1 Colo. Code Regs. § 101-1-3-1

Current through Register Vol. 48, No. 1, January 10, 2025

Rule 1 CCR 101-1-3-1 - COMMITMENT VOUCHERS

1.AUTHORITY

State of Colorado Procurement Rules - 1 CCR 101-9

§24-30-202 (1-4), and (5)(a), C.R.S. (State Controller Authority)

§24-30-1401, et seq., C.R.S. (Professional Services)

§24-91-103, C.R.S. (Public entity - Contracts - Partial Payments)

§24-101-101, et seq., C.R.S. (Procurement Code)

§24-102-206, C.R.S. (Contract Performance Outside the United States or Colorado)

§24-106-103, C.R.S. (Centralized Contract Management System)

§24-106-106, C.R.S. (Right to Audit Records)

§24-106-107, C.R.S. (Monitoring of Vendor Performance)

§38-26-106, C.R.S. (Contractor Executes Bond - Applicability)

§38-26-107, C.R.S. (Final Settlement and Notice - Withholding Funds)

2.DEFINITIONS

All references to "contract" or "agreement" refer to legally binding documents between the State and another party or documents describing the agreement between State Agencies and Institutions of Higher Education. The terms "contract", and "agreement" are used interchangeably in the following definitions to reflect their common usage in the State and include any amendments and modifications thereto.

2.1. Advance Payment - A payment made for goods or services prior to the receipt and acceptance of the goods or the completion and acceptance of the services as well as a payment made in advance of performance for any contractual or grant obligation.

2.2. Advice of Employment - A document that includes an offer of employment.

2.3. Chief Information Officer - See §24-35.7-102(3), C.R.S.

2.4. Chief Procurement Officer. See § 24-101-301(6), C.R.S.

2.5. Contract - Any Commitment Voucher that constitutes a State Contract or Purchase Order under this Fiscal Rule, where the principal purpose is to acquire supplies, services, or construction or to dispose of supplies for the direct benefit of the State.

2.6. Commercial Cards - See Fiscal Rule 2-7 (State Commercial Cards).

2.7. Commitment Voucher - A document that authorizes the purchase of goods or services, encumbers the funds, and provides for disbursement of funds, in a form approved by the State Controller. Examples include: Purchase Order, State Contract, Grant Agreement, and Small Purchase Documentation. See §4 of Fiscal Rule 3-1 (Commitment Vouchers).

2.8. Disaster Emergency - Emergency declared in an executive order issued by the Governor of the State of Colorado pursuant to Article IV, of the Colorado Constitution and the relevant portions of the Colorado Disaster Emergency Act § 24-33.5-701, et seq. C.R.S. A declaration of a disaster emergency does not create an Emergency Procurement defined in §2.9 of this Fiscal Rule.

2.9. Emergency Procurement - A procurement authorized by the Department of Personnel & Administration's Executive Director, the Chief Procurement Officer, the Procurement Official defined in § 24-101-301(30), of a Principal Department, or a designee of any of them when there exists a threat to public health, welfare, or safety under emergency conditions. See § 24-103-206, C.R.S. Emergency conditions create an immediate and serious need for supplies, services, or construction that cannot be met through normal procurement methods and lack of which would seriously threaten:

2.9.1. The functions of State government and its programs;

2.9.2. The preservation or protections of property; or

2.9.3. The health or safety of any person or persons. See Procurement Rule R-24-103-206-1 Definition of Emergency Conditions.

2.10. Encumbrance - An amount reserved on the State Financial System or an approved State Agency or Institution of Higher Education financial system to reflect a formal obligation of the State.

2.11. Financing - The receipt of a loan or issuance of bonds or certificates of participation.

2.12. GAAP - See Fiscal Rule 1-1 (Accounting Principles and Standards).

2.13. Grant - See Fiscal Rule 3-4 (Grants).

2.14. Interagency Agreement - See Fiscal Rule 3-5 (Interagency Agreements).

2.15. Major Information Technology Project - See § 24-37.5-102(19), C.R.S.

2.16. Party - An individual or entity who is not a State Agency or Institution of Higher Education. If appropriate in the context, the term "Party" may also refer to multiple individuals or entities who are not State Agencies or Institutions of Higher Education.

2.17. Personal Services Commitment Voucher - A Commitment Voucher between a State Agency or Institution of Higher Education and a Party, where the Party provides labor, time, or effort for the direct benefit of the State. An individual or entity performing services under a Personal Services Commitment Voucher is an independent contractor and not an employee of the State.

2.18. Procurement Official - The head of the procurement function for an Institution of Higher Education or a State Agency who has received delegation from the State's Chief Procurement Officer.

2.19. Purchase - The act of incurring an obligation on behalf of the State in order to acquire goods or services from another entity.

2.20. Purchase Order or PO - See Fiscal Rule 3-2 (Purchase Orders).

2.21. Small Dollar Grant Award - See Fiscal Rule 3-4 (Grants).

2.22. Small Purchase Documentation - Documentation of a purchase, which does not require a Purchase Order, Grant Agreement, Interagency Agreement or State Contract under §4 of this Fiscal Rule, but does require, without limitation, an invoice, billing statement, itemized receipt, court order, travel authorization, approved Vendor Agreement, or any other document appropriate to the transaction and approved by the State Controller.

2.23. State Contract - See Fiscal Rule 3-3 (State Contracts).

2.24. State Personnel Director - The Executive Director of the Department of Personnel & Administration.

2.25. Statutory Violation - Liabilities incurred or payments made on the State's behalf without prior approval of a Purchase Order, Grant Agreement, Small Dollar Grant Award, or State Contract by the State Controller or a proper delegate, when required under this Fiscal Rule, or without the prior approval of a State Contract by the State's Chief Information Officer or a proper delegate for a Major Information Technology Project. An Unauthorized Purchase does not necessarily constitute a Statutory Violation under these Fiscal Rules.

2.26. Unauthorized Purchase - A purchase that has occurred or a purchase commitment that has been issued to a vendor to obtain goods, services, or construction and (i) the issuing State Agency has not followed the Procurement Code and Rules, or (ii) a purchase or commitment to purchase is made by a person(s) who is not so authorized. An Unauthorized Purchase is subject to ratification in accordance with the Procurement Code and the Procurement Rules. See Procurement Rule 24-109-404-01.

2.27. Vendor Agreement - Any form of agreement provided by a contractor or vendor, including an online or "click-through" agreement, containing contractual provisions relating to the goods and/or services to be provided by such contractor or vendor.

3.RULE

3.1. A State Agency or Institution of Higher Education shall not disburse funds unless the disbursement is supported by a Commitment Voucher and complies with Fiscal Rule 2-1 (Propriety of Expenditures). Prior to entering into Commitment Vouchers for proposed expenditures, State Agencies and Institutions of Higher Education shall ensure the following:

3.1.1. The purchase satisfies all appropriate procurement requirements;

3.1.2. The Commitment Voucher used meets the requirements for that type of Commitment Voucher, as defined by Fiscal Rules; and

3.1.3. The purchase complies with applicable statutes, executive orders, rules, and policies.

3.2. In addition to the requirements in §3.1 of this Fiscal Rule, State Agencies and Institutions of Higher Education shall ensure the following for all Commitment Vouchers, other than Small Purchase Documentation:

3.2.1. The Commitment Voucher adequately defines all parties involved in the transaction, the respective performance obligations of the parties, the maximum amount payable and pricing, the required performance date, the timing of payments, and the entity responsible for payments;

3.2.2. The Commitment Voucher terms and conditions represent a commercially reasonable allocation of risks between the parties and any risks to the State are outweighed by the benefits to the State; and

3.2.3. The expenditure is encumbered prior to or concurrently with the execution of the Commitment Voucher.

3.2.3.1. The Encumbrance of funds is not required for the following:

3.2.3.1.1. Agreements related to the issuance of Financing where the payment for that work will be paid out of the proceeds of the Financing and the State is not obligated to pay if the Financing is never received by the State;

3.2.3.1.2. Agreements where the total amount of payments are calculated as a portion of revenues received, and the State is not obligated to pay until after the revenues are actually collected; and

3.2.3.1.3. Any of the items specified in §5.4 of this Fiscal Rule.

3.2.3.2. Regardless of the total term of a Commitment Voucher, a State Agency or Institution of Higher Education shall only encumber funds for the current State fiscal year of the Commitment Voucher, unless the Agency or Institution of Higher Education has continuous spending authority for the Commitment Voucher.

4.COMMITMENT VOUCHERS

4.1. Purchase Orders - When State Agencies and Institutions of Higher Education are required to use a PO as the Commitment Voucher under this Fiscal Rule, the State Agency or Institution of Higher Education shall use the PO in accordance with Fiscal Rule 3-2 (Purchase Orders) and shall comply with all requirements of that Rule.

4.2. State Contracts - When State Agencies and Institutions of Higher Education are required to use a State Contract as the Commitment Voucher under this Fiscal Rule, the State Agency or Institution of Higher Education shall use the State Contract in accordance with Fiscal Rule 3-3 (State Contracts) and shall comply with all requirements of that Rule.

4.3. Grants - When State Agencies and Institutions of Higher Education are required to use a Grant Agreement or Small Dollar Grant Award as the Commitment Voucher under this Fiscal Rule, the State Agency or Institution of Higher Education shall use the Grant Agreement or Small Dollar Grant Award in accordance with Fiscal Rule 3-4 (Grants) and shall comply with all requirements of that Rule.

4.4. Interagency Agreements - When State Agencies and Institutions of Higher Education are required to use an Interagency Agreement under this Fiscal Rule, the State Agency or Institution of Higher Education shall use the Interagency Agreement in accordance with Fiscal Rule 3-5 (Interagency Agreements) and shall comply with all requirements of that Rule.

4.5. Small Purchase Documentation - When State Agencies and Institutions of Higher Education use Small Purchase Documentation as the Commitment Voucher under this Fiscal Rule, the State Agency or Institution of Higher Education shall ensure that the Small Purchase Documentation describes the following:

4.5.1. The goods or services being purchased and the reason for the disbursement of funds if the description of the goods or services doesn't otherwise clearly specify the reason;

4.5.2. The total amount due for the goods delivered or services provided and sufficient detail or itemization to ensure that the proper amount will be paid and the prices are fair and reasonable; and

4.5.3. Sufficient detail to determine if the delivery of goods or provision of services was successfully completed and accepted.

4.6. Separate Small Purchase Documentation is not required for purchases made by Travelers, defined in Fiscal Rule 5-1 (Travel), that do not require a receipt under Fiscal Rule 5-1(Travel), as the travel authorization constitutes the Small Purchase Documentation for those purchases. As the Commercial Card is only a method of payment, purchases made with a Commercial Card require Small Purchase Documentation and also may require another form of Commitment Voucher.

5.DOLLAR LIMITS AND REQUIREMENTS

5.1. The following table describes the required Commitment Voucher for the different types of agreements.

TYPE OF AGREEMENT	DOLLAR LIMIT	REQUIRED DOCUMENT FOR COMMITMENT VOUCHER
Goods	$10,000 and less	Small Purchase Documentation, PO, or State Contract
	More than $10,000	PO or State Contract
Services	$10,000 and less	Small Purchase Documentation, PO, or State Contract
	More than $10,000 and not more than $250,000	PO or State Contract
	More than $250,000*	State Contract
Grants	$10,000 and less	Small Purchase Documentation, Small Dollar Grant Award, or Grant Agreement
	More than $10,000 and not more than $250,000	Small Dollar Grant Award or Grant Agreement
	More than $250,000	Grant Agreement
Capital Construction / Controlled Maintenance	$150,000 and less	Construction PO (See Fiscal Rule 4-1)
	More than $150,000	Construction Contract (See Fiscal Rule 4-1)
Professional Services under § 24-30-1401, et seq., C.R.S., including architectural, engineering, land surveying, industrial hygienist, and landscape architect services	Any dollar amount	State Contract
Real Property lease or license of land, buildings, or a portion thereof for term of more than 30 days	Any dollar amount	State Contract
Agreements Between State Agencies and/or Institutions of Higher Education	Any dollar amount Encumbrance required for amounts more than $250,000	Use Interagency Agreement in accordance with Fiscal Rule 3-5

* $250,000 applies to price agreements and other sourcing methods

5.2. Dollar Limits - The dollar limits shown in the table in §5.1 of this Fiscal Rule apply to the total term of the Commitment Voucher. If a single Commitment Voucher will be used for a purchase that will span multiple fiscal years, then the total of all fiscal years included in that Commitment Voucher is the amount to which the dollar limit will apply. State Agencies and Institutions of Higher Education shall use a single Commitment Voucher for purchases in accordance with the State Controller Contract, Grant, and Purchase Order Policies regarding single purchases.

5.3. Dollar Limits and Price Agreements - The dollar limits apply to orders of goods or services using price agreements. For orders more than $250,000, a State Agency or Institution of Higher Education shall assess the level of risk to determine the appropriate review required under State Controller policies. Using a price agreement does not remove the requirement for these purchases to be reviewed when the amount is more than $250,000. Personal services contracts are required for purchase of services over $250,000.

5.4. Protecting the State's Interests - State Contracts shall be used in situations in addition to those described in this Section if other Commitment Vouchers do not adequately protect the State's interests. Refer questions regarding the proper form of Commitment Voucher to the Office of the State Controller.

5.5. Disbursements Exempt from Purchase Order or State Contract - A Purchase Order or State Contract is not required for the following types of disbursements regardless of the amount of funds disbursed:

5.5.1. Access to internet-based, on-demand training classes and webinars;

5.5.2. Advices of Employments;

5.5.3. Calculated payments required under a program within a State Agency or Institution of Higher Education (e.g., formula distributions, other distributions required by regulatory or statutory formulas);

5.5.4. Copier rental agreements when the payment is based on a defined rate per copy;

5.5.5. Conference registrations;

5.5.6. Conference facilities at hotels or other venues that include, but need not be limited to, meeting rooms, audio visual equipment, catering, and guest accommodation rooms;

5.5.7. Financial aid or tuition assistance programs that is paid directly to a beneficiary;

5.5.8. Membership and license dues and fees, and participation assessments, that do not include services or examinations;

5.5.9. Insurance premiums;

5.5.10. Services needed by the Department of Law, or by another State Agency or Institution of Higher Education, with the approval of the Department of Law, to seek outside counsel, to support civil or criminal proceedings, civil or criminal enforcement, or legal services (e.g. attorneys, expert consultants, expert witnesses, mediators, and arbitrators);

5.5.11. Court orders related to criminal proceedings, civil enforcement, or legal services;

5.5.12. Intra-agency or intra-institution purchases;

5.5.13. Moving expenses reimbursed to State employees ;

5.5.14. Payroll and related disbursements to employees (withholding, authorized benefits, etc.), including reimbursements or payment for Travel as described in Fiscal Rule 5-1 (Travel);

5.5.15. Postal and other delivery charges, including messenger fees, post office boxes and postage meters;

5.5.16. State program payments to or on behalf of individuals qualified for the program's benefits;

5.5.17. Subscriptions for journals, informational publications, informational and research databases or similar materials (print or electronic), which do not include additional services (such as training or configuration);

5.5.18. Utility hook ups, relocations, and line extensions performed by a utility company;

5.5.19. Water; energy (regulated electric and natural gas, and steam); local, long-distance, wireless, satellite, and telephone communication or data services, including pagers, cell phones and other wireless/communication devices; septic pumping services; regular, non-hazardous trash collection services; and bulk fuel (coal, heating oil, gasoline, propane), which are routinely purchased by a State Agency or Institution of Higher Education; and

5.5.20. Other disbursements approved in writing by the State Controller.

5.6. Exemption from Purchase Order and State Contract Only. The exemptions listed in §5.4 of this Fiscal Rule are exemptions from the requirement to have a Purchase Order or State Contract only and does not create any exemption from any other statutory requirement, such as the requirements of the Procurement Code and the Procurement Rules.

6.PROHIBITED TERMS AND LIMITATIONS

6.1. Indemnification by the State Prohibited - Unless specifically authorized by statute, a State Agency or Institution of Higher Education shall not indemnify and/or hold harmless another Party (no matter how it is phrased) against any liability incurred as a result of the acts or omissions of such State Agency or Institution of Higher Education. Article V, §33 of the Colorado Constitution prohibits disbursement by the State Treasurer except upon appropriations made by law or as otherwise authorized by law. Except as authorized by law, any term or provision of any Commitment Voucher or any other agreement that requires the State to indemnify or hold harmless another Party is void as described in § 24-106-109, C.R.S.

6.2. Binding Arbitration Prohibited - A State Agency or Institution of Higher Education shall not be bound by the results of arbitration or any other extrajudicial dispute resolution process in which the final resolution is not determined by the State. Any term or provision of any Commitment Voucher or any other agreement that requires the State to agree to binding arbitration or any other binding extrajudicial resolution process in which the final resolution is not determined by the State is void as described in § 24-106-109, C.R.S.

6.3. Limitations of Liability - A State Agency or Institution of Higher Education may not limit another Party's liability for claims or damages arising out of bodily injury, death, or damage to tangible property of the State. Any term or provision of any Commitment Voucher or any other agreement that limits the liability of a Party for bodily injury, death or damage to tangible property of the State is void as described in § 24-106-109, C.R.S. Other liability may be limited if the State Agency or Institution of Higher Education determines in writing that the benefits outweigh the risks, the limitation of liability does not apply to any insurance required under the Commitment Voucher, if any, and the Office of the State Controller has approved the limitation.

6.4. Choice of Law Outside of Colorado - A State Agency or Institution of Higher Education may not agree to be bound by the laws of another state. As described in § 24-106-109, C.R.S., all agreements except those with another government shall be governed by Colorado law. State Agencies and Institutions of Higher Education may agree to be silent on choice of law in agreements with another governmental entity, but cannot agree to their law as controlling. State Agencies and participating Institutions of Higher Education may agree to federal law in agreements with federal agencies.

6.5. Inclusion of Void Terms - A State Agency or Institution of Higher Education should not include a term or provision that would be void under this §6 or under § 24-106-109, C.R.S., in any Commitment Voucher or a Vendor Agreement entered into by a State Agency or Institution of Higher Education with another Party. If another Party requires the inclusion of a void provision, the State Agency or Institution of Higher Education shall inform the Party that those terms or provisions will be void if they are included. If the Party is unwilling or unable to remove those terms or provisions after being notified but is unwilling to accept the Commitment Voucher, Small Purchase Documentation, or Vendor Agreement without the inclusion, the State Agency or Institution of Higher Education may enter into the Commitment Voucher or Vendor Agreement that includes the void provision if the State Controller, Chief Procurement Officer, authorized Procurement Official or delegate, or authorized State Controller delegate approves the inclusion of the void term or provision.

7.COMMITMENT VOUCHER APPROVALS

The State Controller, or an authorized delegate of the State Controller, shall approve all Purchase Orders, State Contracts, Grant Agreements, and Small Dollar Grant Awards. A State Agency or Institution of Higher Education, at its discretion, may require such additional internal approvals as it deems proper. The State Agency or Institution of Higher Education shall obtain all required approvals and signatures and retain documentation thereof in its files for the period specified in the State Controller Contract, Grant, and Purchase Order Policies. Unless a State Agency or Institution of Higher Education is exempt by statute or has delegated approval authority, prior approval of the Commitment Voucher by one or more of the Central Approvers, defined in Fiscal Rule 3-3 (State Contracts), is required as follows:

7.1. Commitment Vouchers for Capital Construction and Controlled Maintenance, defined in § 24-30-1301, C.R.S., require the approval of the State Architect or a delegate of the State Architect, unless otherwise exempt by statute or waived by the State Architect. See § 24-30-1303(1)(d), C.R.S.

7.2. Commitment Vouchers for services normally provided by the Division of Central Services require the approval of the Director of the Division of Central Services, Department of Personnel & Administration, or a delegate of the Director of the Division of Central Services, for all State Agencies located within Adams, Arapahoe, Boulder, Douglas, Pueblo, El Paso, and Jefferson counties, the City and County of Broomfield, and the City and County of Denver, and any other area in the State where a Division of Central Services offers services. Institutions of Higher Education are exempt from this requirement. See § 24-30-1104(1), C.R.S.

7.3. Contingency-Based, defined in Fiscal Rule 3-3 (State Contracts), Commitment Vouchers require the approval of the Office of State Planning and Budgeting. See § 24-17-204, C.R.S.

7.4. Financial Information Commitment Vouchers used by a State Agency or Institution of Higher Education to record financial transactions and information, develop financial reports, or prepare financial statements require the approval of the State Controller. See § 24-30-202(2), C.R.S.

7.5. Information technology Commitment Vouchers require approval by the Governor's Office of Information Technology as described in the State Controller Contract, Grant, and Purchase Order Policies.

7.6. Legal services Commitment Vouchers require the approval of the State Attorney General or a delegate of the State Attorney General. See § 24-31-101, C.R.S.

7.7. Personal services Commitment Vouchers require the approval of the State Personnel Director or a delegate of the State Personnel Director. See § 24-50-501, et seq., C.R.S. This approval is not required for personal services Commitment Vouchers for services that are:

7.7.1. Exempt from the State classified personnel system under Article XII, §13 of the State Constitution, including without limitation, attorneys at law serving as assistant attorneys general; faculty members and certain administrators at Institutions of Higher Education, exempt under § 24-50-135, C.R.S., and members, officers, and employees of the judicial and legislative branches of the State, unless specifically provided by the Constitution, and the offices of the Governor and Lieutenant Governor whose functions and duties are confined to such offices.; or

7.7.2. Non-recurring services lasting nine months or less, where the need for such services is not expected to recur on a regular basis. Temporary services that do not meet these criteria require approval from the State Personnel Director or a delegate of the State Personnel Director.

7.8. Real property State Contracts, including leases where the State Agency or Institution of Higher Education is the tenant, easements, and rights-of-way agreements, require the approval of the State Architect or the Director of Real Estate Programs within the Office of the State Architect, Department of Personnel & Administration, or a delegate of either position, unless otherwise exempted by statute. See § 24-30-1303, C.R.S. Real property administered by the State Board of Land Commissioners, Division of Parks and Wildlife in the Department of Natural Resources, and the Department of Transportation, are exempt from this requirement. See § 24-30-1301(15)(b), C.R.S.

7.9. Utility cost-savings Commitment Vouchers require the approval of the State Personnel Director or a delegate of the State Personnel Director. See § 24-30-2003(1)(b), C.R.S.

7.10. Commitment Vouchers related to the Business Enterprise Program require the approval of the Business Enterprise Program within the Department of Labor and Employment. See § 8-84-201, et seq., C.R.S.

8.STATUTORY VIOLATIONS

A Statutory Violation occurs when liabilities are incurred or payments are made on the State's behalf without prior approval of a State Purchase Order, Small Dollar Grant Award, Grant Agreement, or State Contract, when required under this Fiscal Rule.

8.1. Personal Liability - Under § 24-30-202(3), C.R.S., any person(s) who incurs, orders or votes for an obligation or makes a payment which creates a Statutory Violation shall be personally liable for such obligation, unless the contractor payment subject to the Statutory Violation is approved by the State Controller and the State Controller permits the State Agency or Institution of Higher Education to make payment to the contractor without recovering the amount of that payment from the person(s) who incurred, ordered or voted for an obligation or made a payment which created the Statutory Violation.

8.2. Payment Prohibition

8.2.1. A State Agency or Institution of Higher Education shall not make payments to a contractor that is subject to a Statutory Violation, unless and until the contractor payment subject to the violation has been approved by the State Controller.

8.2.2. Agencies may pay bills for Commercial Card statements to the bank to ensure timely payment without determining whether these payments are subject to a Statutory Violation. Agencies shall reconcile Commercial Card statements and request ratification by the State Controller for any Statutory Violations included in these statements.

8.3. Commitment Voucher Modification Provision - A State Agency or Institution of Higher Education shall not modify any requirements related to the work contained in a Commitment Voucher if that Commitment Voucher is subject to an unapproved Statutory Violation.

8.4. Approval Allowing Contractor Payment - The State Controller or an authorized delegate of the State Controller, in that individual's sole discretion, may retroactively approve a Commitment Voucher supporting the expenditure or obligation creating a Statutory Violation, and allow payment to the contractor if the State Controller or delegate finds all of the following:

8.4.1. The prices or rates are fair and reasonable;

8.4.2. The amount of the expenditure is authorized by the appropriation and allotment to which it will be charged and is within the unencumbered balance available within that allotment;

8.4.3. The State Agency or Institution of Higher Education provides a written explanation in accordance with the State Controller Contract, Grant, and Purchase Order Policies; and

8.4.4. The contractor did not act in bad faith or in a fraudulent manner.

8.5. Ratification of Statutory Violation Removal of Personal Liability - As part of any approval allowing contractor payment, the State Controller or an authorized delegate of the State Controller, in that individual's sole discretion, may permit the State Agency or Institution of Higher Education to make payment to the contractor without recovering the amount of that payment from the person(s) who incurred, ordered, or voted for an obligation or made a payment which created the Statutory Violation if that individual finds all of the following:

8.5.1. The violation does not show a willful disregard of law, rules, policies or regulations on the part of the person(s) who incurred, ordered, or voted for an obligation, or who made a payment which created the Statutory Violation;

8.5.2. The violation happened accidentally or was unavoidable through no fault of the person(s) who incurred, ordered, or voted for an obligation, or who made a payment which created the Statutory Violation; and

8.5.3. The State Agency or Institution of Higher Education has requested permission to make the payment without recovering the amount of the payment from the person(s) who incurred, ordered, or voted for an obligation or who made a payment that created the Statutory Violation.

8.6. Fiscal Rule Violation Ratification - If the State Controller or an authorized delegate of the State Controller approves a retroactive Commitment Voucher supporting the expenditure or obligation creating a Statutory Violation, then that approval shall also constitute a ratification of the violation of this Fiscal Rule.

8.7. Federal Awards and Pre-award costs - If a federal award includes a prohibition on pre-award costs, the State Controller cannot ratify pre-award costs as part of a statutory violation.

9.ADVANCE PAYMENTS

9.1. General Prohibition - Commitment Vouchers shall not provide for Advance Payment for goods supplied and/or services performed or for any other contractual or grant obligation, except as permitted in §§9.4 through 9.6 of this Fiscal Rule.

9.2. Accounting for Advance Payments - Regardless of when a payment is made, State Agencies and Institutions of Higher Education shall account for those payments in accordance with GAAP and any Grant, defined in Fiscal Rule 3-4 (Grants), requirements applicable to those payments.

9.3. Waiver Process - The State Controller or an authorized delegate of the State Controller, in that individual's sole discretion, may grant the request of a State Agency or Institution of Higher Education for a waiver, allowing an Advance Payment not listed in the exceptions in §§9.4 through 9.6. The waiver request shall include evidence that advance payment is an established industry standard and/or provides a benefit to the State at least equal to the cost and risk of the Advance Payment.

9.4. Exceptions - Prior Approval of State Controller Not Required - Advance Payments where the payment is made no more than one year in advance of the substantial receipt and acceptance of the goods or completion and acceptance of the services to which the payment applies are permitted without prior approval of the State Controller or a delegate of the State Controller for the following, unless the State Controller or delegate determines that the circumstances around the payment require prior approval to minimize risk to the State:

9.4.1. Advertising services and related goods;

9.4.2. Charter Transportation;

9.4.3. Construction permits;

9.4.4. Catering for events at both State and non-State facilities;

9.4.5. Deposits for conference facilities at hotels or other venues that include, but need not be limited to, meeting rooms, audio visual equipment, catering, and guest accommodation rooms;

9.4.6. Emergency Procurements approved by a Procurement Official;

9.4.7. ExpressToll passes issued by the E-470 Public Highway Authority;

9.4.8. Federal grants that are formula-based distributions where eligibility and amounts that subgrantees receive are determined at the federal level and the State acts as a fiscal agent and manages the pass-through of the funds in compliance with federal requirements;

9.4.9. Information technology (IT) service agreements (including internet access, systems and database access);

9.4.10. Insurance premiums;

9.4.11. Interagency Agreements;

9.4.12. Janitorial services;

9.4.13. Licenses, including licenses for software;

9.4.14. Maintenance of office equipment or information technology (IT) (software and hardware), and other maintenance agreements;

9.4.15. Membership dues and fees, and participation assessments, that do not include services or examinations;

9.4.16. Personal property leases or rentals;

9.4.17. Postal and other delivery charges, including messenger fees, post office boxes and postage meters;

9.4.18. Purchase of State agricultural products by a charitable food organization using State grant money;

9.4.19. Purchases made with a Commercial Card through an online retailer. See Fiscal Rule 2-7 (State Commercial Cards);

9.4.20. Professional services provided by entertainers and speakers;

9.4.21. Participation in conferences and trade shows as an exhibitor or presenter, including booth rental at those conferences or events;

9.4.22. Real property leases, where the State is a tenant, and perpetual easements, if the entire interest is purchased and all attendant rights are transferred upon payment;

9.4.23. Real property leases, where the State pays lease payments on behalf of tenants eligible under a State program, where lease payments must be received on or before the first day of the lease period;

9.4.24. Security alarm and safety systems and monitoring;

9.4.25. Services needed by the Department of Law, or by another State Agency or Institution of Higher Education, with the approval of the Department of Law, to seek outside counsel, to support criminal or civil proceedings, civil or criminal enforcement, or legal services (e.g. attorneys, expert consultants, expert witnesses, mediators, and arbitrators);

9.4.26. Sponsored projects - See Fiscal Rule 3-3 (State Contracts);

9.4.27. State grants and awards that are appropriated in statute for a specific purpose and advance payment to awardees is specified in statute or deemed necessary to implement the program requirements.

9.4.28. Subscriptions for journals, informational publications, informational and research databases or similar materials (print or electronic), which do not include additional services (such as training and configuration);

9.4.29. Telecommunications services, such as prepaid local, long-distance, wireless, satellite, and telephone communication or data services, including pagers, cell phones and other wireless/communication devices;

9.4.30. Travel expenses such as hotels, motels, airfare etc. paid in accordance with Fiscal Rule 5-1 (Travel);

9.4.31. Tuition, registration, and fees charged for trainings, classes, conferences, and seminars;

9.4.32. Utility hook-ups, relocations, and line extensions performed by a utility company;

9.4.33. Utility services including trash and recycling collection, heat, water, and sewer; and

9.4.34. Water rights purchases, temporary water leases, or water storage payments.

9.5. Exceptions - Prior Approval of State Controller Not Required - Multiple Years. Advance Payments, where the payment may be made any time in advance of the receipt of the goods or completion of the service to which the payment applies, are permitted without prior approval of the State Controller for the following:

9.5.1. Federal contracts where the State Agency or Institution of Higher Education is paying the Federal government and the Federal agency requires Advance Payments under the Anti-Deficiency Act, 31 U.S.C. § 1341, or other Federal rule or regulation; and

9.5.2. In-kind payments, where the State Agency or Institution of Higher Education has access to variable quantities of the good or commodity to be used for payment. Advance Payment is permitted if the State Controller delegate for the State Agency or Institution of Higher Education determines, and documents in the contract file, that it is in the best interest of the State Agency or Institution of Higher Education to be able to prepay in years where the State Agency or Institution of Higher Education has access to high quantities to offset years where lower quantities are available (e.g. when a State Agency or Institution of Higher Education is required to pay in water, it may need to prepay in "wet" years in order to offset drought years).

9.5.3. Exceptions - Prior Approval of State Controller Not Required - Payments up to $10,000. Advance Payments of up to $10,000, may be made any time in advance of the receipt and acceptance of goods or the completion and acceptance of services, if the State Controller delegate for the State Agency or Institution of Higher Education determines, and documents in the Contract file, that the Advance Payment provides a benefit to the State at least equal to the cost and risk of the Advance Payment. Advance Payments shall not be split in order to stay below the $10,000 maximum. In no instance shall more than $10,000 be advanced under a single Commitment Voucher without State Controller approval.

10.REQUIREMENTS FOR PERSONAL SERVICES COMMITMENT VOUCHERS

10.1. Designation of Contract Manager - In accordance with § 24-106-107, C.R.S., State Agencies and Institutions of Higher Education shall designate at least one person with subject matter expertise as a contract manager to be responsible for day-to-day management of the Personal Services Commitment Voucher, including performance monitoring as required by § 24-106-107(3), C.R.S. State Agencies and Institutions of Higher Education shall comply with all State Controller training requirements for designated contract managers.

10.2. Monitoring - Each State Agency and Institution of Higher Education shall monitor its Personal Services Commitment Vouchers to ensure that the work is performed in accordance with the performance measures and standards of the Personal Services Commitment Voucher and that the contractor was paid in accordance with the payment schedule in the Personal Services Commitment Voucher. State Agencies and Institutions of Higher Education shall follow the State Controller Contract, Grant, and Purchase Order Policies and the accountability standards in § 24-106-107(2)(b), C.R.S.

10.3. Contract Management System - In accordance with § 24-106-103(3)(d), C.R.S., State Agencies and Institutions of Higher Education subject to § 24-106-103, C.R.S., shall include all Personal Services Commitment Vouchers over $100,000.00 in the State's centralized contract management system, maintained by the Department of Personnel & Administration, within 30 days following their execution, regardless of the type of Commitment Voucher used.

10.4. Personal Services Provided By Retirees - State Agencies and Institutions of Higher Education that purchase services from an independent contractor who is also a retired State employee, or from any entity owned or operated by a retired State employee or an affiliated party, shall make employer contributions to Public Employees' Retirement Association (PERA) in accordance with per § 24-51-1101(2), C.R.S. For State Agencies that utilize the State Financial System, full disclosure of the relationship with the retired State employee working as independent contractor, or entity owned or operated by a retired State employee or an affiliated party, shall be provided to the Office of the State Controller to allow coordination of employer contribution payments to PERA on behalf of State Agencies. Agencies and Institutions of Higher Education that do not use the State Financial System shall be responsible for ensuring that the proper contribution payments are made to PERA.

10.5. Personal Services Commitment Voucher Terms - In addition to the elements otherwise required for each type of Commitment Voucher, each Personal Services Commitment Voucher over $100,000 shall include all of the following terms, as required by § 24-106-107, C.R.S.:

10.5.1. Performance measures and standards developed specifically for the Commitment Voucher by the administering State Agency or Institution of Higher Education;

10.5.2. Accountability standards requiring regular contractor reports on achievement of the specified performance measures and standards;

10.5.3. Payment provisions allowing the State Agency or Institution of Higher Education to withhold payment until successful completion of all or specified parts of the Commitment Voucher and requiring prompt payment upon successful completion;

10.5.4. Monitoring requirements specifying how the State Agency or Institution of Higher Education will evaluate the contractor's performance, including progress reports, site visits, inspections, and reviews of performance data; and

10.5.5. Processes for resolving disputes between the State Agency or Institution of Higher Education and the contractor.

11.DISBURSEMENTS FOR EMERGENCY PROCUREMENTS:

Disbursements for Emergency Procurements that would require a State Contract or Purchase Order under non-emergency conditions shall be made upon presentation of valid and accepted invoices, receipts, or other statements describing goods or services purchased and the amount to be paid. Goods and services necessary to respond to an Emergency may be procured immediately, without issuing a Commitment Voucher or obtaining a written waiver from the Office of the State Controller, where all of the following conditions are met:

11.1. The nature of the situation requires an immediate response and there is insufficient time to issue a Commitment Voucher;

11.2. The Emergency Procurement is exempted from or is authorized in accordance with the Procurement Code and the Procurement Rules;

11.3. The expenditure is approved by a State Controller delegate;

11.4. If any future performance obligations are necessary to resolve the Emergency, a Commitment Voucher is executed as soon as possible to define those future performance obligations, as required by Fiscal Rules; and

11.5. The State Agency or Institution of Higher Education shall notify the State Controller's Office in writing, as soon as possible, of the circumstances, the goods and services purchased, and the dollar amount of the commitment. Failure to provide notice in a timely manner, as determined by the State Controller's Office, will constitute a Statutory Violation.

12.VENDOR AGREEMENTS

12.1. Prohibited Use - A Vendor Agreement shall not be used in lieu of a State Purchase Order or State Contract, where one is required, absent the prior written approval of the State Controller or an approved delegate. A Vendor Agreement shall not be used where a State Purchase Order or State Contract is not required, except as provided in §12.2 or in the State Controller Contract, Grant, and Purchase Order Policies.

12.2. Permitted Use - The Chief Fiscal Officer or Procurement Official of a State Agency or Institution of Higher Education, or a delegate of either individual, may authorize the use of Vendor Agreements up to $10,000, if a State Contract or Purchase Order is not required.

12.3. Conditions of Use - All of the conditions set forth in the State Controller Contract, Grant, and Purchase Order Policies related to Vendor Agreements shall be met whenever a Vendor Agreement is used.

13.INDEPENDENT CONTRACTOR RELATIONSHIP

State Agencies and Institutions of Higher Education shall ensure that all Commitment Vouchers create only an independent contractor relationship and do not create an employer-employee relationship. State Agencies and Institutions of Higher Education shall not engage in any practices that would result in the creation of an employer-employee relationship.

1 CCR 101-1-3-1

41 CR 19, October 10, 2018, effective 11/1/2018

45 CR 11, June 10, 2022, effective 7/1/2022

46 CR 11, June 10, 2023, effective 7/1/2023

47 CR 08, April 25, 2024, effective 7/1/2024