902
KAR 8:170. Local health department financial management requirements.
RELATES
TO: KRS 41.240, 211.170, 211.180(1), 212.230, 212.240, 212.245, 212.890,
424.110-424.150
STATUTORY
AUTHORITY: KRS 194A.050(1), 211.170
NECESSITY,
FUNCTION, AND CONFORMITY: KRS 194A.050 requires the Cabinet for Health and
Family Services to promulgate administrative regulations necessary to protect,
develop, and maintain the health, personal dignity, integrity, and sufficiency
of the citizens of the Commonwealth; to operate the programs and fulfill the
responsibilities vested in the cabinet; or to comply with federal law. KRS
211.170(1) and (3) require the Department for Public Health to establish
policies and standards of operation for Kentucky’s local health departments. This
administrative regulation establishes minimum fiscal and financial management
requirements for Kentucky’s county and district local health departments and
for all other classes of local health departments, except if a specific
Kentucky revised statute requires a more stringent minimum requirement.
Section
1. Definitions. (1) "Fee-for-service program" means a program in
which service fees, excluding program administration fees, are greater than
fifty (50) percent of funding.
(2)
"Local support" means local health department financial support:
(a)
Including:
1.
Unrestricted receipts from a local government agency or special district;
2.
Receipts from the public health taxing district;
3.
Nonfederal receipts from a contract with a board of education; and
4.
An unrestricted donation from another source; and
(b)
Excluding funds from the Undesignated and Restricted fund balances.
(3)
"OMB" means the federal Office of Management and Budget.
(4)
"Public health department director" means:
(a)
The administrative or health officer of a county or district health department;
(b)
The administrative assistant of a county health department that does not have a
health officer;
(c)
The director of a district health department that does not have a health officer;
(d)
The district director of health of an independent district department of
health; or
(e)
The commissioner of an urban-county department of health or of a health
department serving a county with a city of the first class.
(5)
"Restricted fund balance" means the portion of a local health
department's total fund balance that is restricted by the Department for Public
Health for use for a specific program's expenses or other items of expense.
(6)
"Undesignated fund balance" means the portion of a local health
department's total fund balance that is not restricted by the Department for
Public Health for a specific program's expenses or other items of expense.
Section
2. Budgeting Requirements. (1) Each local health department shall prepare a
fiscal year budget in accordance with annual budgeting instructions developed
and distributed by the Department for Public Health.
(2)
Each local health department shall have a balanced budget in which receipts at
least equal expenditures. Each local health department shall operate within its
approved budgets.
(3)
Each local health department annual budget shall be approved by both the
governing local board of health and the Department for Public Health.
(4)(a)
Each local health department shall be responsible for making budget changes
necessitated by:
1.
Changes in financial status;
2.
Changes in project status; or
3.
The addition or deletion of a new project.
(b)
Changes shall:
1.
Be subject to review and approval by the Department for Public Health; and
2.
Require a corresponding change in plans if required by the Department for
Public Health.
(5)
Actual capital expenditures of local health departments for furniture and
equipment, data processing equipment, and vehicles shall not exceed the
approved budgeted amount without prior approval by the governing board of
health.
(6)
Actual use of a local health department’s undesignated fund balance in excess
of the amount included in the approved budget shall be approved by the
governing board of health and shall be used solely for the operation and
maintenance of local health departments.
(7)
An actual deficit in a local health department's financial operations for the
fiscal year wherein cash expenditures and payroll related liabilities exceed
available cash receipts, including approved use of the unrestricted fund
balance, shall not be allowable.
(8)(a)
If the Department for Public Health determines that a local health department
is receiving fewer receipts than are budgeted or is making expenditures in excess
of the approved budget or, if through any other circumstances a deficit
condition is probable at the end of the fiscal year, the Department for Public
Health shall notify the local health department in writing of the
determination.
(b)
Within fifteen (15) working days of receipt of the notification, the local
health department shall inform the Department for Public Health in writing of
the reasons that the determination may be in error.
(c)
If the reasons and corrective actions listed by the local health department are
not sufficient in the department's opinion to prevent a deficit condition from
occurring at the end of the fiscal year, the Department for Public Health shall
direct the local health department to institute a hiring freeze on employees, a
freeze on meritorious, promotional, or other salary increments, a reduction in
contractual and other expenditure categories, or other action necessary to correct
the deficit situation.
Section
3. Use of Receipts. A local health department may, with the approval of the
Department for Public Health, transfer funds from a restricted to an
unrestricted account.
(1)
Receipts from any source shall be used in accordance with laws, policies,
administrative regulations, and contracts governing the use of the receipts.
Receipts shall be used only for the operation and maintenance of the health
department for necessary, reasonable, and proper purposes that protect and
improve the health of the people of the Commonwealth.
(2)
The minimum acceptable level of local support shall be determined annually by
the
Commissioner of the Department for Public Health.
(3)
The state allotment to a local health department shall be adjusted in the
following circumstances:
(a)
The local health department decreases its budgeted amount of local support
below the minimum acceptable level. The state allotment shall be decreased by
the same percentage in the year of the decrease.
(b)
The local health department receives less local financial support than the
required level. The state allotment shall be decreased by a percentage equal to
the percentage that the actual local support was less than the required local
support. The decrease shall apply to the fiscal year following the shortage.
(c)
The local health department accumulates an unrestricted fund balance, as of
June 30 of a fiscal year, in excess of thirty (30) percent of that year's
expenditures for non fee programs plus forty (40) percent of that year's
expenditures for fee for service programs, or $100,000, whichever is greater.
The local health department shall submit, to the Department of Public Health, a
written plan of use for the amount of the excess. If approved, the funds shall
be placed into a local restricted fund to be used solely for the purpose(s)
approved.
(4)
Fees.
(a)1.
A request from a local health department to change patient fees to either a
sliding or nominal fee basis shall be sent to the Department for Public Health
for approval.
2.
A request shall include documentation of the proposed full amount of the fee,
the estimated annual cost of the service and the estimated net fee income for
the service.
3.
Charges for medical supplies and equipment may be requested as a percentage of
the acquisition cost of the supply or equipment item or may be requested as charges
for individual items.
(b)
Patient fees charged to self-pay patients, if approved by the Department for
Public Health, may be charged on a sliding fee basis, in accordance with the
following formula: Fees for self-pay patients with a household income up to 250
percent of the most recent poverty guidelines, published annually by the
Department of Health and Human Services, shall be based on a schedule of
discounts from 101 to 250 percent of poverty, with full charge assessed for
individuals above 250 percent of poverty and no charge for individuals below
101 percent of poverty; except:
1.
A nominal fee up to five (5) dollars shall be charged for communicable disease
services specified by the Department for Public Health; and
2.
A charge shall not be made to school age children at a school-based clinic if
requested by the local health department and authorized by the Department for
Public Health.
a.
Inability to pay the assessed fee shall not be a barrier to services.
b.
A policy of a local health department that may result in referral of services
due to nonpayment of fees shall be approved by the Department for Public
Health.
c.
A local health department shall bill third-party payors for covered services
provided to individuals.
(c)
If a third-party governmental payor is billed for services rendered to an
eligible patient, the regulations of the third-party payor shall be followed
for the part of the fee charged directly to the patient.
(d)
A Medicaid "spend down" patient shall be billed at 100 percent of
charges.
(e)
A patient who has health insurance coverage shall be billed at 100 percent of
charges. A balance not covered by health insurance shall be charged to the
patient, except that the amount charged shall not exceed the amount that a
patient without health insurance coverage would be charged, using standard
discounts as applied to total charges for services rendered.
(f)
A fee, regardless of the source of the fee or the funding of the project, shall
be applied to the project that generates the fee, in accordance with income
procedures of the OMB Circular A-102. A third-party cost reimbursement payment
and an interim payment shall be recorded in the same project where the costs
were recorded, in proportion to the expenditures of each project that were reimbursed
by the third party.
(5)
A matching requirement for any source of receipts shall be the sole
responsibility of each local health department.
(6)
The following policies shall be applied in closing receipt accounts for the
local health department fiscal year, July 1 to June 30:
(a)
Receipts earned and received during a fiscal year shall be recorded as a
receipt of that fiscal year; and
(b)
Receipts earned in one (1) fiscal year and received after June 30 of that
fiscal year shall be recorded as new fiscal year receipts.
Section
4. Expenditure Policies. Policies and procedures required by the OMB Circular
A-87 shall be followed by local health departments for expenditures in
projects, regardless of the source of funds for the project. The following
policies concerning allowable expenditures and their proper documentation shall
be followed by local health departments:
(1)
Salaries, wages, benefits, and personnel payments.
(a)
Salaries and wages for only those positions specified in administrative
regulations for local health departments, 902 KAR 8:040 and 902 KAR 8:060
through 902 KAR 8:140, shall be allowable. The positions and related
expenditures shall be included in the approved budget or approved budget
revisions of the local health department. Other salary, wage, or bonus payments
shall not be allowable, unless specifically approved by the Department for
Public Health. Uniform pay dates shall be determined annually by the Department
for Public Health.
(b)
Expenditures shall be authorized for payment of employer paid fringe benefits
required or allowed by policies of the Department for Public Health.
1.
Required benefits shall be payments of the single-coverage amount for health
insurance and life insurance that are part of the state-negotiated plans.
2.
Additional allowed benefits shall be determined by the public health department
director and approved by the governing board of health.
3.
A part-time employee or a personal services contract employee working less than
100 hours per month shall not be eligible for employer-paid fringe benefits.
4.
A payment to or on behalf of an employee for another direct or fringe benefit
or other reason shall not be made unless:
a.
Specifically allowed by this administrative regulation;
b.
Approved by the Department for Public Health; and
c.
A disbursement for services of a contract employee or independent contractor
shall be made in accordance with the terms of the written contract. A contract
payment shall not be made without proper written documentation demonstrating
that services have been rendered.
(2)
Capital expenditures.
(a)
Capital expenditures are allowable for necessary capital equipment, land, and
buildings.
1.
The equipment in this category shall cost more than $5,000 and have an expected
useful life of one (1) year or more.
2.
The same purchasing policies apply to capital items as apply to noncapital
purchases.
3.
Before purchasing land or buildings or contracting for the construction or
remodeling of a building, the local health department shall contact the
Department for Public Health for approval.
(b)
A local health department shall pay a vendor within thirty (30) working days of
the receipt of the service or goods, or within thirty (30) working days of the
receipt of the invoice or bill from the vendor, whichever is later, unless the
health department and the vendor have agreed in writing to a longer period of
time.
(c)
A local health department shall not donate anything of value to any individual
or entity.
Section
5. Travel Policies. The public health department director shall insure that
travel expenses are economical.
(1)
A person who travels on official local health department business shall state
on the expense voucher the purpose of each trip and shall maintain records to
support claims.
(a)
A local health department may provide an employee with a credit card to cover
travel expenses.
(b)
Due care shall be taken to assure that use of a local health department credit
card is not abused.
(c)
A local health department shall not provide an employee with cash to pay travel
expenses. The public health department director responsible for insuring that
travel reimbursement conforms to this policy shall disallow, reduce, or
strike
from an expense voucher any claim contrary to this administrative regulation,
and may require written justification for an amount claimed.
(2)
With the exceptions cited in this policy, reimbursement shall not be claimed
for expenses of a person other than an employee, or other person in the official
service of the local health department. Only necessary expenses of official
travel shall be reimbursed.
(3)
Each day's vicinity travel shall be listed on a separate line on the expense
voucher. The employee's supervisor or the public health department director shall
monitor vicinity mileage claimed by an employee on travel status.
(4)
A travel voucher shall be signed and dated by the employee submitting the claim
and by an employee designated in accordance with the local health department’s
internal control procedures. The public health department director’s travel
voucher shall be signed by one (1) or more board of health members designated
at a board of health meeting to perform the function.
(5)
The official work station of an employee shall be:
(a)
The street address of the health department facility;
(b)
For a health department with more than one (1) facility, the facility in which
the employee most often works;
(c)
Established not for an employee's purposes, but in the best interest of the health
department; and
(d)
Designated for a valid purpose.
(6)
A standard travel expense voucher or another voucher approved by the Department
for Public Health shall be used to claim reimbursement for travel expenses.
(a)
Each travel expense voucher shall show the claimant's identifying number, name,
address and official workstation. The travel voucher may be typed, prepared by
computer, or legibly prepared in ink.
(b)
Receipts shall be stapled to the travel voucher.
(c)
If leave interrupts official travel, the travel voucher shall show the dates of
leave.
(7)
A travel expense shall not be reimbursed unless the travel was authorized in
advance as follows:
(a)
Travel in Kentucky and within the other forty-nine (49) states and the District
of Columbia may be approved by the public health department director or
designee; and
(b)
Budgeted out-of-state travel funds shall be available in the amounts required
for the out-of-state travel.
(8)
A health department employee traveling on health department business shall use
the most economical, standard transportation available and the most direct and
usually traveled routes. Expenses added by use of other transportation or
routes shall
be
assumed by the employee.
(9)
Health department-owned vehicles and gasoline credit cards shall be used for
health department business travel if available and feasible.
(a)
Mileage payment shall not be claimed by an individual when health department
vehicles are used.
(b)
Routine personal use of a health department vehicle, including commuting use,
shall not be an allowable public expenditure.
(c)
An assignment of a vehicle to an employee who takes the vehicle home shall be
minimal and limited to direct service personnel providing:
1.
On-call direct services, or a majority of services in the field; or
2.
Substantial direct services on the way to or from the employee's workstation.
(d)
If a vehicle is assigned under paragraph (c) of this subsection, some personal
commuting mileage may be unavoidable. A local health department shall develop a
written policy to address the unavoidable personal mileage. The policy shall
conform to current federal and state tax requirements for income and travel and
shall be forwarded to the Department for Public Health for review and approval.
(10)
Mileage claims for use of privately-owned vehicles shall be disallowed if a
health department vehicle was available and feasible.
(11)
An employee on official travel status whose private or agency automobile breaks
down may continue in travel status as approved by the public health department
director.
(12)
An employee on official travel status may be granted annual leave during which
time and travel expenses shall not be reimbursed.
(a)
An employee on official travel status may be continued on travel status, as
approved by the public health department director, if the employee becomes
incapacitated due to illness or injury that qualifies as official sick leave.
(b)
Medical expenses shall not be allowable travel costs.
(13)
On nonworking days, an employee on official travel status shall forfeit
official travel status if the employee returns to his official work station or
domicile.
(14)
Reimbursement shall not be paid for travel between the employee's residence and
official workstation, unless requested to report to work while off duty.
(15)
Commercial airline travel shall be coach or tourist class. Additional expense
for first-class travel shall not be reimbursed.
(16)
Mileage for each in-state trip shall be based on the Department of
Transportation's official mileage map or on the Finance and Administration
Cabinet's mileage chart if available. Out-of-state mileage shall be based on mileage
maps. If point of origin is the claimant's residence, mileage, and time shall
be
paid
between the residence and travel destination, or between the work station and
travel destination, whichever is shorter.
(17)
The cost of renting a car or other special conveyance in lieu of ordinary
transportation shall be allowed only with acceptable written justification to
the public health department director. Privately-owned aircraft may be used
only when it is to the advantage of the health department as evidenced by a
reduction in both travel costs and travel time.
(18)
Lodging costs shall be the most economical available.
(a)
Facilities providing special government rates or commercial rates shall be used
where feasible.
(b)
State-owned facilities or local health departments shall be used for meeting
rooms and lodging if available, practical, and economical.
(19)
A claimant who attaches the hotel's or motel's preprinted, receipted bill shall
be reimbursed for the claimant's actual cost of lodging, subject to the
following provisions:
(a)
Reimbursement at a Kentucky state park shall be at the park’s actual rate.
(b)
The local health department shall not pay for lodging located within forty (40)
miles of a claimant's residence or work station without approval of the public
health department director.
(c)
Lodging accommodations shared with another person or persons, not a local
health department employee, shall be reimbursed at the rate for a single room.
Lodging accommodations shared with other local health department employees
shall be reimbursed on a pro rata basis.
(20)
Mileage reimbursement for official use of privately-owned vehicles shall be at
the mileage reimbursement rate determined by the Department for Public Health.
(21)
With receipts, actual commercial transportation costs shall be reimbursed.
(22)
Reimbursement for use of privately-owned aircraft shall not exceed the cost of
air coach fare or the privately-owned vehicle rate, whichever is less.
(23)
A claimant using camping vehicles for lodging shall be reimbursed for actual
expense plus parking or camping charges. A receipt for parking or camping
charges shall be submitted.
(24)
Actual parking, bridge, and toll charges shall be reimbursable. Toll receipts
shall not be required for in-state travel by a two (2) axle vehicle.
(25)
Reasonable expenses shall be allowed for baggage handling, for delivery to or from
a common carrier or lodging, and for storage. Charges for overweight baggage
shall be allowed if the excess was for official business.
(26)
Registration fees required for admittance to meetings shall be allowed. An
employee shall not claim meal expenses for meals included in the registration
fee. A notation shall be made on the travel voucher that the registration fee
included the cost of meals. Reimbursement for registration fees and other
job-related training may be claimed as "other expenses" on the travel
voucher and charged to the appropriate expenditure accounts. Receipts for
job-related fees shall be attached to the travel voucher.
(27)
Telephone, fax, and telegraph costs for necessary official business shall be
allowed. A call to agency central offices shall be made collect, or a telephone
credit card or similar telephone card shall be used.
(28)
If justified, other necessary miscellaneous expenses associated with official
travel may be allowed by the public health department director. Receipts shall
be attached to the travel voucher.
(29)
Receipts shall be required for travel expenses over ten (10) dollars except for
subsistence expense items.
(30)
Subsistence shall include amounts determined to have been spent for meals,
taxes, and tips. To be eligible for subsistence for breakfast or lunch while
traveling in Kentucky, a claimant's authorized work shall require overnight
accommodations at a destination more than forty (40) miles from both work
station and home and shall also require absence from the work station and home
during mealtime. The claimant shall attach to his travel voucher, either his
lodging receipts or other credible documentation sufficient for audit.
(31)
Health department employees assigned to attend a function of an organization
not under their control may be reimbursed for actual meal costs charged or
arranged for by the organization. Receipts for meals shall be attached to the
travel voucher.
(32)
The health department may pay for subsistence and related expenses at staff
meetings not to exceed four (4) meals per year for an employee. The subsistence
expense
shall not exceed the department’s standard meal reimbursement amount.
Travel
status shall not be required for staff meeting meals.
(33)
Other allowable travel expense reimbursements shall consist of the following:
(a)
Expenditures for the actual and reasonable cost of meals provided for district
and county board of health members for official board functions, and for meals
of guests invited to participate in the official business conducted at these
functions;
(b)
Travel expenditures of board of health members attending official board of
health functions, in accordance with travel policy provisions;
(c)
Travel expenditures incurred by board members other than the chairperson if
approved by the chairperson or the full board;
(d)
Travel expenditures incurred by the chairperson if approved by the
vice-chairperson or the full board;
(e)
Expenditures for meals and transportation expenses of local health department
advisory committee members attending official local health department
functions; and
(f)
Travel expenses of a person applying for a position that will designate the
applicant as the public health director for the department, or as the medical
director subject to the limits applicable to local health department employees,
but no more than one (1) round trip for each applicant.
(34)
Expenditures shall be authorized for employee morale and welfare items, as
defined in OMB circular A87, in an amount not to exceed twenty-five (25)
dollars per employee per fiscal year. Receipts shall be kept for all
expenditures.
(35)
Expenditures shall be allowed for other items necessary for the maintenance and
operation of the local health department, if the expenditure is made in accordance
with statutes and administrative policies.
(a)
The Department for Public Health may require a local health department to
provide adequate justification for any expenditure made by the local health
department.
(b)
If the justification is determined to be inadequate, appropriate corrective
action shall be taken by the Department for Public Health.
Section
6. Purchasing Policies. (1) Each local health department shall develop and
follow formal procedures for authorizing purchases made on behalf of the local
health department.
(a)
These procedures shall be outlined in the local health department's written
internal control procedures.
(b)
Written purchase orders (service authorizations for independent contractors)
and receiving reports or service verifications shall be used except for utility
bills and purchase orders not in conformance with standard business practice.
(2)
A local health department shall use at least the following minimum procedures
for purchasing and advertisement for bids:
(a)
If an expenditure for a single type of good or service not covered by contract
policies is more than $40,000 in a fiscal year, advertisements for bids shall
be made in accordance with KRS 424.110-424.150. The Department for Public
Health may be contacted for assistance in determining whether an expenditure is
for a single type of good or service. The local health department shall:
1.
Record, in writing, and maintain for department review:
a.
Price quotations received; and
b.
Reasons and basis for selecting and placing the order, if the lowest price was
not selected; and
2.
Select the lowest and best bid.
(b)
If the expenditure for a single type of good or service is more than $10,000 but
not greater than $40,000 in a fiscal year, the local health department shall:
1.
Obtain three (3) or more price quotations from qualified sources of supply, if
available, in the department's normal trade area; and
2.
Record, in writing, and maintain for department review:
a.
Price quotations received; and
b.
Reason and basis for selecting and placing.
(c)
If a single type of good or service purchased is not greater than $10,000 annually,
purchases may be made by local health departments from any available source of
supply as long as the maximum value for each purchase is obtained.
(d)
The requirements for competitive bidding shall not apply to a purchase made
under the provisions of a state price contract.
(e)
A physician who is the health officer for more than one (1) local health
department may purchase supplies and services or technical services on a
cooperative purchasing basis, in accordance with the purchasing administrative
regulations for local health departments.
(f)
A local health department shall not enter into a lease or purchase agreement
for nonprofessional services with a local health department employee or a
business entity in which a local health department employee owns or controls
more than five (5) percent interest, except if determined to be in the best
interest of the public and approved in writing by the Department for Public
Health.
Section
7. Contracting for Services. (1) A local health department shall not contract
with a provider who is disbarred or suspended by a federal funding agency or by
a Kentucky licensure board.
(2)
This policy applies to personal services contracts for services of a
professional or technical nature not available through the local health
department merit system.
(3)
Services of a professional or technical nature shall be contracted for in
writing in accordance with this policy except:
(a)
Nonprofessional emergency repair services of skilled tradesmen shall not
require written contracts. Nonemergency services of skilled tradesmen shall be
procured in accordance with purchasing policies.
(b)
Administrative or management services, financial management services, data
processing services or consulting services or studies shall not be contracted
for if these services can be provided to the local health department by the
Department for Public Health.
(4)
Allowable services.
(a)
The service desired to be contracted for shall be an essential service which is
necessary for carrying out public health services.
(b)
A health department shall not use a personal services contract to substitute
for establishing a position in the local health department.
(c)
A health department shall not contract for personal services with an individual
who works 1,200 hours or more in a year, except with Department for Public
Health approval.
(5)
A provider shall not be paid more than the standard hourly rate determined by
the Personnel Cabinet. In determining acceptable rates of reimbursement,
consideration shall be given to:
(a)
The type of service to be provided;
(b)
The availability of providers;
(c)
The duration of services to be performed;
(d)
Rates being paid to regular employees for similar services; and
(e)
Comparable rates being paid in the area and other parts of the state for
similar services.
(6)
A contract shall not be entered into with a provider when a conflict of
interest, real or apparent, will occur.
(a)
Conflicts of interest fall into the following categories:
1.
Constitutional;
2.
Statutory;
3.
Common-law; and
4.
Department for Public Health policies.
(b)
A contract shall not be entered into with a local health department employee or
local board of health member, unless authorized in writing by the Department
for Public Health, and except for medical or professional services under
$10,000.
(c)
A county board of health member who is not a member of the district board of
health shall not incur a conflict of interest if the district health department
contracts for the county board of health member's services.
(d)
A contract exceeding $5,000 in a fiscal year shall not be entered into with a
professional service corporation that has employees or governing board members
as constituents, unless authorized in writing by Department for Public Health.
(7)
In drafting a contract, a determination shall be made concerning whether the
provider of the service is an "independent contractor".
(a)
If it is determined that the individual is not an independent contractor, the
local health department shall withhold applicable federal, state, and local
taxes and Social Security (FICA), and shall use a standard local health
department personal services contract.
(b)
If it is determined that the provider is an independent contractor, a standard
local health department independent contract shall be used.
(8)
A contract:
(a)
Shall not exceed one (1) year in duration and shall not contain a clause which
indicates the contract is automatically renewable at the end of the fiscal
year;
(b)
Shall expire on or before June 30 of each fiscal year unless approved by the
Department for Public Health; and
(c)
May be extended into the new fiscal year by filing a formal contract extension,
approved by the Department for Public Health.
(9)
Either party shall have the right to terminate a contract at any time upon
notice to the other party.
(a)
A local health department may add a clause to a contract requiring up to a
ninety (90) day notice prior to termination.
(b)
Confirmation of termination shall be in writing and a copy of the notice of
termination shall be provided to the Department for Public Health.
(10)
All local health department contracts and amendments are subject to review by
the Department for Public Health.
(a)
If the Department for Public Health questions the legality, propriety,
necessity, rate of compensation, or description of services, in a contract, the
department shall notify the local health department of its concerns.
(b)
A contract for which clarification is requested by the Department for Public
Health shall be put on hold until a review has been completed.
(11)
A contract may be modified at any time, and a proposed change shall be
accomplished by formal contract amendment.
Section
8. Disposition of Assets, Surplus, or Excess Property. (1) If one (1) or more
counties withdraw from a district health department, the following policies
shall apply to the disposition of surplus receipts, assets, and liabilities:
(a)
Program restricted surplus receipts or supplies, inventories or equipment shall
be retained by the district health department except in the case of complete
dissolution of the district. If the district is dissolved, program restricted
surplus receipts and items shall be equitably distributed to the county or
counties proportionate to their taxing district or fiscal court participation
in the district;
(b)
Unrestricted receipts, supplies, and inventories shall be divided among
district and withdrawing county boards of health proportionate to the ratio of
local taxing district support provided by each county in the year preceding the
withdrawal;
(c)
Deficits shall be charged to the district and withdrawing county boards of
health according to the ratio of local taxing district or fiscal court support
provided by each party in the year preceding the withdrawal;
(d)
Equipment purchased by withdrawing county boards of health prior to the
organization of the district shall be returned to the board which originally
purchased the equipment;
(e)
Equipment purchased during the operation of the district shall be divided among
the district and the withdrawing boards of health according to the ratio of
local taxing district or fiscal court support provided by the withdrawing
county boards of health to the total local taxing district or fiscal court
support of the district in the year preceding the withdrawal:
1.
The net inventoried book value of the equipment shall be used in determining
the distribution.
2.
The Department for Public Health shall approve the final disposition of
equipment.
(f)
Buildings owned by the district board of health shall remain the property of
the district health department. If total dissolution of a district health
department occurs, buildings owned by the district shall be sold according to
the policies of the Department for Public Health and the proceeds shall be
added to the surplus receipts of the district to be divided according to the
procedures listed in this subsection; and
(g)
The Department for Public Health shall approve the disposition of assets and
liabilities.
(2)
A local health department may sell or dispose of any real or personal property
including intangible property which is not needed or has become unsuitable for
use.
(3)
The funding source shall be contacted for the exact requirements. Property
purchased with restricted funds may have disposal requirements in addition to
or instead of the following requirements:
(a)
A written determination as to need or suitability of any property of the local
health department shall be made, and shall fully describe the property; its
intended use at the time of acquisition, and the reasons why it is in the
public interest to dispose of the item;
(b)
Surplus or excess property may be transferred, with or without compensation, to
another governmental agency; or it may be sold at public auction or by sealed
bids. The highest bid shall be accepted. Other methods of disposition of
surplus or excess property shall not be allowable;
(c)
If a local health department receives no bids for surplus or excess property,
either at public auction or by sealed bid, or reasonably determines that the
aggregate value of the item is less than $500, the property may be disposed of,
consistent with the public interest, in any manner determined appropriate by
the local health department. A written description of the property, the method
of disposal, and the amount of compensation, if any, shall be made; and
(d)
Any compensation resulting from the disposal of surplus or excess property
shall be deposited in the local health department's bank account. If the
property was purchased with restricted funds, appropriate accounting of the
compensation received shall be made as required by OMB Circular A-87,
incorporated by reference.
Section
9. Bank Accounts and Investments. (1) Fidelity bonding shall be obtained on
local health department employees and board of health members who handle funds
of the local health department.
(a)
An individual who makes deposits or signs checks or other instruments on local
health department checking or investment accounts or certificates shall be
bonded.
(b)
Employees or board members shall be bonded in an amount sufficient to cover the
total amount of funds to which they have access at any one (1) time.
(2)
Local health departments may invest and reinvest money subject to their control
and jurisdiction in the following investments:
(a)
Obligations of the United States and of its agencies and instrumentalities.
These investments may be accomplished through repurchase agreements reached
with national or state banks chartered in Kentucky; and bonds or certificates
of indebtedness of the state of Kentucky and of its agencies and
instrumentalities;
(b)
A savings and loan association insured by an agency of the government of the
United States up to the amount so insured; and
(c)
Interest-bearing deposits, or other authorized insurance instruments, in
national or state banks chartered in Kentucky and insured by an agency of the
government of the United States up to the amount so insured, and in larger
amounts if the bank shall pledge as security, obligations as permitted by KRS
41.240(4), having a current quoted market value at least equal to uninsured
deposits.
(3)
A local health department may hold funds in its local bank account in a
federally-insured bank at the minimum level necessary for efficient operations.
(4)
Local health department funds shall not be transferred to a public health taxing
district
account or to an account not reported in the local health department financial
statements.
Section
10. Incorporation by Reference. (1) The following material is incorporated by
reference:
(a)
"OMB-87 - Cost Principles for State, Local and Indian Tribes
Government", edition 5/04; and
(b)
"OMB-A-102 - Grants and Cooperative Agreement with State and Local
Government".
(2)
This material may be inspected, copied, or obtained, subject to applicable
copyright law, at the Kentucky Department for Public Health, Division of
Administration and Financial Management, 275 East Main Street, Frankfort,
Kentucky, Monday through Friday, 8 a.m. to 4:30 p.m. (28 Ky.R. 770;
Am. 1162; 1654; eff. 1-14-2002; 29 Ky.R. 1100; 1616; eff. 12-18-2002; 37 Ky.R.
3012; 38 Ky.R. 249; eff. 8-17-2011.)
