maintain

monies for such purposes as class dues, student association dues, yearbook,

newspaper, school club dues, money-raising funds, excursions, etc., which do not

require deposit into the State Treasury pursuant to Section HRS 302A-1130.

Each school has a Local School Checking Account established with a commercial bank

to maintain these funds. The Principal of the school serves as trustee for the account,

and is directly responsible for the conduct of student financial activities in accordance

with the rules, policies, and procedures set forth by the DOE. Additionally, the students

who have contributed monies for specific purposes should receive direct benefit from

these monies, unless participants have agreed to carry these monies into future years.

(One example is bequeathing a class gift to the school)

The Non-Appropriated Local School Fund uses a cash basis of accounting. In other

words, financial transactions are posted only when money is received or paid by the

school. Additionally the chart of accounts systematically categorizes the listing for all

amounts as follows:

Assets (Control Code)

010 Cash

(Checking account)

030 Investments

(Records investments from idle cash. Only secured investments

are allowed.)

Liabilities (Control Code)

100 School Wide

(Accounts in which all students receive benefits such as

newspaper, yearbook, etc.)

300 Revenue Raising

(Accounts of all revenues and expenses for all fundraisers)

400 Student Activity

(Accounts for subgroups within the school such as class or grade

level accounts and clubs)

500 Trust and Agency

(Accounts set up for specific purposes such as field trips,

admissions, donations etc.)

5. Description of Asset Accounts

Asset accounts of a school are generally known in commercial accounting as “current

assets”, i.e. cash in bank checking account and investments.

Cash-in-Bank – Checking Account (010): This account records the deposits of

monies and disbursements of the schools non-appropriated local school fund. All

checks drawn are restricted to those properly executed and supported by valid

vouchers. The unexpended balance in the account is reconciled monthly to the

balance shown on the bank statement.

Investments (030): This account is to record investments in savings and

government securities. These investments are to be recorded individually to

provide accountability and control. Schools are authorized to use idle funds for

investment to earn additional income for use by the school for the general welfare

of the school. Refer to SP 1126 for detailed procedures.

6. Description of Liabilities/Fund Accounts

A fund is defined as “a sum of money or other resources set aside for the purpose of

carrying on specific activities or to attain certain objectives”. The financial operations of

the school are therefore, classified by funds. These funds are broken down into groups

of accounts to show in detail the operations of each fund.

School Wide Activities (100): This control account records the financial

transactions of the funds used for administrative and/or educational purposes.

These activities are school-wide in nature.

Following is the list of types of sub-accounts that the schools are authorized to

have:

1) General School

2) Year Book

3) Newspaper

4) Book/School Store

5) Cash overage/shortage

6) Library (not book fair fundraisers)

General School Sub-Account: The General School sub-account is

specifically established for uses directly related to school-wide operations.

The sources of revenue for this sub-account are limited to interest income

from investments, closure of inactive accounts of school sponsored

organizations, fundraising and donations specifically designated for the

benefit of the entire school, and other sources of revenue designated

specifically for the benefit of the entire school.

Allowable expenditures for general school sub accounts are:

1) Purchasing of materials, supplies, equipment and services that benefit

students and the school.

2) Providing staff and students opportunity to attend workshops.

Revenue Raising (300): This control account is to record the financial

transactions of all money-raising activities of the various organizations authorized

by the principal. The balances (deficits) from each of the money-raising activities

must be transferred to the appropriate organization’s sub-account at the end of

the money raising activity or by year-end, whichever occurs first.

Student Activities (400): This control account is to record the financial

transactions of the student government, class/grade level organizations and

school clubs. Refer to SP 1128 for procedures for school clubs.

The following are a few examples:

1) Student council

2) Grade 4 (not excursion-related)

3) Class of 2020

4) Key Club

5) Drama Club

Expenditure of Monies: Monies derived from dues and money-raising

activities should be expended in such a way to benefit those students

currently in school who have contributed to the accumulation of such money.

(Refer to Administrative Rule, Chapter 32)

Trust and Agency (500): The Trust Fund is used to account for cash or other

resources received and held by the school in the capacity as a trustee or as an

agent. This fund is subject to restrictions and is to be expended or disposed of at

the discretion of the donors or their authorized representatives.

For donations with a donor’s specific intent and purpose, a sub-account must be

established. However, when the designated trustee of the fund is the school’s

principal, revenue raising balances and donations designated for the benefit of

school-wide activities should be deposited into the General School sub-account

(100 series). Also, a copy of the letter or memorandum shall be retained in the

office file. The Agency Fund is used to account for monies held by the school

acting as an agent for individuals and private organizations.

7. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

8. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Hawaii Revised Statutes Section 302A-1130

http://www.capitol.hawaii.gov/hrscurrent/Vol05_Ch0261-

0319/HRS0302A/HRS_0302A-1130.htm

(b) SP 1126 Non-appropriated Local School Fund; Investing Idle Cash

(d) SP 1131 Non-appropriated Local School Fund; Fund Raising

SP 1121: Non-Appropriated Local School Fund;

Administrator’s Checklist/Internal Controls

1. Purpose

Provide internal compensating controls for administrators due to the non-segregation of

duties by office staff for the cash receipt and disbursement process.

2. Effective

Immediately.

3. Applies to

All schools.

4. Internal Compensating Controls

Schools are often challenged by insufficient staff to segregate duties for cash control

measures to prevent theft or misappropriation of funds. More specifically, the same

employee may receive cash, record the cash receipt, deposit the receipt, and issue the

check to pay vendors. To ensure accountability, the department has instituted internal

compensating controls to address this situation. The Principal or designee shall provide

for compensating controls at each school or office.

The internal compensating controls are documented on a form called the Non-

Appropriated Local School Fund Administrator’s Checklist. See Form (a) below.

The Checklist includes the following requirements.

A. Quarterly (at least once a quarter), conduct an unannounced cash count of the

Petty Cash Fund.

B. Monthly, conduct a reconciliation of the bank statement’s ending balance, against

the school’s check register ending balance. The Principal needs to initial and

date when this task was performed on the checklist, on the reconciliation form,

and sign and date the bank statement.

C. Monthly, the Principal should perform review of bank statement for unusual

checks or other transactions before giving it to the individual who performs the

bank reconciliation.

D. Monthly, review outstanding checks (defined as more than six months old).

These checks should be cancelled through a journal voucher.

E. Annually, check that cash receipts are reconciled and deposited by the next

business day or next scheduled armored carrier pickup day. Reconciliation of

field trip cash receipts however, can be done upon completion of collection.

Cash collected from students for field trips should be secured in the school safe.

F. Annually, check that all journal vouchers have been pre-approved by the

Principal prior to being posted. See Form (b) below.

G. Annually, check that proper documentation (original invoice or receipt) have been

attached to disbursements.

H. The Principal or designee will complete the Non-Appropriated Local School

Fund Administrator’s Checklist to indicate the areas reviewed, the date of the

reviews, discrepancies found and the report should be kept on file for audit

purposes.

It is recommended, at the discretion of the Complex Area Superintendent, that the

complex Administrative Services Assistant or Complex Area Business Manager assist in

this review.

5. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Forms

(a) Non-Appropriated Local School Fund-Administrator’s Check List

(b) Non-Appropriated Local School Fund-Journal Voucher

SP 1122: Non-Appropriated Local School Fund;

Preparation for Financial Audit

1. Purpose

To provide suggestions to schools on how to prepare for a financial audit of the Non-

Appropriated Local School Fund.

2. Effective

Immediately.

3. Applies to

All schools.

4. Preparing for an Audit

The following is a checklist to prepare for a financial audit of the Non-Appropriated Local

School Fund:

A. Check that all expenditures have been pre-approved, signed, and dated by the

Principal through either a Purchase Order Form AC-3, or a Requisition Order.

Auditors will check the date of the invoice or receipt against the date on the

purchase order or requisition form, to determine if prior approval was obtained.

B. Ensure that the Principal’s Financial Report is signed by the Principal and dated.

C. Verify that all payments have the proper documentation (original invoices or

Form 99 along with receipts), for payment or reimbursement. Original invoices or

Form 99 should be stamped with Approval of Payment stamp and attached to

the corresponding purchase orders.

D. Ensure that the Monthly Bank Reconciliations and Bank Statements have been

completed, signed, and dated by the Principal and the preparer.

E. Verify that all items on the Administrator’s Checklist have been completed and

documented. This would include unannounced cash counts of the Petty Cash

Fund, checking for timely cash deposits, canceling stale-dated (over six months

old) checks, approval of all journal vouchers, and obtaining proper

documentation for disbursements (original invoices or Form 99 along with

receipts) as noted above. (See SP 1121 for description of Administrator’s

Checklist.)

F. Check that all school-sponsored fundraisers have been approved by the Principal

prior to and after the fundraising activity as noted on the Form 422, Money

Raising Activity. Verify that the form has been reconciled with the amounts

reported in respective Revenue Raising Control Accounts.

G. Verify that all donations have been logged on Form 434, Report of Gifts,

Grants and Bequests, in addition to compliance with the requirement that all

donations $500 or more are accepted by the Superintendent of Education.

Ensure that the Letter of Acknowledgment and supporting documentation are

attached to the Form 434.

H. Match the validated bank deposit slip to the Daily Summary of Collection, and

attach yellow carbon copy of Form WIZ 239 or other documentation, for detailed

information on the deposit.

I. Keep booster club, PTA, PTSA or other independent organization accounts out

of the local school fund. Since they are entities independent of the school, they

must maintain separate bank accounts.

J. Update authorized signatories to the bank, if administrator or office personnel

have changed.

K. Complete the Compliance of Local School Fund Procedures Annual Checklist.

L. Review chart of accounts. All fundraising (300 level) and excursion accounts

should be zero. All class accounts should be closed within 5 years.

M. Verify that fixed asset purchases are included in inventory.

N. School must be in compliance with all other policies and procedures noted in all

SPs and other resources.

5. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Forms

(a) Form AC-3, Purchase Order

(b) Form 99, Bill for Collection

(d) Non-Appropriated Local School Fund-Administrator’s Checklist

(e) Form 422, Money-Raising Activity Form

(f) Form 434, Report of Gifts, Grants and Bequests

(g) Form 239, WIZ Receipt

(h) Daily Summary of Collection

SP 1123: Non-Appropriated Local School Fund;

Collection and Deposit Procedures

1. Purpose

Provide an overview on collection and deposit procedures for the Non-Appropriated

Local School Fund.

2. Effective

Immediately.

3. Applies to

All schools.

4. General Procedures

A. Internal control requires that someone other than the person executing the cashiering

function perform the depositing and reconciling. See SP 1121 “Non-Appropriated

Local School Fund; Administrator’s Checklist” for additional information regarding

internal controls.

B. An Official Receipt (i.e. WIZ Receipt Form 239) must be issued for all collections

received, except in certain circumstances, such as excursions (see SP 1129),

admissions and money raising activities, where a “Record of Collection by

Individuals” Form may be used. The receipt must be properly completed including

information as to name of payer, purpose of collection, amount, method of payment,

account # and initialed and dated by the receiver of the collection.

C. Erasures should not be made on the receipt. If an error is made, the receipt should

be voided by writing “VOID” on the face of the receipt or line out to correct and initial.

All copies of voided receipts must be retained.

D. All receipt books shall be recorded and accounted for on a log “Inventory Record of

Pre-numbered Forms”, Form 439. Unused receipt books shall be secured (i.e.

kept in a locked safe or locked drawer) so that they are inaccessible to unauthorized

personnel.

White copy: payer

Yellow Copy: suspense file

Pink Copy: remain in receipt book

E. Collections received must be deposited in the bank by the next business day or the

next scheduled armored carrier pick up and recorded in the local school system

except fieldtrip collections which can be deposited upon completion of collection as

described in SP 1129. During breaks and summers, monies must be deposited at

least once per week. Collections that are awaiting deposit must be safeguarded and

kept in a locked safe or a locked drawer.

F. Cash collections made outside of the school business office shall be turned in daily to

the school business office. The school business office will issue a pre-numbered

receipt to acknowledge receipt of the monies from the individual in charge of

activities.

G. All checks and other legal tender (i.e. money orders) must be made payable to the

school. Payment by check or money order shall be for the exact amount. Post-

dated checks shall not be accepted. Cashing of checks at the school level is

prohibited.

H. Endorse all checks immediately upon receipt, utilizing a restrictive endorsement such

as:

(Sample)

Deposit to the credit of “XYZ School”

XX-XXXXXXX (bank account number)

I. The following information must be included on all checks:

1. Individual’s Name

2. Drivers License Number

3. Address and telephone number

If payment is received in person, require some form of photographic identification

and initial the face of the check to show compliance with all requirements for

information and identification.

J. When it cannot be immediately determined as to which account monies should be

credited, deposits should be made promptly to the suspense account pending a final

determination. The transfer to the appropriate account should be made as soon as

possible upon final determination. Call the Complex Area Business Manager for

instructions.

K. Restrictions

1. Local school funds shall not be commingled with petty cash or with personal

funds (ie. Cashing of personal checks and payroll checks are not allowed).

2. The Department of Education does not accept foreign personal checks.

5. Procedures for Depositing Cash/Check Collections

A. Count and take total of all cash/checks received daily. Monies shall be counted in

the presence of two individuals.

B. Prepare bank deposit slip in triplicate.

1. Enter the date of deposit

2. Enter the amount of currency deposited.

3. Enter the amount of coins deposited.

4. List checks and amounts.

a. If the number of checks exceeds the number of spaces on the deposit

slip, an attached listing may be prepared in lieu of filling in the spaces

for checks on the deposit slip. The attached listing may be an adding

machine tape or a prepared list. Enter the total on the front of the

deposit slip.

b. If an attached listing is prepared, enter “See Attached” on the front side

of the deposit slip along with the total amount of the checks deposited.

5. Enter the total amount of deposit.

6. Enter the total number of checks deposited.

C. Place the monies collected and the original plus one copy of the deposit slip in a

sealed bank deposit bag. Retain third copy of deposit slip in suspense file. Destroy

and replace copy with validated bank deposit slip received from the bank. If

validated copy is not returned to the School within 3-5 business days, contact the

bank to inquire.

D. Prepare the form “Daily Summary of Collections” to summarize the total pre-

numbered official receipts for the day. The copy of the validated deposit slip and the

copies of the pre-numbered official receipts must be stapled or filed together with the

form “Daily Summary of Collections” and filed in a separate folder by fiscal year.

1. For collection outside of the school office e.g. field trips: The copy of the

validated deposit slip, copies of the pre-numbered official receipts and form

“Record of Collection by Individuals” must be stapled or filed together with

the form “Daily Summary of Collections”.

6. Bad Check:

The Commercial bank of the Non-Appropriated Local School Fund will inform the school

of the payer’s situation of having either insufficient funds, closed bank account or other

reasons. The commercial bank will issue a form, “Return Item: Advice of Charge”

(“Debit Memo”-Insufficient Funds) to inform the school. This memo provides information

as to the maker of the check and the amount.

Schedule of Bills for Collection: School shall maintain the form, “Schedule of Bills for

Collection”, as a log of all bad check notices received from the commercial bank.

Replacing Bad Check and Service Fee:

A. Prepare “Journal Voucher” Form to record the bad check. The account debited

is the Non-Appropriated Fund Account and sub-account, and the account

credited is the Cash-in-Bank Checking Account. This reduces amount available

for sub-account.

B. Notate the bad check amount on the student’s record and on the copy of the

Official Receipt, Form WIZ 239.

C. Inform the maker of the bad check of the situation and request that the bad check

be replaced. Do not re-deposit the bad check.

D. Collect cash, certified check or money order to replace the bad check. Return the

bad check to the maker upon receipt of repayment.

E. Collect a service fee of $25.00 for each bad check from the maker of the check.

The service fee is classified as State Treasury receipt and is to be deposited into

the DOE Central Checking account.

F. Official receipts should be issued for both bad check service fee and the replaced

amount.

G. When a parent/guardian does not pay the service fee on the bad check, all future

payments from that individual must be made in cash. A list shall be maintained at

the School of outstanding service fees payable by parent/guardian.

7. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

8. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Forms

(a) Form 439, Inventory Record of Pre-numbered Forms

(b) Record of Collection by Individuals – Activity

(d) Form 239, WIZ Receipt

(e) Non-Appropriated Local School Fund- Daily Summary of Collection

(f) Schedule of Bills for Collection

(g) Journal Voucher Form

SP 1124: Non-Appropriated Local School Fund

Bank Reconciliations; Procedures for

1. Purpose

Provide an overview of Bank Reconciliation procedures for the Non-Appropriated Local

School Fund.

2. Effective

Immediately.

3. Applies to

All schools that maintain a Non-Appropriated Local School Fund account.

4. Procedures for Bank Reconciliation of the Non-Appropriated Local School

Account

A. Frequency: Non-Appropriated Local School account (checking and savings) must

be reconciled monthly and completed by the 10

calendar day after the close of

each month, using the electronic standardized bank reconciliation form.

B. Documents that will be needed:

1) Prior month’s bank reconciliation

2) Current month’s check register printed from web-based, Non-

Appropriated Local School system

3) Current month’s bank statement

4) Blank electronic standardized bank reconciliation form

C. Steps to reconcile Non-Appropriated Local School bank account:

1) Begin with the ending balance per bank statement

2) Compare the deposits on the bank statement with deposits per school

check register and deposits in transit from previous bank reconciliation.

(Deposits/receipts posted in school’s check register that do not appear on

the bank statement or previous bank reconciliation are deposits in transit

and are added to balance per bank.)

3) Compare the paid checks shown on the bank statement to the following:

a. Checks outstanding from previous bank reconciliation

b. Checks issued per the school’s current month check register

(Issued checks that have not been paid by the bank are

outstanding checks and are subtracted from the balance per bank.)

4) Add deposits in transit and subtract outstanding checks to get the

adjusted bank balance.

5) Verify that:

Any interest transferred to the Cash-in-Bank Checking Account has

been added

All debit or credit memos issued by the bank have been posted as

adjustments

Any bank charges/fees have been deducted from Cash-in-Bank

Checking Account balances

D. Every month the SASA or Account Clerk and Principal or Vice Principal verifies

and signs the bank reconciliation form. The Principal also signs the

Administrator’s Checklist. The process of the monthly bank reconciliation is

not complete until the Principal ensures the following items listed:

1) Bank reconciliations are done monthly.

2) Investigate all items which have been outstanding for an unusual period

of time (six months or more).

3) Review bank statement for any unusual entries, e.g. debit memos.

4) Agree that the bank reconciliation amount matches to the Check Register

balance.

5) Review the Check Register report for any unusual adjustments.

6) Indicate that review of the bank reconciliation has been performed by

signing and dating the bank reconciliation and bank statement.

E. Review bank reconciliation for stale-dated outstanding checks. Stale-dated

checks are checks that have been issued and have not been presented to the

commercial bank within the six month statutory void date.

Schools should make every effort to contact the recipient in writing within five

months of its issue, and give the recipient a deadline to respond before the check

is six month old. The recipient should be notified that if they do not respond

before that time, the check will no longer be valid for deposit or cashing. The

document should be maintained on file. When the recipient does not respond to

the written request, schools shall proceed to adjust the voided check by

preparing a journal voucher document with the written notification as

documentation.

F. To prevent fraud related to alteration and irregular endorsement of checks:

1) As part of the bank reconciliation procedures, the person performing bank

reconciliation should examine cancelled checks for alteration or irregular

endorsements.

2) They should also examine the cancelled checks for payee names that are

similar to but not the same as typical vendors, discrepancies between the

payees on the check register and the check, erasures or white outs of payees

or amounts, variations in endorsements by the same payee, and multiple

endorsements.

G. Bad checks, debit/credit memos and other adjustments must be made prior to

completing the bank reconciliation. Journal Vouchers must be prepared to adjust

the bank reconciliation accordingly.

H. Preparing Journal Vouchers:

Transaction

Cash Account (010)/

Investment Account

(030)

Fund Account (100,

300, 400, 500)

Effect on Cash

Debit Memo

1) Bad Check –

Deposited Item

Returned

2) Bank Adjustment-

ACH Deposit

Credit

Debit

Decrease

Credit Memo

Bank Adjustment-

ACH Credit

Debit

Credit

Increase

Cancel stale dated

check

Debit

Credit

Increase

When the Journal Voucher is entered, actual transaction and the bank balance is shown

on the screen. This must be printed out and attached with other supporting documents

e.g. debit/credit memo.

5. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Forms

(a) Electronic Standardized Bank Reconciliation Form

(b) Administrator’s Checklist

SP 1125: Non-Appropriated Local School Fund;

Expenditure of Funds

1. Purpose

Provide rules regarding expenditure of funds in the Non-Appropriated Local School

Fund.

2. Effective

Immediately.

3. Applies to

All schools.

4. Expenditure of Funds

The responsibility of accounting for expenditures of each school sponsored organization

is the budget. The budget prepared by each organization or program will be the vehicle

to use for authorization to carry out its objective during a specific period of time. The

school sponsored organization account should be reviewed prior to any obligation to

determine if funds are available and unobligated in the amount sufficient to provide for

the proposed expenditures. This procedure will avoid the possibility of over expending.

A. All expenditures must be pre-approved by the principal. Except for purchase

orders requested by the Principal, which the Complex Area Superintendent

should approve and sign on the line above “PRINCIPAL”.

B. Purchase Order (Form AC-3) serves as pre-approval document. See Forms (b).

C. All purchases must have the necessary documentation i.e. original invoices or

Form 99 along with receipts, packing slip and purchase order, before checks are

released to vendors or reimbursements made to employees.

D. In the event an invoice is lost or vendor issues a receipt instead of an invoice, a

pro forma invoice (Form 99) can be used in its place.

E. The Form 99 must be signed by the employee or the vendor submitting the form.

F. Schools are authorized to issue the book form, Purchase Order (Form AC-3), to

the school sponsored organization and program activity to serve as a written

request to purchase materials, supplies and services.

5. For Clubs that Bank Outside of the Non-Appropriated Local School Fund

A. The Principal can delegate purchasing authority to the club advisor.

B. The club advisor must pre-approve all purchases through the Purchase Order

(Form AC-3).

C. The club advisor must prepare an annual financial report and submit it to the

Principal within 10 days following the close of the year.

6. Preparing a Vendor Purchase Order

When preparing a Purchase Order (Form AC-3) for vendor purchasing, the following

detailed instructions must be completed:

A. Date: Enter today’s date (date must be the same as or precede the

invoice/receipt date).

B. Account: Name of the organization purchasing supplies and/or monies to

individual or organization.

C. Purchaser: Write in the name of the requestor.

D. Principal: The Principal or some officially designated by the Principal will sign on

the line above “PRINCIPAL”.

E. Distribution of Copies:

White copy - to Vendor

Yellow copy - leave in the Purchase Order book

Pink copy - file in the school business office (Accounting copy)

7. Outstanding Purchase Orders

A. School shall check the outstanding purchase order file on a monthly basis.

B. School should contact the vendors as to check the status of items ordered for

purchase orders dated more than sixty (60) days.

C. If the vendor is unable to complete the delivery, the school may cancel the

purchase order.

D. The school may cancel the purchase order by sending a written notice to the

vendor. See form (a).

E. The copies of the purchase order cancelled should be marked “CANCELLED”

and retained in the purchase order book with the written notice.

8. Procurement Code and Expenditure of Non-Appropriated Local School Funds

Expenditures from the Non-Appropriated Local School Funds must follow the best

practice to obtain products for the most advantageous price. Although it is

recommended, schools are not required to follow the State Procurement Code since the

source of funds does not originate from appropriated funds.

9. Prohibition of Expenditures for Payroll Purposes

A. It is prohibited to use Non-Appropriated Local School Funds for payroll purposes,

directly.

B. To use Non-Appropriated Local School Funds for payroll, the school must first

write a check to the Department of Education and deposit it into the State Central

Checking Account.

C. The deposit must be validated to a program id where the payroll will be charged.

10. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

11. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Forms

(a) Cancellation of Order

(b) Form No. AC-3 Purchase Order

SP 1126: Non-Appropriated Local School Fund;

Investing Idle Cash

1. Purpose

Provide an overview on the rules regarding investment of idle cash.

2. Effective

Immediately.

3. Applies to

All schools.

4. Investing Idle Cash

A. Schools are permitted to invest idle cash from the Non-Appropriated Local

School Fund only in secured investments.

B. A secured investment is defined as an investment such as a certificate of deposit

from a federally insured financial institution that will not put the funds invested at

risk.

C. Supporting documents such as copy of certificate of deposit, initial investment

statement, etc. must be reconciled to the investments and kept on file.

D. Savings and Security investments available for use are:

Savings Account – Passbook

Certificates of Deposit

Bonds-US Government

E. A separate sub-account shall be established for each investment (e.g. 031, 032,

033).

F. The signatory cards must be updated each year when there is a change of

authorized signors.

5. Before investing idle cash, schools must:

A. Determine if there is an amount of money in the Non-Appropriated Local School

Fund that will not be needed for a known period of time. For example, if the

school has a total of $33,000 in the bank, of which $25,000 is known to be used

for expenses and emergencies for a fiscal year, quarter, or month, the school has

$8,000 of idle cash in the account that it could invest in a secured investment.

B. The investment should be noted as a journal voucher in the Non-Appropriated

Local School Fund accounting program.

C. To record the journal voucher the following transaction should be entered:

a. Cash (010) Credit $xxxx

b. Investment (030) Debit $xxxx

D. Interest income derived from investments of idle cash must be credited to the

school’s General School sub-account and used for the benefit of the entire

school.

E. The school has the option to rollover interest income into the same investment

account. To record interest income when it has been rolled over into the

investment account, the school should prepare a journal voucher form. When

the interest is credited, the entry should be a debit to the respective investment

account and a credit to the General School sub-account of the School Activities

Fund.

F. When the interest is deposited in the checking account, an entry should be a

debit to the Cash-in-Bank Checking account and a credit to the General School

sub-account of the School Activities Fund.

G. School-sponsored organizations may request the Principal to invest their idle

cash in an interest bearing account to generate additional income. The use of

idle cash for investment purpose of any school sponsored organization or

program activity will restrict the availability of cash in the checking account. The

amount of investment will not be available for use by the school sponsored

organization until such time that the investment is terminated. Interest income

earned from investment for school sponsored organizations shall be credited to

their account.

6. Schools may not:

A. Invest in stocks, mutual funds, stock futures, commodities or in any other form of

marketable securities.

B. Loan money to an individual or a business.

C. Loan money to employees for payroll purposes.

7. Monitoring

A. Investment accounts should be reviewed periodically, and documented on the

Administrator’s Checklist, to evaluate their purpose and to determine if

consolidation or redemption is needed.

B. Investment accounts must be reconciled on a quarterly basis. When the School

does not receive quarterly or more frequent statements; the investment account

should be reconciled at the end of the school year by contacting the financial

institution to verify the account balance.

C. The Principal should review and approve the closure of any investment accounts.

8. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

9. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Forms

(a) Administrator’s Checklist

SP 1127: Non-Appropriated Local School Fund;

Financial Reporting Requirements

1. Purpose

Provide an overview and frequency of financial reporting requirements.

2. Effective

Immediately.

3. Applies to

All schools.

4. Statutory Financial Reporting Requirements

A. Monthly Financial Reports

1. A monthly Check Register must be printed and reconciled against the

monthly ending balance of the Bank Statement.

2. The principal must sign and date the bank reconciliation.

3. The monthly bank reconciliation must also be documented on the

Administrator’s Checklist.

B. Quarterly Financial Reports

1. The DOE is required to report all cash balances to the Department of

Accounting and General Services (DAGS) by the 10

business day of the

month following the close of each fiscal quarter (October, January, April,

and July).

2. Schools must close their fiscal quarter before the Accounting Section,

Office of Fiscal Services, can access ending cash balances at the

schools.

3. To meet this deadline, schools must monitor their deposits and

disbursements utilizing on-line web internet bank services.

4. Each school shall prepare the Principal’s Financial Report (Control

Level and Detail Level) at the end of each quarter for their files and for

audit purposes no later than the 10

calendar day following the end of

each quarter.

5. Quarterly Principal’s Financial Reports must be signed and dated by the

Principal or designee who is an Educational Officer (EO).

C. Annual Financial Reports

1. School shall also prepare an annual Principal’s Financial Report

(control/detail) no later than the 10

calendar day following the end of the

fiscal year.

2. Annual Principal’s Financial Report must be signed and dated by the

Principal or designee who is an Educational Officer (EO).

3. Independent Club Financial Reporting:

a. Clubs that bank independently from the school’s local school

account are required to submit at the minimum, an Annual

School Club Financial Report prepared by an officer and advisor

of the club no later than the 10

calendar day following the end of

the fiscal year.

b. The Annual School Club Financial Report must be approved by

the principal.

c. If deemed necessary, the Principal may request financial reports

on a more frequent basis (i.e. monthly, quarterly, semi-annually).

d. The Principal also has the right to revoke the privilege of

independent banking to any club.

5. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Forms

(a) Administrator’s Check List

(b) School Club Annual Financial Report

SP 1128: Non-Appropriated Local School Fund;

School Clubs

1. Purpose

Provide an overview of the rules governing financial procedures for school clubs.

2. Effective

Immediately.

3. Applies to

All schools.

4. Establishing School Clubs

A. All school clubs must apply annually by completing the Application for School

Club Charter to be officially recognized by the school. See Forms (a).

B. Once the school club application is approved by the Principal, all school rules

applicable to school clubs will apply.

C. Schools must keep a list of all school clubs that have been approved by the

Principal.

5. Procedures:

A. All school clubs must prepare and submit an Annual School Club Financial

Report to the Principal within 10 calendar days following the close of the fiscal

year. All obligations and receivables must be settled before the final report is

prepared.

B. All school clubs must turn in financial records to the school’s office for

safekeeping during the summer months.

C. Clubs may choose to conduct their financial transactions either within the Non-

Appropriated Local School Fund Account, or in an external bank account. Clubs

must notify the Principal of this decision in the “Comments” section of the

Application for School Club Charter.

1. Clubs with external bank accounts must:

a. Obtain Federal and State Identification numbers and be

responsible for all tax obligations. (Clubs that bank with the Non-

Appropriated Local School Fund do not have any tax obligations.)

b. Use all DOE forms: Purchase Orders (Form AC-3), WIZ

Receipts (Form 239), Money Raising Activity Report (Form

422). (See Forms below)

c. Establish an external bank account with two signatories.

d. Have a club advisor to sign checks on behalf of the club.

e. Collect monies and pay obligations related to the school club.

f. Submit an Annual School Club Financial Report to the

Principal. See Forms (e).

6. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Forms

(a) Application for School Club Charter

(b) Form AC-3, Purchase Order

(d) Form 422, Money Raising Activity

(e) School Club Annual Financial Report

SP 1129: Non-Appropriated Local School Fund;

Field Trips

1. Purpose

To provide an overview of cash collection and refund procedures for field trips.

2. Effective

Immediately.

3. Applies to

All schools.

4. Field Trips Collections:

A. General Instructions

1) Money from students can be collected in the classroom and documented

using the Record of Collection by Individuals Excursion form.

2) If the collection process takes place over several days, the cash collected

must be secured overnight in the school safe or a locked drawer in the

school office, on a daily basis.

3) Upon final collection for the field trip, the school office will have two

working days to reconcile the collection and deposit the funds in the bank.

Upon reconciliation:

a. Overpayments – refunds are to be issued to the student or parent

of the student.

b. Underpayments – every effort should be made to collect the funds

due for the field trip.

4) An official receipt, (i.e. WIZ receipt, Form 239) must be given to the

teacher to verify the reconciled amount being deposited. See Forms (a).

5) Deposit should be credited to a Trust and Agency account in the non-

appropriated local school fund.

B. If a field trip is cancelled and the cost is $15.00 and under per person:

1) The office may issue a check to the teacher.

2) The teacher will cash the check.

3) The teacher will notify parents that a cash refund will be issued to the

student.

4) If a parent chooses to be refunded, the office will issue a check directly to

the parent.

5) Teacher will use the Record of Collection by Individuals Excursion

form to document the cash refunds received by the students. See Forms

(b).

6) Students will initial Record of Collection by Individuals Excursion form

upon receipt of their reimbursement.

7) The completed Record of Collection by Individuals Excursion form

shall be returned to the school office for back up documentation of the

disbursement to the teacher.

8) If a student inadvertently misplaces his cash refund, upon investigation

the school will have the option to directly refund the parent with a check.

9) Reimbursements, other than field trips and/or over $15.00, must be

issued by check to the parent.

5. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Forms

(a) Form 239, WIZ Receipt

(b) Record of Collection by Individuals – Excursion

SP 1130: Non-Appropriated Local School Fund;

Gifts, Grants and Requests (Donations)

1. Purpose

Provide an overview on the receiving gifts, grants and bequests (donations) to schools.

2. Effective

Immediately.

3. Applies to

All schools.

4. Gifts, Grants and Bequests (Donations) to Schools

A. School shall maintain an annual log of all gifts, grants and bequests (monetary and

nonmonetary) on Form 434 Report of Gifts, Grants and Bequests. See Form

(a).

B. Schools are delegated the authority to accept gifts, grants, and bequests on behalf

of the DOE with the following conditions:

Gifts $500 or more

Gifts, grants, and bequests of $500 or more must first be accepted by the

Superintendent of Education. Acceptance of these gifts, grants, and bequests

are coordinated through the Complex Area Superintendent’s Office. A copy of

the acceptance letter should be filed with Form 434.

Gifts under $500

Gifts, grants, and bequests under $500 may be accepted by the school.

C. A receipt (WIZ 239) and a letter of acknowledgement shall be given to the donor

for monetary donations.

D. A letter of acknowledgement shall be issued by the administrator for all non-

monetary donations by listing in detail the item(s) received and the value of the

item(s) provided by the donor. The school should not estimate the value of a non-

monetary donation, but will instead acknowledge receipt of the donation. If the

school does not want to accept the value of the property established by the donor,

the school should not accept the gift.

E. Letters, memorandum, written instructions or copies of checks for all gifts, grants,

or bequests received by the school should be filed with Form 434 (Report of

Gifts, Grants and Bequests).

F. Equipment, textbooks and library books donations that fall under current

departmental inventory practices shall be recorded in the FMS Fixed Assets file.

G. If the gift, grant, or bequest is for payroll purposes, the funds should be placed in

the Department’s Trust and Agency Fund (State Treasury) and paid through

normal departmental procedures.

5. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Forms

(a) Form 434, Report of Gifts, Grants and Bequests

SP 1131: Non-Appropriated Local School Fund;

Fundraising Activities

1. Purpose

Provide an overview of school fundraising procedures.

2. Effective

Immediately.

3. Applies to

All schools.

4. Fundraising Activities Are Governed by the Following Conditions

A. Fundraising activities within the schools and community are allowed upon approval

by the Principal.

B. Fundraisers are approved through the Fundraising Activity Report (Form 422).

This form must be prepared and approved by the Principal prior to conducting the

activity. A fundraising activity should be for raising money for the stated

educational purpose and documented on the Fundraising Activity Report (Form

422). See Forms (c).

C. Schools are required to maintain a log and file of the form, Fundraising Activity

Report (Form 422), of all money raising activities conducted by the school

sponsored organizations and program activities of the School.

D. Each fundraising activity shall have a sub-account number within the Fundraising

Control Account (e.g. 315 - 7

grade Entertainment Book sale) for each separate

fundraising activity.

E Any fundraising activity with anticipated gross revenues exceeding $25,000 shall

be approved by the Complex Area Superintendent and a final report must be

submitted within 15 calendar days of completion of the activity.

F. All fundraisers must comply with the Board of Education Policy 6810, Competitive

Food Sales Policy, and the Board of Education Policy 110-6, Wellness Guidelines.

G. In the case of non-presale fundraising activities (where the account balance will

initially be in a deficit as funds are spent before money is collected), the Principal

must approve the activity in advance.

H. The duration of the fundraising activities should conclude at the end of the school

year unless before the activity commences, the Principal gives their approval for

the activity to extend over more than one school year.

I. For fundraising activities that are planned for a specific school year, the balances

(deficits) from each of the fundraising activities must be transferred to the

appropriate organization’s sub-account at the end of the money raising activity or

by year-end, whichever occurs first. For pre-approved multi-year fundraising

activities, this transfer can occur when the fundraising activities are completed.

J. If the fundraising activity is completed and the ending account balance is negative,

the school must cover the deficit before the end of the school year.

K. Money received from a school fundraiser shall be used for the benefit of all

students involved in the fundraiser. Fundraised monies shall not be refunded due

to individual cancellations for travel or events.

L. At the conclusion of the fundraising activity, the Fundraising Activity Report

(Form 422) must be completed with the actual financial results. See Forms (c)

M. An annual report to the Complex Area Superintendent of all fundraising activities

for the school year must be completed on the Fundraising Activity Annual

Report (Form 422a) by the close of each school year.

N. At the end of the school year, the Account Clerk should verify that the Fundraising

Activity Annual reports (Form 422) are reconciled with the amounts reported in

the respective Fundraising Control Accounts (300 series).

O. Clubs with external bank accounts are NOT exempt from tax obligations.

P. Schools are not allowed to use raffles, bingo games, and/or beauty contests for

fundraising purposes.

5. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Board of Education Policy 6810, Competitive Food Sales Policy

(a) Board of Education Policy 110-6, Wellness Guidelines

Forms

(b) Form 422, Fundraising Activity Report

SP 1132: Non-Appropriated Local School Fund:

School Stores, Sale of PE/School Uniforms

1. Purpose

Provide guidance to the operation of school stores.

2. Effective

Immediately.

3. Applies to

All schools.

4. Schools are authorized to run school stores and sell physical education uniforms

or school uniforms with the following conditions:

A. Written approval from the Complex Area Superintendent is required to operate a

school store or to sell merchandise of any kind, per Board of Education (BOE)

Policy 1710-7 Sale of Merchandise, except as follows:

(i) Things made or grown at the school; special school equipment or

supplies not regularly carried in stock by local stores; and sanitary

napkins.

(ii) School uniforms, physical education uniforms, logo wear, and logo items

at the school’s cost of purchase.

(iii) Logo items sold through internet web-based stores.

B. Schools may not sell items that are contrary to the BOE Policy 6810 Competitive

Food Sales Policy, which disallows the sale of food items during the school day

or before school if the school participates in a federally subsidized breakfast

program.

C. School stores are not subject to general or income tax liability if proceeds and

expenses are recorded through the Non-Appropriated Local School Fund.

5. Vendor selection of merchandise for resale – Bidding process

A. All items to be purchased for resale must follow a competitive bidding process.

Schools will select vendors on the basis of obtaining bids from at least three (3)

reliable sources.

B. Schools must provide complete specifications, including delivery date and sale

period to vendors.

C. Schools are not allowed to enter into multi-year sale agreements with any

vendor.

D. Schools must attach all documentation of the bidding process to the purchase

orders for audit purposes.

6. Physical Education Uniforms –Consignment Sales Only

A. Schools may not purchase and resell PE uniforms to students.

B. Consignment basis from vendor(s): No mark up on sale price of uniforms will be

allowed by the school. Any remaining uniforms shall be returned to the vendor.

7. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

8. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) BOE Policy 1710-7 Sale of Merchandise

(b) BOE Policy 6810 Competitive Food Sales

SP 1133: Non-Appropriated Local School Fund;

Independent Organizations (PTSA, PTA,

Boosters, etc.)

1. Purpose

Provide accountability guidelines for independent organizations such as Booster Clubs,

PTA, and PTSA.

2. Effective

Immediately.

3. Applies to

All schools.

4. Overview:

A. Support organizations such as Booster Clubs, PTA, PTSA, etc. are considered

independent entities separate from the Department of Education (DOE).

B. These organizations generally support and benefit various school organizations

and provide them with funds through donations and fundraising activities, but are

NOT required to submit fundraising request forms Fundraising Activity Report

(Form 422) to the school for approval. Form 422 is used only for official DOE

fundraisers.

C. Support organizations using the school’s name in its fundraising must also

include their affiliation with the school (e.g. XYZ School Alumni Foundation).

D. Support organizations must coordinate the scheduling of a fundraising activity

with the school.

E. DOE employees, including casual employees, may NOT sign checks or

negotiable instruments on behalf of the independent organizations. However,

DOE employees may participate in other capacities in these organizations e.g. as

a member of the organization, chairing committees and other leadership

positions.

5. Procedure for Schools:

Schools must maintain a listing of all active independent organizations with an

association with the school. The listing should contain the following current information:

1. Name of Organization

2. Federal and State Tax Identification numbers

3. Contact person and contact information

6. Guidelines and Recommendations for Independent Organizations:

A. Establish By-laws and policies;

B. Prepare a budget;

C. Establish cash receipt and control measures;

D. Establish a bank account with a minimum of two authorized signers;

E. Apply for a Federal and State tax identification number;

F. Establish disbursement procedures;

G. Produce and review financial reports on a regular basis; and

H. Conduct an annual audit of records.

7. Tax Obligations for Independent Organizations:

There may be Federal or State tax obligations for the independent organization. It is

recommended that these organizations seek guidance from tax advisors.

8. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

9. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Form 422, Fundraising Activity Report

SP 1134: Non-Appropriated Local School Fund:

Bank Account Set Up and Maintenance

1. Purpose

Provide an overview of Bank account set-up and maintenance for the non-appropriated

local school fund.

2. Effective

Immediately.

3. Applies to

All schools.

4. Bank Account

Schools are authorized to establish and maintain one (1) bank account for the Non-

Appropriated Local School Fund Checking Account. The Department of Education’s

Federal Employer Identification Number (EIN) is 99-0266482. This EIN number will be

required in applying for a Non-Appropriated Local School Fund Checking Account.

Banking Policy: Schools are required to establish and maintain the Non-Appropriated

Local School Fund Checking Account with a FDIC-insured financial institution. The

armored carrier services are contracted to provide services to one bank per school.

5. Maintenance of the Signatory Card

Schools are required to maintain a current signatory card of personnel authorized to

represent the school in all bank transactions. The signatory cards must be updated

each year when there is a change of authorized signors. The schools should update all

bank signature cards, including investment accounts, immediately prior to the employee

leaving the school.

6. Monthly Bank Statement

Schools shall keep the monthly bank statement, cancelled checks (if any), bank notices

of interest income from investment accounts, and adjustments together in the envelope

sent by the bank. The contents of the envelope should not be separated.

7. Bank Transactions

Schools shall request the commercial bank to provide deposit slips and checks with

special printing requirements of the school’s Non-Appropriated Local School Fund. The

checks and deposit slips should be imprinted with the school’s name and address and

the words “Non-Appropriated Local School Fund” as follows:

XYZ School – Non-Appropriated Local School Fund

1234 Pine Street

Honolulu, HI 96813

8. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

9. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

SP 1135: Non-Appropriated Local School Fund;

Processing Invoices for Payment

1. Purpose

Provide an overview on procedures for processing invoices for payment.

2. Effective

Immediately.

3. Applies to

All schools.

4. General Procedures

A. Goods Received: All delivery personnel must check in at the school office for

authorized acceptance of the delivery. All goods received must be checked

immediately by authorized personnel to ensure that the correct order was

received (e.g. correct item, quantity of items ordered and that the items are not

damaged). If there are any problems with the delivered items, discrepancies

must be noted on the delivery/packing slip and the vendor must be immediately

notified. Receiving documents can be in the form of a delivery/packing slip or

invoice. Check off items as they are received on the school’s copy of the

purchase order (the pink carbon copy).

Services Rendered: Services must have been rendered before any payment is

made. Services do not require check off on the school’s copy of the purchase

order.

Items Not Received in the Office: If teachers receive items directly, they must

verify all items as they are received on the delivery/packing slip or invoice. The

teacher must ensure that the correct order was received (e.g. correct item,

quantity of items ordered and that the items are not damaged.) If there are any

problems with the delivered items, discrepancies must be noted on the delivery

slip and the vendor must be immediately notified. The teacher must submit the

delivery/packing slip to the school office personnel.

The school office personnel must match the delivery/packing slip and invoice to

ensure that the invoice reflects the received goods. In addition, the school office

personnel should check off items on the school’s copy of the purchase order (the

pink carbon copy).

B. No invoice: In cases when a vendor issues a receipt instead of an invoice, the

school will prepare the Bill for Collection A404 (Form 99).

C. Invoice Processing: Stamp the original invoice or Form 99 with the ‘Approval

for Payment’ stamp. If the invoice consists of more than one page, the stamp

should be placed on the page which displays the invoice total.

D. Fill in the ‘Approval for Payment’ stamp sections:

Date Invoice Rec’d - Enter the date that the invoice/receipt was received.

Date Goods/Services Rec’d - Enter the date goods were received or services

were rendered.

Inv. Prices/Ext./Totals Ok’d - Ensure that unit prices, extensions and totals are

correct and indicate by your initials.

P.O./Contract Partial  Complete  - Indicate whether the order was complete

or items are missing/backordered.

APPROVED FOR PAYMENT: - The Principal or designee must sign the

approval before payment can be made.

E. Returned items: If any merchandise is returned to the vendor, indicate the

return date next to the item on the invoice with proper notation as to reason for

return.

5. Processing Payments

Schools are responsible for promptly processing vendor invoices for goods received or

services completed in a satisfactory manner. The following are the requirements and

procedures for processing a payment:

A. School shall issue voucher/bank checks for processing of payments for

purchases made on accounts.

B. The voucher/bank check must be supported with a copy of the purchase order,

invoice and/or delivery/packing slip before presenting to the Principal or designee

for review. The Principal must ensure that the payment matches the invoice

amount.

C. The voucher/bank check must be signed by two (2) authorized signatories. Pre-

signing of voucher/bank checks is strictly prohibited.

D. Supporting documents such as an invoice, purchase order, delivery/packing slip,

etc. should accompany the carbon copy of the check. These documents must be

filed in check numerical sequence and maintained in a separate file. Each pre-

numbered check must be accounted for.

E. Voucher/bank checks that are voided must be marked “VOID” and must be filed

with the pre-numbered carbon copy of the check and/or with the bank check stub.

6. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Forms

(a) Form 99, Bill for Collection A404

SP 1136: Non-Appropriated Local School Fund;

Refund and Reimbursements

1. Purpose

Provide an overview on refund and reimbursement procedures.

2. Effective

Immediately.

3. Applies to

All schools.

4. Refunds

The processing of refunds to students is allowed through the Non-Appropriated Local

School Fund account or the Petty Cash Fund. The following procedures must be

followed when processing refunds to students:

Procedures for processing payment of refund from Non-Appropriated Local School Fund

A. Verify payment with the source document and the pre-numbered official receipt

(Form WIZ 239) upon receipt of request for refund from the advisor of the

student’s organization.

B. Prepare Purchase Order, Form A-3-C to the student or parent requesting the

refund. Include the referenced information from the Form WIZ 239.

C. Issue a voucher/bank check from the Non-Appropriated Local School Fund

account to the student or the parent.

Procedures for processing payment of refund from the Petty Cash Fund

A. The payment of a refund must be supported by the Petty Cash Voucher, Form

FMS-PY3 along with original receipts or supporting documents. To authorize the

payment to refund a student, an original signed copy of the request for refund

from the advisor of the activity must also be submitted.

B. The Petty Cash Fund must be replenished by claiming reimbursement of the

refund payment from the Non-Appropriated Local School Fund sub-account of

the activity related to the refund.

C. The claim for replenishment of the petty cash fund must be prepared on the

Purchase Order, Form A-3-C, and approved by the authorized representative of

the sub-account. The Purchase Order, Form A-3-C, must be made payable to

the designated custodian of the petty cash fund. Attach the original copy of the

Petty Cash Voucher Form, FMS-PY3 to the Purchase Order, Form A-3-C

along with original receipts or supporting documents.

D. The designated custodian to whom the check is payable shall cash the check

and place the cash in the Petty Cash Fund.

Procedures for processing payment of refund of field trip collections

A. For refunds of field trip collections of $15.00 or less, see SP 1129.

B. Reimbursement over $15.00 must be issued by check to the parent.

5. Reimbursements to School Staff

Reimbursements should only be made for school-related purchases that were previously

approved by the Principal or designee. This process should be kept to a minimum, as

properly planned expenditures should have followed the purchase order process.

6. SP Maintenance Responsibility

The Accounting Services Branch in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Administrative Rules, Chapter 32 Collection of Authorized Fees and Charges

Forms

(b) Form 239, WIZ Receipt

(d) Form FMS-PY3, Petty Cash Voucher

SP 1200 Payroll Calculations for Salaried

Employees—Ten (10) Month Employees

1. Purpose

To provide a brief overview of the methodology of how 10-month salaried employees are

paid.

2. Effective

Immediately.

3. Applies to

All 10-month salaried employees, including but not limited to, teachers bargaining unit

(BU05 and BU45), 10-month white collar employees – e.g., educational assistants,

school security attendants, school health aides (BU03), 10-month professional

employees – e.g., school psychologist, speech pathologist (BU13), and school food

service managers (BU02).

4. Ten-Month Pay Concepts/Formulas

Ten-month employees work ten (10) months a year, but their salaries are paid over

twelve (12) months, thus their pay is prorated. An employee who works the entire

school year and has no other adjustments (i.e.: pay changes, leave without pay, etc.)

during the school year, his/her pay is made semi-monthly and calculated by dividing the

yearly salary into twenty-four (24) equal payments. See calculation as follows:

Yearly salary / 24 (paychecks per year) = Amount per paycheck

For employees who do not work the entire 10-month year or who had pay adjustments

during the year, the adjustments are made using the daily rate, which is calculated as

follows:

Daily rate = Yearly salary/number of paid days in the year

Note: The number of paid days in the year is equal to the total number of days from the

first day work day through the last day work day minus all weekends and intersession

days.

Summer salary is paid the last four (4) paychecks of the school year for a 10-month

employee. As stated above, if a 10-month employee works the entire year and has no

adjustments, summer salary would be the same amount as his/her twenty (20) other pay

checks during the school year. However, if the employee does not work the entire year

or has other adjustments, summer salary is calculated as an “earned minus paid”

calculation as follows:

Earned:

Total earned for the school year = Number of days worked x daily rate

Paid:

The paid amount is the sum of the employee’s paychecks prior to summer salary.

Summer salary:

Earned – paid = Total summer salary

Total summer salary / 4 (# of summer salary paychecks) = summer salary per

paycheck

5. Ten-Month Pay Calculation Scenarios for Jane Aloha

A. Jane Aloha starts on the first day and works the entire school year.

Example: Jane works from July 26, 2007 (first day for teachers) through June 6,

2008 (last day for teachers) with a yearly salary of $54,000.

$54,000 / 24 (paychecks per school year) = $2,250 (paid for 24 pay periods)

B. Jane takes leave without pay (LWOP).

Example: Jane has a monthly salary of $4,500 and has four (4) days of LWOP

from October 22, 2007 through October 25, 2007.

$54,000 (yearly salary or $4,500.00 x 12) / 213 (# of paid days for

teachers for the 2007-2008 school year) = $253.52 (daily rate)

$253.52 (daily rate) x 4 (days of LWOP) = $1,014.08

Amount paid for 10/16-31/07 paycheck on 11/5/07: $2,250 (half month

salary) - $1,014.08 (LWOP deduction) = $1,235.92

C. Summer Salary:

Jane earned:

$253.52 (daily rate) x 209 (# of paid days for teachers minus 4 days of

LWOP) = $52,985.68

Jane was paid:

8/20/07 (first check for the 07-08 school year) through 10/20/07 = 5

(paychecks) x $2,250 (half month salary) = $11,250

11/5/07 (see calculations above) = $1,235.92

11/20/07 through 6/5/08 (last paycheck before summer salary for the

07-08 school year) = 14 (paychecks) x $2,250 (half month salary) =

$31,500

$11,250 + $1,235.92 + $31,500 = $43,985.92 (total paid from 8/20/07 –

6/5/08)

Summer salary:

$52,985.68 (earned) - $43,985.92 (paid) = $8999.76 (total summer

salary)

$8,999.76 / 4 (# of summer salary paychecks) = $2,249.94 (summer

salary per paycheck)

D. Jane Aloha had a pay increase in the middle of the school year.

Example: Jane has a pay increase from $4,500 per month to $4,650 per month

effective February 1, 2008.

On February 20, 2008, Jane would receive a half month salary of $2,325

due to the February 1, 2008 pay increase.

Daily rate:

For $4,500 monthly salary:

$54,000 (yearly salary or $4,500 x 12) / 213 (# of paid days for teachers

for the 2007-2008 school year) = $253.52 (daily rate for $4,500 monthly

salary)

For $4,650 monthly salary

$55,800 (yearly salary or $4,650 x 12) / 213 (# of paid days for teachers

for the 2007-2008 school year) = $261.97 (daily rate for $4,650 monthly

salary)

Summer salary:

Earned:

$253.52 (daily rate) x 126 (# of paid days from 7/26/07 – 1/31/08) =

$31,943.52 (total earned at $4,500 monthly salary)

$261.97 (daily rate) x 87 (# of paid days from 2/1/08 – 6/6/08) =

$22,791.39 (total earned at $4,650 monthly salary)

$31,943.52 + $22,791.39 = $54,734.91 (total earned)

Paid:

8/20/07 (first check for the 07-08 school year) through 2/5/08 = 12

(paychecks) x $2,250 (previous monthly salary) = $27,000

2/20/07 through 6/5/08 (last paycheck before summer salary for the 07-08

school year) = 8 (paychecks) x $2,325 (current half month salary) =

$18,600

$27,000 + $18,600 = $45,600 (total paid from 8/20/07 – 6/5/08)

Summer salary:

$54,734.91 (earned) - $45,600 (paid) = $9,134.91 (total summer salary)

$9,134.91 / 4 (# of summer salary paychecks) = $2,283.73 (summer

salary per paycheck)

6. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Administrative

Services Branch, Office of Fiscal Services is responsible for maintenance,

administration, and questions regarding this SP.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1200.

SP 1201: Payroll Calculations for Salaried

Employees—Twelve (12) Month Employees

1. Purpose

To provide a brief overview of the methodology of how 12-month salaried employees are

paid.

2. Effective

Immediately.

3. Applies to

All 12-month salaried employees, including but limited to, custodial and food service staff

(Bargaining Unit (BU) 01), clerical staff (BU 03), rainbow employees (various BU’s), 12

month professional staff (BU 13), and 12 month educational officer (BU 06).

4. Twelve-Month Pay Calculation

Monthly salary x # of days worked in the month including holidays / # of working days in

the month including holidays = Monthly earnings.

5. Twelve-Month Pay Calculation Scenarios

A. If a 12-month employee’s first day of work is in the middle of the month, the

monthly salary would be calculated as follows:

Ex: Twelve-month employee starts working on August 3, 20XX with a monthly

salary of $3,000.00

($3,000.00 (monthly salary) x 21 (# of working days from 8/3/XX –

8/31/XX)) / 23 (# of working days in August 20XX) = $2,739.13 (Earnings

for August 20XX)

Amt paid for 8/1-15/XX = $2,739.13 - $1,500.00 (semi-monthly salary) =

$1,239.13

Amt paid for 8/16-31/XX = $1,500.00

B. If a 12-month employee starts on the first day of the month, the monthly salary

would be calculated as follows:

Ex: Twelve-month employee starts working on September 1, 20XX through

September 30, 20XX with a monthly salary of $3,000.00

($3,000.00 (monthly salary) x 20 (# of working days from 9/1/XX –

9/30/XX)) / 20 (# of working days in September 20XX) = $3,000.00

(Earnings for September 20XX)

Amt paid for 9/1-15/XX = $3,000.00 - $1,500.00 (semi-month salary) =

$1,500.00

Amt paid for 9/16-30/XX = $1,500.00

C. If a 12-month employee is on leave without pay (LWOP).

Ex: Twelve-month employee has a LWOP from October 2, 20XX through

October 5, 20XX for four (4) days with a monthly salary of $3,000.00

($3,000.00 (monthly salary) x 19 (# of working days in October minus four

(4) LWOP days)) / 23 (# of working days in October 20XX) = $2,478.26

(Earnings for October 20XX)

Amt paid for 10/1-15/XX = $2,478.26 - $1,500.00 (semi-month salary) =

$978.26

Amt paid for 10/16-31/XX = $1,500.00

D. If a 12-month employee receives a pay increase in the middle of the month.

Ex: Twelve-month employee receives a pay increase from $3,000.00 per

month to $3,200.00 per month effective November 7, 20XX.

($3,000.00 (previous monthly salary) x 4 (# of working days from

November 1, 20XX – November 6, 20XX)) / 22 (# of working days in

November 20XX) = $545.45 (Earnings for November 20XX at the

$3,000.00 monthly salary)

($3,200.00 (new monthly salary) x 18 (# of working days from

November 6, 20XX – November 30, 20XX)) / 22 (# of working days in

November 20XX) = $2,618.18 (Earnings for November 20XX at the

$3,200.00 monthly salary)

$545.45 (old rate earnings for November) + $2,618.18 (new rate earnings

for November) = $3,163.63 (Total earnings for November 20XX)

Amt paid for 11/1-15/XX = $3,163.63 - $1,600.00 (new semi-monthly

salary) = $1,563.63

Amt paid for 11/16-30/XX = $1,600.00

6. LAG versus After-The-Fact (ATF)

Employees hired within the State of Hawaii prior to July 1, 1998 were placed on a

predicted pay or lag status. Lag refers to the five (5) day period from the end of the pay

period until the actual pay date.

Ex: If a 12-month employee was hired on June 30, 1998 and works from August 1,

20XX through August 15, 20XX.

For the pay period August 1, 20XX through August 15, 20XX, the pay date is

August 20, 20XX (August 15, 20XX is the last day of the pay period plus five (5)

days lag.)

Employees hired within the State of Hawaii on or after July 1, 1998 were placed on an

after-the-fact or ATF pay status. ATF employees are paid at the end of the following pay

period plus the five (5) day lag described above.

Ex: Twelve-month employee was hired on July 1, 1998 and works from

August 1, 20XX through August 15, 20XX.

For the pay period of August 1, 20XX – August 15, 20XX, the pay date is

September 5, 20XX (August 31, 20XX is the last day of the following pay period

plus five (5) days lag.)

The above law can be referenced in Section, 78-13, Hawaii Revised Statues.

7. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for maintenance, administration, and

questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone.

8. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1201

SP 1202: Casual Employees; Casual Payroll

System; Processing

1. Purpose

To provide the steps required to pay casual or emergency hire employees in the Casual

Payroll System (CPS).

2. Effective

Immediately.

3. Applies to

Employees that are paid on an hourly basis which includes but are not exclusive to

classroom cleaners, adult supervisors, substitute classified employees, substitute

educational officers, part-time teachers, paraprofessional tutors, emergency hires,

student helpers, summer school/intersession employees, coaches, temporary contract

employees, and teacher stipend payments.

4. Paying Casual/Emergency Hires on the Casual Payroll System

The CPS is used to input the hours/days worked for casual and emergency hire

employees. It can be accessed via the Budget System using Hyperaccess. The

following steps are used to enter hours/days worked for an employee:

A. Select the database needed and press <Enter> (see below):

1) Summer School Programs Only – summer school employees.

2) A+ Program Only – A+ employees including classroom cleaners hired to

clean A+ classrooms.

3) Non-A+ Programs Only – Employees except summer school and A+

employees.

B. Select Casual Time Sheet Entry and press <Enter>.

C. Retrieve an employee’s calendar by entering a portion of or the entire last name

and press <Enter>. If multiple employees have the same last name, a list of

employees will appear. Scroll down to select desired employee.

D. From the calendar, select the day to be paid and press <Enter>.

E. Enter the hours/day by either entering the total hours worked or the start and end

time(s) and press <Enter>. Cursor will return to calendar.

F. Continue to enter hours as in Step D and E until all hours for the pay period is

entered.

G. Press <F1> <s> to save. It is important to save entries. Otherwise, data will

need to be re-entered.

H. Retrieve another employee’s calendar and continue Steps C-F or to go back to

the menu screen press <F1> <m>.

Once you have completed entering the hours/days for all your employees, a draft report

should be printed to check the accuracy of what was entered. To print the report, follow

the steps below:

A. Press <F1><O> to go to the reports menu.

B. Select Current Pay Period – Draft Report and press <Enter>.

C. Select either Without SSN or With SSN and press <Enter>.

D. Once prompted press <ALT> <P> to print.

E. Verify timesheet entries made are correct. If errors are found, re-enter

corrections on timesheet entry screen.

5. Troubleshooting

A. After inputting the employee’s name the system returns you back to the menu

screen.

1) The last name was entered incorrectly. Go into the Casual Time Sheet

Entry screen and try again. Note: The last name must be spelled

correctly and first names are not allowed. Try using only the first two (2)

letters of the last name.

2) The employee has not been certified to be paid. Use the Statewide

Employee Register Search by SSN menu option to determine if the

employee is certified by using the following steps:

a) Select Statewide Employee Register Search by SSN from the

Casual Payroll menu screen and press <Enter>.

b) Enter the employee’s social security number without dashes and

press <Enter>.

c) First table will show what is on the Active Jobs screen on Casual

Personnel press <Enter> when done viewing. Use to check if the

employee was certified on Casual Personnel.

d) Next table shows the Jobs to be Transferred to Casual Payroll

Tonight. If the name is on this listing, it will appear on the CPS the

next day.

e) The third table shows the Jobs Being Reviewed by Personnel.

Certain employees after being entered into the Casual Personnel

System need to be reviewed by Personnel before being

downloaded onto the CPS, this listing shows if the record is still

being reviewed.

f) The fourth table shows the Jobs Terminated this Pay Period listing

all the employees’ records which will be terminated this pay

period. Press <Enter> after finish viewing.

g) Last table shows what is on the CPS. If the employee record you

need is here, the record can be accessed through the CPS,

however there may be a problem with the record (go to option 3 C

below).

3) If the employee’s record appears on the On Casual Payroll System table

through the Statewide Employee Register Search by SSN, choose the

Casual Time Sheet Register menu option from the CPS menu screen and

follow the following steps:

a) Enter the employee’s last name and press <Enter>.

b) Select the appropriate employee record and press <Enter>.

c) Check to see if there are any asterisks (*) in the Uniform

Accounting Code (UAC) field. If there are asterisks (*) in this field,

it means there is an incorrect code in the UAC which must be

corrected before the employee’s record can be used.

d) Check to see if the person is On-leave.

1) If there is an “x” in the On-Leave box press <Enter> until

the On-Leave box is selected. Clear the “x” by pressing

the <Space Bar>. Press <F1> <s> to save. You can now

access the employee’s record through the Casual

Timesheet Entry menu option.

2) If there is a “P” in the On-Leave box, it means that

Program ID has expired. Correct program ID before

paying.

B. The employee’s record was incorrect (e.g. wrong rate, name spelled incorrectly,

UAC incorrect, etc.)

1) Correct the employee’s personnel record on CPS.

6. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for the maintenance, administration, and

questions regarding this SP.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) www.issb.k12.hi.us – Casual Payroll System http://165.248.6.166/CasualPayroll/

SP 1203: Teacher Substitute Employee

Automated System (TSEAS); Processing

1. Purpose

To provide an overview on the Teacher Substitute Employee Automated System

(TSEAS) and its effect on payroll.

2. Effective

Immediately.

3. Applies to

All salaried teachers, both 10-Month and 12-Month for recording leaves (e.g.: sick,

personal, vacation, etc.) and authorizing payment of all substitute teachers.

4. Teacher Leaves

When a teacher calls in to TSEAS to report an absence, this absence is recorded on the

teacher’s Leave Status Report, after the job is verified. If a leave was properly called in

to TSEAS, an Application for Leave of Absence (Form 400a) does not need to be

submitted to the Payroll Unit for the same dates. However, if a leave was incorrectly

recorded on TSEAS or inadvertently missed, one or more of the following corrections

may need to be made:

A. To make a change to a teacher’s leave which was already processed on TSEAS,

a Change of Leave Code Request Form (Form BLA-01) must be completed (see

SP on BLA-01 for instructions) and sent to the Payroll Unit.

E.g.: Sick leave was processed on TSEAS but needed to be changed to

personal leave.

B. To correct a leave that was recorded in TSEAS in error, a note signed by the

school’s Principal should be submitted to the Payroll Unit.

E.g.: Sick leave was processed on TSEAS, but the teacher had actually come to

work.

C. If a leave was not called in to TSEAS, an Application for Leave of Absence (Form

400a) should be submitted to the Payroll Unit (see SP on Application for Leave

of Absence 400a for instructions). Note: Please ensure that the Form 400a is

submitted for only those days not called in to TSEAS. Leaves processed on

TSEAS as well as through the Form 400a may cause duplicate entries on the

leave status report. E.g.: Sick Leave was not called in to TSEAS, but the teacher

was on sick leave.

5. Substitute Teacher Pay

A substitute teacher is paid after verification of their job is made by the school on

TSEAS. The deadline to verify jobs on TSEAS is the first working day following the end

of the pay period by 4:30 p.m. If the deadline is met, the substitute teacher will be paid

the following pay period plus the five (5) day lag. See examples below:

A. If a substitute teacher works between November 1 and November 15, the job on

TSEAS must be verified by November 16 (the first working day after the end of

the pay period) by 4:30 p.m. If the job is verified on time the substitute teacher

will be paid on December 5 (next pay period plus five day lag).

B. If a substitute teacher works between November 16 and November 30, the job on

TSEAS must be verified by December 3, 4:30 p.m. If the job is verified on time,

the substitute teacher will be paid on December 20.

6. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for the maintenance, administration, and

questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1203.

Forms

(b) Form 400A, Application for Leave of Absence

http://sp.k12.hi.us/pdf/form5000_400a.pdf

SP 1205: Individual Time Sheet; Form D-55

1. Purpose

To report fringe payment hours on time sheet for payment purposes after each pay

period.

2. Effective

Immediately.

3. Applies to

Classified/School Support Personnel (CSSP) employees.

4. Instructions for completing Individual Time Sheet Form D-55

For instructions and a sample of this form, please refer to the DOE Forms website at

http://doe.k12.hi.us/forms/index.htm.

5. Other Important Information

Submit original and yellow copy to Office of Fiscal Services-Payroll Unit at the end of

each pay period by the specified deadline, one workday after the end of the pay period.

Please refer to the current Payroll Deadlines memorandum posted on DOE Memos and

Notices for deadline dates. The pink copy is to be kept on file. Fringe payments are

paid two (2) pay periods after it is turned in. For overtime payments, please submit

approved Request for Overtime, Form BP-2 with timesheet, except for call out pay and

use of facilities. See Form (c).

6. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for the maintenance, administration, and

questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1205.

Forms

(b) Form D-55, Individual Time Sheet

SP 1206: Employee Organizational Timesheet;

Form D-56

1. Purpose

To process fringe payments for classified substitute employees, recall payment for vice-

principals, and recall payment for teachers.

2. Effective

Immediately.

3. Applies to

Substitute Teachers – to be turned in only if the job cannot be called in to the Teacher

Substitute Employee Automated System (TSEAS), e.g., deadline has passed in which

jobs can be backdated; and ensure remarks “Not on TSEAS” are on the Form D-56;

Substitute Classified – To be turned in for overtime purposes only (e.g., substitute

employee works overtime – ensure that proper approval (Request for Overtime, Form

BP-2) is attached or proper remarks (e.g., Use of facilities, call out) is listed in the

“Comments” on the Form D-56;

Vice-Principals and teachers – Form D-56 is used for payment of recall pay.

4. Instructions for Completing Organizational Timesheet (Form D-56)

Instructions and a sample of this form can be located in the DOE Forms website at

http://doe.k12.hi.us/forms/index.htm.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for the maintenance, administration, and

questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1206.

If an employee is not listed in the casual payroll system can I turn in a manual

timesheet or Form D-56?

No, schools/offices need to wait until the employee has been listed in the casual

payroll system (see SP on Casual Payroll System Troubleshooting) to input

hours.

Forms

(b) Employee Organizational Timesheet, Form D-56

SP 1207: Notification of Temporary Assignment

(Form SF-10)

1. Purpose

To provide a description of how the Notification of Temporary Assignment, Form SF-10

is paid.

2. Effective

Immediately.

3. Applies to

All salaried employees who perform temporary assignments.

4. Temporary Assignment Payments

Salaried employees are compensated for temporary assignment two pay periods plus

the five (5) day lag, as are all fringe (e.g.; overtime, additional hours, etc) payments.

Example: A salaried employee temporarily assigned from August 1, 20XX to August 15,

20XX, will be compensated in the September 20, 20XX paycheck.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for the maintenance, administration, and

questions regarding this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1207.

Forms

(b) Form SF-10, Notification of Temporary Assignment

SP 1208: Request for Overtime; Form BP-2

1. Purpose

To request for overtime for worked performed.

2. Effective

Immediately.

3. Applies to

All DOE employees who are approved and allowed to receive overtime pay.

4. Instructions on Completing the Request For Overtime, Form BP-2

The instructions for completing the Request for Overtime, Form BP-2 and a sample of

this form can be viewed on the link below:

(NEED TO INCLUDE INSTRUCTIONAL PAGE AND SAMPLE OF FORM)

5. Overtime Circumstances where Form BP-2 is not needed:

If the Overtime is for Call Back or Use of Facilities, the Form BP-2 is not needed. In

these situations “Call Back” or “Use of Facilities” should be notated in the remark section

of the timesheet, Form D-55.

6. Additional Hours Approval

Prior approval from the Complex Area Superintendent or Assistant Superintendent is not

needed for additional hours.

7. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for the maintenance, administration, and

questions regarding this SP.

8. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1208.

Forms

(a) Form BP-2, Request for Overtime

(b) Instructions for completing the form

SP 1209: Claim for Lost Check/Non-Received

Check; Procedures for

1. Purpose

To request the re-issuance for a lost, stolen or non-received check.

2. Effective

Immediately.

3. Applies to

Any DOE employee who received a check issued through the DOE Payroll Unit.

4. Procedure to Request Reissuance of Lost Check/Non-Received Check

A. Contact the DOE Payroll Unit at (808) 586-3181 for a Claim for Lost

Check/Non-Received Check form.

B. The payee of a check who received the check but was unable to cash it because

it was either lost or stolen is eligible to request the check be reissued, if the check

was not endorsed. If the check was endorsed by the payee, a check may not be

reissued unless the check is not cashed by the expiration date of the check,

which is at the close of the following fiscal year in which the check was issued.

If the payee of the check did not receive the check for any reason, including not

received in the mail, a request for the check to be reissued may be made.

C. It will take approximately two to three weeks for a check to be reissued.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for the maintenance, administration, and

questions regarding this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Frequently Asked Questions (FAQ) for SP 1209.

(a) http://www.capitol.hawaii.gov/hrscurrent/Vol01_Ch0001-0042F/HRS0040/

(b) For a sample of the form and information needed to complete the form, please

see the DOE Forms website at: http://doe.k12.hi.us/forms/index.htm

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone.

A. Can I cash the original check if the check was found before returning the “Claim

for Lost Check”/”Claim for Non-Received Check” form to DOE?

Yes, please contact the Payroll Unit to cancel the Claim.

B. Can I cash the original check if the check was found after returning the “Claim for

Lost Check”/”Claim for Non-Received Check” form to DOE?

No. The stop payment has been issued and the original check is no longer valid.

Please return the original check to the DOE Payroll Unit for cancellation.

SP 1209.1: Claim for Escheated Check/Voided

Check

1. Purpose

To request re-issuance of an escheated or voided check.

2. Effective

Immediately.

3. Applies to

Any DOE employee who received a warrant voucher from the Department of Education

and the check has either been escheated i.e. unclaimed or voided.

4. Procedure to Request Re-Issuance of Escheated Check Voided Check

A. Send escheated or voided check to:

Department of Education

Payroll Unit

P.O. Box 2360

Honolulu, Hawaii 96804

B. Provide the following information:

1. Reason for the request

2. Address to mail the replacement check

C. It will take appropriately two to three weeks for a check to be reissued.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for the maintenance, administration, and

questions regarding this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

A. Frequently Asked Questions (FAQ) for SP 1209.1.

B. Sec. 40-68, Hawaii Revised Statutes, Non-presentment of warrants and checks.

http://www.capitol.hawaii.gov/hrscurrent/Vol01_Ch0001-0042F/HRS0040/

SP 1210: Wage and Tax Statement (Form W-2);

Request for Duplicate

1. Purpose

To request a duplicate Wage and Tax Statement; Form W-2.

2. Effective

Immediately.

3. Applies to

All DOE employees.

4. Background

The cost for a duplicate Form W-2 statement is $10. Payment may be made by cash,

money order, certified or cashiers’ check made payable to the Director of Finance. Any

payment except cash not made payable to the Director of Finance will delay the

processing of the duplicate Form W-2 request. Payment by personal check will require

more time to process because receipt of funds must be verified before the duplicate

Form W-2 is released. If a personal check is returned unpaid, an additional $25 returned

check fee must be collected, pursuant to Section 40-35.5, Hawaii Revised Statutes.

Note: Duplicate Form W-2’s may be requested for the last ten (10) years.

5. Procedure to Request Duplicate Form W-2

A. Requests for duplicate Form W-2 must be made in writing by the employee.

B. The following information must be provided in the request:

1) Employee name

2) Social security number

3) Name of school or office

4) Payroll number/warrant distribution code [located on Pay Statement or Check Stub]

5) Phone number

6) Reason for the request

7) Year requested (up to 10 years)

8) Enclosed payment ($10 for each year requested)

9) State delivery option

a. Picked up by employee – provide a daytime contact number that

employee can be reached when Form W-2 is ready to be picked up

b. Sent to employee’s home – provide home address

10) Employee signature

c. Request may be sent to:

Department of Education

Payroll Unit

P.O. Box 2360

Honolulu, Hawaii 96804

6. Processing After the Request is Received at the Payroll Unit

It will take approximately one week if payment is made by cash, cashiers’ check, or

money order made payable to Director of Finance. Personal checks will take

approximately two weeks.

Form W-2’s can’t be picked up at Payroll Unit because we do not have Form W-2’s

here. Payroll Unit will send your request to the Department of Accounting and General

Services to get a copy of your requested Form W-2.

7. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for maintenance, administration, and

questions regarding this SP.

8. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1210.

SP 1211: Tax Withholding Exemption Changes

(Federal W-4, State HW-4)

1. Purpose

To make changes in tax withholding exemption.

2. Effective

Immediately.

3. Applies to

All employees of the Department of Education (DOE).

4. Instructions to Change Federal or State Tax Exemptions, Form W-4 and HW-4

Complete the following items for Federal Form W-4. See Form (b):

Item Type of Information

1. Type or print your first name, middle initial and your last name.

2. Type or print your social security number.

3. Check box for marital status [Note: Marital status must be the same as HW-4].

4. If your last name differs from the name shown on your social security card, check

box. You must also call 1-800-772-1213 for a replacement social security card.

5. Enter the total number of allowances you are claiming.

6. Enter any additional amount.

7. Type or print “exempt” if this applies to you.

8. Sign and date the form.

9. Submit completed form to the DOE Payroll Unit.

Complete the following items for State Form HW-4. See Form (c):

Item Type of Information

1. Type or print your full name.

2. Type or print your social security number.

3. Check appropriate box for marital status [Note: Marital status must be the same as W-4].

4. Enter the total number of allowances you are claiming.

5. Enter any additional amount.

6. Sign and date the form.

7. Submit completed form to the DOE Payroll Unit.

5. Impact on Tax Exemptions on Earnings and Leave Statement

For federal withholding taxes, each negative number represents an additional $5

withheld over zero (0) exemptions and for state withholding taxes, each negative number

represents an additional $2 for being withheld. Thus, if claiming any additional amount

to be withheld per pay period, these amounts will show as a negative exemption on your

pay statement.

6. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for the maintenance, administration, and

questions regarding this SP.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1211.

Forms

(b) Form W-4, Employee’s Withholding Allowance and Status Certificate.

Certificate

SP 1212: Salary Assignment/Cancellation Form

D-60 for Bank Assignment (BA)

1. Purpose

To authorize the assignment or cancellation of net pay or a specific dollar amount of

assignment to a financial institution.

2. Effective

Immediately.

3. Applies to

All Department of Education employees (including casual employees) hired on or after

July 1, 1998, and employees hired prior to that date who wish to have direct deposit.

Section 40-53, Hawaii Revised Statutes, requires employees hired on or after July 1,

1998 to specify a financial institution account into which the State will deposit the

employee’s net pay.

4. Instructions for Completing Form D-60, Salary Assignment/Cancellation

For Bank Assignment (BA)

Please see the link below for instructions and a sample of Form D-60 to assign your net

wages.

(NEED TO ADD LINK, FORM AND INSTRUCTIONS)

New employees must submit Form D-60 after receiving their first paycheck. The State of

Hawaii’s Form D-06 must be used to start, change or cancel a bank assignment. No

other forms will be accepted.

Only net wages can be assigned to a financial institution. An employee may have a

portion of their salary assigned to a credit union via a Credit Union (CU) deduction.

Note: Causal employees are not allowed to have CU deductions. See (b) SP1213.

Employees with financial institutions located out-of-state should expect a delay in

receiving their net pay. Funds will not be available for immediate use on payday due to

a check being mailed to the out-of-state financial institution the day before payday.

Upon receipt of the check by the out-of-state institution, they will deposit an employee’s

net wages into their account.

5. Instructions for Completing Salary Assignment /Cancellation Form D-60

For Cancellation or Change of Bank Assignment

Please see the link below for instructions and a sample of Form D-60 to assign your net

wages.

(NEED TO ADD LINK, FORM AND INSTRUCTIONS)

A. Change in Financial Institution or Bank Account Number

Submit a new Form D-60 with updated bank information in which it will override

an employee’s previous salary assignment. Ensure an employee’s former

account is still open until the new salary assignment takes effect. Failure to do

so will result in a delay in receipt of net pay.

If an employee’s account is closed, then the receiving financial institution will

return the employee’s net wages to the State of Hawaii. Upon receipt, re-

issuance of a check will be mailed directly to the employee’s school or office.

This process normally takes seven (7) to ten (10) working days.

B. Separation from Service with DOE

The bank assignment will continue to be in effect until a cancellation Form D-60

is submitted. Submit a cancellation Form D-60 after an employee receives their

last paycheck from the Department.

6. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for the maintenance, administration, and

questions regarding this SP.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP1212.

(b) SP 1213 “Salary Assignment/Cancellation Form D-60 for CU Deduction

Forms

SP 1213: Salary Assignment/Cancellation Form

D-60 for Credit Union Deduction

1. Purpose

To authorize a specific dollar amount be deposited into a credit union account or to

cancel previously authorized assignments.

2. Effective

Immediately.

3. Applies to

All salaried Department of Education employees.

4. Credit Union (CU) Deductions

Salaried employees may have one or more credit union deductions. Note: The CU

deduction amount listed is a monthly amount. If an employee wants a deduction per

paycheck, then the amount should be doubled on the Form D-60 section (K) below.

Note: Casual employees are not allowed to have CU deductions. See (b) SP1212

5. Instructions for Completing Form D-60, Salary Assignment/Cancellation

for Assigning Credit Union Deduction

No. Type of Information Instructions

A. Department Education

B. Sub-Division or School Enter name of sub-division or school at

which the employee is employed

C. Social Security Number Enter employee’s social security number

D. Last Name, First Name, Enter employee’s Last Name, First Name

Middle Initial and Middle Initial

E. Type Enter CU to assign deduction to a Credit

Union

F. Agent Credit Union to receive employee’s

assignment. Field must be completed with

3-digit numeric code for institution. If agent

code is not known, leave blank. Payroll

Unit will complete.

G. Plan Code to identify type of account. “C” for

checking account and “S” for Savings

account

H. I.D. No Employee’s account number. This is limited

To eight numeric characters. If account

number exceeds 8 digits, check with

financial institution on which numbers to

use

I. Dept. E

J. The Undersigned Hereby: Place “X” in the Assigns box

Assigns or Cancels

K. $_____.__The First Month Specify dollar amount to be deposited

$_____.__Each Month Thereafter each month and each month thereafter.

L. Effective Date with the Payroll Enter the last day of the pay period

Period that includes (month/day/year) on

which the assignment is to begin

M. ______ ________________ Employee must sign and date the form

Date Employee or Authorized Signature

N. ______ ________________ Agent name, branch, address must be

Date Authorized Signature of Assignee completed. Authorized signature of agent

is also required

6. Instructions for Completing Form D-60, Salary Assignment/Cancellation

for Cancellation of Credit Union Deduction

No. Type of Information Instructions

A. Department Education

B. Sub-Division or School Enter name of sub-division or school at

which the employee is employed

C. Social Security Number Enter employee’s social security number

D. Last Name, First Name, Enter employee’s Last Name, First Name

Middle Initial and Middle Initial

E. Type Enter CU for Credit Union deduction

F. Agent Field must be completed with 3-digit

numeric code for the Credit Union

G. Plan Code to identify type of account. “C” for

checking account and “S” for Savings

account

H. I.D. No Employee’s account number

I. Dept. E

J. The Undersigned Hereby: Place “X” in the Cancels box

Assigns or Cancels

K. Effective Date with the Payroll Enter the last day of the pay period

Period that includes (month/day/year) on which the assignment

is to be cancelled

L. ______ ________________ Employee must sign and date the form

Date Employee or Authorized Signature

M. ______ ________________ Agent name, branch, address must be

Date Authorized Signature of Assignee completed. Authorized signature of agent

is also required

7. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for the maintenance, administration, and

questions regarding this SP.

8. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1213.

(b) SP 1212 Salary Assignment/Cancellation Form D-60 for Bank Assignment (BA)

Forms

SP 1214: Savings Bond Authorization (State

Accounting Form D-68)

1. Purpose

To authorize savings bond deductions.

2. Effective

Immediately.

3. Applies to

All salaried Department of Education employees.

4. Instructions for Completing State of Hawaii United States Savings Bonds

Authorization (State Accounting Form D-68)

Information must be printed in BLUE ink or typed.

No. Type of Information Details

A. Effective Date Date to start the deduction

B. Social Security Number Employee’s social security number

C. Employee’s Name Last, first and middle initial

D. Department/Agency Department of Education

E. Division or Branch District office/State office

F. Location School/office name

G. Work Phone Work telephone number

H. Requested Action Check appropriate box

I. Other Action Provide description of action being

requested

J. Allotment per month If requested action in No. 8 is A, B, C, or D,

indicate amount to be allotted each month

K. Choose Series Select bond type (either I Bond or EE Bond)

L. Select Denomination For I Bonds (denomination $50 or $75)

for EE Bonds (denomination $100, $200,

$500 or $1,000)

M. Owner’s Name First, middle name or initial, last name

N. Social Security Number Owner’s social security number (required)

O. Address Owner’s home address

P. Co-Owner/Beneficiary Check appropriate box

Q. Name of Co-Owner/Beneficiary First, middle name or initial, last name of

co-owner or beneficiary

R. Social Security Number of Social security number of co-owner/

Co-Owner/Beneficiary beneficiary (optional)

S. Employee’s signature and date Employee must sign and date authorization

form in BLUE ink.

Form must be typed or printed in blue ink. Completed form must be sent to the DOE-

Payroll Unit. Only State Accounting Form D-68 will be accepted for any savings bond

transaction.

5. Replacement of Lost Savings Bond

To replace a lost savings bond contact the Federal Reserve Bank (FRB) directly

at 1-800-553-2663. The lost bond form can be obtained via FRB website at

www.savingsbond.gov.

6. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Accounting Services

Branch, Office of Fiscal Services is responsible for maintenance, administration, and

questions regarding this SP.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1214.

Forms

(b) State Accounting Form D-68, Savings Bond Authorization Form

http://www/hawaii.gov/forms

SP 1235: Change of Leave Code Request (Form

BLA-01)

1. Purpose

To change a leave code erroneously verified in the Teacher-Substitute Employee

Automated System (T-SEAS).

2. Effective

Immediately.

3. Applies to

Ten (10) month and twelve (12) month teachers.

4. Instructions for Completing Form BLA-01 Change of Leave Code Request

No. Item Description

A. Date Today’s date

B. School/Office School or office name

C. SASA/Clerk Name Contact name if there are any questions

D. Phone No. Contact phone number

E. Employee’s Name Enter teacher’s name

F. Social Security No. Enter teacher’s social security number

G. From code Enter incorrect leave code as recorded in T-SEAS

H. To code Enter correct leave code

I. For Date(s) Enter dates for codes to be changed

J. Form 400a submitted Check this box if 400a for LWOP was submitted

Enter date form was submitted

K. Reported in T-SEAS Check this box if absence was called in T-SEAS

L. Administrator’s Signature Administrator must sign and date form

The Form BLA-01 is used to change codes as reported in T-SEAS. The Form 400a

must also be submitted for leave without pay. The completed form should be sent to the

DOE Payroll Unit.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Payroll Unit, Operations Section, Administrative

Services Branch, Office of Fiscal Services is responsible for the maintenance,

administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

A. An absence was called into TSEAS, but the teacher reported to work. How do I fill

out the Form BLA-01?

Form BLA-01 is not needed. The Form BLA-01 is used to change a leave. If an

absence was called into TSEAS in error, a memo stating the circumstances and

approved by the principal is required to remove this absence.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1235.

Forms

(b) DOE Form BLA-01, Change of Leave Code Request

SP 1240: Payment Processing; Introduction

1. Purpose

To explain the process and responsibilities of the Vendor Payment Unit in the

Administrative Services Branch of the Office of Fiscal Services.

2. Effective

Immediately.

3. Applies to

All School Administrative Services Assistants (SASA) and Account Clerks.

4. Introduction

A. Hawaii Revised Statutes 103-10 requires that vendors be paid no later than thirty

(30) calendar days following receipt of the invoice or satisfactory delivery of the

goods or services, whichever is later.

1. Payments made after thirty (30) calendar days will entitle vendors to an

interest rate equal to the prime rate for each calendar quarter plus two

percent (2%).

B. Schools and offices assist the vendors in decreasing their waiting period for

payment by promptly processing all invoices within five (5) working days of

receipt of either the goods/services or the invoices, whichever is later.

C. Once the Vendor Payment Unit receives the Approval to Pay Reports (ATPs) the

process which includes pre-auditing, check writing, and mailing of checks

requires approximately ten (10) working days.

D. If the ATP contains errors, they will be returned to the schools/offices for

corrections.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor for Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for the

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1240.

(b) Hawaii Revised Statutes, Section 103-10 (Payment for Goods and Services)

SP 1241: Payment Processing: Supporting

Documentation Required

1. Purpose

To list additional documents required to be submitted with the Approval to Pay Report

and original or certified original itemized invoices for that type of payment.

2. Effective

Immediately.

3. Applies to

All School Administrative Services Assistants (SASA) and Account Clerks.

4. Additional documents to be submitted for auditing

A. Program manager approval or the Request to Purchase Personal Use Items,

Form J-1 for the following types of payments:

1) Food

2) Bus

3) Admission

4) Leis

5) Personal use items

B. Payments $25,000 and higher on final payment:

1) If vendor is registered on Hawaii Compliance Express, Certificate of

Vendor Compliance

2) If vendor is not registered, original tax clearance certificates with green

certification stamp within two (2) months of processing date

3) Department of Commerce and Consumer Affairs (DCCA) certificate of

good standing (not required if it is an exempt purchase)

4) Department of Labor and Industrial Relations (DLIR) certificate of

compliance (not required if it is an exempt purchase)

5) If certificates from DCCA and DLIR are not available, submit vendor self-

certified Certification of Compliance for Final Payment, Form 22 from

Procurement.

C. Meals:

1) Agenda showing meals as an integral part of the meeting and also

reflecting type of beverages.

D. Telephone and Cellular Phones:

1) Approved telecom request for new purchases

2) Administrator's approval directly on invoice for cellular phone charges

incurred which exceeds the plan’s monthly cost.

E. New Air Conditioning Equipment:

1) Auxiliary Services Branch approval

2) If using appropriated funds, approval memo from Assistant

Superintendent or Complex Area Superintendent.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor for Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for the

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1241.

(b) FMS User Policy and Process Flow Guide, Section (i.) Authorization to Purchase

listing

Forms

The following forms are available for download from the FMS website:

http://fms.k12.hi.us/forms.

(d) Form J-1, Request to Purchase Personal Use Items.

(e) Form A-6, Tax Clearance Application

The following forms are available for download from the Procurement icon on Lotus

Notes

(f) Form 4, Request for Civil Service Exemption

(g) Form 10C, Contract for Goods or Services Based on Small Purchase

Procurement

SP 1242: Credit Memos; Definitions and

Procedures

1. Purpose

To explain procedures for processing a credit memo with an offsetting invoice.

2. Effective

Immediately.

3. Applies to

All School Administrative Services Assistants (SASA) and Account Clerks.

4. Definitions

A. A credit memo is a document issued by the vendor for merchandise that has been

returned.

B. An offsetting invoice is an invoice from the same vendor whose amount must be

greater than the amount of the credit memo. If the invoice amount is less, then an

additional offsetting invoice is needed to be processed with the credit memo. A

credit memo must equal or exceed the amount of the invoice processed for payment.

5. Procedures

A. Credit memos must be an original and printed on the same Approval to Pay Report

as the offsetting invoice.

B. If there is no offsetting invoice expected from the vendor, the credit memo should be

returned with a request that a refund check be issued.

C. For telephone and cellular phone E-Rate credits, deduct the credit amount appearing

on the invoice from the current charges and process the balance.

6. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor for Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for the

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

A. Frequently Asked Questions (FAQ) for SP 1242.

B. FMS User Policy and Process Flow Guide.

C. WINFMS Help, Walk-Throughs, Payment

SP 1243: Approval to Pay (ATP) Types;

Descriptions

1. Purpose

To explain the four (4) types of Approval to Pay Reports (ATP) which can be identified

by the Special Handling Indicator (SHI).

2. Effective

Immediately.

3. Applies to

All School Administrative Services Assistants (SASA) and Account Clerks.

4. Descriptions

A. Regular Payment – “Blank” Indicator applies to most payments which include

petty cash, postage, and reimbursements.

B. Invoice with Check – “I” Indicator requires the original and one (1) copy of the

invoice to be attached to the ATP for the following list of vendors or circumstances:

1) Cingular Wireless

2) Interest Payments

3) Invoices with no invoice numbers or NONE is posted in the invoice field

4) Invoices with numbers exceeding the 14 character invoice field (enter the last

14 digits of the number).

5) Memberships (including invoices with invoice numbers)

6) National Geographic Society

7) Netted-out totals due to the following conditions:

a.) Receipt of a credit memo reducing the total of the invoice.

b.) Receipt of separate invoices for goods and freight. (if current year

funds are being used, process the freight invoice as a Direct

Payment)

8) Registration Fees (including invoices with invoice numbers)

9) Research Corporation of the University of Hawaii (RCUH)

10) Split Payments (if paid from different batch orgs or printed on separate ATPs)

11) Sprint and Sprint PCS

12) State Governments (e.g.: DOE, DAGS, DOH, etc.)

13) Subscriptions (All except for Weekly Reader, Scholastic, Inc., & Honolulu

Advertiser)

14) T-Mobile

15) Tesoro Fleet Services

16) University of Hawaii (including all Community Colleges & UH Bookstore)

17) Utilities (e.g.: HECO, MECO, HELCO, Board of Water Supply, Gas Company,

etc.)

18) Verizon Wireless

C. Mileage/Travel – “S” Indicator applies to mileage and inter-island or out-of-state

per diem payments which should all be printed on separate ATPs. Advance per

diem payments should also be printed on a separate ATP with a red-tag marked

“Advance Per Diem”. Revenue Refund – “4” Indicator are for refunds made to an

individual who previously paid a fee to the school

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor for Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for the

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1243.

(b) FMS User Policy and Process Flow Guide

(d) FMS Forms Guide

Forms

The following forms are available for download from the FMS website:

http://fms.k12.hi.us/forms.

(e) FMS-PY1, Direct Payment/Invoice Form

(f) FMS-PY2, Personal Automobile Mileage Voucher

(g) FMS-PY3, Petty Cash Voucher

(h) FMS-C1, Revenue Refund Form

(i) Form 438, Statement of Out-of-State Travel Completed Report

(j) Form 440, Statement of Inter/Intra-Island Travel Completed and Claim for

Allowable Travel Expenses

SP 1244: Direct Payments; Supplemental, Split,

Advance, and Employee Reimbursements

1. Purpose

To explain the different scenarios for processing direct payments, supplemental

payments, split payments, advance payments and employee reimbursements.

2. Effective

Immediately.

3. Applies to

All School Administrative Services Assistants (SASA) and Account Clerks.

4. Scenarios (refer to FMS User Policy and Process Flow Guide for procedures)

A. A supplemental payment should be processed when the purchase order (PO) is

prematurely finalized or erroneously canceled and another invoice is received

from the vendor.

B. Split payments should be processed when an invoice exceeds the PO

encumbrance and the balance is paid as a direct payment creating two (2)

separate payment transactions.

C. Advance payments are allowed for the following types:

1) U.S. Postal Service for stamp purchases.

2) Advance Per Diem

a) Inter/Intra-Island Travel

b) Out-of-State Travel

3) Registration Fees

4) Subscriptions

5) Membership Dues

D. Employee type reimbursements

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor for Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for the

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1244.

(b) 6.9 Direct Payments – Supplemental Payments from FMS User Policy and

Process Flow Guide.

(d) WINFMS Help, Walk-Through, Payment, Add Direct Payment

Forms

(e) Form PY-1, Direct Payment

SP 1245: Blanket Purchase Orders; Guidelines

1. Purpose

To explain the processing of blanket purchase orders.

2. Effective

Immediately.

3. Applies to

All School Administrative Services Assistants (SASA) and Account Clerks.

4. Guidelines

A. Schools and offices may issue blanket purchase orders to a vendor for various items

to be purchased within a three (3) month period following the date of issuance.

B. Blanket purchase orders are made for sums not to exceed $500 (for each purchase

order) and will be used to purchase items with a unit cost of less than $50.

1) However, the $50 limitation does not apply to equipment repairs or from

purchases through the State Surplus Branch.

C. The description on the purchase order should list:

1) Items/services being purchased (e.g. office supplies, equipment repairs)

2) Authorized purchaser’s name

3) Dates of the three (3) month period (e.g. July, 2008 to September, 2008)

D. Schools and offices should maintain internal control over these blanket purchase

orders to prevent the lapsing of funds.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor for Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for the

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Frequently Asked Questions (FAQ) for SP 1245.

(a) FMS User Policy and Process Flow Guide

(b) WINFMS Help, Walk-through, Purchase Orders

Forms

The following forms are available for download from the FMS website:

http://fms.k12.hi.us/forms

SP 1246: Petty Cash Replenishment; Procedures

1. Purpose

To explain the procedures for replenishment of the school’s petty cash account.

2. Effective

Immediately.

3. Applies to

All School Administrative Services Assistants (SASA) and Account Clerks.

4. Procedures

A. A Petty Cash Voucher (Form PY-3) must be completed for each cash receipt being

reimbursed.

B. Reimbursement for purchases made with a charge card, personal check or by any

other non-cash method, should be processed through FMS as a “Reimbursement.”

C. Expenditures from the petty cash fund shall not exceed $50 in amount.

D. An original, itemized receipt marked “Paid” or on which “Cash Received’ is marked

must be attached to each Petty Cash Voucher.

E. The “Received By” and “Custodian” lines on the Petty Cash Voucher should not be

signed by the same person.

F. The petty cash vouchers must be submitted with the Approval to Pay Report (ATP)

1) Vendor Suffix 01 must be used with the school’s vendor code when processing

the payment so that the check is made payable to the Principal who is the

Custodian of the Petty Cash Fund.

G. Listed below are expenditures that are not allowed to be reimbursed through the

petty cash fund:

1) Items for personal use or consumption

2) Payments that should be processed through the State’s payroll system

3) Out-of-State Travel

4) Contract or other agreement-type payments

5) Cashing of personal checks and making personal loans

6) Questionable items – e.g. items that administrators and employees are expected

to pay for from personal funds or because expenditure is not business related:

a) Meals, coffee and refreshments and supplies

b) Leis and flowers

c) Greeting cards

d) Parking citation, space and towing charges

e) Umbrellas, rentals, briefcases, etc.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor for Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for the

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Frequently Asked Questions (FAQ) for SP 1246.

(a) FMS User Policy and Process Flow Guide

(b) FMS Forms Guide

Forms

The following form is available for download from the FMS website:

http://fms.k12.hi.us/forms.

SP 1247: Monitoring Status of Payments;

Procedure

1. Purpose

To request a copy of a canceled check or re-issue a check that was not received.

2. Effective

Immediately.

3. Applies to

All School Administrative Services Assistant (SASA) and Account Clerks.

4. Procedures

A. Complete a Status of Payment Request, Form FMS-PY7 (do not refer vendors to

the Vendor Payment Unit)

1) Information is on the Vendor Payment Inquiry screen in WinFMS.

B. Fax form to Vendor Payment Unit, fax number 586-3135.

C. After the request is researched, Vendor Payment Unit will send you a copy of the

canceled check with remittance advice or a reissued check if original check had not

been cashed.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor for Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for the

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1247

(b) FMS User Policy and Process Flow Guide

Forms

The following form is available for download from the FMS website:

http://fms.k12.hi.us/forms.

(d) FMS PY-7 Status of Payment Request

Status of Payment Request

School/Office

Yes

Documents Vendor Payment Unit

Vendor calls

checking on

the status of a

payment

Was

payment

procesed?

Sec/SASA/Clerk

processes

payment

Sec/SASA/

Clerk gets

check

information

from WINFMS

Sec/SASA/Clerk

completes a Status of

Payment Request

(Form PY-7) and

submits to Vendor

Payment Unit

Check write

section

researches

status of check

Was check

cashed?

Check write

section prints copy

of cancelled check

from BOH website

and remittance

information from

FMS website

Check write

section processes

a stop payment

and re-issues a

new check

Form PY-7

Check write

section sends

either document

and copy of Form

PY-7 to school/

office

Copy of cancelled

check and

remittance info.

New Check

Sec/SASA/Clerk

sends document

to vendor

Yes

SP 1248: Interest Charges on Late Payments;

Procedures

1. Purpose

To process interest charges caused by late payment of vendor’s invoices pursuant to

Section 103-10, Hawaii Revised Statutes.

2. Effective

Immediately.

3. Applies to

All School Administrative Services Assistant (SASA) and Account Clerks.

4. Procedures

A. The original invoice must be for interest charges only and not be combined with

charges for goods and services.

B. It must reference the invoice number, date goods/services received and amount of

the invoice which incurred the interest charge.

C. Schools and offices must check the FMS on-line Interest Inquiry Screen for the

system’s interest calculation to determine the amount to be paid.

D. Prepare a Direct Payment Form PY-1, attach the original and a copy of the invoice

and submit with the Approval to Pay Report (ATP).

1) The ATP Type should be “Invoice with Check” and the commodity code is

7301

E. The only exceptions to the above, whereby interest charges may be combined with

services on the same invoice are for utility charges from the following vendors:

1) AT & T

2) Board of Water Supply

3) Cingular

4) Gas Company

5) Hawaii Electric Light Co.

6) Hawaiian Electric Co.

7) Hawaiian Telcom

8) Maui Electric

9) Nextel

10) Sprint

11) T-Mobile

12) Verizon Wireless

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for the

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1248.

(b) Hawaii Revised Statutes, Section 103-10 (Payment of Goods and Services)

Forms

The following form is available for download from the FMS website:

http://fms.k12.hi.us/forms

(d) Interest Calculation Form

(e) Form PY-1, Direct Payment

SP 1249: Contract Payments; Required

Documents

1. Purpose

To list the required documents which are necessary to submit with the Approval to Pay

Report (ATP) for the three (3) different types of contract payment. For information on

the process of procuring the contracts, see the Procurement Section’s Contract

Guidelines in lotus notes.

2. Effective

Immediately.

3. Applies to

All School Administrative Services Assistants (SASAs) and Account Clerks.

4. Required Documents

A. Request For Exemption From Civil Service (Form 4)

1) The purpose of this form is to determine if there is an employer/employee

relationship with contractor.

a. Part I (ABC Test), if all of your answers are YES, process through

Vendor Payment as an independent contractor; if you answered any

question with a NO, process through Personnel as a temporary contract

employee.

b. Part II, (4 Point Test), if all of your answers are YES, you will need the

Civil Service Exemption (CSE) Form, if any of your answers are NO, the

CSE not required.

c. Enter all information relating to the contract.

d. Check off block for either Part III (CSE required and attached) or Part IV

(CSE not required),

e. The Administrator approves and dates form.

B. Contract Amount Less than $5,000

1) A purchase order (PO) noting the scope of service, dates of service,

compensation schedule and inclusive of all operational and travel expenses

in contract amount may be processed.

2) Subsequent payments – A copy of the PO with the Approval to Pay (ATP)

print date and time of initial payment noted, Form 4 and if applicable CSE.

C. Contract Amount $5,000 to $24,999

1) The original Contract for Goods or Services Based on Small Purchase

Procurement (Form 10-C).

2) Notate the ATP print date and time of initial payment and PO number on the

contract form.

3) Subsequent Payments – A copy of the Department of Education’s Contract

Form 10-C with the ATP print date and time of initial payment and PO

number noted, Form 4 and if applicable CSE.

D. Contract Amount $25,000 or more (original contract at the Procurement

Section)

1) A purchase order with CO contract number in approval number field, which

notes the scope of service, dates of service and compensation schedule from

CO contract or contract encumbered purchase order from the Procurement

Section.

2) Compensation schedule (if not listed on the PO)

3) Current, original (within 2 months) tax clearance certificate on final payment

4) Subsequent Payments – copy of PO and compensation schedule (if not listed

on PO)

E. Invoices

Original vendor invoices must list scope of service, dates of service, follow

compensation schedule or lump sum paid at end of contract, and include operational

and travel expenses (if from outside Oahu).

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor for the Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for the

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1249.

(b) FMS User Policy and Process Flow Guide.

Forms

The following form is available for download from the FMS website:

http://fms.k12.hi.us/forms.

(d) Form 4 – Request for Exemption from Civil Service

(e) Form 10C – Contract for Small Purchase of Goods or Services

(f) Civil Service Exemption Form

SP 1250: Procurement Card; Overview

1. Purpose

Provide an introductory overview of the Procurement Card (P-Card) process.

2. Effective

Immediately.

3. Applies to

All schools and offices.

Procurement Card Overview

The procurement card (p-card) is a MasterCard credit card issued by First Hawaiian

Bank to be used for official Department of Education purchases only. First Hawaiian

Bank was awarded the p-card bid through the DAGS State Procurement Office. The p-

card should be seen as an alternate form of purchasing from the traditional purchase

order method. P-cards save time as opposed to traditional purchase orders because

they do not require:

A. Posting of purchase orders; and

1) Posting of payments/ (ATP Approval to Pay) through the FMS (Financial

Management System). Vendors are normally paid within three days after

the transactions have been posted.

2) Many vendors are also not accepting purchase orders, and are requiring

the use of p-cards.

B. Procurement Code

P-card transactions are subject to the procurement code. Specifically, if the

department is participating in a bid or vendor list, purchases must be made from

these lists. Small purchase guidelines and formal bid guidelines are also

applicable and must be followed (See Procurement Icon in Lotus Notes).

C. Authorized Uses:

Currently the p-card can only be used for the following:

1.) Office and/or educational supplies;

2.) Inter island airfare;

3.) Inter island car rental; and

4.) USPS Click it Postage.

D. Unauthorized Uses:

Unauthorized uses are controlled through a coding system, called Merchant

Category Code (MCC). These codes are assigned to businesses as general

classifications to describe the primary nature of their business. For example,

liquor establishments would be block from p-card use. In general, other

restricted items include:

1.) Personal use

2.) Contracts

3.) Equipment

4.) Cash advances

5.) Food

6.) Other categories block by Merchant Category Codes

E. Who is Eligible to Use a P-Card, Delegation of use of the P-Card

In general, only educational officers authorized to sign purchase orders may

obtain p-cards. Since the educational officer’s name is on the p-card, only

he/she may conduct face to face transactions. He/she however may delegate

use of the card to subordinate employees for phone and internet transactions.

It is important that if a change in the cardholder’s employment status changes i.e.

retires, changes positions, resigns etc. that the Office of Fiscal Services School

Support Section be notified immediately so that the p-card can be cancelled. The

P-Card is issued to a specific person and school and is not transferable.

If a p-card is lost or stolen, First Hawaiian Bank should be notified immediately,

then the School Support Section.

F. How to Obtain a P-card

The following documents must be submitted to Office of Fiscal Services School

Support Section:

1) P-Card Request Form; and

2) P-Card Cardholder Agreement

3) P-Card training for both support staff and cardholders are also required.

4. SP Maintenance Responsibility

The School Support Section in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

5. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1250.

Forms

None

SP 1251: Procurement Card Purchasing and

Payment Process

1. Purpose

Provide an overview of the purchasing and payment process using the Procurement

Card (P-Card).

2. Effective

Immediately.

3. Applies to

All SASAs and Account Clerks.

Procurement Card Purchasing and Payment Process

The following are the steps when purchasing and paying with a Procurement Card (p-

card):

1.) A P-Card/Purchasing worksheet or Requisition order is filled out by requester

and approved by the cardholder.

2.) Purchase with P-card is made and supporting documentation (original invoice,

receipt, confirmation order) is obtained and turned over to SASA or account clerk.

3.) The transaction is posted on the PVS Net.

4.) Vendor is paid within two to three days by First Hawaiian Bank.

5.) Purchase is noted and supporting documents attached to the P-Card

Transaction Log, which is a chronology of purchases for a billing cycle.

6.) P-Card Transaction Log is checked against the charges listed on PVS Net.

7.) Cardholders log into the PVS Net system to update charges, if needed, made

against the default accounting code(sub organization codes, program id, object

code).

8.) Charges that do not belong to the schools may be disputed within the current

billing cycle, and up to roughly two successive billing cycles.

9.) Upon the close of the billing cycle which runs from the 15

of every month to the

of the next month, schools and offices have about five business days to

change accounting codes.

10.) About a week after the close of the billing cycle, schools/offices receive a Memo

Statement of P-Card activity from First Hawaiian Bank.

11.) The PVS Net system for the billing cycle is locked for further corrections upon

receipt of the Memo Statement.

12.) The PVS Net system data is interfaced in the FMS.

13.) One check is issued to First Hawaiian Bank from the department for all P-Card

charges and each cardholder’s program id’s are assessed. Program balances

should be checked from the on-line, FMS Allotment Status Report.

14.) Principal reviews and signs P-Card Transaction Log.

15.) Documents must be submitted by the end of the month to Vendor Payment Unit

for auditing. These documents must be submitted in this order: original P-Card

Transaction Log signed by Principal or Administrator, original FHB Memo

Statement, original invoices, confirmations, receipts and any supporting

approvals required for purchase.

4. SP Maintenance Responsibility

The School Support Section in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

5. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1251.

Forms

(b) P-Card Transaction Log

SP 1252: Procurement Card Controls

1. Purpose

To provide an overview on the internal controls for the Procurement Card (P-Card).

2. Effective

Immediately.

3. Applies to

All schools and offices.

Procurement Card Controls

The procurement card (p-card) has the following internal controls:

PVS-Net System Controls:

1.) Monthly credit limit.

The monthly credit limit is established when applying for a p-card to the School

Support Section, Office of Fiscal Services. If a school/office chooses to increase its

limit, it must first submit an application to the School Support Section.

2.) Velocity limit

A velocity limit will restrict the number of transactions per day. In general schools

and offices will not choose this restriction. The First Hawaiian Bank fraud protection

center however will flag any unusual activity regarding use of the card, and will either

contact the cardholder through a cellular telephone number, or will temporarily

suspend use of the p-card.

3.) Merchant Category Codes (MCC)

Businesses are registered and codified by the credit card companies by numerical

codes. These four digit codes classify their type of business, and are called

Merchant Category Codes. In order to minimize the potential for abuse, the

department has placed p-card restrictions on certain merchant categories.

4.) Individual Transaction Limits

Individual transaction limits can also be placed as a measure to prevent abuse. For

example, a p-card can have a self imposed individual transaction limit not to exceed

a dollar amount. Transactions that exceed this amount will be rejected. Normally,

most schools and offices do not place individual transaction limits.

Department’s Internal Controls:

5.) P-Card Purchasing Worksheet Approvals

All p-card transactions must be pre-approved by an administrator through a P-Card

Purchasing Worksheet. Pre-approval of all purchases will be a first line deterrent to

prevent abuse of the p-card.

6.) P-Card Transaction Log Approval

A P-Card Transaction Log is a chronological journal of all transactions for an

individual p-card. For each billing cycle, the cardholder must sign the Transaction

Log certifying that it is true and accurate, and that the charges were for departmental

purposes.

7.) Monthly P-Card Transaction Reviews

The Vendor Payment Section of the Office of Fiscal Services, reviews all p-card

transactions on a monthly basis. Schools and offices are required to turn in the

following documents by the ending of each month, in the following order:

1.) Approved P-Card Transaction Log;

2.) Original Memo Statement issued by First Hawaiian Bank;

3.) Original invoices, receipts, confirmation orders; and

4.) Original of any applicable approvals required for purchase.

1 4. SP Maintenance Responsibility

The School Support Section in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

2 5. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1252.

Forms

None

SP 1253: Procurement Card Change of

Accounting Codes

1. Purpose

To provide instructions on changing default accounting codes for charges from the

Procurement Card (P-Card).

2. Effective

Immediately.

3. Applies to

All schools and offices.

A default uniform accounting code (UAC) is identified on the Purchasing Card (p-card)

Request Form by the requester. A uniform accounting code has the following

information:

1.) Org ID = six digit code identifying school/office and sub-org

2.) Program ID = five digit code that identifies the fund source

3.) Object Code = four digit code that identifies category of purchase

A few days after a purchase is made with the p-card, the transaction will be posted in the

PVS Net system. Cardholders log into the PVS Net system and review their

transactions. Changes to the defaulted UAC is done on the Transaction Review screen.

Users may change the following fields:

1.) Sub-organization;

2.) Program Id; and

3.) Object Code

These fields can only be changed during and approximately five to seven days after an

active billing cycle. The billing cycle runs from the 15

of the month to the 14

of the

next month.

It is recommended that the charges be updated regularly, to avoid having to submit

correcting journal vouchers (Form AC-4) to the Accounting Office.

4. SP Maintenance Responsibility

The School Support Section in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

5. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1253.

Forms

None

SP 1254: Procurement Card Reports

1. Purpose

Describe reports that are available to manage the Procurement Card Program (P-Card).

2. Effective

Immediately.

3. Applies to

All schools and offices.

The Procurement Card (P-Card) Program has the following reports to help the

cardholder manage, review and prevent abuse of their p-card:

1.) EFRP 100C, P-Card Transaction Report

This report can be accessed through the FMS reports website at the following

address http://fms-reports.k12.hi.us/school-reports.htm. This report will

breakdown charges by program id and object code, and is available on a monthly

cycle.

2.) PVS Net Statement of Accounts

This report is from TSYS:Solutions’ web-based commercial card management

software called PVS Net. This report will provide a facsimile of the cardholder’s

First Hawaiian Bank Memo Statement, and will show a chronology of charges

from the beginning to the ending of a billing cycle. The DOE P-Card billing cycle

is the 15

of the month to the 14

of the following month.

3.) First Hawaiian Bank Memo Statement

Each cardholder receives a Memo Statement from First Hawaiian Bank about a

week after the close of a the billing cycle. The Memo Statement provides an

account summary and total as well as a detailed listing of account activity. The

Memo Statement is the official document of P-Card charges.

4.) FMS Status of Allotment Report

The Allotment Status Report is accessed on-line through the Financial

Management System (FMS). This report helps to monitor program (funding)

allotment balances. Allotment balances are updated when a transaction is

processed through the FMS. P-Card charges from the First Hawaiian Bank PVS

Net Software is interfaced monthly to assess charges to the various program ids.

Due to the monthly interface, accounts can be placed in deficit.

4. SP Maintenance Responsibility

The School Support Section in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

5. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1254.

Forms

None

SP 1261: Inter/Intra-Island Travel Procedures

1. Purpose

To describe the procedures for Inter/Intra-Island Travel for official business.

2. Effective

Immediately.

3. Applies to

Department of Education (DOE) employees and to all other persons representing the

Department on official business, regardless of the source of funding.

4. Procedures

The flow chart provides the chronological process for Inter/Intra-Island Travel.

5. Travel Allowances

A. Per diem allowance may be secured by way of a cash advance before travel, if

the employee is to be on travel status for more than one day (overnight). For

same day travel, reimbursement will be made after the travel is completed.

To process advance per diem on a timely basis, the Approval to Pay (ATP)

Report and FMS PY-2, Direct Payment/Invoice Form, must be in the

Vendor Payment Unit at least ten (10) working days prior to the trip. The ATP

Report must be RED tagged and labeled “Inter-Island Advance Per Diem.”

B. Claims for per diem or reimbursements of travel expenses must be submitted to

the Vendor Payment Unit within five (5) calendar days after completion of the trip

with the following documents:

1) Form 440, Statement of Inter/Intra-Island Travel Completed & Claim for

Allowable Travel Expenses. Submit in sets the original and one (1) copy.

2) Original airline boarding passes or e-ticket passenger receipts for round

trip flights.

3) Original itemized receipts for reimbursements.

C. No administrator or employee should be authorized to approve payment for

his/her own travel. The source of such approval must be the traveler’s

supervisor.

E. Subsistence allowance for trips when accommodations or lodging is made

available to the traveler without charges shall be as follows:

1) Breakfast – 8% of per diem (round to nearest dollar) = $ 6.00

2) Lunch – 12% of per diem (round to nearest dollar) = $10.00

3) Dinner – 20% of per diem (round to nearest dollar) = $12.00

F. When meals are furnished to the traveler in connection with an approved training

program or other program approved by the Superintendent, the administrator

may require adjustments to the per diem at the prescribed subsistence rates to

avoid duplicate payment for any meal, with the exception of BU 05 teachers.

G. Intra-Island (Overnight) Travel - In the case of trips within the same island (e.g.

Hilo to Kona, Wailuku to Hana) in which the principal/administrator considers it

necessary for the traveler to remain overnight at a work destination, per diem

may be allowed for intra-island (overnight) travel if approved by the

principal/administrator.

6. Other Allowable Travel Expenses

A. Inter-island airline tickets may be purchased directly from airlines for official

travel. The P-Card is the only accepted form of payment except for Pacific

Wings. Refer to Attachment 1, Inter-Island Scheduled Passenger and Vehicle

Carrier Quick Reference, for specific airline information.

B. Taxi fare to and from an airport for official travel will be allowed only when airport

shuttles are not available or accessible, when government transportation cannot

be economically obtained, and when private automobiles on a mileage basis

cannot be reasonably used. Taxis and private automobiles used on a mileage

basis should be shared by travelers whenever possible.

C. Rental of cars will be allowed where it would be impractical to obtain necessary

transportation in government owned vehicles or privately owned vehicles on a

mileage basis, and where public carriers are not available to the point to be

visited, Hawaii Administrative Rules (HAR), Section 3-10-10(d)(1). Car rentals

should not be used solely on the basis of convenience.

Reservations must be made online via the Panda State website or by phone

directly with Enterprise, Thrifty or Dollar Rent-A-Car. P-Card is the only accepted

form of payment. Should the traveler make reservations with any other car rental

agency, the Form 5, Request Exception from Purchasing from Price List, must be

completed, approved and submitted with the Form 440, Statement of Inter/Intra-

Island Travel Completed.

The size of the car shall be determined by the number of people in the party (1-2

passengers, compact car; 3-4 passengers, midsize car; 5 or more passengers,

mini-van).

No car insurance such as collision damage waiver, personal accident, personal

effects, or supplemental liability shall be purchased by an employee for in-state

car rentals as the State is self-insured. Employees choosing to purchase

supplemental insurance shall be responsible for the cost.

D. Excess lodging expenses – Employees receive either $80 or $90 per diem

depending upon their bargaining unit contract. Of this amount, $50 is for

lodging expenses. Whenever an employee’s commercial lodging expense

exceeds the applicable lodging allowance of $50, the employee is entitled to a

reimbursement of the difference between the two amounts multiplied by the

number of official travel days spent on commercial lodging.

When employees share hotel rooms, the cost shall be divided by the number of

persons occupying the room and, in most situations, would not incur any excess

lodging expense. When employees stay at a conference hotel where excess

lodging is incurred, no quotes are required. Employees must attach a copy of the

flyer listing the conference hotel to the Form 440, Statement of Inter/Intra-Island

Travel Completed.

If employees do not stay at the conference hotel because it may already be

booked or for other reasons, they must solicit three (3) quotes if they are claiming

excess lodging. The quotes must be recorded on the DOE Form 10B, Record of

Small Purchase. Employees should then make their room reservations at the

hotel with the lowest quote. If no excess lodging is being claimed, then quotes

are not required.

E. Other necessary and reasonable expenditures when incurred by the traveler in

connection with official business may be claimed for reimbursement, provided

they meet the stipulated conditions and are supported by original itemized

receipts, for example, registration fees and telephone or internet charges.

7. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services, is responsible for the

maintenance, administration, and questions regarding this SP.

. The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

8. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

A. Frequently Asked Questions (FAQ) for SP 1261.

B. Hawaii Administrative Rules, Title 3, Department of Accounting & General Services,

Chapter 10, Travel Rules

C. Hawaii Government Employees Association, Unit 02, Bargaining Agreement, Article

41, Travel.

D. Hawaii Government Employees Association, Unit 03, Bargaining Agreement, Article

44, Travel.

E. Hawaii Government Employees Association, Unit 04, Bargaining Agreement, Article

44, Travel.

F. Hawaii Government Employees Association, Unit 06, Bargaining Agreement, Article

24, Travel.

G. Hawaii Government Employees Association, Unit 09, Bargaining Agreement, Article

36, Travel.

H. Hawaii Government Employees Association, Unit 13, Bargaining Agreement, Article

45, Travel.

I. Hawaii State Teachers Association, Unit 05, Bargaining Agreement, Article VI,

Teaching Conditions & Hours Article M, Traveling Teachers

J. United Public Workers, Unit 01, Bargaining Agreement, Article 44, Travel.

K United Public Workers, Unit 10, Bargaining Agreement, Article 44, Travel.

Forms

The following forms are available for download from the FMS website

http://fms.k12.hi.us/forms.

(a) Form PY-1, Direct Payment/Invoice Form

(b) Form 440, Statement of Inter/Intra-Island Travel Completed & Claim for

Allowable Travel Expenses

The following forms are available for download from the Procurement Database on Lotus

Notes:

(d) Form 5, Request Exception from Purchasing from Price List

SP 1262: Inter/Intra Island Travel Procedural

Flow

1. Purpose

To describe the process for the submittal and routing of inter/intra-island travel forms.

2. Effective

Immediately.

3. Applies to

Department of Education (DOE) employees and to all other persons representing the

Department on official business, regardless of the source of funding.

100

4. Same Day Travel

A. School/Office

1) Upon the approval from your supervisor, refer to the Inter-Island

Scheduled Passenger and Vehicle Carrier Quick Reference Guide for

contact information on making flight reservations. Except for Pacific

Wings, the P-Card is the only accepted form of payment.

2) Should the travel require a rental car, reservations can be made online at

www.hawaiistatecars.com or by telephone directly with Enterprise,

Thrifty or Dollar Rent-A-Car. The P-Card is required when making

reservations.

3) Check that the traveler has a vendor code in the FMS system. If not,

complete and submit the Request for Vendor Information Form, FMS T1,

to the Vendor Payment Unit to establish a vendor code.

4) When the travel is over, complete and forward to the employee’s

supervisor the original and two copies of the Statement of Inter/Intra-

Island Travel Completed & Claim for Allowable Travel Expenses,

Form 440, within five (5) days after travel has been completed.

Attach the original boarding passes/e-ticket passenger receipts and any

other original itemized receipts for reimbursement, such as, airport

parking and gas for rental car. Rental car reservations made through the

www.hawaiistatecars.com website includes one full tank of gas.

5) Once the supervisor has reviewed and approved the Form 440, post the

payment for the per diem and/or reimbursement and print the Approval to

Pay (ATP) Report. Submit the ATP Report with the original and one (1)

copy of the Form 440 and attachments to the Office of Fiscal Services

(OFS), Vendor Payment Unit, in the following order:

a) Statement of Inter/Intra-Island Travel Completed, Form 440.

b) Original boarding passes/e-ticket passenger receipts.

c) Original receipts for reimbursement.

B. Office of Fiscal Services, Vendor Payment Unit

1) Review and audit the ATP Report, Form 440 and attachments for

compliance with Department guidelines, completeness and accuracy of

computation for per diem and reimbursement amounts.

2) Release payment for check write and forward copy of Form 440 to the

Payroll Unit for audit.

3) Return forms missing required information, signatures, original receipts or

airline boarding passes to the school/office for correction and re-

submittal.

5. Overnight Travel

A. School/Office

1) Upon approval from supervisor, refer to the Inter-Island Scheduled

Passenger and Vehicle Carrier Quick Reference Guide for contact

information in making flight reservations. Except for Pacific Wings, the

P-Card is the only accepted form of payment.

2) Should the travel require a rental car, reservations can be made online at

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www.hawaiistatecars.com or by telephone directly with Enterprise,

Thrifty or Dollar Rent-A-Car. The P-Card is required when making

reservations.

3) Check that the traveler has an established vendor code in the FMS

system. If not, complete and submit the Vendor Table Maintenance

Form, FMS T1, to the Vendor Payment Unit.

4) Requests for advance per diem may be processed for overnight travel

only. Complete the Direct Payment/Invoice Form, FMS PY-1, listing the

traveler’s name and address in the Vendor Name field and the

destination, dates, airline flight numbers, flight times and purpose of travel

in the Description field.

Submit the ATP Report and Form PY-1 with a RED tag labeled “Inter-

Island Advance Per Diem” stapled to the top left. ATPs for advance per

diem must be submitted to the Vendor Payment Unit ten (10) working

days prior to the trip.

5) When the travel is over, complete and forward to the employee’s

supervisor the Statement of Inter/Intra-Island Travel Completed & Claim

for Allowable Travel Expenses, Form 440 within five (5) days after travel

has been completed.

Attach the original boarding passes/e-ticket passenger receipts and any

other original itemized receipts for reimbursement, such as, airport

parking and gas for rental car. Rental car reservations made through the

www.hawaiistatecars.com website includes one full tank of gas.

If the employee did not stay at the listed conference hotel, also attach the

completed Record of Small Purchase, DOE Form 10B, and a copy of the

conference flyer.

6) Once the supervisor has reviewed and approved the Form 440, submit

the ATP Report with the original and one (1) copy of the Form 440 and

attachments to the OFS, Vendor Payment Unit, in the following order:

a) Statement of Inter/Intra-Island Travel Completed, Form 440.

b) Original boarding passes/e-ticket passenger receipts.

c) Original receipts for reimbursement.

d) DOE Form 10B and a copy of the conference flyer, if applicable.

7) The Statement of Inter/Intra-Island Travel Completed, form 440 and

original boarding passes/e-ticket receipt must be submitted to the Vendor

Payment Unit even if there is no reimbursement to be made to the

employee.

B. Office of Fiscal Services, Vendor Payment Unit

1) Review and audit the ATP Report, Form 440 and attachments for

compliance with Department guidelines, completeness and accuracy of

computation for per diem and reimbursement amounts.

2) Release payment for check write.

3) Return forms missing required information, signatures, original receipts or

airline boarding passes to the school/office for correction and re-

submittal.

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6. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor for the Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services, is responsible for the

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1262.

(b) Hawaii Administrative Rules, Title 3, Department of Accounting & General

Services, Chapter 10, Travel

Rules

Article 41, Travel.

(d) Hawaii Government Employees Association, Unit 03, Bargaining Agreement,

Article 44, Travel.

(e) Hawaii Government Employees Association, Unit 04, Bargaining Agreement,

Article 44, Travel.

(f) Hawaii Government Employees Association, Unit 06, Bargaining Agreement,

Article 24, Travel.

(g) Hawaii Government Employees Association, Unit 09, Bargaining Agreement,

Article 36, Travel.

(h) Hawaii Government Employees Association, Unit 13, Bargaining Agreement,

Article 45, Travel.

(i) Hawaii State Teachers Association, Unit 05, Bargaining Agreement, Article VI,

Teaching Conditions & Hours

Article M, Traveling Teachers

(j) United Public Workers, Unit 01, Bargaining Agreement, Article 44, Travel.

(k) United Public Workers, Unit 10, Bargaining Agreement, Article 44, Travel.

Forms

The following forms are available for download from the FMS website

http://fms.k12.hi.us/forms.

(l) Direct Payment/Invoice Form, FMS PY-1

(m) Vendor Table Maintenance Form, Form T1

(n) Statement of Inter/Intra-Island Travel Completed & Claim for Allowable Travel

Expenses, Form 440

The following form is available for download from the Procurement Database on

Lotus Notes:

(o) Record of Small Purchase, Form 10-B

(p) Request Exception from Purchasing from Price List, Form 5

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SP 1263: Inter/Intra Island Travel Frequently

Asked Questions

1. Purpose

To provide standard responses to common inter/Intra-island travel questions. Please

review this resource before inquiring via telephone.

2. Effective

Immediately.

3. Applies to

Department of Education (DOE) employees and all other persons representing the DOE

on official business, regardless of the source of funding.

Inter/intra-island travel for students and chaperones is covered in the Student Travel

Policy, Regulations and Procedures guide issued by the Office of Curriculum, Instruction

and Student Support Services (OCISS) in SP 2250.

4. Frequently Asked Questions

A. Travel Process

Q1) Am I required to solicit three written quotes for inter-island travel airfare?

A) No, quotes are not necessary for inter-island airfare. Tickets may be

purchased directly from the airlines. The P-card is the only accepted form

of payment for most of the airlines.

Q2) Can I request for an advance per-diem for inter-island travel?

A) Yes, but only if you are to be on travel status overnight for one or more

days. For same day travel (departing and returning on the same day),

per-diem will be paid after the travel is completed.

Q3) If I need to be at a workshop site by 8:00 a.m. to help set up and there

are no flights that morning to get me there in time, can I leave the night

before the workshop and receive a per-diem?

A) Yes, but the departure time should be scheduled within the second half of

the day according to the availability of flights so that the maximum per-

diem amount received should be 0.25 day. An explanation for the early

departure should be written in the “Purpose of Travel” section.

B. Car Rental/Transportation

Q1) Am I required to solicit three written quotes for car rental?

A) No, the State has contracted Enterprise, Thrifty and Dollar Rent-A-Car

companies to provide transportation for inter/intra-state travel. Travelers

must make reservations directly with one of these three vendors by going

online at www.hawaiistatecars.com. Payment is required to be made

with the P-card. This price list is applicable to all islands except for Lanai

and Hana, Maui.

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Q2) What if I need to rent a 15-passenger van?

A) Rentals of 15-passenger vans are not part of the price list.

Q3) Can I rent a Sports Utility Vehicle (SUV)?

A) A written justification approved by the administrator should be submitted

when renting a SUV.

Q4) Can I use the same rental car for both official business and personal use?

A) For travel within the State of Hawaii, travelers can not mix business and

personal use on the same rental. Employees should return the rental car

as soon as the official travel ends and pick up the next car with a new

rental agreement.

Q5) What kind of accident or liability insurance should I purchase when

renting a car for inter/intra-island travel?

A) State policy does not permit employees to purchase insurance when

renting cars for official business in the State of Hawaii. The State, not the

employee (driver), is liable for collision damages. Rental agreements

should name the State of Hawaii as the renter by signing the agreement

as “State of Hawaii,” (employee’s signature).”

Each rental agency has its own procedures for reporting an accident or

damages to its vehicles. Regardless of fault, the agency will give the

driver an estimated loss statement. Any claims received directly from the

rental agency should be reported to the Department of Accounting and

General Services (DAGS) Risk Management. Employees should not

respond to claims.

C. Hotel Lodging

Q1) What is “excess lodging?”

A) Employees receive either a $90 (BU 01, 02, 03, 04, 06, 09, 10 & 13) or

$80 (BU 05) per-diem depending upon the terms of their bargaining unit

agreement. Of this amount, $50 is for lodging. Whenever an employee’s

commercial lodging expense exceeds the $50 daily rate, the employee is

entitled to a reimbursement of the difference between the two amounts

multiplied by the number of official travel days spent on lodging. If

travelers share rooms, the cost shall be divided by the number of persons

occupying the room and, in most situations, would not incur any excess

lodging expense.

Q2) Do I need to solicit three quotes for excess lodging?

A) Yes, three quotes are required only if you are not staying at the

conference hotel because it may already be booked and you are unable

to find another hotel with a room rate that is $50 or less per night. Once

the daily rate exceeds $50 per night, then you will need to solicit three

quotes and select the hotel with the lowest quote. Quotes must be

recorded on the Record of Small Purchase, Form 10B. The Form 10B

must then be submitted with the Statement of Inter/Intra-Island Travel

Completed and Claim for Allowable Travel Expenses, Form 440.

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Q3) What if the lowest quote is not selected?

A) The employee’s reimbursement is based upon the lowest quote listed on

the Record of Small Purchase, Form 10B even if a higher quote was

selected and paid for.

D. Travel Completed

Q1) What is required to be submitted by the traveler with the Statement of

Inter/Intra-Island Travel Completed and Claim for Allowable Travel

Expenses, Form 440?

A) a) Original airline boarding passes/e-ticket passenger receipts for each

segment of the trip;

b) Original hotel folio showing a zero balance due for reimbursement of

excess lodging expenses, if applicable;

c) Original airport parking receipt listing the date, time in and time out.

Q2) Can the traveler claim reimbursement for tips?

A) No, the per-diem received is a specific allowance for each day to cover

the personal expenditures of a traveler, such as meals, lodging, tips,

laundry, and other necessary expenditures incident to travel.

Q3) What if the traveler cannot provide the original receipts?

A) The traveler must then contact the hotel or vendor to request for a

certified original receipt that is itemized. Reimbursements cannot be

processed without proper documentation. Schools/offices may contact

the Vendor Payment Unit for assistance.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for maintenance,

administration, and questions regarding this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Hawaii Administrative Rules, Title 3, Department of Accounting & General Services,

Chapter 10, Travel Rules.

(a) Hawaii Government Employees Association, Unit 02 Bargaining Agreement,

Article 41, Travel.

(b) Hawaii Government Employees Association, Unit 03 Bargaining Agreement,

Article 44, Travel.

(d) Hawaii Government Employees Association, Unit 06 Bargaining Agreement,

Article 24, Travel.

(e) Hawaii Government Employees Association, Unit 09 Bargaining Agreement,

Article 36, Travel.

(f) Hawaii Government Employees Association, Unit 13 Bargaining Agreement,

Article 45, Travel.

(g) Hawaii State Teachers Association, Unit 05 Bargaining Agreement, Article VI,

Teaching Conditions & Hours, Article M, Traveling Teachers.

106

(h) United Public Workers, Unit 01 Bargaining Agreement, Article 44, Travel.

(i) United Public Workers, Unit 10 Bargaining Agreement, Article 44, Travel.

Forms

(k) Form PY-1, Direct Payment/Invoice Form

(l) Form 440, Statement of Inter/Intra-Island Travel Completed & Claim for

Allowable Travel Expenses

(m) Form 10-B, Record of Small Purchase

SP 1264: Out-of-State Travel Policies

1. Purpose

To describe the policies for Out-of-State Travel for official business.

2. Effective

These policies are effective immediately, but are subject to change during times of

budget restrictions. In these situations, separate cost savings measures will be

established for out-of-state travel and distributed by the Superintendent.

3. Applies to

Department of Education (DOE) employees and to all other persons representing the

Department on official business, regardless of the source of funding.

Out-of-state travel for students and chaperones is covered in the Student Travel Policy,

Regulations and Procedures guide issued by the Office of Curriculum, Instruction and

Student Support Services (OCISS). See SP 2250.

4. Introduction

A. Approval is required for all official out-of-state travel for department personnel as

well as other personnel representing the DOE. Travel forms must be approved

and signed by both the Complex Area Superintendent (CAS) or Assistant

Superintendent (AS), and the Superintendent or the Deputy Superintendent prior

to the date of travel. Such travel shall be planned in advance and included in the

school’s or office’s budget.

Schools/offices shall not request for airline tickets or incur any travel-related

expenses until the approval of the Superintendent or Deputy Superintendent has

been received. Schools/offices shall not process payment for any travel-related

expense until the request has been cleared by the Office of Fiscal Services,

Vendor Payment Unit.

B. A traveler on official travel status would be eligible for the following

considerations:

1) Workers’ compensation coverage if injured while on official travel.

2) Legal representation if sued for actions alleged to have occurred while

acting within the scope of official duties during the approved travel. Legal

representation is not automatic and is determined by the Attorney General

on a case-by-case basis.

3) Accidental death benefits under the Employees’ Retirement System.

107

C. Whenever there is conflict between these rules and the provisions of a collective

bargaining agreement that is in effect, the provisions of the collective bargaining

agreement takes precedence; excluded employees under Chapter 89, Hawaii

Revised Statutes, shall receive the same application of such provisions as

employees included in the related bargaining unit.

5. Purposes of Out-of-State Travel

Out-of-state travel has been restricted to the following activities:

1. Travel mandated by the U.S. Department of Education for the federal program.

2. Travel paid with federal funds that is essential for the compliance and operation

of the federal program.

3. Travel for training outlined in a Professional Services Provider contract that is

essential for school turnaround.

6. Persons Traveling

In general, out-of-state travel shall be limited to administrative and professional staff

responsible for the development or administration of departmental policies and

programs. The individual selected to attend a conference or business meeting shall be

the most appropriate person from the standpoint of both program and job

responsibilities. Information gained from attending the conference shall be directly

related to that individual’s job in order to enhance work knowledge, productivity and

efficiency.

7. Frequency of Persons Traveling

Restraint shall be exercised in determining the number of trips allowed for each person

during any given year.

8. Number of Persons Traveling

The number of persons traveling shall be dictated by the subject matter of the trip itself

and by the availability of funds. More than one person may be permitted to attend

conferences, seminars, institutes and workshops, however, the maximum allowable

should be a “reasonable number” as determined by the merits of each conference and

as decided by the Complex Area/Assistant Superintendent and Superintendent.

9. Standards of Conduct

The State Ethics Commission has issued guidelines on the ethics and propriety of public

employees accepting trips financed by private business organizations. Hawaii Revised

Statutes, Section 84-11, Gifts, states “No legislator or employee shall solicit, accept, or

receive, directly or indirectly, any gift, whether in the form of money, service, loan, travel,

entertainment, hospitality, thing, or promise, or in any other form, under circumstances in

which it can reasonably be inferred that the gift is intended to influence the legislator or

employee in the performance of the legislator’s or employee’s official duties or is

intended as a reward for any official action on the legislator’s or employee’s part.”

Such trips shall not be extended with personal vacation or other types of leaves of

absence. Employees shall file a gifts disclosure statement with the State Ethics

Commission on June 30 of each year if gifts are received, directly or indirectly from one

source valued in excess of $200, whether the gift is in the form of money, service,

goods, or in any other form. If there are questions about such trips, please refer to the

State Ethics Commission’s website at www.state.hi.us/ethics/ or call 587-0460 for further

clarification.

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10. Collective Bargaining Agreements

Collective bargaining agreements contain articles on inter-state and out-of-state travel.

Employees should read their contracts, as applicable, in order to familiarize themselves

with information on per diem rates for meals and lodging, authorized travel times and

excess lodging allowances. See References, Resources, and Forms, Items (d) to (l).

Refer to the most current memorandum from the Office of Fiscal Services, Revised

Mileage and Per Diem Rates Chart for bargaining unit rates.

11. Funds Used for Travel

A. General Funds

General funds may be used to fund out-of-state travel costs per the

Superintendent’s memorandum dated June 4, 2007 on Interim Travel

Procedures.

B. Special Funds

Special funds may be used if the purpose of the special fund involves travel.

(Note: Most Special funded programs do not involve travel.)

C. Federal Funds

Federal funds may be used if the project proposal, allocation or budget

expenditure plan, for which the school/office received the fund, included such

travel.

D. Trust Funds

Trust funds may be used if the purpose of the trust fund involves travel. (Note:

Most trust funded programs do not involve travel.)

E. Private or Personal Funds

Private or personal funds may be used for official travel and would be considered

as “no cost” to the State. Completion and approval of the Travel Order Form (see

Form “n”) and Request for Out-of-State Travel (see Form “o”), Form 437 are

required for these privately funded trips to conduct official business due to liability

coverage.

12. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor for Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for maintenance,

administration and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

13. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1264.

(b) Travel Guidelines – Lotus Notes Database

Services, Chapter 10, Travel Rules

(d) Hawaii Government Employees Association, Unit 02, Bargaining Agreement,

Article 41, Travel

109

(e) Hawaii Government Employees Association, Unit 03, Bargaining Agreement,

Article 44, Travel

(f) Hawaii Government Employees Association, Unit 04, Bargaining Agreement,

Article 44, Travel

(g) Hawaii Government Employees Association, Unit 06, Bargaining Agreement,

Article 24, Travel

(h) Hawaii Government Employees Association, Unit 09, Bargaining Agreement,

Article 36, Travel

(i) Hawaii Government Employees Association, Unit 13, Bargaining Agreement,

Article 45, Travel

(j) Hawaii State Teachers Association, Unit 05, Bargaining Agreement, Article VI,

Teaching Conditions & Hours and Article M, Traveling Teachers

(k) United Public Workers, Unit 01, Bargaining Agreement, Article 44, Travel

(l) United Public Workers, Unit 02, Bargaining Agreement, Article 44, Travel

Forms

The following forms are available for download from the FMS website:

http://fms.k12.hi.us/forms.

(m) Form 437B, Out-of-State Travel Quotations Worksheet

(n) Form TOF, Travel Order Form

(o) Form 437, Request for Out-of-State Travel

(p) Form TA-1, Adjustments to Approved Out-of-State Travel

(q) Form 438, Statement of Out-of-State Travel Completed and Report of Expenses

(r) Form 438A, Calculation of Reportable & Taxable Per Diem

SP 1265: Out-of-State Travel Procedures

1. Purpose

To describe the procedures in requesting for Out-of-State Travel approval for official

business.

2. Effective

These procedures are effective immediately, but are subject to change during times of

budget restrictions. In these situations, separate cost savings measures will be

established for out-of-state travel and distributed by the Superintendent.

3. Applies to

Department of Education (DOE) employees and to all other persons representing the

Department on official business, regardless of the source of funding.

Out-of-state travel for students and chaperones is covered in the Student Travel Policy,

Regulations and Procedures guide issued by the Office of Curriculum, Instruction and

Student Support Services (OCISS). See SP 2250.

4. Procedures

The flowchart explains in detail the process for the request for out-of-state travel. Three

forms are required to request approval.

A. Form 437B, Out-of-State Travel Quotations Worksheet (Required) See Form (m).

Since there is no current price list of vendors for out-of-state travel airfare, hotel

and car rental, schools and offices are required to obtain three quotes by

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contacting travel agencies or viewing websites via the internet. All quotes must

be obtained and recorded onto the Form 437B on the same day since prices

fluctuate from day to day.

1) Airfare quotes must only be for the “authorized” travel. The lowest quote

must be selected. If not, a written justification is required on the form.

Should the traveler decide to deviate on a personal trip, the itinerary should

list a second quote for the “actual” travel. Any additional deviation cost must

be paid for by the traveler.

2) Hotel quotes are required only if the traveler is not staying at a listed

conference hotel and is claiming excess lodging. If no excess lodging is

being claimed, then quotes are not required.

3) Car rental quotes are required whenever renting a car for out-of-state travel.

If traveler is staying at the conference hotel, shuttle/taxi service should be

used in lieu of a rental car unless a justification is submitted.

B. Form TOF, Travel Order Form (Required) See Form (n).

The Travel Order Form is used to list the flight, lodging, transportation, cost

information and fund source for the trip and must be approved by the traveler’s

supervisor and Complex Area Superintendent or Assistant Superintendent.

C. Form 437, Request for Out-of-State Travel (Required) See Form (o)

The Form 437 is used to provide the purpose of the travel, reason and rationale

of why the trip should be taken and the benefits that will accrue to the

Department. It provides a breakdown of the source of funds for the trip and

determines the number of official per diem days allowed for the authorized travel.

D. Submittal of Form TOF, Form 437 and Form 437B

The original and four (4) copies of the TOF, Form 437 and Form 437B should be

submitted to the Complex Area Superintendent or Assistant Superintendent and

Superintendent’s office at least thirty (30) calendar days prior to the departure

date. Upon the Superintendent’s approval, a copy of the approved forms will be

scanned and emailed to the Complex Area Superintendent or Assistant

Superintendent’s office for distribution to the initiating school/office. The

Superintendent’s office will forward the original and three (3) copies of the forms

to the Office of Fiscal Services, Vendor Payment Unit for review. Exception:

Travel which is at “no cost” to the state does not require Vendor Payment Unit

clearance. The original and one (1) copy should be submitted to the Complex

Area Superintendent/Assistant Superintendent and Superintendent for approval.

Travel requests are processed by the Vendor Payment Unit on a first-in, first-out

basis, regardless of the date of travel. Late submittals to the Vendor Payment

Unit may not receive clearance in time for advance per diem checks to be

processed.

E. Form TA-1, Adjustments to Approved Out-of-State Travel See Form (p).

If there are significant changes to a trip after the TOF and 437 forms have been

approved and cleared, such changes must be submitted through the Form TA-1

and approved by the Complex Area Superintendent or Assistant Superintendent.

The Form TA-1 is required for the following changes:

1) Change in the person traveling.

2) Change in the purpose of the trip.

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3) Change in the dates of the trip.

4) Change in the itinerary.

5) Change in the source of funds or account codes.

6) Adding a cost that was omitted from the TOF and Form 437 (e.g.

registration fees, ground transportation, excess lodging costs.)

7) Increase in the cost of travel (including excess lodging costs) that

is more than the cost of one per diem day.

F. Minor Changes to Approved Travel

Minor increases in costs can be reported and explained on the Form 438,

Statement of Out-of-State Travel Completed and Report of Expenses, See Form

(q) that is submitted fifteen (15) days after completion of travel. These would

include minor increases in the cost of airfare, per diem, registration fees or

ground transportation.

G. Per Diem

A per diem is a specific allowance for each day to cover the personal

expenditures of a traveler, such as meals, lodging, tips, laundry and other

necessary expenditures incident to travel. A per diem allowance is paid only for

the time on official travel status.

1) Travel Time

The traveler is considered to be on travel status only during the time

when conducting official business away from their regular place of

business and while traveling to and from the place at which official

business is transacted. Travel status begins with departure of common

carriers from the island on which traveler’s regular place of business is

located and terminates upon the traveler’s return to that island.

2) Work Time

This is the time the traveler is performing the duties for which the travel

was approved. At the discretion of the traveler’s supervisor, professional

development leave (Bargaining Unit 05, Bargaining Unit 06) may be

considered work time.

3) Leave Time

A request for approval of out-of-state travel may include personal leave

time with official work time. Personal leave time includes vacation,

sabbatical leave, school intersession (winter, spring and summer),

weekends and holidays. Per diem is not paid for personal leave time

added at the beginning or end of an official travel.

The travel request must account for each day the traveler will be away on

the trip including any personal leave days.

4) Computation of Per Diem Days

In computing the per diem allowance, the calendar day from midnight to

midnight shall be the unit. Allowable claims for departure and return days

shall be in quarter day periods beginning at midnight, per Hawaii Revised

Statutes, Travel Rules and bargaining unit contracts. Forms 437, TA-1

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and 438 include a “Computation of Days” chart to assist when preparing

the forms. All calculations will be based on Hawaii Standard Time.

Departure/Return

Allowed on Day of

Times

Departure

Return

12:01am – 6:00am

1 Day

¼ Day

6:01am - Noon

¾ Day

½ Day

12:01pm – 6:00pm

½ Day

¾ Day

6:01pm - Midnight

¼ Day

1 Day

In order to account for travel that includes personal leaves, per diem shall

include travel time to and from the conference/business meeting.

5) Estimated Per Diem Allowance

The total travel days multiplied by the authorized Bargaining Unit per

diem rate shall be the traveler’s per diem amount for the trip. A reduced

per diem amount may be agreed upon and so noted in the signature

block of the Form 437. Should the travel request be approved at the

reduced amount, the traveler shall not seek recourse for additional

compensation upon completion of travel.

6) Advance Payment of Estimated Per Diem Allowance

The traveler’s school/office shall follow the Office of Fiscal Services,

Vendor Payment Unit’s procedures in obtaining advance per diem. When

the check is received, a copy should be made to assist in completion of

the Form 438, Statement of Travel Completed and Report of Expenses,

due fifteen (15) days after the trip has been completed. See Form (q).

H. Roles of Travelers and Administrators

1) Travelers

Travelers (initiators) have the responsibility to submit the Form 437B,

Out-of-State Quotations Worksheet, Travel Order Form (TOF), and Form

437, Request for Out-of-State Travel and Report of Expenses forms in

accordance with established procedures. Travelers must ensure that

sufficient documentation is attached for reviewers to determine if the

travel is appropriate.

2) Traveler’s Immediate Supervisor

As appropriate, the School Principal/Administrator/Director shall review

and sign the forms authorizing further processing for approval. This

authorization signifies that the supervisor agrees that:

(a) The purpose of the travel is an appropriate activity for the traveler.

(b) The traveler has permission to be absent from the DOE worksite

during the period of the trip.

determination.

(d) The request forms have been completed correctly.

(e) The requested travel is an appropriate use of the funds.

(f) There are sufficient funds to cover the total estimated travel cost.

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Should the supervisor deny this request, he/she must provide written

justification to be retuned with the forms to the traveler within ten (10)

calendar days of the request.

3) Funding Source Administrator

If the cost of the travel is to be paid by another school/office within the

Department, the request must also be approved and signed by the

administrator responsible for the funds. A memorandum signed by the

funding source administrator may be attached in lieu of routing the Form

437 for an approved signature.

4) Complex Area or Assistant Superintendent and Superintendent

A travel request authorized by the traveler’s supervisor shall be submitted

to the respective Complex Area/Assistant Superintendent and

Superintendent for approval. A request that has been approved and

signed:

(a) Signifies that it has been prepared in accordance with

these guidelines and that all required documentation is

attached.

(b) Authorizes the traveler to proceed with the conference

registration, hotel reservations, car rental and airline

bookings.

Should the Complex Area/Assistant Superintendent and/or

Superintendent deny the travel request, he/she must provide written

justification to be returned with the forms to the traveler within ten (10)

calendar days of the request.

5) Office of Fiscal Services (OFS), Vendor Payment Unit

Approved requests shall be routed to the Vendor Payment Unit for review

and clearance. This clearance:

(a) Signifies the calculations of estimated per diem and other costs

are correct.

(b) Authorizes the traveler to process requests for advance per diem,

registration fees and other travel costs.

Requests that are missing supporting documentation will be returned to

the respective district/state office for completion prior to processing for

clearance.

The Vendor Payment Unit is also responsible for entering all approved

travel requests into the Department’s travel database for reporting

purposes.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, for Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services, is responsible for the

maintenance, administration and questions regarding this SP.

114

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

1 References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP1265.

(b) Travel Guidelines – Lotus Notes

Chapter 10, Travel Rules

(d) Hawaii Government Employees Association, Unit 02, Bargaining Agreement,

Article 41, Travel.

(e) Hawaii Government Employees Association, Unit 03, Bargaining Agreement,

Article 44, Travel.

(f) Hawaii Government Employees Association, Unit 04, Bargaining Agreement,

Article 44, Travel.

(g) Hawaii Government Employees Association, Unit 06, Bargaining Agreement,

Article 24, Travel.

(h) Hawaii Government Employees Association, Unit 09, Bargaining Agreement,

Article 36, Travel.

(i) Hawaii Government Employees Association, Unit 13, Bargaining Agreement,

Article 45, Travel.

(j) Hawaii State Teachers Association, Unit 05, Bargaining Agreement, Article VI,

Teaching Conditions & Hours, Article M, Traveling Teachers

(k) United Public Workers, Unit 01, Bargaining Agreement, Article 44, Travel.

(l) United Public Workers, Unit 10, Bargaining Agreement, Article 44, Travel.

Forms

The following forms are available for download from the FMS website

http://fms.k12.hi.us

(m) Form 437B, Out-of-State Travel Quotations Worksheet

(n) Form TOF, Travel Order Form

(o) Form 437, Request for Out-of-State Travel

(p) Form TA-1, Adjustments to Approved Out-of-State Travel

(q) Form 438, Statement of Out-of-State Travel Completed and Report of Expenses

(r) Form 438A, Calculation of Reportable & Taxable Per Diem

SP 1266: Out-of-State Travel Required

Supporting Documents

1. Purpose

To provide an explanation of the required supporting documents for out-of-state travel

requests.

2. Effective

These required supporting documents are effective immediately, but subject to change

during times of budget restrictions. In these situations, separate cost savings measures

will be established for out-of-state travel by the Superintendent.

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3. Applies to

Department of Education (DOE) employees and to all other persons representing the

Department on official business, regardless of the source of funding.

Out-of-state travel for students and chaperones is covered in the Student Travel Policy,

Regulations and Procedures guide issued by the Office of Curriculum, Instruction and

Student Support Services (OCISS). See SP 2250.

4. Supporting Documents

A. Supporting documents are required to substantiate all requests for out-of-state

travel. It is the traveler’s responsibility to obtain documentation in advance in

order to submit the request for travel to the Office of Fiscal Services (OFS),

Vendor Payment Unit, thirty (30) days prior to the date of travel.

1) Requests for trips to conferences, workshops, seminars and business

meetings for professional improvement should include:

a) A copy of the conference program or agenda.

b) The brochure/flyer describing the purpose and/or activities of the

conference.

c) A copy of the completed registration form listing any pre-

conference programs and the total cost of the conference fees.

d) A copy of the designated hotels for the conference.

2) Requests for visitation to schools or other educational sites should

include copies of correspondence from the school/site to be visited

confirming the dates and times of the visitation.

3) Requests related to student or parent travel due to out-of-state placement

in an educational facility should include a copy of the appropriate

document that specifies the travel (e.g., IEP, hearing officer finding, or

court order.)

5. Reimbursement of Registration Fees Without Prior Approval

All costs of travel shall be requested and approved before the trip is taken. If a traveler

departs on a personal trip and then decides to attend an educational conference, all of

the costs related to the conference are the responsibility of the traveler. The only

exception is if the traveler feels the information obtained from the conference is critical to

the Department and would, therefore, substantiate a request for reimbursement of the

registration fees. The burden of proving criticalness is on the traveler. In these cases,

the traveler must submit a memo to his/her immediate supervisor with all of the pertinent

information together with a copy of the registration form and proof of payment.

The Travel Order Form (TOF), see Form (n), and Form 437, see Form (o), must be

completed, approved by the traveler’s supervisor and Complex Area or Assistant

Superintendent and forwarded to the Vendor Payment Unit for review. Once the

approved forms are returned to the school/office, the reimbursement can be processed

on Financial Management System (FMS) and submitted with the Approval to Pay (ATP)

to the Vendor Payment Unit.

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6. State Employees on Leave

Employees who are on leave (personal, sabbatical) or on intersession break (spring,

summer and winter) and are asked to attend out-of-state conferences to represent the

Department in an official capacity, must complete and submit the TOF and Form 437,

Request for Out-of-State Travel. This will ensure that the traveler is covered by workers’

compensation, legal representation, accidental death benefits under the employees’

retirement system, and other such benefits while on official travel status. While the

traveler is attending a function at the request of the Department, the time is considered

official travel and travel related costs may be claimed.

7. Trips That Combine Official Business and Personal Travel

Whenever possible, the traveler should obtain separate billings from travel agencies or

car rental agencies for any additional costs incurred for deviations in trips resulting from

personal travel. The added costs for these personal trips shall be paid by the traveler

using personal funds.

8. Employees Traveling with Spouses, Other Family Members or Friends

Only travel costs that relate to the official traveler shall be allowed. All travel costs such

as hotel, registration or ground transportation, incurred by other members traveling

together who are not on official business, will not be covered by the Department. Any

excess lodging claimed by the official traveler will be calculated on the basis of the room

cost divided by the number of persons occupying the room.

9. Trips Financed by Private Sources

On trips financed by private sources such as foundations or business organizations, if

sponsors renege on any part of their financial commitment, the Department will not make

up the shortage. The traveler must find other sources to cover the deficit. When

planning a trip financed by private sources, refer to Out-of-State Travel Regulations,

Item 4E, Standards of Conduct.

10. Double Payment for Travel Expenses

If a trip is financed by the Department and the traveler subsequently receives another

payment for any portion of the trip (such as sponsors paying for the hotel, meals or

airfare), such duplicate payments must be returned to the Department.

11. Allowable Travel Expenses

Aside from airfare and per diem costs, other expenses of a trip may be reimbursable

provided the expenditures are incurred as part of the official business and are supported

by original receipts. These would include ground transportation for traveling to and from

official business sites (e.g. bus fares, taxi fares, car rentals, shuttles and parking fees),

registration fees, baggage fees, copying charges, postage for mailing materials,

telephone and internet charges.

When claiming for bus, shuttle or taxi fares, the “to” and “from” destinations and dates

must be provided. For postage, copying and internet charges, provide a brief

justification. When claiming telephone charges, provide the purpose for the call.

Employees are entitled to one checked bag. Any additional fees, e.g. second bag,

special items, oversized, and overweight baggage are the responsibility of the traveler,

unless appropriate justification is provided that the additional fees are for official State

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business. It is the traveler’s responsibility to check with the respective airlines on

checked baggage requirements and fees.

12. Car Rentals

Travelers are required to obtain three (3) quotes from car rental agencies whenever a

car rental is required for out-of-state travel. Quotes must be documented on the Form

437B, Out-of-State Travel Quotations Worksheet, see Form (m), and submitted with the

Form 437, Request for Out-of-State Travel, see Form (o). The lowest quote must be

selected. The traveler will be responsible to secure the reservation with a credit card

and make payment upon return of the car. The traveler will be reimbursed upon

submittal of original receipts with the Form 438, Statement of Out-of-State Travel

Completed and Report of Expenses. See Form (q).

For car rentals, the size of the car should be consistent with the number of official

travelers (1-2 passengers, compact car; 3-4 passengers, midsize car; 5 or more

passengers, van)

The only insurance allowed to be purchased when renting a car for out-of-state travel is

the Collision or Loss Deductible Waiver (CDW or LDW) coverage. This is the only

coverage allowed for reimbursement.

Whenever possible, travelers renting cars for both business and personal use should

return the car after the official business is completed and check out a car for personal

use on a separate car rental agreement. If this is not possible, charges will be prorated

and reimbursed accordingly.

Only the designated driver should request approval for the car rental on the TOF and

Form 437. All expenses related to the use of the rental car (e.g. parking fees, toll

charges and gas) should be reported and claimed by the traveler who is the designated

driver. A traveler cannot be reimbursed for costs related to use of a rental car if the

approved TOF did not include the car rental.

13. Non-Allowable Travel Costs

Any travel expense that appears to be personal or social in nature and not related to the

conduct of the official business, such as hospitality hours, sightseeing tours or social

gatherings, will be considered personal expenses. These activities are deemed to be

non-official business and cannot be reimbursed with Department funds.

14. Excess Lodging Expenses

When an employee is required to travel out-of-state on official business, he/she shall be

provided with a daily per diem allowance rate as set forth in accordance with their

respective collective bargaining unit agreement. See References (d) to (l). Employees

may refer to the memo, Revised Mileage and Per Diem Rates Chart, sent to all

schools/offices annually by the Office of Fiscal Services for a listing of the current rates.

Employees receive either $130 or $145 daily per diem rate depending upon their

bargaining unit (BU) contract. Of this amount, $85 is for lodging expenses. Whenever

an employee’s commercial lodging expense exceeds the applicable lodging allowance of

$85, the employee is entitled to a reimbursement of the difference between the two

amounts multiplied by the number of official travel days spent on commercial lodging.

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When travelers share hotel rooms, the cost shall be divided by the number of persons

occupying the room and, in most situations, would not incur any excess lodging

expense.

When travelers stay at a listed conference hotel where excess lodging will be incurred,

no quotes are required. But if they do not stay at a listed conference hotel because the

conference hotels may be full, or for other reasons, they must solicit three (3) quotes if

they are claiming excess lodging. The quotes must be recorded on the Form 437B, Out-

of-State Travel Quotations Worksheet. See Form (m). Travelers should then make their

room reservations at the hotel with the lowest quote. Quotes are not required if no

excess lodging is being claimed.

Any anticipated excess lodging expense must be listed on the TOF for approval prior to

the trip. If the traveler inadvertently omitted it from the original travel request, the excess

lodging expense must then be requested on the Form TA-1, Adjustments to Approved

Out-of-State Travel, see Form (p), after the trip.

15. Review of Travel Requests

The burden of proof to justify a trip is on the requestor. Each school or office requesting

out-of-state travel should thoroughly review the request to assure compliance with

departmental regulations. The review should consider whether there is a more efficient

or effective way of providing staff development or training and if the benefit of the

requested trip is worth the cost.

16. Audit of Expenditures

Finally, the caveat should be noted that the Office of Fiscal Services, Vendor Payment

Unit, may disallow any expenditure deemed unwarranted or excessive which has been

incurred by the traveler.

17. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, for Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services, is responsible for

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

18. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Frequently Asked Questions (FAQ) for SP 1266.

(a) Travel Guidelines – Lotus Notes

(b) Hawaii Administrative Rules, Title 3, Department of Accounting & General

Services, Chapter 10, Travel Rules

Article 41, Travel.

(d) Hawaii Government Employees Association, Unit 03, Bargaining Agreement,

Article 44, Travel.

(e) Hawaii Government Employees Association, Unit 04, Bargaining Agreement,

Article 44, Travel.

119

(f) Hawaii Government Employees Association, Unit 06, Bargaining Agreement,

Article 24, Travel.

(g) Hawaii Government Employees Association, Unit 09, Bargaining Agreement,

Article 36, Travel.

(h) Hawaii Government Employees Association, Unit 13, Bargaining Agreement,

Article 45, Travel.

(i) Hawaii State Teachers Association, Unit 05, Bargaining Agreement, Article VI,

Teaching Conditions & Hours, Article M, Traveling Teachers.

(j) United Public Workers, Unit 01, Bargaining Agreement, Article 44, Travel.

(k) United Public Workers, Unit 10, Bargaining Agreement, Article 44, Travel.

Forms

The following forms are available for download from the FMS website

http://fms.k12.hi.us/forms.

(l) Form 437B, Out-of-State Travel Quotations Worksheet

(m) Form TOF, Travel Order Form

(n) Form 437, Request for Out-of-State Travel

(o) Form TA-1, Adjustments to Approved Out-of-State Travel

(p) Form 438, Statement of Out-of-State Travel Completed and Report of Expenses

(q) Form 438A, Calculation of Reportable & Taxable Per Diem

SP 1267: Out-of-State Travel Completed Report

1. Purpose

To describe the process for completing the Form 438, Statement of Out-of-State Travel

Completed and Report of Expenses.

2. Effective

These procedures are effective immediately, but are subject to change during times of

budget restrictions. In these situations, separate cost savings measures will be

established for out-of-state travel and distributed by the Superintendent.

3. Applies to

Department of Education (DOE) employees and to all other persons representing the

Department on official business, regardless of the source of funding.

Out-of-state travel for students and chaperones is covered in the Student Travel Policy,

Regulations and Procedures guide issued by the Office of Curriculum, Instruction and

Student Support Services (OCISS). See SP 2250.

4. Report of Out-of-State Travel Completed

A. Form 438, Statement of Out-of-State Travel Completed and Report of Expenses

All travelers returning from an approved out-of-state trip shall submit a report,

Form 438, Statement of Out-of-State Travel Completed and Report of Expenses,

see Form (m), within fifteen (15) calendar days after the trip has been completed

to the Office of Fiscal Services, Vendor Payment Unit.

Included on the Form 438 shall be a brief, concise summary of the trip in the

section, “Implications for Program Improvement for the State of Hawaii”. Specific

advantages, knowledge and information obtained from the trip that will benefit the

Department and State of Hawaii should be included in the report.

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The report shall be reviewed and approved by the Complex Area Superintendent

or Assistant Superintendent prior to submittal to the Vendor Payment Unit.

Travel reports submitted for which there is “no cost” to the State, will be approved

and returned to the initiating school/office for appropriate filing.

B. Payment of additional expenses and per diem

The amount of any per diem allowance due to the traveler and/or additional

reimbursements will be paid upon submittal of a signed and approved Form 438.

Claims for travel expenses for airfare, ground transportation, excess lodging,

registration fees and other allowable costs must be supported with the original

itemized receipts and supporting documents. Payments posted for travel

reimbursements must be printed on a separate Approval to Pay (ATP) Report

and labeled as “Travel” in order to expedite processing.

C. Form 438A, Calculation of Reportable and Taxable Per Diem

Effective July 1, 1990, the State of Hawaii is required by the Internal Revenue

Service (IRS) regulations to withhold taxes on per diem payments to employees

that exceed federally allowable amounts. To fulfill these regulations, Form 438A,

Calculation of Reportable and Taxable Per Diem, see Form (n) is used to

calculate the taxable amount reportable to the IRS and is submitted with the Form

438, Statement of Out-of-State Travel Completed and Report of Expenses, to the

Vendor Payment Unit.

Amounts taxable are dependent upon the federally allowable amount established

by the IRS each year for travel to low or high cost areas involving excess lodging.

As these rates change, the current information will be disseminated by the Office

of Fiscal Services, Operations Section, to all schools and offices through a

memorandum on an annual basis.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor of the Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services, is responsible for

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Frequently Asked Questions (FAQ) for SP 1267.

(a) Travel Guidelines – Lotus Notes

(b) Hawaii Revised Statutes, Title 3, Department of Accounting & General Services,

Chapter 10, Travel Rules

Article 41, Travel

(d) Hawaii Government Employees Association, Unit 03, Bargaining Agreement,

Article 44, Travel

(e) Hawaii Government Employees Association, Unit 04, Bargaining Agreement,

Article 44, Travel

121

(f) Hawaii Government Employees Association, Unit 06, Bargaining Agreement,

Article 24, Travel

(g) Hawaii Government Employees Association, Unit 09, Bargaining Agreement,

Article 36, Travel

(h) Hawaii Government Employees Association, Unit 13, Bargaining Agreement,

Article 45, Travel

(i) Hawaii State Teachers Association, Unit 05, Bargaining Agreement, Article VI,

Teaching Conditions & Hours, Article M, Traveling Teachers

(j) United Public Workers, Unit 01, Bargaining Agreement, Article 44, Travel

(k) United Public Workers, Unit 10, Bargaining Agreement, Article 44, Travel

Forms

The following forms are available for download from the FMS website

http://fms.k12.hi.us/forms.

(l) Form 438, Statement of Out-of-State Travel Completed and Report of Expenses

(m) Form 438A, Calculation of Reportable & Taxable Per Diem

SP 1268: Out-of-State Travel Procedural Flow

1. Purpose

To describe the process for the submittal and routing of out-of-state travel forms.

2. Effective

The procedural flow is effective immediately, but is subject to change during times of

budget restrictions. In these situations, separate cost savings measures will be

established for out-of-state travel and distributed by the Superintendent.

3. Applies to

Department of Education (DOE) employees and to all other persons representing the

Department on official business, regardless of the source of funding.

Out-of-state travel for students and chaperones is covered in the Student Travel Policy,

Regulations and Procedures guide issued by the Office of Curriculum, Instruction and

Student Support Services (OCISS). See SP 2250.

4. Step 1 – School/Office (Submit 30 Days Prior to Departure Date)

A. Form 437B, Out-of-State Travel Quotations Worksheet See Form (m).

1) Obtain three (3) quotes for airfare for the authorized (official) travel dates

and times only from travel agencies or internet websites. Quotes must be

obtained on the same day since prices fluctuate from day to day. The

authorized (official) travel dates are determined by the start date and time

and end date and time of the conference.

2) Obtain three (3) quotes for hotel, only if traveler is not staying at a

listed “conference” hotel AND claiming excess lodging.

3) Obtain three (3) quotes for car rental, if required.

Record quotes on form as required. Provide written justification if the lowest quote is not

selected and submit the form to the principal/administrator for approval. Attach form to

the Travel Order Form (TOF), see Form (n) and Form 437, Request for Out-of-State

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Travel, see Form (o) for submittal to the Complex Area/Assistant Superintendent and

Superintendent for approval.

For those travelers deviating on personal trips, obtain a second quote for the “actual”

travel. Any additional deviation cost must be paid for by the traveler.

B. Travel Order Form (TOF) & Form 437, Request for Out-of-State Travel

1) Complete the TOF, see Form (n) and Form 437, see Form (o). Information

can be obtained from the itinerary quote and conference schedule. Submit

the original and four (4) copies of the travel forms in sets to the Complex

Area/Assistant Superintendents for approval in the following order:

a) Travel Order Form (TOF)

b) Form 437, Request for Out-of-State Travel

c) Form 437B, Out-of-State Travel Quotations Worksheet

d) Itinerary quote

e) Registration form with cost information

f) Conference agenda/schedule

g) Conference hotel listing

C. Check that the traveler has a vendor code on the Financial Management System

(FMS). If not, then complete and submit the Form FMS T1, Vendor Table

Maintenance Form, see Form (s), to the Vendor Payment Unit to establish a

vendor code.

D. After receiving the Complex Area/Assistant Superintendent and Superintendent’s

approval, confirm final itinerary with the travel agency and process payment for

the airfare. Finalize registration and hotel accommodations with the traveler.

5. Step 2 – Complex Area or State Office

A. Review travel requests and forward the original and four (4) copies of the

approved forms to the Superintendent’s office.

B. If the travel request is not approved, provide a written justification and return the

forms to the school/office within ten (10) calendar days.

C. Upon receipt of an email notification from the Superintendent’s office, inform the

school/office of the approval/disapproval of the travel request.

6. Step 3 – Superintendent’s Office

A. Review and approve/disapprove travel request.

B. Scan and email a copy of the request to the Complex Area/Assistant

Superintendent. Approval authorizes the traveler to proceed with transactions

such as finalizing airline ticketing with travel agency, confirming conference

registration, and hotel accommodations.

C. Send the original and four (4) copies of the approved request to the Office of

Fiscal Services, Vendor Payment Unit, for review.

7. Step 4 – Office of Fiscal Services, Vendor Payment Unit

A. Enter the travel request into the Department’s Out-of-State Travel Log database.

123

B. Review request for compliance with Department guidelines and completeness

and accuracy of computation for per diem, excess lodging and total travel costs.

C. Stamp and initial reviewed and cleared travel request and return a copy to the

Complex Area/Assistant Superintendent. Retain the original and three (3) copies.

D. Return request to the Complex Area/Assistant Superintendent for lack of

documentation or signatures and update this information on the travel database.

8. Step 5 – Traveler & School/Office

Retain the following documentation required for completion of the Form 438, Statement

of Out-of-State Travel Completed and Report of Expenses, see Form (q):

A. Copy of advance per diem check.

B. Original out-of-state airline boarding passes/e-ticket passenger receipts.

C. Original inter-island boarding passes if traveling from a neighbor island.

D. Copy of purchase order listing payment numbers for registration fees.

E. Original itemized receipts for reimbursement of airfare, baggage fees, ground

transportation, excess lodging, internet access charges, educational materials

and other expenses which were approved on the TOF and Form 437.

9. Step 6 – Traveler & School/Office Upon Completion of Trip

A. Submit within 15 days the completed Form 438, Statement of Out-of-State Travel

Completed and Report of Expenses, signed by the traveler. Refer to Form (q).

Attach original airline boarding passes/e-ticket passenger receipts and original

itemized receipts for reimbursement. Submit the original and three (3) complete

copies to the Complex Area/Assistant Superintendent for approval.

B. Complete Form 438A, Calculation of Reportable & Taxable Per Diem, see Form

(r), only if travel was to a low-cost area and the traveler is claiming excess

lodging. Refer to the current rates memo disseminated annually to all

schools/offices by the Office of Fiscal Services, Operations Section. Submit the

original and three (3) copies attached to the Form 438. A copy must be given to

the traveler for use in the preparation of his/her personal tax return.

If there are significant changes to a trip from the approved TOF and Form 437, such

changes must be submitted through the Form TA-1, Adjustments to Approved Out-of-

State Travel Form, see Form (p), prior to the completion of the Form 438.

10. Step 7 – Complex Area or State Office

A. Review forms and approve Form 438.

B. Retain one copy and return the original and two (2) copies to the traveler’s

school/office for processing.

11. Step 8 – School/Office

A. If no reimbursement is claimed, forward the original Form 438 and Form 438A, if

applicable, to Office of Fiscal Service, Vendor Payment Unit.

B. If a reimbursement is claimed, post the payment and print an Approval to Pay

(ATP) Report. Submit the ATP Report with the original and one (1) copy of the

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Form 438 and Form 438A, if applicable, to Office of Fiscal Services, Vendor

Payment Unit.

The original and one (1) copy of the forms should be submitted in the following

order:

1) Form 438, Statement of Out-of-State Travel Completed and Report of

Expenses.

2) Original airline boarding passes/e-ticket passenger receipts.

3) Original itemized receipts for reimbursement of baggage fees, ground

transportation, excess lodging and other approved travel expenses.

4) Form 438A, Calculation of Reportable & Taxable Per Diem, if applicable.

12. Step 9 – Office of Fiscal Services, Vendor Payment Unit

A. Review and audit the ATP Report, Form 438 and Form 438A for compliance with

Departmental guidelines and completeness and accuracy of computation for total

travel cost and reimbursement amounts.

B. Release payment for check writing and forward a copy of Form 438A to the

Payroll Unit for audit.

C. Return forms missing required information, signatures, original receipts or airline

boarding passes to the school/office for correction and re-submittal.

13. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor, for Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services, is responsible for

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

14. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Frequently Asked Questions (FAQ) for SP 1268.

(a) Travel Guidelines – Lotus Notes

(b) Hawaii Administrative Rules, Title 3, Department of Accounting & General

Services, Chapter 10, Travel Rules

Article 41, Travel

(d) Hawaii Government Employees Association, Unit 03, Bargaining Agreement,

Article 44, Travel

(e) Hawaii Government Employees Association, Unit 04, Bargaining Agreement,

Article 44, Travel

(f) Hawaii Government Employees Association, Unit 06, Bargaining Agreement,

Article 24, Travel

(g) Hawaii Government Employees Association, Unit 09, Bargaining Agreement,

Article 36, Travel

125

(h) Hawaii Government Employees Association, Unit 13, Bargaining Agreement,

Article 45, Travel

(i) Hawaii State Teachers Association, Unit 05, Bargaining Agreement, Article VI,

Teaching Conditions & Hours, Article M, Traveling Teachers

(j) United Public Workers, Unit 01, Bargaining Agreement, Article 44, Travel

(k) United Public Workers, Unit 10, Bargaining Agreement, Article 44, Travel

Forms

The following forms are available for download from the FMS website

http://fms.k12.hi.us/forms

(l) Form 437B, Out-of-State Travel Quotations Worksheet

(m) Form TOF, Travel Order Form

(n) Form 437, Request for Out-of-State Travel

(o) Form TA-1, Adjustments to Approved Out-of-State Travel

(p) Form 438, Statement of Out-of-State Travel Completed and Report of Expenses

(q) Form 438A, Calculation of Reportable & Taxable Per Diem

(r) Form FMS T1, Vendor Table Maintenance Form

SP 1270: Automobile Allowances

1. Purpose

To explain how to submit a claim for reimbursement for mileage and parking fees. Rates

to be used to compute the claim are listed on the Mileage and Per Diem Rate chart

located on the FMS website. Travel on the employee’s island should be by the most

direct route possible and should not be done when phone calls, faxes, electronic mail or

letter would produce comparable results.

2. Effective

Immediately.

3. Applies to

All School Administrative Service Assistants (SASA) and Account Clerks.

4. Guidelines

A. Flat monthly allowances for the use of private automobiles on official business

may be applicable to the Superintendent, Deputy, Assistant and Complex Area

Superintendents, Executive Assistant and Board Executive Director.

1) The amount of the flat monthly allowance shall be adjusted

proportionately in case the employee has not used his/her car on official

business for more than a week because of vacation, sickness, or any

other cause.

2) Submittal of these claims should be done after the month has been

completed.

3) The total amount of the flat monthly allowance is taxable and reported as

wages-in-kind on the employee’s paycheck.

4) These employees have the option of processing mileage claims as stated

above or on a trip by trip basis as it is done for other employees. Once

an option is chosen, it cannot be changed.

B. Mileage Allowance – Assistant and Complex Area Superintendents, Principals

and Administrators may authorize employees to use privately owned vehicles on

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official business on a mileage allowance basis when publicly owned vehicles

from the Department of Accounting and General Services Central Motor Pool

Division are not available and/or not practical to use.

1) Current mileage rates are dependent on the existing bargaining unit

agreements.

2) An updated memo of the current rates is distributed as changes occur.

3) The Comptroller’s office issues a separate memo on a yearly basis listing

the current Internal Revenue Service (IRS) federally allowed rate.

C. To qualify for mileage allowance, employees must carry current no-fault

insurance as required by HRS, Chapter 294.

D. Mileage reimbursement is allowed for transportation from place to place as

required in the normal course of an employee’s or official’s performance of

assigned duties.

E. Transportation between the home and the regular place of business of an

employee is not considered official business, and no mileage or other

reimbursement is allowed for such transportation.

1) However, if an employee’s supervisor finds it more practical for the

employee to travel directly between home and a job site or other place of

official business, the employee may be reimbursed for miles between

home and the job site which are in excess of the miles normally traveled

between home and the regular place of business and claimed as “home

adjusted.”

2) No employee will be allowed mileage for traveling directly between home

and a job site if the miles traveled are less than the miles normally

traveled between home and the regular place of business.

F. Reimbursements for parking fees, including metered parking, and bus fare claims

are allowed when travel is being done in the performance of official duties.

1) Original itemized receipt listing the date of travel, time in and out must be

attached to the mileage form whether payment is by cash, check or

charge. No reimbursement can be claimed without an original receipt or

proof of payment.

2) For parking and bus fare reimbursements, record the total cash paid for

each trip on the mileage form under the “Parking Fees” column.

3) Reimbursements for parking and/or traffic citations due to employee

negligence are not allowed.

G. If travel occurs on an official workday, employees may be reimbursed for miles

traveled between home and the airport, which are in excess of the miles

normally incurred between home and the regular place of business.

1) Employees traveling on official business off island may elect to be

dropped off and picked up at the airport.

2) Mileage may be claimed for two round trips from home and adjusted

depending on whether it is a workday or non-workday.

3) All reimbursements for airport parking fees in conjunction with official

travel must be claimed on the Statement of Inter/Intra-Island Travel

Completed, Form 440 or on the Statement of Out-of-State Travel

Completed, Form 438.

H. Any person delegated with the authority to approve claims shall be responsible

for reviewing all claims for propriety prior to submission.

1) All mileage claims should be listed on a separate form for each month

and submitted to the Vendor Payment Unit within thirty (30) days

following the applicable month.

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2) If a mileage claim is submitted before the month has ended, it must

include a statement that no further mileage will be claimed for that month.

I. Mileage claims for use of mopeds and motorbikes are allowed as long as the

vehicles are insured for liability insurance purposes by the employee’s insurance

agent. The mileage allowance rate shall be one-half (1/2) of the rate for

automobiles.

J. Mileage claims are not allowed for social events such as Secretary’s Day or

retirement luncheons or dinners; the Public Schools of Hawaii Foundation dinner;

political rallies or fundraisers, and union-sponsored activities such as Teachers’

Institute Day workshops.

5. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor of the Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services is responsible for the

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Frequently Asked Questions (FAQ) for SP 1270.

(a) FMS User Policy and Process Flow Guide

(b) FMS Forms Guide on FMS website

(d) Rates – Mileage and Per Diem Chart

Forms

The following form is available for download from the FMS website:

http://fms.k12.hi.us/forms.

(e) FMS-PY2 – Personal Automobile Mileage Voucher on FMS website

SP 1280: Inter/Intra-Island Travel Policies

1. Purpose

To describe the policies for inter/intra-island travel for official business.

2. Effective

Immediately.

3. Applies to

Department of Education (DOE) employees and to all other persons representing the

Department on official business, regardless of the source of funding.

4. Introduction

A. Official travel means the trip has been approved by the traveler’s supervisor and

authorizes the traveler to journey inter/intra-island as a representative of the DOE. A

traveler on official travel status would be eligible for the following considerations:

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1) Workers’ compensation coverage if injured while on official travel.

2) Legal representation if sued for actions alleged to have occurred while acting

within the scope of official duties during the approved travel. Legal

representation is not automatic and is determined by the Attorney General on a

case-by-case basis.

3) Accidental death benefits under the Employees’ Retirement System.

B. Wherever there is a conflict between these rules and the provisions of a collective

bargaining agreement that is in effect, the provisions of the collective bargaining

agreement take precedence; excluded employees under Chapter 89, Hawaii Revised

Statutes (HRS), shall receive the same application of such provisions as employees

included in the related bargaining unit.

5. Purposes for Inter/Intra-Island Travel

A. The following policies on inter/intra-island travel are established as a guide for DOE

employees and/or others who must travel in the performance of their duties.

Inter/Intra-Island travel may be allowed for the following purposes:

1) Official DOE representation at meetings and/or functions.

2) Travel to conduct training activities.

3) Travel to perform duties directly related to the traveler’s position.

B. Inter/intra-island trips shall not be taken if the business can be accomplished

satisfactorily by correspondence, phone or video-conferencing.

C. Intra-island travel within the same island (e.g., Hilo to Kona, Wailuku to Hana) that

requires overnight absence, may be allowed with prior approval, if the

principal/administrator considers it necessary for the traveler to remain overnight at a

work destination. Travel on the same island not requiring overnight absence, does

not qualify as intra-island travel.

D. Inter/intra-island travel for students and chaperones is covered in the Student Travel

Policy, Regulations and Procedures Guide issued by the Office of Curriculum,

Instruction and Student Support Services (OCISS).

6. Travel Status

A. An employee or representative is considered to be on travel status only during the

time when conducting official business away from their regular place of business and

while traveling to and from the place at which official business is transacted.

B. Travel status begins with departure of common carriers from the island on which the

traveler’s regular place of business is located and terminates upon the traveler’s

return to that island.

C. A member of the Board, Commission or Council on travel status, whether

compensated or not, is subject to State rules and regulations on travel as in the case

with State employees.

7. Travel Routes

A. The travel route shall be the most economical and direct route available to and from

the point of business destination.

B. Travel tickets shall be for complete routes, including all direct connections. Any

charges related to travel not applicable to State business will be the responsibility of

the employee. This includes stopovers, personal side trips or any other routing

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impacting the lowest possible fare. Any specific airline preference that will increase

the cost of the fare shall be borne by the traveler.

8. Preferred Times of Travel

Official business and related travel shall be conducted, whenever practicable, within the

typical work week, Monday through Friday, and within the typical work day.

9. Means of Transportation

A. Schools/offices authorizing travel shall be sure that the means of transportation are

justified by the circumstances.

B. Travel shall be by the most economical means consistent with time availability and

urgency of the trip, unless otherwise justified.

C. Inter-island travel shall be by regularly scheduled transportation whenever available,

feasible, and otherwise appropriate. In selecting the means of transportation for

inter-island travel, schools/offices shall consider travel time and per diem costs in

determining the most economical means.

10. Allowable Travel Time Involving Air Transportation

A. Allowable travel time is the time necessary to travel by the most direct route to and

from the points specified in the approved travel plan or request, plus the time

necessary to conduct the required official business.

B. Every effort should be made to reserve completed travel schedules well in advance

to avoid delays at transfer points.

11. Travel Allowances

A. Per diem is a specific allowance for each day to cover the personal expenditures of a

traveler, such as meals, lodging, tips, laundry, and other necessary expenditures

incident to travel. A per diem allowance is paid only for time on official travel status.

B. The rate of per diem is based on the provisions of the collective bargaining

agreement. When accommodations or lodging is made available to the traveler

without charge, the principal/administrator shall prescribe a lower rate of per diem.

The per diem allowance shall be granted for time on travel status.

C. In computing the per diem allowance for overnight travel, the official time begins

sixty (60) minutes before the scheduled flight and ends upon the return to the

employee’s home airport. The calendar day (midnight to midnight) shall be the unit.

Allowable claims shall be in quarter day periods beginning at midnight, per Hawaii

Revised Statutes, Travel Rules and bargaining unit agreements.

D. In computing the per diem allowance for same day travel (depart and return on the

same day), employees shall use rates as set forth in accordance with their respective

collective bargaining unit agreement for inter/intra-island travel.

Employees may refer to the memo, Revised Mileage and Per Diem Rates Charts

that is sent annually to all schools/offices by the Office of Fiscal Services for a listing

of the current bargaining unit rates.

12. SP Maintenance Responsibility

The Claims Pre-Audit Supervisor in the Vendor Payment Unit, Operations Section,

Administrative Services Branch, Office of Fiscal Services, is responsible for the

maintenance, administration and questions regarding this SP.

130

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

13. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

A. Frequently Asked Questions (FAQ) for SP 1260

B. Hawaii Administrative Rules, Title 3, Department of Accounting & General Services,

Chapter 10, Travel Rules

C. Hawaii Government Employees Association, Unit 02, Bargaining Agreement, Article

41, Travel

D. Hawaii Government Employees Association, Unit 03, Bargaining Agreement, Article

44, Travel

E. Hawaii Government Employees Association, Unit 04, Bargaining Agreement, Article

44, Travel

F. Hawaii Government Employees Association, Unit 06, Bargaining Agreement, Article

24, Travel

G. Hawaii Government Employees Association, Unit 09, Bargaining Agreement, Article

36, Travel

H. Hawaii Government Employees Association, Unit 13, Bargaining Agreement, Article

45, Travel

I. Hawaii State Teachers Association, Unit 05, Bargaining Agreement, Article VI,

Teaching Conditions & Hours Article M, Traveling Teachers

J. United Public Workers, Unit 01, Bargaining Agreement, Article 44, Travel

K. United Public Workers, Unit 10, Bargaining Agreement, Article 44, Travel

The following forms are available for download from the FMS website

http://fms.k12.hi.us/forms.

L. Form PY-1, Direct Payment/Invoice Form

M. Form 440, Statement of Inter/Intra-Island Travel Completed & Claim for

Allowable Travel Expenses

The following form is available for download from the Procurement Database on Lotus

Notes.

N. Form 10-B, Record of Small Purchase

O. Form 5, Request Exception from Purchasing from Price List

SP 1281: Decaling; Guidelines for

1. Purpose

To provide a method of assigning a unique identification number to each inventory item.

2. Effective

Immediately.

3. Applies to

All Principals, Complex Area Superintendents, Assistant Superintendents, and all other

individuals responsible for accounting and internal control of fixed assets.

4. Decaling

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Tagging equipment with a decal provides a method of assigning a unique identification

number to each inventory item. All state equipment should be affixed with a decal tag or

other identification showing State of Hawaii ownership at the time of physical receipt.

This allows the item to be accounted for and identified in the inventory system and also

allows the identifying of stolen property, discourages theft, and simplifies physical

inventory. Grouped items less than $250 each need not be decaled.

A. Decals can be ordered through the State Procurement Office (SPO), Price List:

“STATE OF HAWAII Inventory Decals.” Approved decals are 1 ¾” long and

7/16” wide. Schools/offices should keep a log of decal tags ordered to maintain

numbering sequence.

B. Decals may not adhere permanently to some equipment due to the composition,

shape or contour of an item. A felt pen or painting the number on the equipment

is the recommended solution. For more permanent identification, an electric

engraver may be used.

C. Equipment transferred-in from another school or department which carries that

organization’s decal tag should be removed and replaced with the decal number

of the organization receiving the property.

5. SP Maintenance Responsibility

The Systems Accountant, Accounting Section, Accounting Services Branch, Office of

Fiscal Services is responsible for maintenance, administration, and questions regarding

this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Website for State Procurement Office for Decal SPO Price List

www.spo.hawaii.gov

SP 1282: Annual Physical Inventory

Verification—Reports and Deadlines

1. Purpose

To explain the various reports used for and the deadlines that must be met for the

annual physical inventory verification.

2. Effective

Immediately.

3. Applies to

Principals, Complex Area Superintendents, Assistant Superintendents, and all other

individuals responsible for the annual physical inventory verification.

4. Frequency

Required at least once every fiscal year in order to safeguard assets and maintain

appropriate fiscal accountability.

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5. Annual Physical Inventory Verification—Reports and Deadlines

Reports serve to ensure the items recorded in the Fixed Asset Property File physically

exist; determine whether unrecorded or improperly recorded transactions have occurred;

identify any excess, defective or obsolete equipment on hand; and maximize use of

equipment and minimize equipment loss.

A. Inventory reports will be printed as of January 31 and will be distributed in

February/March. Schools/offices will receive one copy of each of the following

reports:

1) Location and Detail Location Report, DAFMZ201. The report lists the

various locations and detail locations within one batch org where the

property is assigned. It is in alpha/numerical order with the location

description next to its corresponding number. The location and detail

location represents the building and room number, respectively.

2) Fixed Assets Inventory-Subschool Level Report, DAFMZ511. This report

provides a detailed listing of fixed assets by Location and Detail Location

for a Responsible Org Id. The report includes information such as

quantity, subclass description, acquisition date, original cost, fund source,

decal number, PO number, make, model, and serial number.

3) Fixed Assets Inventory-Subclass Report, DAFMZ513. The report

provides a detailed summary listing of equipment alphabetically by

subclass code. It provides information such as location code, quantity,

make, model, serial number, acquisition date, original cost, funding

source and decal number. It also provides numbers and total cost for

each subclass code.

4) Fixed Assets Hold File, DAFMZ517. Provides a listing of items that have

been paid for but not updated to the property file.

5) New Book Purchases Report, DAFMR560A.

6) New Furniture Report, DAFMR565A.

B. March-June: Schools/offices should conduct the physical inventory using the

DAFMZ511 and/or DAFMZ513 to verify against the property. The New Book

Purchases Report, DAFMR560A and New Furniture Report, DAFMR565A may

also be used to update the books and furniture inventory. Any discrepancies

discovered during the physical inventory should be promptly corrected.

C. June 15: Deadline for schools to submit to OFS-Inventory Unit updates for the

fixed asset property file. These updates will be reflected on the June 30

inventory reports.

D. June 30: Year-end inventory reports will be printed as of June 30. In July/August,

schools/offices will receive one copy of each of the following reports:

1) Detail and Location Report, DAFMZ201

2) Fixed Assets by Subclass Report, DAFMZ513

3) Fixed Assets Inventory-School Level Report, DAFMZ514

4) Report of Hold File Records, DAFMZ517

5) Archived Fixed Assets by Subclass Report, DAFMZ513A

6) Archived Fixed Assets Inventory Report-School Level, DAFMZ514A

7) Archived Fixed Assets Hold File Records, DAFMZ517A.

E. Updating School Textbooks/Library Books Inventory will be done annually. Since

books are inventoried as a group, only changes in quantity and value are updated.

The month of June is considered the best time to conduct a physical inventory of

books, as book shipments may be received in the fourth quarter and textbooks

may still be in use.

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To provide a more realistic unit book price and to have uniformity and consistency

in the department, unit book prices have been established as follows:

a. School textbooks and library books purchased by December 31,

1987 and not yet inventoried will use $6.00 as unit price.

b. Books purchased from January 1, 1988 will be inventoried as a

separate line item using $16.00 as the unit price.

c. Reference books such as encyclopedias will be carried at

acquisition cost.

F. During the month of August, schools/offices will be required to submit the Annual

Certification of Inventory to OFS-Inventory Unit. The certification form is located

on the last page of the Fixed Assets Inventory-School Level Report, DAFMZ514.

As required by Section 103D-1206, Hawaii Revised Statutes, the Department shall

prepare and file before September 16 of each year an annual inventory return of

state property in the possession, custody, control, and use of the Department of

Education. To meet this deadline, schools/offices must submit their Annual

Certification of Inventory to OFS-Inventory Unit by the specified August

deadline.

6. SP Maintenance Responsibility

The Systems Accountant, Accounting Section, Accounting Services Branch, Office of

Fiscal Services is responsible for maintenance, administration, and questions regarding

this SP.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

a. http://www.capitol.hawaii.gov/hrscurrent

b. http://fms.k12.hi.us/forms/

c. http://fms-reports.k12.hi.us/school-reports.htm

SP 1284: Disposal of Property—Procedures and

Process Flowchart

1. Purpose

To explain the fixed asset disposal process.

2. Effective

Immediately.

3. Applies to

All Principals, Complex Area Superintendents, Assistant Superintendents and all other

individuals responsible for the accounting and internal control of fixed assets.

4. Disposal Process Flowchart

This flowchart illustrates the disposal process from submitting the correct disposal form

to reviewing the completed transactions in the monthly web report, Fixed Assets

Transaction Report, DAFMC650.

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School wants to

dispose a fixed

asset from the

property file

DISPOSAL OF FIXED ASSETS

Is the Fixed

Asset $250 or

more?

Yes

Submit Form FMS

FA6 Request for

Property File Adj

Submit Form FMS

FA3 Request to

Dispose

Inventory Unit

reviews FMS FA6

and FMS FA3

School/Office

reviews the

monthly

DAFMC650 Fixed

Assets

Transaction report

for completed

transactions

OFS-CFO reviews

and approves FMS

FA3 disposal

requests

END

Inventory Unit

forward to school/

office disposal

documents

Disposal documents:

Original & copy of FMS

FA8 Certificate of Disposal

and copy of approved

FMS FA3

School disposes of

fixed asset per

approved disposal

application (FA3)

FMS FA8 is

reviewed by

Inventory Unit for

completeness

Disposals requested

on FMS FA3 with

completed FMS FA8

are deleted from the

property file by the

Inventory Unit

deletes FMS FA6

disposal

transactions from

the property file

School completes

the FMS FA8 and

submits original to

Inventory Unit

FMS FA6

FMS FA3

5. Disposal Process

A. If the item to be disposed is $250 and under, complete and submit the Request for

Property File Adjustment, FMS-FA6, to the OFS-Inventory Unit. The Inventory Unit

will review the request and process the disposal through FMS.

B. If the item to be disposed is above $250, complete and submit the Request to

Dispose, FMS-FA3, to OFS-Inventory Unit. The Inventory Unit will review the

request and submit it to the Assistant Superintendent and CFO, Office of Fiscal

Services, for approval.

C. Upon receipt of the disposal approval from the CFO, the school/office will be sent the

Certificate of Disposal, FMS-FA8 (original and copy) and a copy of their approved

FMS-FA3.

D. The school/office will physically dispose of the fixed asset as per their approved

disposal application.

E. After disposing of the fixed asset, the school/office will complete the original FMS-

FA8 and return it to OFS-Inventory Unit.

1) The FMS-FA8 must be completed by the school/office when the item has

been physically disposed of as approved on their disposal application. The

top half of the certificate is signed by the witness to the disposal who is a

person other than the head of the Department/Branch, the custodian of the

property, the person who maintains the inventory records or the person who

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supervises and is responsible for the proper operation of the activity in which

the property is located.

2) The second half of the FMS-FA8 is signed by the administrator/principal; the

custodian of the property. The same person shall not sign both sections of

the certificate.

F. The signed completed original FMS-FA8 must be sent to OFS-Inventory Unit. The

copy of the FMS-FA8 and the copy of the approved FMS-FA3 forms are kept on file

at the school/office.

G. Once the Inventory Unit receives the signed completed original FMS-FA8 from the

school/office, the Inventory Unit will process the disposal through FMS. If the

Inventory Unit does not receive the signed completed original FMS-FA8 from the

school/office, the item will not be removed from the property file even if the disposal

was approved.

H. A completed Report of Loss or Damage to State Property, Form E-9 must

accompany the disposal request when theft or vandalism is involved. Submit a

separate FMS-FA3 form for each completed Form E-9.

6. Fixed Assets Disposal Interface

This program interfaces with the FMS Fixed Assets property file to assist in the

completion of the fixed assets disposal request forms. The automated disposal request

forms must be submitted to OFS-Inventory Unit for normal processing.

A. The Disposal Interface may be found at the FMS homepage at

1) http://fms.k12.hi.us

2) Click on Web Application Portal (Local School, Fixed Assets Disposal, etc)

3) Scroll down and click on the Fixed Assets Disposal

4) Use your WINFMS sign on and password.

B. Step by step instructions can be viewed or printed:

1) At the FMS homepage, click on WINFMS Application Help (Quick Reference,

Walk-throughs, Trouble shooting, etc.)

2) Open the Walk-through folder

3) Open the Fixed Assets folder

4) Click on Disposal Web Application Tutorial

a. To print the instructions, click SAVE to desktop and print,

b. To view the instructions, click OPEN

7. Disposal of Archived items

To dispose of items that have been archived, you do not need to submit the form FMS-

FA3 or FMS-FA6. You should manually document the disposal on your archive report;

note the reason for and method of disposal, witness and date of disposal and then

dispose of the item in the proper manner.

8. Procedures for Disposal with the State’s Surplus Property Branch

The custodian responsible for the accountability of state property and desiring the

disposal of items with the State Surplus Property Branch must follow these procedures:

A. Prior concurrence should be obtained from the State Surplus Property Branch.

Prepare a form FMS-FA3 and indicate the Proposed Method of Disposal as “Surplus

Property Branch”.

B. Submit the completed form FMS-FA3 to OFS-Inventory Unit. The Inventory Unit will

review the request to dispose and submit it to the Assistant Superintendent and

CFO, Office of Fiscal Services for approval. When approval is received, the

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Inventory Unit will send a copy of the approved FMS-FA3 and the FMS-FA8 to the

school/office.

1) SPO Form 26 (formerly AGS Form 18) Transfer Property is not required for

disposal with the State’s Surplus Property Branch.

C. Upon receipt of the approved FMS-FA3 and the FMS-FA8, the school/office will:

1) Make a copy of the approved FA3 and send it together with the equipment to

State Surplus Property Branch.

2) Complete two (2) copies of FMS-FA8. The original FMS-FA8 will be

submitted to the Inventory Unit and the copy will be kept on file.

9. Procedures for Trade-In

Purchase order for new equipment with a trade-in must cite the approval number or a

note “pending approval from the Superintendent.” Prior to the payment, a FMS-FA3

should have been processed and approved for the equipment to be traded in.

10. Exception Handling of Classroom and Cafeteria Furniture

Disposal of classroom or cafeteria furniture which is part of a group asset under one

property number should be made on the form FMS-FA6, regardless of the cost. Items

that are inventoried individually (have separate property numbers) and costing $250 or

more should follow the normal disposal process.

11. Disposal of Books

Books and periodicals should be disposed of in the order listed:

1) Exchange or transfer among DOE schools as needed,

2) Sale-offers received only. State employees and members of their family are not

eligible,

3) Donate to a non profit organization, provided that it certifies that the books are

sold at public sale,

4) Send abroad to other countries desirous of such books, if need is known, and

5) Destroy and discard.

Any book or set of books costing $250 or more must have form FMS-FA3 approved

before disposal.

12. Special Conditions

State owned equipment cannot be sold, used as a traded in, destroyed, or otherwise

disposed of except upon approval by the Superintendent of the Department of Education

or designee. Prior to any disposal action, the responsible administrator must obtain an

approval from OFS-Inventory Unit.

A. State-owned equipment may not be sold to State employees or to members of their

families.

B. State-owned equipment may not be given, loaned or donated to any individual or

non-State organization.

C. Property approved for disposal may be disposed of at the school’s location or it may

be taken to a central disposal location at the school’s expense. Any markings or

decals indicating State of Hawaii ownership must be removed or eradicated prior to

disposal.

D. When equipment is disposed of by sale, the money received should be deposited to

the DOE Central Checking Account and remitted to the State Treasury through a

Collection Activity Report (CAR).

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1) The information should be entered on the Collection Activity Report to include

disposal approval number under the description field.

E. When approval is made by the Superintendent or designee to sell an item at a

certain price, no deviation will be made by the school.

F. Checks received from bidders should be made payable to the “Director of Finance,

State of Hawaii.” If checks are made payable to the school, the following restrictive

endorsement should be made:

FOR DEPOSIT ONLY WITH

THE DIRECTOR OF FINANCE

STATE OF HAWAII

(Name of School)

(Signed)

Principal

1) Money deposited to the State Treasury is not made available to the

schools for future use.

2) Others: Income derived from the sale of items purchased from federal

funds should be returned to the same federal fund. Also proceeds of sale

purchased from local school funds should be returned to the same school

fund.

13. Exceptions to the provision of approval prior to disposal

A. The continuing custody of equipment is considered detrimental to health, safety,

sanitation or public convenience.

B. Equipment is lost, stolen or destroyed by fire and other casualty. In such cases, an

after-the-fact application will be acceptable.

14. Cancellation of Approved (FMS-FA3) Request to Dispose

To cancel an item that has been approved for disposal by the Superintendent or

designee, submit a written request to Inventory Unit stating the reason for the

cancellation and include the following information:

a. FMS-FA3 approval number

b. Property Number

c. Sub Class title

d. Disposal approval number

e. Disposal approval date

15. SP Maintenance Responsibility

The Systems Accountant, Accounting Section, Accounting Services Branch, Office of

Fiscal Services is responsible for maintenance, administration, and questions regarding

this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

16. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

138

a. Frequently Asked Questions (FAQ) for SP 1284

b. http://fms.k12.hi.us/forms/

Link to SPO 26

c. www.spo.hawaii.gov/StateForms/SPOInt/ShowInternal.cfm

SP 1286: Transfers of State Property

1. Purpose

To explain the transfer process: Inter-departmental and Intra-departmental.

2. Effective

Immediately.

3. Applies to

Principals, Complex Area Superintendents, Assistant Superintendents, and all other

individuals responsible for the accounting and internal control of fixed assets.

4. Inter-Departmental Transfer:

Inter-departmental transfer is the transfer of equipment between state departments such

as Department of Education and the Department of Health. It is the Department of

Education’s policy that equipment be re-utilized within the DOE prior to transferring to

another department.

A. Procedures for Inter-Departmental transfer. The Request to Dispose, FMS-FA3 is

not required for the transfer of equipment between State departments.

1) Transfer Out to another State department. The losing school:

a) Obtains transfer approval from Complex Area office.

b) Prior concurrence should be obtained from the receiving department.

c) State Procurement Office (SPO) Transfer of Property, SPO-26 must be

completed in triplicate prior to the actual transfer.

Assign a transfer document number, i.e. 09-01, 09-02, fiscal year and

sequence number.

Complete and sign the “FROM” section of SPO-26 leaving the codes

blank (Dept., Div., Sub-Div., Island, and Fund).

Forward the original and a copy of SPO-26 to the gaining department

with the equipment being transferred.

Maintain a file for each pending transaction until the signed copy of

SPO-26 is received from the gaining department.

d) When the signed copy is received, complete the Property File Adjustment,

FMS-FA6 and submit together with a copy of SPO-26 to the Office of

Fiscal Services (OFS), Inventory Unit. This will be the supporting

documents for removing the item from the losing school’s property file.

2) Transfer In from another State department. The gaining school is responsible

for entering the item into the property file:

a) Receives transferred equipment from another state department with the

original SPO-26.

b) Complete and sign the “TO” section of the SPO-26 leaving the codes at

the top of the form blank (Dept., Div., Sub-Div., Island, and Fund). Send

the completed original to the Department of Accounting and General

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Services (DAGS), Inventory Management Office and a copy to the losing

department to acknowledge receipt of the transferred equipment.

c) Retain a copy of the SPO-26 as a backup when adding the item to the

property file.

d) No forms need to be submitted to OFS-Inventory Unit.

5. Intra-Departmental Transfer:

Intra-departmental transfer is the transfer of equipment from one school/office to another

within the Department of Education.

A. Types of transfer forms:

1) Inventory Report of Newly Purchased Items, ERFI 1000-A. It is a

combination of a hold file report and transfer form, sometimes called the

central buyer transfer form.

2) Mass Transfer Request, FMS-FA2A. All items in one location are transferred

to another responsible org id/batch org number or to another location code

within the same school.

3) Request to Transfer, FMS-FA2B. Transfer one or more items between two

different batch orgs.

B. Procedures for Intra-Departmental Transfer. The forms FMS-FA3 and SPO-26 are

not required for Intra-Departmental Transfers.

1) Transfer Out. The losing school:

a) Prepares transfer form in triplicate.

b) Retains a suspense copy and forwards to the gaining school the original

and one copy of the transfer form with the equipment being transferred.

c) Replaces suspense copy after signed copy from gaining school is

received.

2) Transfer In. The gaining school:

a) After receiving the transfer form and equipment from the losing school,

complete and sign the “TO” Section of the transfer form as required.

b) Forward the completed original transfer form to OFS-Inventory Unit and

send a copy to the losing school.

c) Upon receipt of the completed original transfer form, OFS-Inventory Unit

will complete the transfer by updating the property file in FMS.

d) The school can recall the property number and verify whether the transfer

was completed or reference the monthly web report, Fixed Assets

Transaction report, DAFMC650.

C. For central buyers transferring equipment/furniture to schools:

1) Complete the Request to Transfer section of the ERFI1000-A (bottom half of

the form). Complete the Transfer From: D/O, Batch Org, Losing School/Unit

and have it signed and dated by your Administrator. Complete the Transfer

To: D/O, Batch Org, Gaining School/Unit.

2) Send the completed original ERFI1000-A to OFS-Inventory Unit for

processing. The Inventory Unit will transfer the property from the central

buyer’s hold file to the gaining school’s property file.

3) If the equipment/furniture was not initially delivered to the school, send the

equipment/furniture with a copy of the ERFI1000-A to the school.

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4) Gaining school must complete the property file information for the transferred

in equipment/furniture. The monthly web report DAFMC650 may be

referenced to determine when the transfer was completed by the Inventory

Unit.

6. If the item to be transferred was archived from the Hold File or the Property File:

A. To transfer to another location within the same batch org, document the change

manually on your archive report.

B. To transfer to a different batch org:

1) If the subclass code is blank and the item should not have been archived, enter

the fixed asset into the property file using the Add Other Fixed Asset-process.

Once the item has been updated to the property file, complete the FMS-FA2A or

the FMS-FA2B. Forward the request to the receiving school/office for their

approval. The receiving school/office will then send the completed original

transfer form to the Inventory Unit for processing.

2) If the subclass code is blank and the item should be archived, the losing school

would fill out the FMS-FA2A or the FMS-FA2B. The item should not be updated

to your property file; the request to transfer will be your manual documentation of

the transfer. The losing school will send the original request to transfer to the

gaining school and the gaining school should update the item to their property file

even if it will be archived at the end of the fiscal year. This update to the property

file will allow the item to appear on at least one fixed asset report. No document

needs to be sent to the Inventory Unit.

7. SP Maintenance Responsibility

The Systems Accountant, Accounting Section, Accounting Services Branch, Office of

Fiscal Services is responsible for the maintenance, administration, and questions

regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

8. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

A. Frequently Asked Questions (FAQ) for SP 1286

B. http://fms.k12.hi.us/forms/

C. Website for Form SPO 26 Transfer of property

http://www4.hawaii.gov/StateForms/SPOInt/ShowInternal.cfm

SP 1287: Off-Site Use of Property Form

1. Purpose

To provide accountability of State property when authorized staff members wish to use

state property at home or outside the school grounds for State/school activities.

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2. Effective

Immediately.

3. Applies to

Principals, Complex Area Superintendents, Assistant Superintendents, and all other

individuals responsible for the accounting and internal control of fixed assets.

4. Fixed Asset Sign Out Form

A fixed asset sign out form should be completed and kept on file prior to the releasing of

state property. If the item is stolen or damaged, please refer to SP 1370 Risk

Management Services. Be aware of the Hawaii Revised Status (HRS), Chapter 487N,

that requires Security Breach of Personal Information be immediately reported to the

legislature.

5. SP Maintenance Responsibility

The Systems Accountant, Accounting Section, Accounting Services Branch, Office of

Fiscal Services is responsible for the maintenance, administration, and questions

regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

SP 1288: Motor Vehicles—Registration, Junking

and Other Procedures

1. Purpose

To describe the various motor vehicle procedures.

2. Effective

Immediately.

3. Applies to

Principals, Complex Area Superintendents, Assistant Superintendents, and any other

individuals responsible for the accounting and internal control of motor vehicles.

4. New Vehicle Registration

A. To register a new vehicle, submit the following documents to the Office of Fiscal

Services (OFS), Inventory Unit:

1. Certificate of Title. Do not sign off on the Title. The Inventory Unit will

have an authorizing administrator for the Department of Education (DOE)

sign the Title.

2. If the vehicle purchased from a dealership is brand new, an Application

for Registration, form CS-L(MVR) 1 (REV. 7/01) should be signed by the

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DEALER ONLY. Schools/offices should not sign the Application for

Registration.

a. Only CITY AND COUNTY OF HONOLULU Application for

Registration will be accepted. Department of Motor Vehicle

(DMV) will not be able to process applications for other counties in

the State of Hawaii.

b. On the back of the application, the signature line for the registered

owner(s) should be left blank.

c. If the vehicle purchased from the dealership is pre-owned, the

Inventory Unit will complete the Application for Registration.

d. If registering a van or bus, please provide the carrying capacity

information (number of passengers) to the Inventory Unit.

3. Motor Vehicle Inspection Certificate.

4. A Certificate of Measure from a certified company may be required if the

vehicle was not purchased from a dealership. Call the Inventory Unit to

confirm requirement.

5. Submit a check for $6.00 made payable to the City & County of Honolulu

for the state license plates for each vehicle you are registering. Separate

checks should be made for each vehicle.

6. Submit a check made payable to the Department of Education (DOE) for

motor vehicle decals:

Department of Education 2 per car

For Official Use Only 2 per car

State of Hawaii seal 2 per car

Postage

Call the Inventory Unit for current prices.

7. Odometer reading.

8. Inform the Inventory Unit if additional insurance coverage is desired.

B. Basic No Fault Insurance is provided through the State Self Insurance program

and includes the personal injury protection/no fault, and personal damage to the

other vehicle if the State employee driving is at fault. Refer to SP 1370 Risk

Management Services for coverage and accident reporting information and driver

exclusion.

C. Additional insurance coverage. In addition to the basic no-fault coverage

provided through the State Self Insurance program, the following insurance may

be purchased at an additional cost. Schools/offices should contact the Inventory

Unit for current premium cost.

1) Comprehensive/Collision Insurance Coverage. Provides coverage if the

car is stolen or vandalized. It also covers physical damage to the car if it

was in an accident.

2) Fire/Theft Insurance Coverage.

3) Claim payments will not exceed the actual cash value (ACV) of the

covered vehicle regardless of the contractual amounts owed on a lease

agreement. The ACV is obtained by averaging the blue book value and

market sales on comparable vehicles.

D. MAXIMO System. All DOE registered vehicles will be entered into the MAXIMO

system. Schools/offices that register a vehicle with the DOE are required to

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access the MAXIMO system and complete the vehicle information. Reference

MAXIMO Standard Procedures.

E. All DOE registered vehicles must also be entered into the FMS Fixed Asset

Property File. Fixed Asset Transfer and Disposal procedures apply to vehicles.

5. Duplicate License Plates (License plates lost or stolen)

After reporting the theft to the police, submit your request to the Inventory Unit for

duplicate license plates. Request should include the following:

A. License Plate Number (old)

B. Check for $6.00 made payable to City & County of Honolulu for new plates

6. Duplicate Registration (Registration lost or stolen)

Request to the Inventory Unit should include the following:

A. License Plate Number

7. Junking of Vehicle

Request to the Inventory Unit should include the following:

A. Completed Request to Dispose form, FMS FA3

B. License Plates

C. Certificate of Registration, if available

D. Odometer Reading, if available

E. If towing is required (Oahu only), using the school/office letterhead, provide

authorization to the tow company to enter the school/office property to tow the

vehicle away. Include the contact person’s name and phone number.

8. Transfer of Vehicle within DOE

Complete the Request to Transfer, FMS-FA2B and submit to the Inventory Unit.

9. Personal Use

A. Complete the Department of Accounting and General Services (DAGS) form,

Application for Personal Use of State-Owned Vehicle, AGS-PU-1 (Rev. 03/06).

Leave the Department Head’s Signature and the Comptroller’s Signature lines

blank. The Inventory Unit will secure these signatures.

B. Submit the completed form to the Inventory Unit.

C. Upon approval of the application, the applicant will be sent the Motor Vehicle

Permit for personal use of the vehicle and a copy of the Comptroller’s

Memorandum explaining the “commuting valuation rule.” This commuting

valuation rule as allowed by the Internal Revenue Service (IRS) Regulation

Section 1.61-21(f) values the commuting use of a State owned vehicle and the

amount is includible in compensation as a fringe benefit.

1) As in prior years, the State of Hawaii will not withhold income taxes on the

computed fringe benefit amount. Social Security and Medicare taxes will

be withheld, as required by law.

2) Taxability of Personal Use of State Automobiles, Form BP-10, must be

filed by the employee semi-monthly to the OFS-Payroll Unit to report any

personal use of an employer-provided vehicle.

10. Motor Vehicle Loss

All automobile claims will be reported to and handled by the Department of Accounting

and General Services (DAGS) Risk Management Office. See SP 1370 Risk

Management Services.

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A. If the vehicle is not repairable, to remove the vehicle from the property file,

submit the Request to Dispose, FMS-FA3 to the Inventory Unit. The Inventory

Unit will process the vehicle for “junking” with DMV and remove it from the

property file.

1) Submit request and necessary documents for junking of vehicle. See #7.

Junking of Vehicle.

11. SP Maintenance Responsibility

The Systems Accountant, Accounting Section, Accounting Services Branch, Office of

Fiscal Services is responsible for maintenance, administration, and questions regarding

this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

12. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1288

(b) Comptroller’s Memorandum No. 2006-01

Comptroller’s Memorandum No. 2009-03

http://www.hawaii.gov/aarc/cm/index_html

Forms

Motor Pool Branch, Application for Personal use of State-owned Vehicle

(d) Taxability of Personal Use of State Automobiles, Form BP-10(needs to be link to

the form in Payroll—form not yet created as of 1/31/09)

(e) City and County of Honolulu form

a. Application For Registration, form CS-L(MVR) 1 (rev 7/01)

SP 1289: Inventory Forms

1. Purpose

To identify the different inventory forms used to ensure the recording of fixed assets in

the Financial Management System (FMS) are properly documented.

2. Effective

Immediately.

3. Applies to

Principals, Complex Area Superintendents, Assistant Superintendents, and any other

individuals responsible for the accounting and internal control of their school/office fixed

assets.

4. Forms

A. Add Other Fixed Asset Hold File Update, FMS-FA1

To add a fixed asset item to FMS that was either donated, or purchased outside

of FMS.

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B. Mass Transfer Request, FMS-FA2a

To document the transfer of all items from a single location code to another batch

organization (org)/responsible org id/location code and to provide the information

required to data enter the transfer. If the transfer is within the same batch org,

the school/office can enter the transfer into the system; no Form FA2a needs to

be submitted to the Inventory Unit.

C. Request to Transfer, FMS-FA2b

To document individual items being transferred to a different batch

org/responsible org id.

D. Request to Dispose, FMS-FA3

To request disposal of items from the property file that is valued at $250 or

more.

E. Request to Dispose (Continuation), FMS-FA3 A

This form is self explanatory.

F. Location/Detail Location Table Maintenance Form, FMS-FA4

To add, delete or make changes to a location or detail location code.

G. Request for Property File Adjustment, FMS-FA6

To request the disposal of items under $250 or to request property file

changes in cost, fund source, acquisition method, received date, etc.

H. Report of Loss or Damage to State Property, Form E-9

To report the burglary, theft and vandalism of a fixed asset item.

I. Application for Personal Use of State Owned Vehicle, Form AGS-PU-1

To request the approval to store state owned vehicles at an employee’s

residence. This is normally used for the driver’s education program vehicles

to protect vehicles from vandalism.

J. State of Hawaii, Transfer of Property, Intra and Inter Departmental, SPO-26

To transfer state-owned property between state departments. This form may

be found at the State Procurement Office website, Quicklinks, Forms for

State Agencies.

5. SP Maintenance Responsibility

The Systems Accountant, Accounting Section, Accounting Services Branch, Office of

Fiscal Services is responsible for the maintenance, administration, and questions

regarding this SP.

6. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

A. http://fms.k12.hi.us/forms/

B. http://www.spo.hawaii.gov/

SP 1301: Local School Account Audits (Non-

Appropriated); Description of

1. Purpose

To describe how state-wide audits, of the Non-Appropriated Local School Accounts by

the Audit Division of the Department of Accounting and General Services (DAGS), are

conducted.

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2. Effective

Immediately.

3. Applies to

Principals, Complex Area Superintendents, personnel in the school offices responsible

for the Local School Accounts.

4. Authority

Authority to conduct this type of audit resides in Section 40-83, Hawaii Revised Statutes,

which authorizes the comptroller to examine and audit books of accounts kept by any

public school in connection with school fees and all other moneys collected by these

schools. The Audit Division of DAGS maintains its organizational independence in

accordance with Section 3.27, Independence Standards, Government Auditing

Standards.

5. Background

Each Public/Charter school receives an advance from the State’s General Fund to

establish its petty cash fund, used by the school to pay for small purchases. In addition,

the school receives non-appropriated cash collections for student fees, field trip

collections, fundraising revenues, library book sales and in some cases, investment

income. These cash collections are deposited into the school’s non-appropriated, local

school bank checking account held outside the State Treasury. Also, the school

receives appropriated lunch collections, which are deposited daily into the DOE’s School

Lunch Collection Account. As part of the statewide internal controls, the State

Comptroller is required by statute to examine and audit these funds collected and

managed by the school.

6. Scope, Objective and Methodology of the Audit

The audits are conducted to determine the school’s compliance with the requirements of

the DOE’s FMS User Guide, with respect to the petty cash fund, cash on hand, and cash

in bank of the school’s Non-Appropriated Local School Fund. The audit is conducted in

accordance with auditing standards generally accepted in the United States of America

and the standards applicable to financial audits contained in Government Auditing

Standards, issued by the Comptroller General of the United States.

The Audit Division’s staff will interview appropriate personnel, review the requirements of

the DOE’s FMS User Guide, and document their understanding of the established

accounting procedures and internal controls in place during the audit period to gain an

understanding of the school’s procedures in processing financial transactions.

7. Scheduling of the Audit

The Internal Auditor will receive a list of schools to be audited by the DAGS Audit

Division. The schools will be notified of the audit year to be examined and the

approximate dates of the audit. The DAGS Auditors will then contact the school directly

to request selected documents to be available for the audit, as well as to arrange the

specific dates when the DAGS Auditors plan to perform the audit.

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8. What to Expect after an Audit

When the audit is complete, the DAGS Audit Division will prepare an Audit Report and

submit the report to the Superintendent of Schools. A copy of the Audit Report is sent

to the Internal Auditor for follow-up.

A. The Internal Auditor will send the Audit Report and a formal letter from the

Superintendent to the school requesting that the school submit a corrective

action plan for each finding on a specified due date. Forms for the corrective

action plan will also be provided.

B. The Principal shall review the Audit Report with the staff in charge of the Local

School Account and discuss the audit findings.

C. The Principal and the staff shall decide on the corrective action plan for each

audit finding.

D. The Staff shall document the corrective action plan on the provided forms and

submit the plan to the Internal Auditor by the specified due date.

E. A copy of the corrective action plan document is then forwarded to the DAGS

Audit Division, the Superintendent, the Assistant Superintendent of the Office of

Fiscal Services, and the School Support Section.

F. The Complex Area Superintendent shall ensure that the school prepares,

submits and properly implements the corrective action plan.

9. SP Maintenance Responsibility

The Internal Auditor in the Office of Fiscal Services is responsible for maintenance,

administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) reference page for this SP may provide

standard responses to common questions when posted. Please review this resource

before inquiring via telephone.

10. References, Resources and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1301

(b) HRS, Section 40-83, Audit of Public School Accounts

SP 1310: Procurement of Goods

1. Purpose

To ensure that goods are procured according to all applicable procurement laws, rules,

and regulations.

2. Effective

Immediately.

3. Applies to

Superintendent, Deputy Superintendent, Assistant Superintendents, Complex Area

Superintendents, Directors, and School Principals who have been delegated

procurement authority.

4. Definitions

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Practicable and Advantageous shall be given ordinary dictionary meanings.

Practicable means what may be accomplished or put into practical application.

Advantageous means a judgmental assessment of what is in the DOE's best interest.

The use of competitive sealed bidding may be practicable, that is, reasonably possible,

but not necessarily advantageous, that is, in the DOE's best interest. Advantageous

situations may include determinations based on product/service availability, delivery

schedule, or special discounts, etc. Advantageous does not necessarily mean the

lowest price.

Procurement means buying, purchasing, renting, leasing, or otherwise acquiring any

good, service, or construction. The term also includes all functions that pertain to the

obtaining of any good, service, or construction, including description of requirements,

selection and solicitation of sources, preparation and awarding of contracts, and all

phases of contract administration.

5. Introduction

Goods refers to all property, including but not limited to equipment, equipment leases,

materials, supplies, printing, insurance, and processes, including computer systems and

software, excluding land or a permanent interest in land, leases of real property, and

office rentals.

The procedure for selecting a vendor will depend on many factors, including cost and

type of good(s) being purchased. See Reference (a).

6. Procurement of Goods that DO NOT Require Assistance from Procurement &

Contracts Branch (PCB)

A. Goods that are exempt from the Procurement Law

Goods that are exempt from the Procurement Code are items that are available

from multiple sources but procurement by competitive means is neither

practicable nor advantageous to the DOE. For a complete list of goods exempt

from the procurement law, see References (b) and (c). In these cases, the items

are declared exempt from procurement guidelines. Regardless of the total cost,

procurement of exempt goods is not subject to procurement rules.

B. Goods that are available from the DOE or State Procurement Office (SPO)

Price/Vendor List

Certain goods are available from a DOE or SPO price/vendor list. See

Reference (d). Price/vendor lists allow the DOE access to a Vendor’s best price

for the goods listed, for the duration that the price/vendor list is in effect. In

return, the DOE makes a commitment to purchase all of its requirements of the

goods listed from that Vendor. There is no dollar limit for purchases made from a

price/vendor list.

A complete listing of SPO price/vendor list can be viewed at:

http://www2.hawaii.gov/priceapps/ShowPrice.cfm

C. Goods that are less than $25,000

Goods that are less than $25,000 are considered a small purchase procurement.

See Reference (e). The small purchase process allows schools and offices the

flexibility to obtain goods expeditiously without having to comply with a

competitive procurement process.

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Small purchase procedures require competitive price quotes and a determination

of best value prior to award.

The DOE Small Purchase Guidelines:

Expenditures with an estimated total cost that

is less than $5,000

Purchase from the best available

source.

Expenditures with an estimated total cost that is

at least $5,000,

but less than $15,000

Insofar as it is practicable and based

on the specifications, adequate and

reasonable competition of no fewer

than three quotations (not

necessarily written) shall be solicited.

Expenditures with an estimated total cost that is

at least $15,000,

but less than $25,000

Insofar as it is practicable and based

on the specifications, adequate and

reasonable competition of no fewer

than three written quotations shall

be solicited.

School/Office Responsibilities:

1) Solicit and document small purchase quotations by completing DOE Forms 10A

and 10B, Quotations & Record of Small Purchase. See Forms (n) and (o).

2) Consider all factors, including but not limited to price, quality, warranty and

delivery then select the vendor with the most advantageous quotation (not

necessarily the lowest price).

3) Maintain a procurement file. All quotations received shall be recorded and

placed in a procurement file. The file may contain procurement documentation

(quotations, record of small purchase), purchase documentation (purchase order

worksheet, purchase order), and payment documentation (Approval to Pay).

The file must contain written justification when an award is made to other

than the vendor submitting the lowest price.

The file must also contain written justification when three quotations are

required, but are not obtained (e.g., insufficient sources, sole sources,

emergencies).

CAUTION: DO NOT PARCEL

Purchases shall not be parceled by dividing the purchase of same, like, or related items

of goods into several purchases of smaller quantities during any twelve month period to

evade statutory competitive procurement processes.

NOTE: SITUATIONS IN WHICH ONLY ONE VENDOR CAN PROVIDE THE GOODS

When there is only one source available for the purchase of goods totaling less than

$25,000, schools and offices must follow the small purchase procedures and document

that it is a sole source on the DOE Form 10B. See Form (o). For more detailed

instructions, see Reference (k), pages 23-24.

7. Procurement of Goods that Require Assistance from PCB

A. Chief Procurement Officer (CPO) Exemptions

Schools and offices may also request an exemption from the Procurement Code

when the CPO determines in writing that the good is available from multiple

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sources, but for which procurement by competitive means is neither practicable

nor advantageous to the DOE. Schools and offices must contact the PCB for

assistance in this area.

B. Exception from Price/Vendor List

If the product on the price/vendor list does not meet school or office needs,

complete and submit DOE Form 5, Request Exception from Price List or DOE

Form 6, Request Exception from Travel Related Services Price List to PCB. See

Forms (p) and (q).

C. Procurement of Goods Totaling $25,000 or More

Procurement of goods totaling $25,000 or more requires strict adherence to one

of the following procurement methods:

Sole Source Procurement - $25,000 or more, see Reference (f), or

Competitive Sealed Bids for Goods (IFBs) - $25,000 or more, see Reference

(g), or

Competitive Sealed Proposals for Goods (RFPs) - $25,000 or more, see

Reference (h), or

Multi-Step Competitive Sealed Bids - $25,000 or more, see Reference (i), or

Emergency Procurement - $25,000 or more, see Reference (j).

For more detailed descriptions on the different procurement methods mentioned

above, see Reference (k), pages 19 through 23.

School/Office Responsibilities

1) Complete and submit DOE Form 18, Request for Procurement Services to

the PCB. See Form (r).

2) Describe or specify the goods to be purchased.

3) Identify the source of funds for the purchase.

PCB Responsibilities

1) Determine the appropriate procurement method to purchase the goods upon

receipt of DOE Form 18.

2) Provide administrative guidance to the school or office during the

procurement process.

8. Payment for Goods

A. Goods that are exempt from the procurement law

School or office shall issue a purchase order. Purchase order must contain the

following information:

Applicable HRS exemption (i.e., “Exempt from Chapter 103D, HRS, pursuant

to §103D-102.”),

Applicable HAR exemption (i.e., “Exempt from Chapter 103D, HRS, pursuant

to section 3-120-4(b), Hawaii Administrative Rules”), and

The exact HRS or HAR exemption number.

B. Goods that are available from the DOE or SPO Price/Vendor List

School or office shall issue a purchase order. Purchase order must contain the

exact price/vendor list number in the approval field.

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C. Goods that are Less than $25,000

School or office shall issue a purchase order.

D. CPO Exemptions

School or office shall issue a purchase order. Purchase order must contain the

exact exemption number assigned. Schools and offices must contact PCB for

assistance.

E. Exception from Price/Vendor List

School or Office shall issue a purchase order. Schools and offices must contact

PCB for assistance.

F. Procurement of Goods Totaling $25,000 or More

Schools and offices must contact PCB for assistance.

9. SP Maintenance Responsibility

The Procurement and Contracts Director in the PCB of the Office of Fiscal Services is

responsible for maintenance, administration, and questions regarding this SP.

10. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms. Click anywhere below to

access the linked page.

(a) Hawaii Revised Statutes, Chapter 103D (Procurement Code)

(b) Hawaii Revised Statutes, Section 103D-102(b) (Procurement Exemptions)

(d) Hawaii Administrative Rules, Section 3-121-6 (Procurement via Price List)

(e) Hawaii Administrative Rules, Subchapter 8, Chapter 3-122 (Small Purchase)

(f) Hawaii Administrative Rules, Subchapter 9, Chapter 3-122 (Sole Source))

(g) Hawaii Administrative Rules, Subchapter 5, Chapter 3-122 (Comp Sealed Bids))

(h) Hawaii Administrative Rules, Subchapter 6, Chapter 3-122 (Comp Sealed

Proposals)

(i) Hawaii Administrative Rules, Subchapter 6.5, Chapter 3-122 (Multi-Step Comp

Sealed Bids)

(j) Hawaii Administrative Rules, Subchapter 10, Chapter 3-122 (Emergency

Procurement)

(k) Guidelines for Procurement and Contracting

(l) Guidelines for Procurement and Contracting, Flowchart – Simple Steps to

Procurement

(m) Guidelines for Procurement and Contracting, Matrix – Procurement of Goods

Forms

(n) DOE Form 10A, Written Quotations for Small Purchase

(o) DOE Form 10B, Record of Small Purchase

(p) DOE Form 5, Request Exception from Price List

(q) DOE Form 6, Request Exception from Travel Related Services Price List

(r) DOE Form 18, Request for Procurement Services

Note: Some linked addresses may be accessible only from within the DOE’s internal

network.

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SP 1320: Procurement and Contracting for

Construction

1. Purpose

To ensure that construction projects are procured according to all applicable

procurement laws, rules, and regulations.

2. Effective

Immediately.

3. Applies to

Superintendent, Deputy Superintendent, Assistant Superintendents, Complex Area

Superintendents, Directors and School Principals who have been delegated

procurement authority.

4. Definitions

Construction means the process of building, altering, repairing, improving, or

demolishing any public structure or building, or other public improvements of any kind to

any public real property. The term includes the routine operation, routine repair, or

routine maintenance of existing structures, buildings, or real property.

Procurement means buying, purchasing, renting, leasing, or otherwise acquiring any

good, service, or construction. The term also includes all functions that pertain to the

obtaining of any good, service, or construction, including description of requirements,

selection and solicitation of sources, preparation and award of contracts, and all phases

of contract administration.

5. Procurement and Contracting for Construction Projects

Please contact the appropriate Facilities Development Branch for assistance.

6. SP Maintenance Responsibility

The Procurement and Contracts Director in the PCB of the Office of Fiscal Services is

responsible for maintenance, administration, and questions regarding this SP.

SP 1330: Procurement of Services

1. Purpose

To ensure that services are procured according to all applicable procurement laws,

rules, and regulations.

2. Effective

Immediately.

3. Applies to

Superintendent, Deputy Superintendent, Assistant Superintendents, Complex Area

Superintendents, Directors and School Principals who have been delegated

procurement authority.

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4. Definitions

Practicable and Advantageous shall be given ordinary dictionary meanings.

Practicable means what may be accomplished or put into practical application.

Advantageous means a judgmental assessment of what is in the DOE's best interest.

Advantageous situations may include determinations based on product/service

availability delivery schedule, or special discounts, etc. Advantageous does not always

mean the lowest price.

Procurement means buying, purchasing, renting, leasing, or otherwise acquiring any

good, service, or construction. The term also includes all functions that pertain to the

obtaining of any good, service, or construction, including description of requirements,

selection and solicitation of sources, preparation and award of contracts, and all phases

of contract administration.

5. Introduction

Hawaii’s civil service law states, in part, that work for government shall be performed by

government employees recruited through the merit system. See Reference (a).

The DOE may employ methods such as paying of overtime; employing of casual hires

such as substitute teachers, part-time temporary teacher (PTT), paraprofessional tutor

(PPT); or establishing temporary positions as allowed, for accomplishing work.

However, the DOE may not have adequate staffing or resources to meet its needs and

may need to outsource some of its business functions.

Outsourcing of services should only be considered after DOE staff and other internal

employment options have been exhausted or deemed impractical. Services refer to the

furnishing of labor, time, or effort by a contractor, not involving the delivery of a specific

end product other than reports that are merely incidental to the required performance.

For a more detailed explanation of outsourcing services, see Reference (l), pages 29-33.

Procurement contracts for services are awarded to independent contractors (e.g., sole

proprietors, corporations, joint ventures, partnerships, limited liability companies, etc.).

These contracts do not engage an “employer/employee” relationship. An independent

contractor exercises independent employment and conducts work according to his/her

own methods without being subject to the control of the DOE, except as to the described

result or work product. Schools and offices must complete DOE Form 4, Request for

Civil Service Exemption that provides an analysis of whether an employer-employee

relationship exists. See Form (t).

The procedure for selecting a vendor will depend on many factors, including cost and

type of good being purchased. See Reference (b).

CAUTION: PERSONAL SERVICES CONTRACT

Personnel Services Contract refers to a contract with an individual, the terms of which

engage an “employer/employee” relationship. To determine whether an

“employer/employee” relationship exists, see Reference (l), pages 31-32.

Personal services contracts shall not be obtained in accordance with procurement laws

and rules. Personal services contracts are to be processed via procedures established

by the Office of Human Resources (OHR). Please contact the appropriate OHR office

for assistance.

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6. Procurement of services that do not require assistance from Procurement &

Contracts Branch (PCB)

A. Services that are exempt from procurement law

Services that are exempt from the Procurement Code refer to services that are

available from multiple sources; however procurement by competitive means is

neither practicable nor advantageous to the DOE. For a complete list of services

exempt from procurement law, see References (c) and (d). In these cases, the

services are declared exempt from procurement guidelines. Regardless of the

total cost, procurement of exempt services is not subject to procurement rules.

B. Services that are available from the DOE or State Procurement Office (SPO)

Price/Vendor List

Certain services are available from a DOE or SPO price/vendor list. See

Reference (e) for a complete listing of SPO price/vendor list. In the retail market,

the price of services may vary widely by vendor. In order to minimize the time

needed to solicit quotations and determine competitive pricing and vendor

qualifications, price/vendor lists for frequently purchased services have been

developed. The price/vendor lists assure the DOE access to competitively priced

services provided by qualified vendors. Some lists offer discounted pricing for

services for the duration of the price/vendor lists. In return, the DOE makes a

commitment to purchase the services listed from the vendor. There is no dollar

limit for purchases made from a price/vendor list.

C. Services that are less than $25,000

Services that are less than $25,000 are considered small purchase procurement.

See Reference (f). The small purchase process allows schools and offices the

flexibility to obtain services expeditiously without complying with a competitive

procurement process.

IMPORTANT: The total purchase price must not exceed $25,000 regardless

of the contract term or period of performance. In the event the total

purchase price exceeds $25,000, the procurement would no longer qualify

as a small purchase and must then comply with a competitive sealed

process.

Small purchase procedures require competitive price quotes and a determination

of best value prior to award.

The DOE small purchase guidelines are as follows:

Expenditures with an estimated total

cost that is less than $5,000

Purchase from the best available source.

Expenditures with an estimated total

cost that is at least $5,000 but less

than $15,000

Insofar as it is practicable and based on

the specifications, adequate and

reasonable competition of no fewer than

three quotations (not necessarily written)

shall be solicited.

Expenditures with an estimated total

cost that is at least $15,000 but less

Insofar as it is practicable and based on

the specifications, adequate and

155

than $25,000

reasonable competition of no fewer than

three written quotations shall be solicited.

School/Office Responsibilities:

1) Solicit and document small purchase quotations by completing DOE Forms

10A and 10B, Quotations & Record of Small Purchase. See Forms (o) and

(p).

2) Consider all factors, including but not limited to price, quality, warranty, and

delivery then select the vendor with the most advantageous quotation (not

necessarily the lowest price).

3) Maintain a procurement file. All quotations received shall be recorded and

placed in a procurement file. The file may contain procurement

documentation (quotations, record of small purchase), purchase

documentation (purchase order worksheet, purchase order), and payment

documentation (Approval to Pay).

The file must contain written justification when an award is made to

other than the vendor submitting the lowest price.

The file must also contain written justification when three quotations

are required but are not obtained (e.g., insufficient sources, sole

sources, or emergencies).

CAUTION: DO NOT PARCEL

Purchases shall not be parceled by dividing the purchase of same, like, or

related items of goods into several purchases of smaller quantities during any

twelve-month period to evade statutory, competitive, procurement processes.

Schools and offices are cautioned against unforeseen circumstances that may

cause costs to increase beyond the $25,000 threshold.

NOTE: SITUATIONS IN WHICH ONLY ONE VENDOR CAN PROVIDE THE

SERVICE

When there is only one source available for the purchase of services totaling less

than $25,000, schools and offices must follow the small purchase procedures

and document that it is a sole source on DOE Form 10B. See Form (p). For

more detailed instructions, see Reference (l), pages –37-39.

7. Procurement of Services that require assistance from PCB

A. CPO Exemptions

Schools and offices may also request an exemption from the procurement law

when the CPO determines in writing that the service is available from multiple

sources but procurement by competitive means is neither practicable nor

advantageous to the DOE. Schools and offices must contact the PCB for

assistance in this area.

IMPORTANT: ALL CONTRACTS MORE THAN $25,000 FOR SERVICES

AWARDED VIA A CPO EXEMPTION ARE SUBJECT TO BOARD OF

EDUCATION (BOE) REVIEW.

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B. Exception from Price/Vendor List

If the service on the price/vendor list does not meet school or office needs, they

must complete and submit DOE Form 5, Request Exception from Price List to

PCB. See Forms (q).

C. Procurement of Services Totaling $25,000 or More

Procurement of services totaling $25,000 or more requires strict adherence to

one of the following procurement methods:

Sole Source Procurement - $25,000 or more, see Reference (g), or

Competitive Sealed Bids for Services (IFBs) - $25,000 or more, see

Reference (h), or

Competitive Sealed Proposals for Services (RFPs) - $25,000 or more,

see Reference (i), or Multi-Step Competitive Sealed Bids - $25,000 or

more, see Reference (j), or

Emergency Procurement - $25,000 or more, see Reference (k).

School/Office Responsibilities

1) Complete and submit DOE Form 18, Request for Procurement Services

to the PCB. See Form (s).

2) Describe or specify the services to be purchased.

3) Identify the source of funds for the purchase.

PCB Responsibilities

1) Determine the appropriate procurement method to purchase the services

upon receipt of the DOE Form 18.

2) Provide administrative guidance to the school or office during the

procurement process.

8. Payment of Services

A. Services that total less than $5,000

For services that total less than $5,000, school or office shall issue a purchase

order. The purchase order must include (attach additional pages if necessary):

1) A complete description of the Scope of Work to be performed,

2) The period during which the services will be performed, and

3) A payment schedule.

A Civil Service Exemption Certificate, if applicable, must be obtained (from the

Office of Human Resources) and attached to purchase order at time of payment.

For purchase orders less than $1,000, the Administrator of the school or office is

authorized to certify this exemption.

B. Services that total at least $5,000 up to $24,999

For services that total $5,000 but no greater than $24,999, school or office shall

issue a DOE Form 10C, Small Purchase Contract. See Form (q). Small

Purchase contracts do not require review and approval by the Department of the

Attorney General or the Board of Education. However, a Civil Service Exemption

Certificate, if applicable, must be obtained (from OHR) and attached to purchase

order at time of payment.

157

NOTE: CONTRACT ADMINISTRATION REGULATIONS GOVERNING

PURCHASE ORDERS

Contracts must be fully executed (signed by all parties) PRIOR to the

commencement of services. RETROACTIVE agreements (contracts

executed after services begin) are NOT ALLOWED. Schools or offices

entering into retroactive contracts risk payment rejection. Contractors risk

non-payment if services are rendered prior to execution of a contract or

issuance of a purchase order.

Purchase orders for payment shall be issued only AFTER a contract has

been fully executed.

Administrators of schools and offices should not sign any agreement (e.g.

leasing, licensing, or credit agreements) initiated by an outside entity (e.g.

the Vendor/Contractor) where DOE is contracting for the services.

Agreements proffered by an outside entity may include terms that conflict

with the General Conditions issue by the Department of the Attorney

General. These conflicting terms may expose the DOE in areas including

but not limited to liability or indemnification, funding obligations, and

governing law. Administrators who sign agreements that include such

conflicting language without prior approval may unknowingly expose the

DOE to potential damage. In these cases, administrators risk personal

liability by exceeding their contract authority.

C. Services that total $25,000 or more

For services that total $25,000 or more, a contract agreement shall be prepared

and processed for approval by PCB.

School/Office Responsibilities

1) Complete and submit DOE Form 18, Request for Procurement Services to

the PCB. See Form (p).

2) Provide a detailed draft of Scope of Work.

3) Provide a detailed draft of Compensation and Payment Schedule.

4) Complete and submit Special Terms and Conditions that would need to be

included in the contract agreement, if any.

5) Provide a detailed draft of Civil Service Exemption Certificate, if

applicable.

PCB Responsibilities

1) Prepare a contract upon receipt of DOE Form 18 and required

documentation.

2) Obtain approvals of the Attorney General’s Office, the Contractor, the

BOE (if required) and the Superintendent.

9. SP Maintenance Responsibility

The Procurement and Contracts Director in the PCB of the Office of Fiscal Services is

responsible for maintenance, administration, and questions regarding this SP.

10. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Hawaii Revised Statutes Section 76-12 (Civil Service)

(b) Hawaii Revised Statutes, Chapter 103D (Procurement Code)

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(d) Hawaii Administrative Rules, Section 3-120-4 (Procurement Exemptions)

(e) Hawaii Administrative Rules, Section 3-121-6 (Procurement via Price List)

(f) Hawaii Administrative Rules, Subchapter 8, Chapter 3-122 (Small Purchase)

(g) Hawaii Administrative Rules, Subchapter 9, Chapter 3-122 (Sole Source))

(h) Hawaii Administrative Rules, Subchapter 5, Chapter 3-122 (Comp Sealed Bids)

(i) Hawaii Administrative Rules, Subchapter 6, Chapter 3-122 (Comp Sealed

Proposals)

(j) Hawaii Administrative Rules, Subchapter 6.5, Chapter 3-122 (Multi-Step Comp

Sealed Bids)

(k) Hawaii Administrative Rules, Subchapter 10, Chapter 3-122 (Emergency

Procurement)

(l) Guidelines for Procurement and Contracting

(m) Guidelines for Procurement and Contracting, Flowchart – Simple Steps to

Procurement

(n) Guidelines for Procurement and Contracting, Matrix – Procurement of Services

Forms

(o) DOE Form 10A, Written Quotations for Small Purchase

(p) DOE Form 10B, Record of Small Purchase

(q) DOE Form 10C, Small Purchase Contract

(r) DOE Form 5, Request Exception from Price List

(s) DOE Form 18, Request for Procurement Services

(t) DOE Form 4, Request for Civil Service Exemption

Note: Some linked addresses may be accessible only from within the DOE’s internal

network.

SP 1340: Procurement of Professional Services

1. Purpose

To ensure that professional services are procured according to all applicable

procurement laws, rules, and regulations.

2. Effective

Immediately.

3. Applies to

Superintendent, Deputy Superintendent, Assistant Superintendents, Complex Area

Superintendents, Directors and School Principals who have been delegated

procurement authority.

4. Definitions

Procurement means buying, purchasing, renting, leasing, or otherwise acquiring any

good, service, or construction. The term also includes all functions that pertain to the

obtaining of any good, service, or construction, including description of requirements,

selection and solicitation of sources, preparation and award of contracts, and all phases

of contract administration.

159

5. Introduction

Professional services refers to those services within the scope of the practice of

architecture, professional engineering, law, medicine, accounting, education, or any

other practice defined as professional by the laws of the State of Hawaii or the

professional and scientific occupation series contained in the United States Office of

Personnel Management’s Qualifications Standards Handbook. For a complete list of

professional services series and position titles, see Reference (c), pages 57-58. For a

complete list of professional services position descriptions, see Reference (c), pages 59-

66.

Professional services shall be procured in two circumstances: (1) when in-house staff

expertise is not available, or (2) when staff is unable to perform the required services

due to workload and/or time constraints. Contracts for professional services shall be

awarded on the basis of demonstrated competence and qualifications for the type of

services required, at fair and reasonable prices.

6. Process for Procuring Professional Services

Before the beginning of each fiscal year, the DOE will publish a legal notice inviting

persons engaged in providing professional services (which the DOE anticipates a need

for during the next fiscal year) to submit current statements of qualifications and

expressions of interest to the DOE. See References (a) and (b).

School/Office Responsibilities

1) Complete and submit DOE Form 18, Request for Procurement Services to the

Procurement and Contracts Branch (PCB). See Form (f).

2) Describe or specify the services to be purchased.

3) Identify the source of funds for the purchase.

4) Participate on the selection committee.

5) Design the selection criteria to be used in evaluating the vendors’ qualifications.

6) Negotiate a contract with the top applicant.

PCB Responsibilities:

Provide administrative guidance to the school or office during the procurement and

contracting process upon receipt of DOE Form 18.

For more detailed information on the respective responsibilities of Schools/Office and

PCB for the procurement and contracting of professional services, see Reference (c),

pages 43-49.

7. Payment of Professional Services

A contract agreement shall be prepared and processed for approval by PCB, regardless

of total contract value.

School/Office Responsibilities

1) Complete and submit DOE Form 18, Request for Procurement Services to the

PCB. See Form (f).

2) Provide a detailed draft of the Scope of Work.

3) Provide a detailed draft of the Compensation and Payment Schedule.

4) Provide a detailed draft of the Special Terms and Conditions that would need to

be included in the contract agreement, if any.

5) Complete and submit a signed Civil Service Exemption Certificate, if applicable.

160

PCB Responsibilities

1) Prepare a contract upon receipt of DOE Form 18 and required documentation.

2) Obtain approvals of the Attorney General’s Office, the Contractor, the BOE (if

required) and the Superintendent.

8. SP Maintenance Responsibility

The Procurement and Contracts Director in the PCB of the Office of Fiscal Services is

responsible for maintenance, administration, and questions regarding this SP.

9. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Hawaii Revised Statutes, Chapter 103D (Procurement Code)

(a) Hawaii Administrative Rules, Subchapter 7, Chapter 3-122 (Professional

Services)

(b) Guidelines for Procurement and Contracting

Procurement

(d) Guidelines for Procurement and Contracting, Matrix – Procurement of Services

Forms

(e) DOE Form 18, Request for Procurement Services

Note: Some linked addresses may be accessible only from within the DOE’s internal

network.

SP 1350: Procurement of Health and Human

Services

1. Purpose

To ensure that professional services are procured according to all applicable

procurement laws, rules, and regulations.

2. Effective

Immediately.

3. Applies to

Superintendent, Deputy Superintendent, Assistant Superintendents, Complex Area

Superintendents, Directors and School Principals who have been delegated

procurement authority.

4. Definitions

Procurement means buying, purchasing, renting, leasing, or otherwise acquiring any

good, service, or construction. The term also includes all functions that pertain to the

obtaining of any good, service, or construction, including description of requirements,

selection and solicitation of sources, preparation and award of contracts, and all phases

of contract administration.

161

5. Introduction

The procurement of Health and Human Services (HHS) is sometimes referred to as

103F procurement, which is the section of the law that establishes how HHS purchases

are made, See Reference (a). HHS purchased by the DOE are intended to help

communities, families, or individuals maintain or improve their health or social well-

being. HHS may include services for assessment, treatment, diagnosis, prevention or

education.

HHS are services provided directly to an individual. Some specific examples of HHS

include psychiatric services, specialized nursing services, and most IEP related services.

6. Process for Procuring Health and Human Services

Given the specialized and unique nature of HHS, Schools and Offices are advised to

seek assistance from the Procurement and Contracts Branch (PCB) to plan and

coordinate HHS purchases. Procurement of HHS requires the strict adherence to one of

the following procurement methods:

Chief Procurement Officer Exemptions, see Reference (b),

Small Purchase of Services, see Reference (c),

Competitive Purchase of Services, see Reference (d),

Restrictive Purchase of Services, see Reference (e),

Treatment Purchase of Services, see Reference (f), and

Crisis Purchase of Services, see Reference (g).

For more detailed descriptions on the different procurement methods mentioned above,

see Reference (h), pages –67-68.

School/Office Responsibilities

1) Complete and submit DOE Form 18, Request for Procurement Services to

the PCB. See Form (i).

2) Describe or specify the services to be purchased.

3) Identify the source of funds for the purchase.

4) Design the selection criteria to be used in evaluating the vendor’s

qualifications.

5) Participate in the selection of an applicant by serving on an evaluation

committee.

6) Negotiate, if appropriate, a contract with the top applicant.

7) Monitor contract performance.

PCB Responsibilities

Provide administrative guidance to the School or Office during the procurement and

contracting process upon receipt of DOE Form 18. For more detailed information on the

respective responsibilities of Schools/Office and PCB for the procurement and

contracting of professional services, see Reference (h), pages 68-69.

7. Payment of Health and Human Services

A contract agreement shall be prepared and processed for approval by PCB.

School/Office Responsibilities

1) Complete and submit DOE Form 18, Request for Procurement Services to the

PCB. See Form (i).

162

2) Provide a detailed draft of the Scope of Work.

3) Provide a detailed draft of the Compensation and Payment Schedule.

4) Provide a detailed draft of the Special Terms and Conditions that would need to

be included in the contract agreement, if any.

5) Complete and submit a signed Civil Service Exemption Certificate, if applicable.

PCB Responsibilities

1) Prepare a contract upon receipt of DOE Form 18 and required documentation.

2) Obtain approvals of the Attorney General’s Office, the Contractor, the BOE (if

required), and the Superintendent.

8. SP Maintenance Responsibility

The Procurement and Contracts Director in the PCB of the Office of Fiscal Services is

responsible for maintenance, administration, and questions regarding this SP.

9. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Hawaii Revised Statutes, Chapter 103F (Health and Human Services)

(b) Hawaii Administrative Rules, Chapter 3-146 (Small Purchase)

(d) Hawaii Administrative Rules, Chapter 3-144 (Restrictive Purchase of Service)

(e) Hawaii Administrative Rules, Chapter 3-145 (Treatment Purchase of Service)

(f) Hawaii Administrative Rules, Chapter 3-146 (Crisis Purchase of Service)

(g) Guidelines for Procurement and Contracting

Forms

(h) DOE Form 18, Request for Procurement Services

Note: Some linked addresses may be accessible only from within the DOE’s internal

network.

SP 1370: Risk Management Services

1. Purpose

To ensure that claims and losses of property, tort, automobile and the recovery of such

claims are processed and administered according to all applicable laws, rules and

regulations.

2. Effective

Immediately.

3. Applies to

Superintendent, Deputy Superintendent, Assistant Superintendents, Complex Area

Superintendents, Directors, School Principals, and department employees.

4. Introduction

The procedure for administration of claims and losses fall within three basic functions of

the program which includes loss reporting, loss control and risk financing. DOE works

with the Risk Management Office (RMO), in the Department of Accounting and General

163

Services, to achieve prompt service in the adjudication of claims. Claims adjustment

involves the prompt and fair payment of reasonable value of the covered loss or claim,

as well as the proper denial of a claim.

5. General Documentation Requirements for Reimbursement of Claims to RMO

In order to facilitate the processing of your claims for reimbursement by the RMO, the

following actions should be taken by the school/office as soon as an event occurs:

Collect as much factual information as possible;

Protect the property from further damage (where appropriate);

Separate the damaged and undamaged property, placing it in the best

possible order (where applicable);

Furnish a complete inventory of the destroyed, damaged and undamaged

property, showing in detail quantities, cost, replacement costs and amount of

loss claimed; and

Pinpoint the cause of loss and collect evidence for subrogation:

 Take pictures of everything;

 Interview everyone connected with the loss;

 Establish tight control to prevent any loss of or tampering with materials

and to keep it well organized and labeled.

Please see sections below for additional forms and documentation requirements based

on the type of loss or reimbursement claim.

Reimbursement for the loss must be completed within the fiscal year the claim is

reported. Schools/offices should be prepared to provide the Journal Vouchering Code to

which the reimbursement will be credited in exactly this format:

ALLO

SOURC

COST

PROJECT

DEP

G/L

S/L

REF.

DOC

AMOUNT

CAT

OBJEC

CENTE

NUMBE

ACT

ACC

NUMBE

xxx

xxxx

xxxxxx

xxx

xxxxx

xxxxxxx

xxxxxxxxx

For assistance with obtaining the appropriate Journal Vouchering Code, please contact

the DOE Accounting Section at (808) 586-3371.

6. Report of Automobile Accident/Loss

All automobile accidents or loss should be reported immediately to the RMO utilizing

Form RMA-001. See Form (b). If an accident is serious or involves bodily injury, it must

be reported within 24 hours to the RMO.

Automobiles covered by the RMO include:

1) All State owned vehicles;

2) Leased, hired, rented and other non-owned automobiles when authorized by the

State and operated under the name of the State; and

3) Employee-owned vehicles when used in the course and scope of his/her

employment and in the name of the State. [Note: Employee will have excess

liability over the employee’s own personal automobile insurance policy; however,

physical damage to the employee’s own vehicle is not covered.

Drivers covered by the RMO include:

164

1) State employees;

2) Members of State Boards, commissions, or councils;

3) Volunteers;

4) Student Drivers; or

5) Any other authorized individuals licensed to operate an automobile covered

under this policy.

Independent contractors are not covered. They must provide their own insurance.

The chart below provides a brief summary of the limits of coverage.

Coverage

Limits

Bodily Injury

Applies to individual who sustains

accidental harm, other than the

employee driver, and who meets the

tort threshold of personal injury

protection benefits equal or exceeding

$5,000

$20,000 per person

Property Damage

Applies to damage to property owned

by others

$10,000 per accident

Personal Injury Protection

Applies to appropriate and reasonable

treatment and expenses arising from

the automobile accident for persons

other than the employee driver [Note:

Employee will utilize Workers’

Compensation.]

$10,000 per person

The State of Hawaii does not carry any additional coverage, such as wage loss, death

benefits, and uninsured motorist coverage or underinsured motorist coverage.

Coverage for physical damage to State owned or leased vehicles is not provided unless

specifically designated for coverage.

7. Report of Loss or Damage of State Property

A. Loss or Damage of State Property is $5,000 or More

All reports of loss or damage to property owned or leased or in the case, custody,

or control of the State should be reported immediately to RMO utilizing Form

RMP-001. See Form (c). There is a $5,000 per occurrence deductible for

preventable losses of theft or loss of equipment.

Examples of covered/not covered property:

Covered Items

Not Covered Items

Computer stolen from

office

Equipment damaged by

water leaks

Windstorm damage

Petty cash

Employee’s personal property

Equipment left in the field

Missing inventory

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A car hits the building

The property loss must meet the following criteria in order to be considered for

reimbursement by RMO:

Must be fortuitous or accidental;

Item must be listed in the State/DOE Inventory System or supported by

accounting records;

Item is not surplus, aged, broken or junked;

Item is not more than 7 years old or scheduled for replacement;

Item is not misplaced or unaccounted for (missing upon taking inventory)

Item is not covered by first dollar insurance; and

Item is not a gift or donation.

Procedures in completing Form RMP-001

1) Part 1 should be prepared by the employee discovering the loss or damage.

2) Parts 2 and 3 should be prepared by the immediate supervisor having control or

authority over the lost or damaged property.

3) All claims should identify whether or not recovery of the damage can be made

against another individual or entity.

4) The completed form should be sent to PCB for review and signature by the Risk

Management Coordinator who will then route to RMO for processing.

5) RMP-001 should be completed and submitted to RMO within five (5) days of any

loss.

Once the loss is reported, the school or office will receive, within 15 days, an

acknowledgement of the loss and instructions on how to receive reimbursement or an

explanation of the denial of the claim.

Any claims involving theft or burglaries should be reported to the police immediately after

the discovery of the theft or burglary. This police report should be submitted as

documentation with the RMP-001.

B. Loss or Damage of State Property is Less than $5,000

Schools/offices may seek reimbursement for losses or damages that do not meet the

deductible limits as established by RMO by filing a claim with the Office of Fiscal

Services, Inventory Unit.

Schools/offices should utilize Form E-9 within ten (10) days of the incident. See Form

(d). The administrator must sign Form E-9. School/office must complete Form FA3,

Request to Dispose, if the item is $250 or more. See Form (e). School/office must

complete Form FA6, Property File Adjustment, if the item is under $250 in order to take

the property off of the property file. See Form (f). Equipment and grouped items not

listed on the property file will be reimbursed, provided that ownership can be

established. All claims for unlisted items require a brief explanation as to why the item

was not inventoried. Completed forms should be submitted to the Inventory Unit.

Equipment lost or damaged will not be covered under this program if:

1) Misappropriation of state-owned property by a state employee, loss of money and

securities and protection against forgery are covered by DAGS RMO.

2) Damage to or loss of vehicles is covered by DAGS RMO.

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3) Loss or damage by students. Refer to HRS 302A-1130.5, Textbook Replacement

Fees, Restitution; Textbook List.

4) Losses of food items, supplies, or cafeteria equipment that cost less than $250 each.

Reimbursement will be made according to the following formula:

Total Funds Available

Total Equipment Costs = Reimbursement Factor (%)

Reimbursement Factor (%) x Total District Losses = Amount to be Reimbursed

8. Catastrophic Losses

The RMO will be the point of contact for any catastrophic (i.e. hurricane or other similar

catastrophe) losses in order to coordinate the claims against the property insurance

carrier.

Types of catastrophic losses that are covered include damages to real property,

personal property, loss of rental income, art work, extra expense, loss of valuable

papers, extended coverage, pollutant/contaminant clean-up, and other expenses.

All forms and required documentation must be submitted to the RMO within one (1)

week after the loss. A claim file should be generated for each location. The following

procedures and documents should be reviewed and completed before submission to

RMO:

1) Procedures to Claim for Catastrophic Losses,

2) Catastrophic - Personal Costs,

3) Catastrophic - Extra Expenses,

4) Catastrophic - Materials Summary, and

5) Catastrophic - State Owned Equipment.

In the majority of cases, Facilities Development Branch will coordinate with RMO to

report the loss of buildings and other real property. Schools and offices should also be

prepared to provide documentation to support reimbursement claims for replacement of

goods and equipment that were lost.

9. Report of Incidents/Accidents that Occur on State Property or at a State Function

All incidents or accidents that occur at a State location or resulting from a State

activity/function should be reported immediately to RMO utilizing Form RML-001. See

Form (g). This form is an internal form to be completed by DOE employees only. It is

not to be provided to a claimant or the general public.

Examples of an incident or accident:

1. Employee finds his/her personal property missing from work space or desk,

2. A person is injured from a fall on State property, and

3. An employee receives a threatening phone call or is threatened by a client in the

office.

At the time of the incident or accident, no liability is to be admitted by anyone involved in

any accident or loss. No commitments should be made to pay for any medical or other

expense, even ambulance services.

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10. Tort Claim Information

The State Tort Liability Act makes the State responsible only when the State is negligent

and when that negligence causes an injury or damage. The State is not automatically

responsible for bills (medical, repairs or other) because an incident occurs on its

premises or as a result of its operations.

All reports of a tort claim should be reported directly to RMO utilizing Form RMTC 9-97.

See Form (h). Note: Statute of Limitations is two (2) years from the date of the

incident.

If your claim is accepted by RMO, the school/office will be required to submit verification

or documentation of:

1) For damage to property that has been or can be economically repaired,

submission of a photograph of the damaged property and 2 itemized signed

statements or estimates by reliable and independent parties. If payment has

been made, an itemized statement or receipt showing the actual payment. Proof

of ownership may also be required.

2) For damages to a motor vehicle, copies of the current registration and no-fault

card will be required in addition to (1).

3) For lost or destroyed property, or for damage to property which cannot be

economically repaired, submission of statements itemizing each item, original

cost of the item, date purchased, where purchased and the value of the item

before and after the incident can be used in determining the actual value of the

claim.

4) For personal injury or death, medical information will be required.

11. Statement of Self-Insurance

All requests for a statement of self-insurance should be made directly to the RMO, in the

Department of Accounting and General Service utilizing Request for Self-insurance.

See Form (i).

12. Contact Information for the RMO

State Risk Manager

State of Hawaii

Department of Accounting and General Services

Risk Management Office

PO Box 19

Honolulu, Hawaii 96810-0119

Phone: (808) 586-0547 Fax: (808) 586-0553

13. SP Maintenance Responsibility

The Procurement and Contracts Director in the PCB of the Office of Fiscal Services is

responsible for maintenance, administration, and questions regarding this SP.

14. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Hawaii Revised Statutes, Chapter 41D

Forms

(b) RMA-001, Automobile Loss Notice Form

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(d) RMP-001, Report of Loss or Damage of State Property

(e) Form E-9, Report of Loss or Damage to State Property

(f) Form FA3, Request to Dispose

(g) Form FA6, Property File Adjustment

(h) RML-001, Incident/Accident Report Form

(i) RMTC9-97, Claim for Damage or Injury

(j) RM-SOSI, Request for Statement of Self-Insurance

Note: Some linked addresses may be accessible only from within the DOE’s internal

network.

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SP 1602: Budget Branch Introduction

1. Purpose

To provide an introduction and overview of the DOE Budget Branch in the Office of

Fiscal Services.

2. Effective

Immediately.

3. Applies to

Assistant Superintendents, Complex Area Superintendents, Superintendent’s Office

Directors, Complex Area Business Managers, Principals, and other State, Complex Area

and School Staff.

4. Background

To fund the Hawaii State public school system, serving over 250 schools and more than

180,000 students, the DOE has two distinct types of budgets—the operating budget and

the capital improvement program (CIP) budget.

A. The operating budget totals approximately $1.8 billion. The funds in the operating

budget are used for personnel, supplies, equipment, and other operating costs.

B. The operating budget includes:

1) General funds (taxpayer revenues),

2) Federal funds,

3) Special funds,

4) Trust funds,

5) Interdepartmental Transfer funds,

6) Revolving funds, and

7) ARRA funds

C. The CIP budget averages between $100 and $200 million annually. Funds from

this budget are spent on construction and major repairs and maintenance.

5. Introduction and Overview

The DOE Budget Branch is responsible for preparing and implementing the $1.8 billion

annual operating budget for the Hawaii Statewide public school system. (The DOE

Office of School Facilities and Support Services Facilities Development Branch oversees

the implementation of the CIP budget.)

A. Two sections comprise the DOE Budget Branch:

1) The Budget Preparation Section, and

2) The Budget Execution Section. See References (c) and (d).

B. The Budget Branch also assists the Chief Financial Officer and Assistant

Superintendent for the Office of Fiscal Services in:

1) Implementing the weighted student formula;

2) Training school principals and staff in financial plans;

3) Coordinating all budget matters with the Board of Education Finance and

Infrastructure Committee;

4) Providing budget analyses and advice on financial matters; and

5) Communicating information related to the DOE budget with other

agencies such as the State Department of Budget and Finance;

Legislative committees; federal agencies; and the public.

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6. SP Maintenance Responsibility

The Budget Director in the Office of Fiscal Services is responsible for maintenance,

administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1602

(b) BOE Policy 1200-1.12, Department of Education Budgets

(d) SP 1604, Budget Execution Process

(e) Budget Branch Functional Statements.

SP 1603: Operating Budget Preparation Process

1. Purpose

To describe the steps in the preparation of the biennial operating budget.

2. Effective

Immediately.

3. Applies to

Principals, Program Managers, Complex Area Business Managers, Budget Branch in

the Office of Fiscal Services, Systems Accountability Office, Assistant Superintendents,

Complex Area Superintendents, Directors in the Superintendent’s Office, Deputy

Superintendent, Superintendent, Board of Education, State Department of Budget and

Finance (B&F), Legislature, Governor.

4. Introduction

As the name implies, the biennial budget period comprises two years (beginning July 1

of odd-numbered years) and lasts 24 months (ending on June 30 of the next odd

numbered year). The biennial operating budget preparation process commences about

18 months prior to July 1 of the first fiscal year. It ends after the enactment of the

Legislature’s appropriations act (budget bill), which can be as early as six weeks prior to

the beginning of the biennial period, or as late as 10 days after the biennial period has

started.

Exhibit 1, which appears on the last page, depicts the general steps in the operating

budget preparation process. For more detailed specificity, such as transferring funds

between programs or characters of expenditure in the current operating budget, see the

detailed process flow map in reference (j).

5. Operating Budget Preparation Process

1) Review and Revise Budget Program Structure and Program Measures

a. In January and February of even-numbered years, the Budget Branch

solicits input from the other offices through the Assistant Superintendents

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regarding changes to the Budget Program Structure. The Superintendent

and the Chief Financial Officer (CFO) may discuss the suggested

changes with the rest of the Leadership Team. These changes could

include adding, deleting, moving, or renaming existing EDNs, Level V

programs, or Program IDs.

b. If the BOE approves any changes to the programs that are funded

through the Weighted Student Formula, the Budget Branch adjusts the

Budget Preparation System files accordingly.

If the BOE decides to reallocate funds from programs as a result of

program evaluations required by BOE Policy 1200-1.17, the Budget

Branch adjusts the Budget Preparation System files accordingly. See

Reference (c).

c. After changes have been finalized, the Budget Branch makes

adjustments to EDNs and the Level V Organization Codes. The Level V

Organization Codes are two-digit alpha codes used by B&F. Level V

codes are a summary grouping of Program IDs, reported externally as a

single program.

d. Later in the year, B&F requests the DOE to review the current Program

Measures (target population/group, workload measures, and measures of

effectiveness) for each EDN and for the DOE. The Budget Branch, with

input from the other offices, identifies changes to the Program Measures

and estimates the values for these measures for the following biennial

period. The updated Budget Program Structure, Program Measures, and

Level V Organization Codes are provided to B&F.

2) Project Salary Requirements

In March of even-numbered years, the Budget Branch obtains a listing of all

established positions and incumbents from the Office of Human Resources

database and reconciles the established positions to the current Appropriations

Act, by Program ID. This list of positions and salaries is referred to as the

“Salary Projection File.”

3) Solicit and Receive Input Regarding Operating Budgetary Needs

In compliance with Board of Education Policy 1200-1.16, the DOE solicits input

from the public (including parents, students, employees, and the community)

regarding the Department’s budget. The Budget Branch analyzes the public

input to determine the high priority areas of budget need and reports results to

the BOE on a monthly basis. See Reference (d).

Usually in the spring of even-numbered years, the Superintendent issues a

memorandum to the Complex Area Superintendents, Assistant Superintendents,

and directors in the Superintendent’s Office requesting input regarding the

current and projected unmet budgetary needs of the schools, complexes, and

state offices. The memorandum provides submittal deadlines and guidelines for

the areas of highest priority for budget requests, including those identified by the

public.

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4) Meet with Program Managers Regarding Current Operating Budgets

As needed, the Superintendent, CFO, and Budget Director/ Budget Branch meet

with Program Managers to review current budgets and expenditures, detailed

calculations/explanations of areas of projected shortfalls, and recommendations

regarding possible program changes to current operating budgets.

5) Review, Evaluate, and Prioritize Operating Budget Requests

If the Budget Request database or zero-based budgeting templates are being

used, after a budget request for additional funds is requested by the Program

Manager, it is routed electronically through appropriate supervisors for review,

edit, and approval. See Reference (f). After the Assistant Superintendent

approves the budget request, the Budget Branch reviews the requests for new

funds. If further justification is required, the budget request is returned to the

Assistant Superintendent. For a listing of the questions that must be answered to

justify a budget request, please refer to the Narrative Justification question

document link and the Additional Program Facts. See Reference (i).

A list of completed budget requests received by the published deadline is

provided to the Budget Director and the Leadership Team for review and

prioritization. If any late submittals are required, the Assistant Superintendent

must obtain CFO approval to add the late submittal to the list of completed

budget requests.

If the total dollar amount of the budget requests received is significantly higher

than the amount the Superintendent believes is reasonable to request based on

the state’s current financial status the CFO, Budget Director and the Leadership

Team may direct that certain requests be deleted or the dollar amount reduced.

A revised list is provided to the Leadership Team for additional review and

prioritization. This process may be repeated several times.

6) Develop Requests for New Facilities

The Budget Branch reviews the list of Capital Improvement Program (CIP)

projects that will add new schools, classrooms, libraries, or other facilities, and

prepares requests for operating costs such as WSF-funded positions/functions

and equipment and textbooks for the facilities. If categorical positions are

required for new schools, the Budget Branch requests the appropriate Program

Manager to submit a budget request for the categorical positions.

7) Update Non-General Fund Ceiling

In about July of even-numbered years, the Superintendent issues a memo to

Program Managers regarding federal grants, special funds, intergovernmental

transfer funds, revolving funds, and trust funds expenditure ceilings in the current

appropriation. The Program Managers are requested to update the expenditure

ceiling amount anticipated for the next biennial period.

8) Update Program Narratives

In about July of even-numbered years, the Budget Branch begins to update the

descriptions of programs for publication in the Department’s biennial operating

budget request document. In some instances, the Program Managers will be

requested to assist with these updates.

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9) Finalize Recommended List of Operating Budget Requests for the Board of

Education

In late summer, the Director of Finance for B&F transmits (to all executive

agencies) policies and guidelines for preparing the budget request for the

upcoming biennial budget. See Reference (g). The CFO and Budget Director

review the Leadership Team’s prioritized list of biennial operating budget

requests and may recommend adjustments to the Superintendent based on the

instructions from B&F. The final list of recommended operating budget requests

is determined by the Superintendent and documented in a recommendation

memorandum to the chairperson of the BOE’s Finance and Infrastructure

Committee (the Committee). The information that must be provided to the

Committee is listed in Board of Education Policy 1200-1.12, Department of

Education Budgets. See Reference (e).

10) Finalize Board of Education’s Operating Budget Requests

In early fall, the Committee takes action on the Department’s recommendation

regarding biennial operating budget requests. The Department’s recommended

list is updated as directed by the Committee (i.e. requests are added, deleted, or

adjusted). Prior to approving the Committee recommendation, the BOE may

revise the requests with additions, deletions, or adjustments.

11) Submit Operating Budget Requests to B&F

In September or October, the DOE submits the operating budget requests that

have been approved by the BOE to the Director of Finance. The B&F analysts

review the requests and may request additional information regarding specific

requests. The Budget Branch responds to the B&F analyst’s requests for

additional information.

12) Prepare Operating Budget Requests for Executive Budget

In November or December, the Governor informs the Superintendent of the

DOE’s operating budget requests and other budget adjustments that have been

included in the Executive Budget, which will be presented to the Legislature.

The Budget Preparation Section prepares updated Budget Journal (BJ) tables

and narratives of the requests for publication in the Executive Budget, and the

CFO informs the Board of Education of the Governor’s decisions. The updated

information is then posted on the DOE web page. See Reference (h).

13) Monitor and Defend Budget Requests

During the Legislative session, the Budget Branch:

a. Responds to the Legislature’s requests for additional information

on the biennial budget requests

b. Monitors and communicates legislative budget actions and decisions to

the BOE and DOE Leadership Team, and

c. Notifies OHR of any adjustments to appropriated positions.

14) Document the Appropriations Act

The budget bill becomes the Appropriations Act when the Governor signs or

allows it to become law without his/her signature. The Budget Branch adjusts the

Budget Preparation System to include the Legislature’s operating budget items,

minus any Executive vetoes, and transmits updated BJ tables to B&F.

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6. Standard Practice (SP) Maintenance Responsibility

The Administrator of the Budget Preparation Section in the Office of Fiscal Services is

responsible for maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone. See Reference (a) below.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions for SP 1603

(b) HRS, Chapter 37, Budget

(d) BOE Policy 1200-1.16, DOE Budget Public Input Required Policy

(e) BOE Policy 1200-1.12, DOE Budgets

(f) SP 1622, Instructions for Using the Budget Request Database

(g) B&F web site for various memos, instructions, forms

(h) Current DOE biennial operating budget document REPORTS

(i) Department of Education Budget Request – Narrative Justification questions

(j) Detailed Budget Preparation process flow map

SP 1604: Budget Execution Process

1. Purpose

To describe the budget execution process.

2. Effective

Immediately.

3. Applies to

Assistant Superintendents, Complex Area Superintendents, Program Managers,

Complex Area Business Managers, Principals.

4. Budget Execution Process

The budget execution process involves the management of DOE appropriations with

regard to legislative intent, within the guidelines and policies set by the Hawaii Revised

Statutes.

A. The annual budget execution process begins with an appropriation or amount of

money set aside by law for a specific purpose during each fiscal year. An

appropriation is the first legal step to expend government funds authorized by the

legislature. Unless otherwise allowed by law, no government funds can be

expended by any department without first being authorized by the legislature

through an appropriation. See Reference (c), HRS, Section 37-32, Quarterly

allotment periods.

B. The next step is an allocation that is the official notification of spending

authorization given to an agency or office. This is the distribution of appropriated

funds to the schools and offices.

C. Once schools and offices receive their allocation notices, they may expend their

funds according to their expenditure plan. This requirement ensures that

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sufficient funds are set aside for planned expenditures and the necessary funds

are in the proper allotment ledgers when the charges, whether they occur through

payroll or purchase orders, are processed.

A detailed expenditure plan shows how the allocated amounts will be spent

during the year by programs, by sources of funds, and by objects of expenditure.

The creation of the expenditure plan occurs right before or during the

implementation of the budget. It is an updated version of the authorized budget

by the expending agency or office.

D. Expenditure plan data are used to create allotments in the Financial Management

System (FMS), i.e., credit the financial accounts with the specified amounts.

Expenditures can only be charged against allotments. The allotment period is for

one fiscal year, rather than for one fiscal quarter.

E. Expenditures are the payout or outlay of cash for services and goods. Schools

execute their expenditure plans by spending monies through purchase orders

and payroll charges. These expenditures are charged against their allotments.

F. Fiscal Contingencies

Spending plans, allotments, and expenditures are subject to other contingencies.

The Governor, the Director of Finance, the BOE, and the Superintendent are

given powers by law to supervise and reduce funding levels when responding to

changing conditions and to promote the more economical and efficient

management of the DOE (HRS, Sections 37-31 to 37-41). See References (b) to

(m).

5. Budget Execution Process Summary

The budget execution process can be summarized in five key steps as follows:

A. Appropriations. Legislature appropriates funds.

B. Allocations. Funds must be allocated down the administrative hierarchy from

the Governor to the departments, to the districts/complexes and the schools.

C. Expenditure plans. Schools (organizations) prepare expenditure plans.

D. Allotments. Expenditure plan data are transmitted to the Financial Management

System (FMS) to create allotments.

E. Expenditures. Schools execute their expenditure plans by spending monies

through purchase orders, direct payments, and payroll charges. These

expenditures are charged against allotments.

6. SP Maintenance Responsibility

The Budget Execution Administrator in the Budget Execution Section in the Office of

Fiscal Services is responsible for maintenance, administration, and questions regarding

this SP.

The Frequently Asked Questions (FAQ) reference page for this SP may provide

standard responses to common questions. Please review this resource before inquiring

via telephone.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1604

(b) HRS, Section 37-31, Intent and policy

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(d) HRS, Section 37-33, Funds to which the allotment system applies

(e) HRS, Section 37-34, Appropriations available for allotment; estimate of expenses

(f) HRS, Section 37-34.5, Department of Education; allotment and expenditure plan;

updates

(g) HRS, Section 37-35, Estimated expenditures; approval

(h) HRS, Section 37-36, Modification

(i) HRS, Section 37-37, Reduction

(j) HRS, Section 37-38, Allotment according to classification prescribed in

appropriation

(k) HRS, Section 37-39, Reductions of allotted amounts for objects and items

(l) HRS, Section 37-40, Exceptions; trust funds

(m) HRS, Section 37-41.5, Department of Education; carryover of funds

(n) HRS, Section 37-42, Allotment as limit of expenditures; liability for excessive

expenditure

(o) HRS, Section 37-74, Program Execution

(p) BOE Policy 1110-3, Application and Allocation of Financial Resources

(q) BOE Policy 1200-1.14, Carryover Funds

(r) BOE Policy 1200-1.11, Budget Restrictions and Reductions

(s) BOE Policy 2040, Use of Program or Project Funds

(t) BOE Policy1200-1.5, Board of Education Roles and Responsibilities

(u) BOE Policy 1200-1.18, Federal Funds

(v) SP 1623.3, Expenditure Plan

(w) SP 3255, Budget Systems (OITS SP)

SP 1605: Budget Policies of the Board of

Education; Compliance With

1. Purpose

To explain the DOE’s responsibilities to comply with BOE Budget Policies.

2. Effective

Immediately.

3. Applies to

Budget Office, Assistant Superintendents, Complex Area Superintendents,

Superintendent’s Office Directors, Complex Area Business Managers, Principals, School

Staff, and any other interested parties.

4. Background

The DOE uses two types of budgets for public education in Hawaii.

A. Operating budget refers to the annual funds, authorized by the Hawaii State

Legislature and approved by the Governor, for personnel, supplies, equipment,

and other operating costs. The DOE operating budget totals over $1.8 billion for

the statewide public school system, serving over 250 schools and more than

180,000 students.

The operating budget includes:

General funds (taxpayer revenues),

Federal funds,

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Special funds,

Trust funds,

Interdepartmental Transfer funds, and

Revolving funds.

B. Capital Improvement Program (CIP) budget refers to funds authorized by the

Hawaii State Legislature, and approved by the Governor, to spend on

construction and major repairs and maintenance. The DOE CIP budget averages

between $100 and $200 million annually.

5. Compliance with BOE Budget Policies

The following is a summary of the BOE Budget Policies with which all DOE budgets shall

comply:

A. BOE budget responsibilities

The BOE has responsibility to monitor and review the DOE’s biennial and

supplemental budgets. Requests for budget increases will be evaluated

according to identified criteria. Any DOE proposal to make adjustments in the

operating and CIP budgets must be approved by the BOE. (BOE Policy 1200-

1.12, Department of Education Budgets)

B. Budget restrictions/reductions

If the Governor or Legislature impose budget restrictions or reductions, the

Superintendent shall request these restrictions or reductions in aggregate or

lump sum amounts. The DOE shall implement restrictions or reductions

according to established criteria and with approval from the BOE. (BOE Policy

1200-1.11, Budget Restrictions and Reductions)

C. Carryover funds

Schools should manage these unobligated balances in an efficient and timely

manner. See Reference (f), SP 1623.4, Budget, Carryover Funds. The DOE is

required to routinely report carryover funds on a school-by-school basis. (BOE

Policy 1200-1.14, Carryover Funds)

D. Federal funds

The DOE shall routinely report planned use of federal funds.

BOE shall approve proposed use of Impact Aid/Department of Defense

funds.

DOE shall provide quarterly reports on federal funds received.

At least six months prior to the lapsing of any funds, DOE shall provide the

Board with an action plan for ensuring the funds will not lapse. (BOE Policy

1200-1.18, Federal Funds)

E. Program evaluations

DOE shall conduct a program and fiscal evaluation of its programs.

BOE shall decide whether to continue or discontinue a program after having

reviewed the results of the program’s evaluation.

BOE shall determine whether to reallocate any funds for programs, which are

to be discontinued. (BOE Policy 1200-1.17, Program Evaluations)

F. Allocations

All funds shall be allocated by the Superintendent.

Federal funds must be used as approved by the appropriate agency of the

United States Government. (BOE Policy 1110-3, Application and Allocation of

Financial Resources)

G. Budget Public Input

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Public school parents, students, employees, and the community should be

afforded the opportunity to provide input to the use of the moneys received by

the Department.

The Board and the Department should be held accountable to the general

public for the use of public moneys.

The Department is encouraged to take the public’s comments and concerns

into consideration prior to submitting a final proposal to the Board for

approval. (BOE Policy 1200-1.16, Budget Public Input Required)

6. SP Maintenance Responsibility

The Budget Director in the Office of Fiscal Services is responsible for maintenance,

administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1605

(b) HRS, Section 37-41.5, Department of Education, Carryover of Funds

(d) BOE Policy 1200-1.11, Budget Restrictions and Reductions

(e) BOE Policy 1200-1.14, Carryover Funds

(f) SP 1623.4, Budget, Carryover Funds

(g) BOE Policy 1200-1.17, Program Evaluations

(h) BOE Policy 1200-1.18, Federal Funds

(i) BOE Policy 1110-3 Application and Allocation of Financial Resources

SP 1611: Budget, Weighted Student Formula

1. Purpose

To provide general information regarding implementation of the Weighted Student

Formula (WSF).

2. Effective

Immediately.

3. Applies to

Principals, School Community Council members.

4. Description of Weighted Student Formula (WSF)

A. Law The 2004 Hawaii State Legislature passed the Reinventing Education Act of

2004 that was numbered Act 51. See Reference (b). The Act updated and

added various sections of HRS 302A, which is the chapter in the Hawaii Revised

Statute regarding Education. The Act included a mandate for the DOE to

allocate resources to schools using a weighted student formula.

B. Concept Weighted student formula is a form of student-based budgeting.

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1) Resources are allocated to schools based on student enrollment

and types of student characteristics/need.

2) School communities have flexibility in determining how to use the

allocated funds to meet student needs through lump-sum funding.

C. Committee on Weights (COW). The COW’s responsibilities are defined in HRS

§302A-1303.5 as follows:

1) Create a list of student characteristics that will be weighted;

2) Create a system of weights based upon the student;

characteristics that may be applied to determine the relative cost of

educating any student;

3) Determine specific student weights, including their unit value;

4) Determine which moneys shall be included in the amount of funds to be

allocated through the weighted student formula;

5) Recommend a weighted student formula to the BOE;

6) Perform any other function that may facilitate the implementation of the

WSF; and

7) Meet at least every odd numbered year to review the WSF and, if the

committee deems it necessary, recommend a new WSF for adoption by

the BOE.

5. Responsibilities of BOE, DOE and Principals (HRS § 302A-1303.6)

A. The BOE shall adopt a weighted student formula that takes into account the

educational needs of each student, not less than annually.

B. The DOE shall use the weighted student formula to allocate funds to fund public

schools, upon receipt of appropriated moneys.

C. The principal shall expend money provided to his/her school.

D. No less than 70% of the total appropriate total budget of the DOE, excluding debt

service and capital improvements, shall be expended by individual school

principals per HRS § 302A-1301(b). (NOTE: this is not a requirement that 70% of

the budget be distributed via the weighted student formula.)

6. COW Recommendations to the BOE

A. Put into the lump those program funds that are available to all schools, or to all

schools at a given level—elementary, middle, and high. (Currently, such

program funds may not be allocated to all schools, or to all schools at a given

level.)

B. Put into the lump those program funds that could be allocated according to a

formula.

C. Methodology adopted by BOE

1) Salary costs

a. Use average salaries to determine both the current allocations to

schools and the amount schools would be charged for individual

employees under the weighted student formula, rather than actual

individual employee salaries.

2) School characteristics

a. School size adjustment. Beginning with SY 2008-09, schools

under a designated enrollment size will receive additional funds on

a sliding scale, with smaller schools receiving a greater

adjustment (the smaller the school, the larger the adjustment).

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b. Geographically isolated schools. $50,000 per “geographically

isolated” school adjustment. All schools on Molokai plus Lanai,

and Hana schools.

d. Neighbor island schools. Beginning in SY 2008-09, students in

schools on Kauai, Maui, Molokai, Lanai, and Hawaii islands are

weighted at 0.005 per student, in addition to the other weighted

characteristics.

NOTE: (TO BE UPDATED SEPTEMBER 2011 FOR FY2011-12)

3) Student characteristics

All general and special education students generate basic allocations.

There are additional weights for:

a. Economically disadvantaged students,

b. English language learners,

c. Transient students (those who are enrolled in a school at the end

of the school year but were not enrolled at the beginning of the

school year),

d. K-2 students,

e. Elementary school students (to ensure that elementary schools in

the aggregate neither gain nor lose funding), and

f. Middle school students (to ensure that middle and intermediate

schools in the aggregate neither gain nor lose funding).

g. High school students (to ensure that funds initially appropriated

only for high school students are directed to the high schools).

4) Enrollment reserve

Beginning SY 2008-09 WSF will set aside funds for an enrollment reserve

by adding a “virtual school” of 1% of projected enrollment (reduced to

0.5% of projected enrollment for SY 2009-10). This will minimize the

effect to schools in the event that the official enrollment count is greater

than the projected enrollment. When adjustments are made for the

official enrollment count in August, these funds will be allocated to

schools. If the official enrollment is equal to or less than projection, the

funds will be used to increase the weight of 1.0 pupil (per-pupil allocation)

for all students.

5) Loss threshold

Beginning SY 2008-09, school WSF allocations will not be less than 96%

of the prior year’s WSF official enrollment count allocation. This is

referred to as the “4% loss threshold.” Starting in SY2010-11 changed to

limit the amount of funds that can be used for the Loss Threshold to 1.5%

of the WSF budget. In SY2011-12 capped the threshold at 5%, meaning

a school would have to lose at least 5% funding from one year to the next

to qualify for assistance.

6) Enrollment changes between the projection and the official fall enrollment

date

Each school’s WSF allocation is adjusted–up as well as down–based on

actual enrollment on the official enrollment date shortly after school

begins. Schools base their Academic and Financial Plans on projected

enrollment, and fine-tune these plans once the actual enrollment is

established. If this fine-tuning includes adjustments to positions (needing

more positions or fewer than planned), such adjustments are made by

buying or selling positions.

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7) Enrollment changes during the year

Each school’s WSF allocation is adjusted (up but not down) two additional

times during the school year: (i) one month after the official enrollment

date, and (ii) as of the beginning of the second semester, based on (i)

enrollment changes in the first month after the fall enrollment cut-off date,

and (ii) between the first adjustment date and the end of the first

semester. The adjustment is prorated for (i) one quarter and for (ii) one

semester for schools that gain students. Schools that lose students are

not affected by either adjustment. The Budget Branch reserves, from the

initial weighted student formula allocation, an amount equal to the

estimated mid-year adjustments for schools gaining enrollment.

8) Unique schools excluded from WSF

Some unique schools continue to receive the same amount of funds

received in FY 2005-06 because they already have separate Categorical

Program ID funding (e.g., Olomana), or they are administratively attached

to another school (Niihau).

9) Changes to WSF

HRS §302A-1303.5 requires a Committee on Weights to meet annually to

consider changes to the WSF. The Committee may recommend that

programs be added to WSF, that additional weighting factors be used, or

that current weighting factors be changed. The Committee’s

recommendations are to be presented to the BOE for decision-making.

7. SP Maintenance Responsibility

The Budget Director in the Budget Branch is responsible for maintenance,

administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) page for this SP may provide standard

responses to common questions. Please review this resource before inquiring via

telephone.

8. References and Resources

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1611

(b) Act 51, Sec. 2 State Legislature of Hawaii, 2004

(d) HRS Sec. 302A-1301(b)

(e) HRS Sec. 302A-1303.5

(f) HRS Sec. 302A-1303.6

(g) Weighted Student Formula/School Financial Plan Implementation Manual

(h) School Community Council Handbook

(i) Committee on Weights meeting minutes and recommendations

SP 1622: Budget Request Database; Instructions

for

1. Purpose

To provide instructions for entering budget requests into the Budget Request database.

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2. Effective

Immediately.

3. Applies to

State-level Program Managers, Assistant Superintendents, Directors in the

Superintendent’s Office.

4. Introduction

The Budget Request Database is used to document requests for increases or decreases

in funding, as part of the Budget Request process described in SP 1603, Budget

Preparation Process. Requests are entered by Program Managers and approved by

their Assistant Superintendents or by the Directors in the Superintendent’s Office.

5. Required Data

Before entering a budget request, the requester must:

A. Know the Program ID and Organization ID under which the request will be

submitted.

B. Possess data to support the request for additional funds or positions,

C. Specify outcome measures by which the effectiveness of the program will be

evaluated; and

D. Specify the number and types of positions, casual hires, current expenses, and

equipment needed.

6. Notification of Budget Request Timelines and Database Link

A memorandum from the Superintendent, usually issued in the spring, provides the

timeline for entering and approving requests. The Budget Director sends an email with a

Budget Request database link to the Assistant Superintendents and Superintendent’s

Office Directors, to be forwarded to Program Managers who have been assigned to

enter budget requests.

7. Layout of the Database

The left side of the pane contains:

A. A button to Create a Budget Request.

B. Several buttons to change the view of the previously entered requests by various

sort orders by Program ID number, Organization ID, and EDN.

C. The right side of the pane contains a view of the requests that have been

previously entered.

8. Creating a Budget Request

A. Click on the button labeled “Create a Budget Request.”

B. In the Narrative Justification window, select the Program ID and Organization ID

from the pull-down menus.

C. Add the requestor’s telephone number and position title.

D. Complete all questions on the Narrative Justification additional program facts and

click Save & Continue.

E. When the Narrative has been saved, new buttons appear at the top, one for each

Character of Expenditure (A-Salary, A1-Casual, B-Current Expenses, C-

Equipment, and M-Motor Vehicle).

F. Click on the Character of Expenditure for the first cost item to be requested. A

new input window appears with fields appropriate for the Character.

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G. After completing the input window, click on Save, and then Close. The screen

returns to the Narrative Justification window.

H. A separate Character A-Salary input window must be entered for each type of

position being requested, and a separate Character A1, B, C, or M input window

must be entered for each Object Code for which costs are requested.

I. When all input windows have been completed, click on View.

J. Put the cursor on the Prog Cost document and press Enter.

K. Click on Calculate Program Cost. The database summarizes the costs from all

input windows by Character. Save the document and click on Close.

L. Put the cursor on the Narrative document and press Enter. The summarized

costs will appear on the Narrative.

9. Editing a Budget Request

A. A budget request can be edited prior to submitting it to the next approver.

B. The Narrative Justification should be reviewed carefully and spell-checked,

before being submitted to the next approver.

C. The Character A, A1, B, C, and M costs input windows can be edited or deleted.

D. To delete a cost input window, go to the database View and place the cursor

over the line to be deleted. Press the Delete key. A confirmation of intent to

delete will be displayed when the database is closed.

E. After a cost input window has been deleted or changed, return to the Prog Cost

document and click on Edit, Recalculate Program Cost.

10. Approvals

A. When the budget request is complete, it may be routed to another person for

review and approval. It is highly recommended that the Narrative Justification

and all cost input windows, be printed prior to routing the request for review and

approval. If the requester, or a subsequent approver, inadvertently deletes any

of the documents comprising the request, the hard copy can be used to recreate

the deleted information.

B. The person to whom a request is routed is determined by internal protocols set

by each office.

C. Enter the person’s Lotus Notes email address in the Next Approver field, and

single-click on Submit to Next Approver.

D. If desired, comments to the Next Approver can be written in the appropriate field

in the Narrative Justification input form.

E. Edits can only be made by the individual currently identified as the Next Approver

on the Narrative Justification.

F. The Assistant Superintendent or the Deputy Superintendent should be the last

person in the office to review and approve the request.

G. The Assistant Superintendent or Deputy Superintendent indicates approval by

submitting the request to Budget Prep as the Next Approver.

11. SP Maintenance Responsibility

The Budget Director in the Office of Fiscal Services is responsible for maintenance,

administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) reference page for this SP may provide

standard responses to common questions. Please review this resource before inquiring

via telephone.

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12. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms

(a) Frequently Asked Questions (FAQ) for SP 1622.

(b) SP 1603 Budget Preparation Process

SP 1623: Budget Execution; Introduction to

Procedures and Manuals

1. Purpose

To provide an introduction to budget execution procedures and guidelines.

2. Effective

Immediately.

3. Applies to

Assistant Superintendents, Program Managers, Principals, Complex Area Business

Managers, Complex Area Superintendents, School Administrative Services Assistants.

4. Introduction

In June of each year, after the Appropriations Bill has been enacted into law, the budget

execution process begins when the Governor allocates positions and funds to the

various State departments. This process involves the allocation of funds, development

of expenditure plans, allotments, implementation of approved budgets, and expenditure

controls.

In summary, before monies can be spent, the following must occur:

A. There must be an appropriation before funds can be allocated.

B. There must be an official allocation of funds before an expenditure plan can be

approved.

C. There must be an approved expenditure plan before funds are allotted.

D. There must be an allotment of funds before any spending can commence.

5. DOE Budget Execution Procedure

A. Positions and funds are allocated to the DOE.

B. DOE Budget Branch then sub-allocates to each office, district, and school.

C. A variety of distribution formulas are used to allocate the resources to the schools

for all staff positions, supplies, and equipment. The Superintendent may impose

restrictions in allocations depending on the DOE’s total fiscal need and priorities.

D. Upon receipt of an allocation notice, which is a notification of spending

authorization, offices, districts, and schools develop expenditure plans that show

how the funds are to be expended by objects of expenditure and means of

financing.

E. The Budget Execution Section of the Budget Branch compares the online

expenditure plans with the program allocations and

1) Uses the expenditure plans to generate the Request for Allotment,

A-19, for all of the program appropriations in the DOE, and

2) Submits the A-19s to the Department of Budget and Finance (B&F) for

final approval.

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3) Upon approval, the A-19s are then processed by the Department of

Accounting and General Services (DAGS), which establishes allotments

by appropriations.

4) Expenditures are permitted and limited by these allotments.

6. SP Maintenance Responsibility

The Budget Execution Administrator in the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) reference page for this SP may provide

standard responses to common questions when posted. Please review this resource

before inquiring via telephone.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1623

(b) SP 1604, Budget Execution Process

SP 1623.1: Budget Allocation Process;

Description of

1. Purpose

To describe the allocation process.

2. Effective

Immediately.

3. Applies to

Assistant Superintendents, Complex Area Superintendents, Complex Area Business

Managers, Program Managers, Principals.

4. Introduction

A. Funding for public education comes from multiple sources—the state Legislature,

annual federal grants, federal government, and other federal grants. Funding

also can come from fees, donations, or other collections, which are accounted for

as special, revolving, or trust funds. Many of these other funds do not have

allocation notices because expenditure is based on the cash amount collected by

the school/office.

Appropriations are divided into general funds (state legislature) and federal funds

(federal government/grants).

The Governor has the authority to place budget restrictions on both state and

federal appropriations, which reduces the level of funds to be allocated.

Once the Governor approves the allocation amounts, the allocation of funds

process begins.

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Budget Branch sends the allocation notice template to the Program

Manager.

The Program Manager completes the allocation notice in Lotus Notes and

routes to the next level for review and approval, usually to the Assistant

Superintendent or the Deputy Superintendent.

The Assistant Superintendent or Deputy Superintendent reviews and

forwards the allocation notice to Budget Branch.

The Budget Branch sends the notice to the Superintendent for approval.

After Superintendent approves, the Information System Services Branch

(ISSB) loads allocation amount into the school’s/office’s account (Org ID)

in the budget system database.

B. The allocation process for federal funds includes additional steps:

1) For federal funds, the Legislature authorizes spending within a ceiling

based on an estimate of anticipated federal grant awards.

2) For a federal grant, the federal government informs the DOE of the

award.

3) If the amount awarded to the DOE is in excess of the ceiling authorized

by the Legislature, the approval to spend the funds is requested from the

Governor, as follows:

a. DOE program manager prepares a memorandum to the Governor

and submits it to the Assistant Superintendent.

b. The Assistant Superintendent reviews and routes to

Superintendent for signature.

c. The Superintendent reviews, signs and then routes to the

Governor for approval.

d. The Governor approves or disapproves the request to spend the

funds or to increase the authorized level of spending.

5. Allocation of Funds: Flow chart

The following flow chart illustrates the allocation process for both general funds (State)

and federal funds.

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Allocation of Funds

State Legislature

Passes Appropriation Bill to

authorize spending

Annual Federal

Grants

State Legislature passes

Appropriation Bill to authorize

spending within ceiling

Federal Government

Notifies DOE (Superintendent or

Program Manager) of Grant Award

Other Federal Grants

Governor authorizes request to

expend funds, or to increase

authorized levels of expenditures

GENERAL FUNDS

APPROPRIATION

FEDERAL FUNDS

APPROPRIATION

Governor Budget Restriction Authority

Program Manager

Completes Allocation Notice in Lotus Notes and routes document for

approvals

Budget Branch

Verifies document information

Sends allocation to Superintendent for approval

Assistant Superintendent

Reviews Allocation Notice and sends to Budget Branch

ISSB

Loads approved allocation into school’s account (Org ID) in Budget System

Budget Branch

Sends Allocation Notice Template to Program Managers in Lotus Notes

Program Manager

Completes memorandum to send to

Governor and routes to Assistant

Superintendent

Assistant

Superintendent

Reviews memorandum and routes to

Superintendent for signature

Superintendent

Signs and transmits memorandum to

Governor for approval

ONLY if Federal Fund Ceiling

Increase is Required

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6. Transfer of Allocations

Upon receipt of allocations, transfers are possible between schools and offices (Org

IDs), programs, and character of expenditure provided these transfers are within

legislative intent and the program manager’s guidelines. Transfers are made by

submitting BUD-3 or Form BUD-4 to the Budget Execution Section either by mail or by

FAX (808) 586-3689.

7. SP Maintenance Responsibility

The Budget Execution Administrator is responsible for maintenance, administration, and

questions regarding this SP.

The Frequently Asked Questions (FAQ) reference page for this SP may provide

standard responses to common questions when they are posted. Please review this

resource before inquiring via telephone.

8. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

(a) Frequently Asked Questions (FAQ) for SP 1623.1

(b) BOE Policy 1200-1.12, Department of Education Budgets

(d) SP 1604, Budget Execution Process

(e) SP 1623, Budget Execution, Introduction to Guidelines and Procedures

Forms

(f) Form BUD-3

(g) Form BUD-4

SP 1623.2: Financial Systems; Description of

1. Purpose

To describe the various financial systems used by the DOE.

2. Effective

Immediately.

3. Applies to

Assistant Superintendents, Program Managers, Complex Area Superintendents,

Complex Area Business Managers, Administrative Services Assistants, Principals,

School Administrative Services Assistants, Account Clerks.

4. Financial Systems

The financial systems of the DOE are (1) the electronic Budget System and (2) the

Financial Management System (FMS).

The Budget System receives the allocation amounts via Lotus Notes. Within the Budget

System, expenditure plans are created.

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The Financial Management System (FMS) receives the expenditure plans from the

Budget System and creates allotments against which schools and offices are able to

charge payroll and operating expenditures, and post encumbrances.

Note: Although not a financial system, the DOE’s internal communication system for

email and official DOE memos and notices, Lotus Notes, first provides the

documentation of the purpose, guidelines for implementation, and distribution of

allocations. Lotus Notes also provides an approval process whereby the Superintendent

approves each allocation per BOE policy 1110-3.

A. The first flow chart (A) that follows shows the relationship of Lotus Notes

communication system to the Budget System and to the FMS, the DOE financial

systems.

The Budget System summarized in the chart includes Budget Preparation and

Budget Execution functions, including Allocations, Expenditure Plans and

Adjustments. Adjustments to this system are requested on form BUD-3 “Request

to Transfer Allocation.”

The FMS system summarized in the first chart includes allotment balances,

payments, purchase orders, payroll, contracts, cash receipts, and cash balances.

Adjustments to this system are requested on form FMS-AC4 “Request for

Change of Accounting Codes and/or Amounts.”

The first chart also shows the relationship to the state Department of Accounting

and General Services, which processes the state payroll and receives charges

from the schools and DOE offices.

B. The second flow chart (B) details the FMS processing of funds allotted to the

School.

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5. Flow charts

A. DOE Financial Systems

Lotus Notes

Allocation Notices

Guidelines for

Implementation

Budget System

Budget Preparation

Module

Budget Execution

Module

Allocations

Expenditure Plans

Adjustments

BUD3 Forms

Allocation

Amounts

Carryover

Finan

cial

Management

System

Cash Receipts

Purchase Orders

Payments

Payroll Costs

Cash Balances

Allotments

Purchase Orders

Contracts

Payments

Payroll Costs

Allotment Balances

FMS

AC4 Forms

Exp

Enditure

Plans

Casual Payroll

System

Manual

Timesheets

Local

School

Accounts

DAGS

Payroll System

TSEAS

Charges

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Funds Allocated to School/Office

School Guidelines Implementation

School/Office Expenditure Budget

BUDGET SYSTEM e-mail notification

Via LN: “DOE Budget Alloc Details FYxx” Database

Via WEB: http://doe.k12.hi.us/; Other Reports

Purchases made on FMS workstation

Documents:

Purchasing Worksheets

Purchase Orders

Direct Payments

Invoices

ATPs

Attachments

Services Rendered

Documents:

Form 432, 435 Certifications

15Z Temporary Contract Employees

D-55, D-56, D-90 Timesheets

Casual Payroll System

Goods, Equipment, Contractor

Services

Fixed Asset Equipment Inventory

Paychecks

Pay Statements

B. Allocation to School/Office - FMS Process

This chart details the processing of funds through FMS, including the forms used and

types of functions carried out through this system.

Budget

Branch

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6. SP Maintenance Responsibility

The Budget Execution Administrator of the Office of Fiscal Services is responsible for

maintenance, administration, and questions regarding this SP.

The Frequently Asked Questions (FAQ) reference page for this SP may provide

standard responses to common questions when posted. Please review this resource

before inquiring via telephone.

7. References, Resources, and Forms

The following resources may provide access to statutory, policy, and contractual

authorities; and closely related SPs, procedures, and forms.

Note: Some linked addresses above may be accessible only from within the DOE

internal network.

(a) Frequently Asked Questions (FAQ) for SP 1623.2.

FAQ - Lotus Notes

FAQ - Budget System

(b) BOE Policy 1110-3, Application and Allocation of Financial Resources

Forms

(d) FMS Forms

SP 1623.3: Expenditure Plans; Description of

Process

1. Purpose

To describe the expenditure plan process that translates school decision-making into

a spending plan.

2. Effective

Immediately.

3. Applies to

Assistant Superintendents, Complex Area Superintendents, Complex Area Business

Managers, Program Managers, Principals, School Administrative Services Assistants,

Account Clerks.

4. Function of Expenditure Plans

Expenditure plans set the expenditure or spending limits within the Financial

Management System (FMS). Before schools and offices can spend any monies, they

must first prepare an expenditure plan and specify the amounts they intend to spend for

the various types/characters of expenditure (salaries, supplies, equipment, etc) in the

electronic Budget System. Schools and offices shall prepare an expenditure plan in the

Budget System for each program for which funds have been allocated. These

expenditure plans then provide the basis for creating allotments and accounts in the

Financial Management System (FMS).

Expenditure plans show the planned annual expenditures.

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A. By program

B. By characters of expenditure and objects of expenditure

1) A Personal Services - Salaries

2) A1 Other Personal Services - Part-time Personnel, Substitute,

Student Helper, Fringe, Differential, etc.

3) B Other Current Expenses - Supplies, Transportation, Utilities,

Repair and Maintenance, etc.

4) C Equipment - AV, Cafeteria, Computer, Custodial, Office, Textbook

5) M Motor Vehicle

5. Relationship Between Allocation, Expenditure Plan, and FMS Characters of

Expenditure

Allocations are made in various budget characters of expenditure (alphabetical) to allow

for flexibility in the creation of expenditure plans. Furthermore, allotments in FMS

created from the expenditure plans are grouped in corresponding FMS characters or

numerical codes. The chart below lists the Budget characters and the corresponding

FMS characters for each type of expenditure.

Budget

Character

FMS

Character

Description

Salaried Personnel Costs

Hourly (Casual) Personnel Costs (e.g., substitutes, part

time employees, temporary contract employees, student

helpers, stipends, fringe benefit costs)

Supplies, utilities, transportation, repair and maintenance

Equipment, textbooks, library books, inventoried items

Motor vehicles

6. Allocation Category = Level of Flexibility

Certain allocation categories allow for greater flexibility in types of expenditures. For

example, Category “BC” is less flexible than Category “F.” Category “T” has the most

flexibility.