![]() Vehicle/Service Contract (contractor provides vehicles and transit service recipient provides maintenance) 10 percent.Turnkey Contract (contractor provides vehicles, maintenance, and transit service) 50 percent.Maintenance/Lease Contract (contractor provides vehicles and maintenance recipient provides transit service) 100 percent.Vehicle Lease Contract (contractor provides vehicles recipient provides maintenance and transit service) 100 percent.Vehicle Maintenance Contract (contractor provides maintenance recipient provides vehicles and transit service) 100 percent.Service Contract (contractor provides transit service only recipient provides vehicles and maintenance) 0 percent.Service Contract (contractor provides maintenance and transit service recipient provides vehicles) 40 percent.Type of Contract: Percent of Contract Eligible for 80 Percent Federal Share (*Based on assumption that contractor provides the assets)īus and Paratransit-Related Contract Services PERCENT OF CONTRACT ALLOWED FOR CAPITAL ASSISTANCE WITHOUT FURTHER JUSTIFICATION The percentages apply whether the service is local, express, shuttle, or paratransit. Presented by type of contract, the calculations represent industry averages in counting capital-eligible activities as a share of total cost. The percentages are calculations using data from the NTD. EXHIBIT III–1, below, shows the percentages and the corresponding type of contract service for bus and paratransit-related services. To avoid imposing burdensome accounting rules with regard to contracts for bus and paratransit-related services, FTA will allow the recipient to consider a percentage of leased service or contracted maintenance capital costs without further justification and will provide assistance for 80 percent of the resultant amount. In such cases, both FTA's capital cost of contracting and preventive maintenance standards will apply. In some instances, the recipient contracts with outside sources for both maintenance and public transportation service, and the contractor provides both maintenance and vehicles. In addition, FTA provides assistance for preventive maintenance, which is defined as all maintenance. Capital consumed for service or maintenance in the provision of service outside the public transportation portion of the contract, such as for charter or school bus service, is not an eligible cost. The exception is a public transportation vehicle privately owned in which the recipient has invested FTA funds from the Over-the-Road Bus Accessibility Program to finance incremental capital costs of complying with the Americans with Disabilities Act (ADA). With one exception, items purchased with Federal, State, or local government assistance are not eligible. ![]() Only the costs attributable to privately owned assets are eligible under this policy. FTA refers to the concept of assisting with capital consumed as the "capital cost of contracting." ![]() Capital consumed may also include a proportionate share of the interest the contractor might pay out as the contractor purchases and makes available to the recipient of these capital assets. In the case of a maintenance contract, the capital consumed may be, for example, depreciation of the maintenance garage, or depreciation of the machine that lifts the vehicle. In the case of a contractor's providing vehicles for public transportation service, the capital consumed is equivalent to the depreciation of the vehicles in use in the public transportation service during the contract period. When recipient's contract for such service, FTA will provide assistance with the capital consumed in the course of the contract. Some FTA recipients turn to an outside source to obtain public transportation service, maintenance service, or vehicles that the recipient will use in public transportation service. ![]() There is no such thing as a "conversion of the operating costs to capital." The FTA Capital Cost of Contracting policy is as follows:Ĭapital Cost of Contracting. How do we report the conversion of the operating costs to capital? Is it reported as an operating expense for both state and federal and then the federal audit will only see the capital grant amount? Or, does the state defer to the federal "capitalization" of these costs and need to have state audits reflect them as such? It does allow state match of the FTA Capital Grant process for Capital Cost of Contracting grant. The state does not currently allow for conversion of operating contracts to a capital cost. Frequently Asked Questions I am trying to help our State auditor resolve accounting for the Capital Cost of Contracting grants for FTA and California's State TDA regulations.
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