Contract Expenditures
Interagency Contracts

Requirements of the Interagency Cooperation Act

A state agency may enter into an interagency contract with another governmental entity to carry out duties such as special or technical services involving employees, materials, or equipment.

The Interagency Cooperation Act does not expand the authority of state agencies. Therefore, a state agency may not enter into a contract requiring the agency to exceed its duties and responsibilities or the limitations of its appropriated funds.

An interagency contract must specify:

• The kind and amount of services to be furnished,
• The basis for computing reimbursable costs, and
• The maximum cost during the period of the contract.

An interagency contract must be formalized in writing unless:

• The contract concerns a defense emergency or planning and preparing for that type of emergency,
• The contract concerns a cooperative effort, proposed by the governor, for the economic development of the state, or
• The amount of the contract is less than $50,000.

If a formal interagency contract is not required, the parties to the informal contract must document it through letters of agreement or memoranda.

Exception

A written contract or agreement between institutions of higher education with a common governing board is not subject to the requirements above, if the board has adopted rules providing for board review and approval of those contracts.

Definitions:

Institution of higher education

Any public technical institute, public junior college, public senior college or university, medical or dental unit, public state college or other agency of higher education as defined in this section.

Interagency contract

Generally a written agreement between state agencies under which goods or services are provided.

Governing board

The body charged with policy direction of any public technical institute, public junior college, public senior college or university, medical or dental unit, or other agency of higher education, including but not limited to boards of directors, boards of regents, boards of trustees, and independent school district boards insofar as they are charged with policy direction of a public junior college.

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Documentation Requirements [+]

Reimbursements

A state agency that receives services or resources under the Interagency Cooperation Act must reimburse each state agency providing the services or resources the actual cost or nearest estimate of the cost of providing the services or resources. However, a reimbursement is not required if the services or resources are provided:

• For national defense or disaster relief.
• In cooperative efforts, proposed by the governor, to promote the economic development of the state.

A receiving agency may advance funds to a providing agency if necessary for the providing agency to provide services, materials or equipment to the receiving agency.

APS 014 – FPP A.028

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