The Cooperative Extension Service has various fiscal roles, and responsibilities for each, within the organization to include (area directors, county fiscal contacts, county support staff, etc). In addition, volunteers may serve as treasurers for the various Extension financial accounts. However, all staff and volunteers have the responsibility to maintain ethical integrity and to provide good stewardship of all public funds.

All employees of the University, regardless of position, have the responsibility to:

• Conduct themselves in a manner that demonstrates integrity, as outlined in the University of Kentucky Governing Regulation, Part XIV, Ethical Principles and Code of Conduct;
• Preserve resources and use those resources only for official business in a prudent manner consistent with the goals and objectives;
• Report known or suspected fiscal or other misconduct as stated in the University of Kentucky Governing Regulation, Part XIV, Ethical Principles and Code of Conduct;
• Cooperate with those performing an investigation into fiscal or other misconduct;
• Be knowledgeable about the policies and procedures related to their job functions, including an awareness of risk issues to achieve maximum safety and minimal liability for the Extension community;
• Review their pay to verify it is at the correct rate and number of hours, and that leave balances, benefits, and deductions are accurate and report discrepancies to the supervisor or departmental human resources administrator;
• Follow the steps outlined in the appropriate Exit Checklist when leaving a department or the University; and
• Depending on level of involvement with fiscal transactions:
  • Ensure transactions are authorized and in compliance with policies;
  • Initiate, enter and/or process transactions in a timely manner;
  • Verify funds are available prior to expenditure; and
  • Maintain supporting documentation in accordance with the records retention schedule and provide to auditors or central units when requested.

Note: The full University policy (E-1-3 Fiscal Roles and Responsibilities) can be found at: http://www.uky.edu/ufs/sites/www.uky.edu.ufs/files/bpm/E-1-3.pdf

As per Kentucky Finance & Administration Cabinet policy FAP 120-23-00, appropriate use of public funds shall only be allowed for carrying out the specific responsibilities of Extension. Expenditures must be reasonable in amount, beneficial to the public and not personal in nature. The following shall be used to determine if the expenditure of public funds is appropriate:

• The expenditure shall be deemed necessary for Extension purposes or will contribute materially to the effective accomplishment of Extension functions, and is not otherwise prohibited by law;
• The expenditure does not conflict with established Attorney General Opinions, the Commonwealth’s Constitution, the Kentucky Revised Statutes, or any agency’s official interpretation of same; and
• The expenditure shall be afforded by allotted budgetary funds in both intent and amount.

The following are examples of unallowable uses of public funds:

• Alcoholic beverages;
• Beverages for employees, including coffee, bottled or filtered water, etc. An exception to this would be providing water for public meetings;
• Donations, in accordance with Kentucky Constitution Section 177;
• Employee parties, including retirement receptions;
• Employee recognition/retirement gifts. An exception would be an inexpensive plaque with no resale value;
• Flowers (for non-educational purposes);
• Holiday cards;
• Holiday decorations;
• Kitchen appliances for employee use, except for those installed as a permanent fixture of the building; and
• Paper products, utensils, and dishes for employee use.

Internal controls are established to provide reasonable assurance regarding the safeguarding of Extension assets and the achievement of operational, financial, and compliance objectives. Internal controls offer a process adopted by an organization and those who are responsible for handling transactions, reasonable assurance regarding the achievement of objectives in the following categories:

• Efficiency and effectiveness of operations
• Reliability and integrity of financial reporting
• Compliance with applicable laws, regulations and policies
• Safeguarding of assets

Components of internal control include the following:

• Control environment: the “tone at the top” that is the foundation for all other components of internal control, including such factors as the administration’s integrity, ethical values, operating style, and commitment to competence.
• Risk assessment: the identification of relevant threats to the achievement of Extension’s objectives.
• Control activities: the policies and procedures, approvals, reconciliations, physical controls, segregation of duties, and other processes used to ensure the administration’s internal control objectives are carried out and risks addressed.
• Information and communication: information systems used to identify, capture, process and report data that, along with other internal and external communications, provides the administration with reports on performance.
• Monitoring: the process that assesses the quality of internal control activities as a part of regular administrative and supervisory responsibilities, including corrective actions when the system does not perform as intended.
• Usage of generally accepted accounting principles (GAAP): the standard framework of guidelines for financial accounting is important.
• Accurate financial reporting: summarization of financial data usually prepared at the end of an accounting period and used to assess the performance of an entity is important.

All staff and volunteers are responsible for setting a tone of accountability and high ethical standards. All employees are expected to comply with the requirements outlined in the University of Kentucky Governing Regulation Part XIV and Ethical Principles and Code of Conduct.

All offices must have the following control activities listed below in place:

• Reinforce the regulations as outlined in University of Kentucky Governing Regulation Part XIV, Ethical Principles and Code of Conduct, and identify and eliminate or manage conflicts of interest or conflicts of commitment within the meaning of the University’s rules;
• Comply with all aspects of contractual agreements for purchasing or providing goods and services;
• Comply with all University, Extension and local level policies and procedures including, but not limited to, the Governing Regulations (GR), Administrative Regulations (AR), Human Resources Policy and Procedure Manual (HRP&P), Business Procedures Manual (BPM); University of Kentucky Information Technology policies, Extension Business Operations Manual and Local Fiscal Court written policies;
• Distribute the functions of authorizing and recording transactions, performing reconciliations, and the physical control of related assets among several people or per Extension policies. Cash handling, purchasing, and receiving, are examples of areas where separation of duties is essential. In a small office where separation of duties is difficult, it is imperative that compensating controls be established;
• Perform periodic self-audits of unit transactions to identify accounting errors, omissions and/or irregularities and to ensure understanding of policies; and
• Report any suspected fraudulent, ethical, or compliance-related issues to the District Director and Extension Business Operations.

Note: The full University policy (E-1-4 Internal Control) can be found at: https://www.uky.edu/ufs/sites/www.uky.edu.ufs/files/bpm/E-1-4.pdf

Delegation of Authority is a process wherein a person responsible for a given task assigns the task to a subordinate along with the authority to accomplish the task on the manager’s behalf. Keep in mind that while the authority to accomplish a task can be delegated, the responsibility for the task cannot. Delegation of Authority must be provided in writing before the authority is transferred to any subordinate.

For Extension purposes, this process would involve the following three basic steps:

• Assignment of the duties and transfer of authority to the subordinate in writing
• Acceptance of the assignment in writing
• Accountability for the assigned task by the subordinate and supervisor

For Extension, a delegation of authority matrix has been developed and must be adopted in the county office.

Matrix Link currently in progress - if needed, contact Extension Business Office. 

Applicable regulations, policies, procedures, and established best practices are based on sound business principles, regulatory requirements, or law and are intended to ensure the integrity of all transactions and the appropriate use of funds regardless of source. However, there may be times when an exception to a policy or procedure is warranted. The following guidelines are provided to obtain an exception to a policy of procedure:

• When uncertain about the interpretation of a policy or unable to find an applicable policy, such knowledge must be obtained before executing a transaction. Staff should contact their Manager, District Director or Extension Business Operations.
• Exceptions cannot be granted to federal laws and regulations (including Internal Revenue Service), state laws, contract provisions, or restrictions imposed by external donors and sponsors.
• Requests for exceptions shall be rare and only approved in extenuating circumstances.
• Requests for exception shall be requested sufficiently in advance to allow them to be reviewed and approved prior to the purchase, event, or travel taking place.
• All travel related requests for exception shall be made using the “Request for Exception to Business Procedures” form and submitted to the appropriate District Director. After review and approval, the District Director will submit the form to Extension Business Operations for further review and processing. The form can be found at: http://www.uky.edu/ufs/sites/www.uky.edu.ufs/files/eforms/ExceptionRequestForm.pdf

All requests for exception shall be made using the above mentioned form and include:

• The policy reference for which an exception is being requested, documenting a clear understanding of the institutional policy for which the exception is proposed;
• A complete justification for the request, explaining how the extension district will be advantaged or disadvantaged by the decision to grant or deny the request;
• The contact information requested on the form in legible format;
• Approval of the Regional Director and Extension Business Office;
• Director, Dean, Provost or Executive Vice President as necessary.

Several KRS Statutes are relevant for Extension in relation to the County Extension Council, Extension District Board, and business operations. The following are those statutes strictly related to Extension Business Operations:

KRS 61: General Provisions as to Offices and Officers

• KRS 61.810: Exceptions to open meetings
• KRS 61.815: Requirements for conducting a closed session
• KRS 61.820: Schedule of regular meetings to be made available
• KRS 61.823: Special meetings -- Emergency meetings
• KRS 61.826: Video teleconferencing of meetings

KRS 64: Fees and Compensation of Public Officers and Employees

• KRS 64.850: Commingling of Public and Private Funds Prohibited

KRS 65A: Special Purpose Governmental Entities

• KRS 65A.010: Special Purpose Governmental Entities (SPGE) defined

• KRS 65.060: Definition of district
• KRS 65.065: Budgets - Filing - Financial statements - Audits - Enforcement
• KRS 65.070: Filing with county clerk and fiscal court
• KRS 65.182: Creating a Taxing District/Extension Taxing Authority
• KRS 65A.010: Definitions for chapter
• KRS 65A.020: Duties of Department for Local Government relating to forms, reporting, and online access -- Information to be submitted by special purpose governmental entities -- Failure to submit information -- Administrative regulations -- Registry -- Registration fee -- Annual report
• KRS 65A.030: Audits, financial statements, and attestation engagements for fiscal periods beginning on or after July 1, 2014 -- Alternative financial review -- Exclusion of some annual receipts
• KRS 65A.040: Failure to submit information or submitting noncompliant information -- Notice -- Withholding of funds -- Audit or special examination -- Distribution of funds upon compliance -- Action to enforce reporting requirements
• KRS 65A.050: Administrative dissolution of special purpose governmental entity -- Dissolution by governing body
• KRS 65A.060: Educational materials and programs for governing bodies and employees
• KRS 65A.070: Code of ethics
• KRS 65A.080: Annual budget -- Publication of information
• KRS 65A.090: Registration with Department for Local Government -- Notification -- Failure to register -- Action to enforce prohibition against taxes and fees
• KRS 65A.100: Fees and ad valorem taxes levied by special purpose governmental entities -- Reporting to governing body of city or county -- Reporting exceptions

KRS 66: Issuance of Bonds and Control of Funds

• KRS 66.480: Investment Policy

KRS 67: County Government

• KRS 67.715: Reorganization Powers (County Judge)
• KRS 67.080: Powers of fiscal court
• KRS 67.083: Additional powers of fiscal courts

KRS 68: County Finance and County Treasurer

• KRS 68.005: County administrative code

• KRS 68.245: Estimate of assessment - Levy in excess of compensatory tax rate subject to recall vote or reconsideration
• KRS 68.248: County revenue limits on tax rate applicable to personal property

KRS 132: Levy and Assessment of Property Taxes

• KRS 132.010: Levy and assessment of property taxes - Definitions for chapter
• KRS 132.023: Limits for special purpose governmental entities - Procedure for exceeding limits (public hearing)
• KRS 132.024: Limits for certain districts on personal property tax rate
• KRS 132.025: Cumulative increase for 1982-83 only by taxing district - Limit - Public hearing and recall provisions not applicable

KRS 134: Payment, Collection and Refund of Taxes

• KRS 134.290: Compensation for sheriff for collecting state and county taxes
• KRS 134.590: Refund of ad valorem taxes or taxes held unconstitutional

KRS 164: State Universities and Colleges

• KRS 164.610: Extension Districts – Purpose
• KRS 164.615: Definitions for KRS 164.605 to 164.675
• KRS 164.620: Extension districts authorized
• KRS 164.625:  Regulations, authority, and duty of director of extension -- Extension council, membership, bylaws
• KRS 164.630: Extension board authorized
• KRS 164.635: Extension board, membership, appointment, term, vacancy, removal of member
• KRS 164.640: Organization (officers elected)
• KRS 164.645: Meetings required
• KRS 164.650: Duties of officers - oath
• KRS 164.655: Extension Board powers and duties
• KRS 164.660: Board Member restrictions/ Nepotism
• KRS 164.670: Revenues payable to treasurer
• KRS 164.675: Directive to Extension Board

KRS 424: Legal Notices

• KRS 424.110: Definitions as used in KRS 424.110 to 424.370
• KRS 424.120: Qualifications of newspapers
• KRS 424.130: Times and periods of publication
• KRS 424.140: Contents or form of advertisements
• KRS 424.150: Person responsible for publishing
• KRS 424.160: Rates for newspaper advertising required by law
• KRS 424.170: Proof of publication
• KRS 424.190: Alternatives to newspaper publication abolished-exception-information required to be sent to the DLG
• KRS 424.195: Supplementation of printed notice by broadcast in certain cases
• KRS 424.210: Official newspapers abolished
• KRS 424.220: Financial statements
• KRS 424.230: Optional monthly or quarterly statements
• KRS 424.260: Bids for materials, supplies, equipment, or services
• KRS 424.270: Local administrative regulations
• KRS 424.280: Due date of ad valorem taxes
• KRS 424.290: Election Ballot
• KRS 424.360: Invitation to bid on municipal bonds
• KRS 424.370: Judicial sale of real property
• KRS 424.380: Failure to comply with publication requirements

KRS 424.990: Penalties for failure to comply

In the course of normal daily operations of a county extension office, cash will be handled by various staff and volunteers. It is likely that the Extension Office will receive funds from a variety of sources. These funds may come from tax payments, soil tests fees, camp fees, program fees, fundraisers, sales of items, etc. Caution should be given with regard to the numbers of individuals who will handle cash.

The majority of the time, cash will be handled in an office environment; but there could also be times when offsite functions involve cash handling. These offsite situations may require volunteer leader involvement in the cash handling process. There must be a "paper trail" for all funds received and spent in order to ensure accountability, honesty, and perceived honesty.

County Extension Office personnel have various roles in cash handling as follows:

• Area Director & County Fiscal Contact:
  • Oversight of the cash handling functions of accepting cash, voiding transactions, balancing cash, preparing deposits, recording transactions, and reconciling accounts so that no single person has control over the entire process;
  • If staffing levels do not permit adequate separation of duties, identify and establish compensating controls to properly perform the duties;
  • In all cases, someone other than the person receiving the funds must review and approve cash transactions daily or as transaction frequency dictates;
  • Limit access to cash and keep funds secure at all times;
  • Ensure all credit card information is received and protected in accordance with Payment Card Industry Data Security Standards (PCI-DSS);
  • Supervise all cash activities so that all funds received are properly recorded, deposited and reconciled in accordance with policies and procedures;
  • Establish additional cash handling policies and procedures specific to the unit’s needs;
• Individuals responsible for handling cash (employees & volunteers):
  • Receive funds in accordance with policies and procedures;
  • Maintain proper records and make entries promptly and accurately;
  • Collect returned checks originally received by the organizational unit;
  • Report any violations of policies and procedures
  • All employees, including supervisors, are required to read the established Cash Handling Policies and Procedures.
  • All employees must be provided with periodic training that reviews all pertinent policies and procedures.

The University considers violations of policies and procedures related to cash handling a serious failure on the part of the employee and the supervisor. Appropriate corrective action must be taken in accordance with University of Kentucky HR Policy and Procedure #62:0 Corrective Action. Violations of the policies and procedures that are deemed by management to be severe or repeated violations are considered grounds for termination of employment as outlined in University of Kentucky HR Policy and Procedure # 12:0 Separation from Employment. Employees charged with theft of funds may be suspended pending conclusion of the investigation. If the investigation finds sufficient cause for officials to believe theft has occurred, employment may be terminated and criminal charges filed.

The Extension Cash Handling Roles Matrix should be utilized to divide responsibilities within an office:

Note: Person 1 or 2 may be any support staff, volunteer or agent with appropriate separation of duties.

As stated above, there will be various forms of funds received in a County Extension Office. The steps below outline the steps required to properly manage all types of cash received. These guidelines are adapted from the University’s Treasury Operations Manual (BPM E-2-1).

• Cash
  • Receipt all cash as outlined below.
  • Use appropriate change funds to provide change back to client as necessary.
  • Deposit all cash intact. No checks may be cashed or disbursements made, including reimbursement of petty cash expenditures, from cash receipts.
• Checks
  • Receipt all checks as outlined below.
  • Accept checks only for amounts owed to the appropriate entity.
  • Checks must be payable to the appropriate affiliated organization.
  • Checks must be current and signed.
  • Checks must be legible, in ink (if written) and numeric and written amounts must match.
  • Check must not be altered or grossly mutilated.
  • Checks must contain sufficient information to permit tracing the presenter (e.g. name, current address, or telephone number).
  • For checks presented in person as payment for goods and services (not gifts), some form of photo identification (e.g., state, federal or UK employee or student ID), should be checked to verify the identity of the presenter.
  • Mailed payments should be treated in the same manner as a face-to-face transaction, immediately receipted, and properly recorded.
  • Restrictively endorse checks immediately upon receipt: “For Deposit Only” with respective entity name. The endorsement may be applied by a stamp or written on each check. For restrictive stamps, offices should contact their local depository bank or approved office supply vendor.
• Credit cards
  • Receipt all credit card payments as outlined below.
  • Payments may be processed via credit card swipe terminals, POS systems, through the UK websites using a hosted order page from an approved third-party internet payment gateway vendor or other approved payment applications.
  • Credit card transactions must be managed in an efficient manner and must comply with Payment Card Industry Data Security Standards (PCI DSS).
  • When receiving funds both inside the office and outside the office, a receipt for each payment must be issued.
• Refunds
  • Refund policy should be established for events, merchandise sales, and event registration fees.
  • Refunds for payment are permitted only upon presentation of the receipt issued at the time of sale or with proper verification of payment received.
  • Refunds are permitted only for the actual amount allowed via established refund policy.
  • Process credit card refunds only via a credit card refund draft according to procedures provided by the merchant card processor. It is not permitted to give refunds by cash or check for purchases made by credit card.
• Receipts
  • Receipt books should be kept separate for each program area and/or bank account.
  • Create a receipt (triplicate form) for all funds received and handle copies as follows:
    • Original provided to payer (if present)
    • One copy kept with deposit documentation
    • One copy kept in receipt book
  • If a receipt is voided, the original receipt and associated copies should be kept in the receipt book.
  • Acceptable receipt forms include:
    • Computerized point of sale system printed receipts.
    • Preprinted and pre-numbered receipt forms that can be completed manually.
  • Receipt forms must include:
    • The amount of the payment.
    • The mode of payment (e.g., cash or check).
    • Name of person making payment.
    • Purpose of payment.
    • Date of payment.
    • Sequential number.
    • Account payment is applied to, if applicable.
    • Signature/initials of employee receiving funds for written receipts.
• Cash Receipts Transmittal Form
  • The Cash Receipts Transmittal Form (see Forms section), should be completed and tied to deposits.  This form will provide an itemized list of all receipt transactions for a deposit.
  • A separate form should be kept for each deposit account.
  • The form should be totaled and should match the total of all cash receipts for a deposit and the total of all receipts entered into the accounting system.
  • The form should be signed by two individuals in the office (the preparer and fiscal contact). The person who prepared the log and the fiscal contact for the office will review to ensure the log is accurate and all cash receipts have been entered into the accounting system.
• End of Day Process
  • Ensure all undeposited funds are secured in a lockable safekeeping device with appropriate log.
• Recordkeeping
  • Keep all records of cash receipts, logs and copies of deposit slips. Maintain these records according to records retention guidelines.
  • When receiving funds either inside the office or outside the office, a receipt for each payment must be issued.
  • Mailed payments should be treated in the same manner as an in-person transaction. Each payment must be immediately receipted and properly recorded.

Recording funds is essential for proper accounting and record keeping. Ideally, recording would be performed by someone different from the individual who received the payments. However, since that is not possible in many county offices, recording may be performed by the same individual that receives payment with review conducted by the fiscal contact after the transactions have been entered. Refer to the Cash Handling Roles Matrix found earlier in this chapter for more details.

• Before Recording

• All funds must be verified to ensure the receipts match the Cash Receipts Transmittal Form and all documentation is present.
• All receipts should be recorded and coded to the proper corresponding line item in the county accounting system.
• After recording, the receipts, Cash Receipts Transmittal Form and the deposit summary from the accounting system should match.
• Each should have verifiable documentation detailing who was responsible for each step in the process.

• Recordkeeping
  • Keep all records of cash receipts, logs and copies of deposit slips. Maintain these records according to records retention guidelines.

Proper safeguarding of funds is an essential step in protecting against the loss or theft of funds. The following steps should be taken to properly secure all funds held by an office or group.

• Cash Handling
  • Restrict access to areas where cash is counted or handled to persons directly involved and restrict visibility by the public in areas where large amounts of money are handled.
  • Keep doors locked at all times in cash handling areas (if possible).
  • Never leave cash unattended. This applies to cash registers and desktops. If an employee leaves his or her workstation for any reason, regardless of how briefly, appropriately secure cash in a locked place.
  • Keep working funds to a minimum at all times. All other cash must be in a locked device.

• Safekeeping Devices
  • Keep all cash in a safekeeping device that cannot be easily removed from the premises; ideally behind a locked door.
  • Keep safe doors closed during business hours when the safe is in use, and locked when it is not in use. Keep safes locked at all other times.
  • Other safekeeping devices (e.g., cash register drawers, cash boxes, bank bags containing cash) must be locked and secured when not in use.
  • Do not secure personal cash and property in the office’s safekeeping device.
• Control of Safe Combinations and Keys
  • Give safe combinations and/or keys to a minimum number of employees and only to those whose functions require access. 
  • It is recommended that two employees be issued keys or given the combination.
  • Keys will be the property of the designated employees and under no circumstances are they to be stored in the office or loaned to other staff members or volunteers.
  • When staffing levels permit, to prevent access to secured cash after normal business hours, no one employee should have access to both a key to a door or an office and the safe combination. When staffing levels do not permit this preferred internal control measure, there should be a plan developed to exercise control and to maintain the proper level of security over cash.
  • To the extent practicable, memorize safe combinations and do not write them down or store them on a computer.
  • Open safes in such a manner that no other person can observe and determine the combination.
  • Each department having a combination safe must establish and maintain a record of each person given the combination, dates the combination was changed, and the reason for the change.
  • Change the combination when a person knowing it is no longer supposed to have access to the safe.
• Safe Keeping Device Opening and Closing Procedures 
  • Two people should be present at all openings and closings of safekeeping devices.
  • The two people will initial a safe log that documents the safe’s opening and closing activity.
  • If the office cannot follow this control procedure because there is only one employee available, the fiscal contact of the respective office must personally exercise control to maintain the proper level of security to minimize potential losses.
• Point of Sale (POS) System and Cash Registers (where applicable) 
  • Keep all cash drawers, point of sale systems, and cash registers locked when not in use.
  • POS systems and cash registers must have the following capabilities:
    • Comply with Payment Application Data Security Standards (PA-DSS).
    • Produce customer receipts.
    • Automatically imprint consecutive numbers (e.g. receipt numbers, transaction numbers) on both the POS or register tape and the customer receipt
    • Provide transaction display windows visible to both the customer and cashier.
• Overnight and after-hours safekeeping 
  • An office receiving cash late in the business day, after normal business hours, or on weekends may retain cash for safekeeping provided it follows the safekeeping procedures defined below:
    • Store all cash received after normal business hours in a safekeeping device.
    • All cash should be dual counted and signed off on as outlined above.
    • Only containers that can be locked by key or combination, or are sealed, may be used for safekeeping.
    • If more than $500 in cash is received after normal business hours or on weekends, consult with banking institution for guidance on after hours deposit procedures. If after hours deposits are not allowed all other procedures must be followed to secure funds until a deposit can be made.
• Credit card transactions 
  • Credit Card transactions must be managed in an efficient manner and must comply with Payment Card Industry Data Security Standards (PCI DSS). Security breaches can result in serious consequences for an office, including release of confidential information, damage to reputation, added compliance costs, substantial fines, possible legal liability and the potential loss of the ability to accept credit card payments.
  • No employee, contractor or agent who obtains access to payment card or other personal payment information in the course of conducting business on behalf of the office may sell, purchase, provide or exchange said information in any form to any third party other than to the merchant card processor, depository bank, VISA, MasterCard or other credit card company, or pursuant to a government request. This includes, but is not limited to:
    • Imprinted sales slips.
    • Photo or carbon copies of imprinted sales slips.
    • Mailing lists.
    • Electronic files or media obtained by reason of a card transaction. 
  • All requests to provide information to a party outside of the office must be coordinated with the Extension District Board Treasurer and/or County Attorney.
• Payment Card Industry Data Security Standards (PCI DSS) Compliance 
  • Merchant departments must comply with PCI DSS. These standards may be found at the PCI Security Council website https://www.pcisecuritystandards.org
  • Individual offices will be responsible for monetary sanctions and/or card acceptance restrictions imposed as a result of a breach in PCI compliance.
  • Under no circumstance will credit card information be obtained or transmitted via email.
  • Credit card information can only be stored or processed on office owned computers or servers that have been deemed PCI compliant per Section VIII, Credit Card Payments.
  • Credit card numbers submitted on hard-copy documents must be rendered unreadable and stored in a manner that would protect the individual cardholder information from potential misuse.
• Process for Responding to a Security Incident 
  • In the event that a merchant knows or suspects that credit card data, including card number and card holder name, has been disclosed to an unauthorized person or stolen, the office must immediately take the following steps:
    • Any office or individual suspecting a security breach must immediately notify the EDB Treasurer, Area Director, and Extension Business Operations.
    • If an actual breach of credit card data is confirmed, the EDB Treasurer should immediately notify the County Attorney and local authorities.
• Reporting Losses 
  • All losses of cash and securities, including those for which the Extension Office has legally accepted custody and responsibility, should be reported, regardless of the cause and amount. This includes losses from actual or suspected theft, burglary, or robbery; errors in record keeping or making change where theft is not suspected; acceptance of invalid or nonredeemable paper, including forged or altered checks; or acceptance of counterfeit money.
  • Report all losses immediately to the fiscal contact for the office.
  • For losses in excess of $100, also send a copy of a police report to the Area Director and Extension Business Operations.
  • University employees may only make statements regarding a loss to a member of the following:
    • Police
    • Board or Council Involved
    • Fiscal Contact
    • Area Director
    • Extension Business Operations 
  • Attempted theft, burglary, or robbery should be reported immediately to the fiscal contact and the local police, even though no actual loss occurred.   

After being properly receipted and recorded, funds will be prepared for deposit. This process should be conducted by someone other than the person receiving the funds. However, because this is not always possible, the person receiving the funds and a second person should both count the cash and verify the information entered on the deposit slip. The county fiscal contact will review and sign/initial the deposit documentation after the deposit is made (see Cash Handling Roles Matrix).

• Guidelines for All Deposits 
  • Deposits must be prepared and two individuals will verify deposits to the receipts and cash recipts log.
  • Use pre-printed deposit slips. Utilizing slips provided by the financial institution is acceptable.
  • Deposit all cash intact.
  • No checks may be cashed or disbursements made, including reimbursement of petty cash expenditures, from receipts.
  • Only the Treasurer or approved staff/volunteers will make deposits. This approval must be notated in minutes of the district board meeting where approval was provided.
  • After the deposit is made, two individuals will verify the deposit, ensure that the deposit receipt matches to receipts, Cash Receipts Transmittal Form, and deposit summary from the accounting system.
• Times and Thresholds for Deposits 
  • Daily, if cash receipts accumulate to $500, although more than one deposit a day is not required.
  • Each time during the week deposits accumulate to $500 if receipts are less than $500 per day.
  • On the last working day of the week if cash is on hand.
  • By the local bank’s cut off time on the last working day of the month if cash is on hand in order to ensure that activity is included in the correct accounting period.
• Transportation of Deposits 
  • Care must be taken when transporting deposits to the bank. Individuals transporting cash must place it in bags, backpacks, etc., that are not obvious cash containers.
  • In addition, if they are carrying large sums of cash they should be accompanied by another employee/volunteer, as it is not recommended that individuals transport large sums of cash alone.   

Cooperative Extension Offices have the authority to establish "petty cash funds", in order to assist with business operations. However, the fund should not be utilized on a regular basis and only in necessary circumstances. A petty cash fund should have a custodian for oversight. The account custodian will, accept personal liability for cash losses and discrepancies in the petty cash fund; and manage the petty cash fund in accordance with established procedures.

• Types of Petty Cash Funds 
  • Change funds are authorized for offices with cash handling functions and may be issued on a permanent basis or for a one-time event such as a fund-raising activity. The custodian is responsible for these funds until the advance is repaid to the office or until they properly transfer the fund to another approved custodian.
  • Small purchase/expenditure funds are authorized for offices to make expenditures that follow the Cooperative Extension purchasing regulations. Custodians responsible for this type of petty cash fund must be thoroughly familiar with purchasing rules and regulations to ensure that disbursements are allowable.
• Fund Management and Policies 
  • The amount for a petty cash fund is established by either the County Extension Council or the Extension District Board. The amount is usually no more than $100.
  • The fiscal contact in the office should be assigned as the custodian for any petty cash funds and should reconcile the fund each month.
  • Detailed receipts and cash must always equal the amount established for the fund.
  • Do not commingle personal and business expenses from Petty Cash.
  • Checks written to replenish the Petty Cash fund must equal the amount of the detailed receipts of expenditures.
  • Record detailed receipts in a log maintained by the office support staff and reviewed by the fiscal contact.
  • Petty Cash funds must always be secured and locked in a safekeeping device unless in current use. Access to funds must follow established guidelines and access to should be limited to only approved personnel.
  • A custodian is authorized to make small cash disbursements from the fund only for the specific purpose for which the fund was established (e.g., custodians may not use petty cash to pay for expenditures, if the fund was established for making change).
• Establishing a Petty Cash Fund 
  • The custodian must complete a Payment Voucher with the following information provided:
    • Amount requested.
    • EDB Treasurer signature/approval.
    • Indicate the type of fund requested.
    • Business purpose for the fund.
    • For a temporary fund, the date the account will be closed. 
  • Once a check is written, the check may be cashed to provide the cash necessary to establish the fund.
• Maintaining a Petty Cash Fund 
  • The custodian must keep paper or electronic copies of all receipts and supporting documentation.
  • The custodian must maintain detailed records (e.g., name, address, payment dates and amounts) for audit purposes that specifically support the payments and maintain these records according to the retention schedule.
  • The custodian may request the ability to exchange cash for different denominations directly through the local financial institution.
  • Replenishment of the fund must occur regularly (at least monthly) and in accordance with Cooperative Extension fiscal year-end procedures and deadlines.
  • Replenishment requests must be submitted to the EDB Treasurer via Payment Voucher and supporting documentation must include the following:
    • Original receipt with line item details for the purchases
    • Date expenditure incurred;
    • Description of the goods or services performed;
    • Purpose for which the goods or services were purchased; and
    • Amount to be replenished.
    • Account reconciliations. 
• Reconciling Petty Cash Accounts
  • The standard requirement is to reconcile the fund and bank accounts at the end of every month.
  • Report any unusual activity, a change in custodian, or a change in fund status to the EDB Treasurer. 
• Auditing Petty Cash Accounts
  • All petty cash funds must be reconciled and a copy of the reconciliation forwarded to EDB Treasurer as part of an annual fund audit. Petty cash funds are also subject to audit and/or random verification by Internal Auditors, External Auditors, and Cooperative Extension Business Operations. 
• Custodian Change for Petty Cash Accounts
  • Request a transfer of custodianship for a petty cash fund in writing via a memo to the EDB Treasurer.
  • A reconciliation of the fund must be performed and accompany the transfer request.
  • The custodian of record is not relieved of responsibility or accountability for the fund until the change is approved. 
• Closing a Petty Cash Fund 
  • Request closure of the petty cash fund when the original authorization period expires, the need for the fund no longer exists, or the custodian leaves the office.
  • The custodian must balance and replenish the fund to its original amount.
  • Once replenished, the custodian must prepare a cash or check deposit for the original amount to return the funds to the EDB bank account.

Offices should undertake a continuing and diligent effort to track, physically control, and collect unpaid checks. Service fees may be established for returned checks to cover all associated expenses. The office/entity should send a letter when receiving a returned check, to inform the check writer of the return and to request appropriate payment.

• Letter to Check Writer Should Contain 
  • Notice that the check has been returned.
  • The reason the check was returned.
  • The date the check was returned.
  • Details regarding any service charge that may have been assessed.
  • The total amount due.
  • That payment is due immediately.
  • If funds are not received within 30 days after the letter is sent, contact County Attorney for further guidance.  

Purchases must be made by staff in order to facilitate office management and maintenance and for conducting and supporting programs. Purchases should be made following approved methods and only relevant and required goods and services should be purchased. Purchases should only be made for materials and services needed to support their intended purpose. As good stewards of public funds, necessity of purchase and budget should always be considered.

• General Information 
  • Conflicts of interest should always be avoided in the purchase of goods and services.
  • Tax exemption must always be utilized for purchases. Tax cannot be reimbursed to staff or volunteers, unless extenuating circumstances do not allow tax to be removed on a purchase. All reasonable efforts should be taken to establish tax exemption with all vendors.
  • Tax exemption must never be used for personal purchases.
  • Staff should always seek to find the best prices for equivalent goods and services.
  • Staff making online or shipped purchases, must avoid having items shipped to their residence. Items should always ship to the office.
  • Items cannot be purchased with Extension funds for personal use.
  • Debit cards are prohibited.
  • The payment voucher or credit card transaction log must be used to document all purchases (office credit card, general office bills, employee reimbursements, etc).
  • All personal reimbursements to staff and volunteers should be minimized whenever possible and should come from the Extension District Board. No reimbursements are allowed to staff or volunteers from program councils or other fund sources. The board will invoice the other entity for the funds disbursed to staff or volunteers.

Certain publications, CD’s, DVD’s, videotapes slide sets and other supplies are available through the web-based order entry system. Additional supplies must be obtained with local funds and secured from local suppliers or through the UK contracted vendors.

• Suggestions for ordering from UK: 
  • The order entry system may be accessed through the College of Agriculture, Food and Environment website (see link below).
  • Supplies - Agents and secretaries should discuss and coordinate orders of supplies to avoid submitting several orders. The Order Entry Computer Program lists supplies available from UK and complete ordering instructions.
  • Supply orders should be anticipated and placed at least two weeks before pickup or delivery by the truck on pre-set dates. Counties will be charged for supplies purchased from the Agricultural Distribution Center. There will be an annual accounting of the balance due for supplies ordered.
  • Each county is sent one copy of new, revised and reprinted publications in the county packet and an e-mail is sent announcing the availability of new publications. Do not order anticipated publications until you have received notice of availability.
  • A limited number of publications require payment. A check payable to the University of Kentucky is required when ordering these publications. Cash transactions are discouraged.
  • The Agricultural Distribution Center maintains only numbered series publications. Back orders are held for annual 4-H Youth Development publication orders only. 
• Publication Distribution
  • Single copies of agricultural and family and consumer sciences publications are available to individuals, schools and other agencies, along with permission to reprint. Should organizations not affiliated with Extension request copies, it is our policy to distribute publications to the group on the basis of one copy per family. Vocational instructors must obtain publications directly from the County Extension Agent. Vocational instructors will be given camera ready copies of publications with permission to reprint. A charge is made for some publications and this cost should be passed on to the individuals or organizations using the publications. Publications are printed on a “demand” basis and only a small quantity is kept at county Extension offices.
  • 4-H Youth Development and EFNEP publications are distributed through County Cooperative Extension offices for use in organized 4-H Youth Development programs, clubs or groups. Distribution is not intended for the general public, but for leaders, teachers and 4-H Youth Development participants. 
• Web-Based Order Entry System Details
  • The Web-based Order Entry system is similar to the old Order Entry program in several ways. For example, there are still four categories to order from; each category is treated separately. Orders are placed by counties, and are delivered by the usual means to the counties. But the new system borrows some ideas from commercial ordering systems.
  • For instance, the concept of a “shopping cart”. As you find items to order (and bear in mind that there is a separate “cart” for (Publications, Supplies, Videos and Slides), you place them in you “cart”. You can remove items if you change your mind.
  • Once your list is completed, you “check out”. At this point, you decide how many (in the case of Publications and Supplies) of each item you want to order, or when (in the case of Videos and Slides) you need the item.
  • You then submit the order. In response to your submission, a screen is presented which contains the items ordered and their quantities and/or delivery dates. You may print this screen as your record of the order.
  • If something interrupts your order process, the information you have entered so far is retained (for up to a week) by sending a “cookie” back to your web browser. (Your browser must accept these cookies in order for the system to function.)
  • The list of items in the system is always current; it is maintained on-line by the Distribution Center. There is no need to update your PC.
• How to use the web-based system.
  • Be sure your browser will accept cookies. In some cases, as a security and anti-annoyance measure, some browsers refuse cookies or require that you approve each one. This can become a nuisance. Contact the Help Desk or your RETC if you have this problem.
  • The system can be accessed at: http://warehouse.ca.uky.edu/OrderEntry/OElogin.asp.  From here you will log in with your county/group and password
  • At the Main Menu, you are presented with a choice of the four components: Publications, Supplies, Videos and Slide Sets. Choose the one you wish. Remember, one-stop shopping hasn’t arrived here as yet; each of these components must be entered independently.
  • In each category, you are given a choice of search methods (the choices vary by category). You must choose one of the methods by clicking on the radio button beside your chosen method. You are usually given a field into which you can type a selection which will further narrow the list presented. (The exception is for Office Supplies, where you are presented instead with the entire list of available supplies.) For example, in the Publications list, you may choose to search by Title, for those publications which contain the word “lim” (case is not important). Having chosen a method and a search string, click on the “Search...” button to start the search. You will receive the list containing both the word “lime” and the word “liming”. You will also see titles which contain the letters “lim” embedded in another words of the title having nothing to do with liming, for example, “elimination” or “limitation”. This is a normal consequence of the way the search is conducted and should not be considered an error.
  • As you scroll through the list, select items to be added to your “shopping cart” by clicking on the box under the column “Add to Cart”. At a later point in the program, you will be asked to supply a quantity (if appropriate) and/or delivery date.
  • At the bottom of the list is a button to “Add checked items to Shopping Cart”. Click on this button to add all the checked items to your shopping cart. You are then presented with a screen that displays the items you have added to your shopping cart. You may remove items from the cart if you wish. If you forgot something, you may go back to the search list (or you may choose another search method) and select additional items. They will be added to the cart without removing the earlier items.
  • When you have everything in your “shopping cart”, click on “...Check Out”. (You may reach this screen from the main category screen by clicking on the “Shopping Cart” button.) This presents your items in a new list with additional fields added. For Publications and Supplies, you are given a field to enter the quantity ordered (the default is one). For Videos and Slides, you are given a place to put in a Date Needed (the default is 2 days from the present date). When all these are completed satisfactorily, click on the “Submit...” button to send the order on its way.
  • Your submitted order is reproduced on a new screen, which you can print using your browser’s Print button. This provides you with a paper copy of the order you just submitted.
  • At the bottom of the screen is a button which will return you to the Main Menu, from where you may enter an order for another category or log out of the system (logging out will verify that you are logged out, then allow you to return to the College Internal page, or, if you choose, close your browser).
  • If you are interrupted (lose your Internet connection) or if you simply close your browser before submitting the order, the information saved up to that point will remain as a cookie on your computer (it is not available to any other computer in the office, even in a networked office, nor to you if you enter the system through a different computer). That information remains valid for up to 7 days if you re-enter the Web Order system. If, during that time, you re-enter the system, you will be told that you   have items in your “shopping cart”. You can view those items by clicking on the “Shopping Cart” button. After 7 days, the data are considered “old” and are discarded. This is to prevent orders accidentally being forgotten and ordered again from another machine, then being submitted weeks (or even months) too late.
  • Input on the system or questions are always welcomed. Send e-mail to the Help Desk, talk with the Help Desk, or with your RETC.

Extension programs may have the need to utilize credit cards in order make purchases. All cards must adhere to proper protocols and be used strictly for their intended purpose.

• Establishing Credit Card Accounts 
  • The Extension District Board has the authority to have credit cards/charge accounts and should establish spending limits and/or approval for expenditure guidelines.
  • Any action taken to establish a credit/credit card account by the Extension District Board should be reflected in the minutes before any credit/credit card accounts are established.
  • If a credit card account is established, the District Board may choose to have one major credit card and/or individual store credit cards and maintain the card(s) in the office for usage.
  • The card(s) should be issued in the name of the Extension District Board.
  • Cards can bear a staff members name, but may not be tied to their credit (some cards required SSN to issue the card but not for credit purposes).
  • Gas cards that remove taxes should be considered such as: Voyager, Fleet One, etc. for county owned vehicles.
  • Debit cards are not allowed.
• Restricted Expenditures
  • The Extension District Board may be more restrictive but should document any other unallowable expenditures in written policies.
• Purchasing Protocol and Record Keeping 
  • Original receipts must be kept and submitted with the payment voucher or credit card transaction log for reconciliation with the bill.
  • All expenditures on office credit cards should be reviewed by the Area Director.
  • No expenditures can be made unless they are approved and properly budgeted purchases.
  • Credit limits as imposed should not be exceeded. Once credit limits are met the card should no longer be used. Another office card cannot be utilized by a staff member who has met their credit limit without prior approval from the Area Director.
  • Receipts and their appropriate vouchers should be turned in a timely fashion to avoid late fees and interest. Late fees and interest should not accrue on a card.
  • Offices should have protocols in place to address the payment of late fees.  Any late fees need to be appropriately coded in accounting systems. Employees cannot be asked to pay for late fees, however each instance where late fees must be paid should be documented. Multiple (more than one) occurrences within a fiscal year should be reviewed by the Area Director with Extension Business Operations to review potential corrective action.
  • The office credit card(s) should be kept in a locked location and checked out by the staff for purchases. After the purchase, the card is returned and a receipt is attached to a payment voucher.
  • Cards specifically issued to staff members maybe carried by that staff member; however they must assume responsibility for the card at all times that it is in their possession.
  • If purchases are made at the same time for two different fund sources (accounts), the charges should be made as if making two separate purchases and two separate detailed receipts should be obtained.
  • Absolutely no personal purchases. Doing so is misappropriation of public funds and a basis for termination of employment.
  • Absolutely no co-mingling of purchases, i.e. a situation where the agent expects to reimburse part of the receipt for personal purchases. Refer to the sentence above in regard to the consequences of misappropriation of public funds.
  • Extension District Board/Council credit cards may not be used for subsistence.
  • Registration, airfare, hotel rooms, parking, etc. are acceptable purchases with EDB Credit Cards, if the staff member is in official travel status.
  • In the event of a staff vacancy due to separation from employment, all credit cards should be cancelled for that employee as soon as possible.

If any Fraudulent Activity is suspected by anyone concerning credit card purchases, the District Director and Extension Business Operations should be contacted immediately.

Extension offices and entities should be held to a high level of accountability with regard to business practices and use of public funds. Every effort should be made to ensure that public funds are used in a reasonable and responsible manner. Certain types of expenditures require particular caution; these expenses have been categorized and entitled “discretionary expenditures”. These expenditures should be paid for using discretionary funds (non-public funds). The discretionary expenditure guidelines below ensure that expenditures in these categories only occur when necessary and appropriate.

All employees and volunteers must practice good stewardship of public funds. Purchases that may be discretionary in nature, should always be discussed with the Area Director before the purchase is made. Repeat or questionable purchases can and will be reviewed and could result in corrective action if misuse of funds is discovered.

Discretionary Expenditure Guidelines

Various circumstances may require boards to utilize the bidding process. There are two principle reasons for bidding; to ensure equal opportunity for qualified vendors and to obtain the best price for the purchaser.

KRS 424.260 provides the bidding requirements that would apply to Extension District Boards regarding bidding for services and equipment. However, specific county policies may be more restrictive. Be sure to check with the County Attorney concerning the bidding requirements for your county.

• Bidding Information and Requirements 
  • If an approved state vendor is utilized there is no requirement for bidding.
  • KRS 45A is the Kentucky Model Procurement Code and will provide further guidance as to the particulars of purchasing.
  • KRS 45A.494 requires that a resident bidder of the Commonwealth be given preference against a non-resident.
  • Study and compare different brands and models to determine what is best for your situation, i.e., usage, price, capability, service, availability, etc.
  • Make a list of specifications you need including delivery, training, service, trade-in, capabilities of the equipment, quantity, color, finish, or any other restrictions.
  • Send the specifications to possible suppliers with a deadline for return.
  • It is recommended that a minimum of 3 bids, for purchases ranging from $10,000 to $29,999, be reviewed before purchases are made. This would be an example of an all reasonable effort to find a better price.
  • Anything $30,000 and above must have the full bid process conducted, unless the county fiscal court has a more restrictive dollar amount policy; in which case the county policy should be followed.
  • Control purchases of energy consuming equipment, supplies and related equipment so as to promote energy conservation and acquisition of energy efficient products.
  • Some counties require publishing the bid in local newspapers. Check with your County Attorney for information on these requirements. 
• Steps in Reviewing and Approving Bids 
  • On the designated/advertised date, bids are opened and compared.
  • Some vendors may choose to place a bid even though the equipment does not meet specifications. These bids may be disallowed.
  • If bids are not acceptable, you may reject all bids and start the bid process again[SC1] .
  • Add steps in opening, reviewing and selection processes.
  • After choosing the winning bid, place your order with the vendor and notify other vendors they were not selected.
  • The accepted bid does not have to be the lowest price if there are reasons that justify selecting another vendor.
  • Conflicts of interest should be avoided. Purchases and contracts should not be made with an employee of the University of Kentucky or District Board for any item of supply, equipment, or service, nor may an employee/board member have any interest, directly or indirectly, in any purchase made by the Board or entity.
• Applicable KRS Statues 
  • 13A.010 Definitions for chapter.
  • 424.260 Bids for materials, supplies, equipment and services – Exceptions.
  • 45A.080 Competitive sealed bidding.
  • 45A.100 Small purchases by state governmental bodies.
  • 45A.365 Competitive sealed bidding.
  • 45A.494 Reciprocal preference to be given by public agencies to resident bidders – List of states – Administrative regulations

The purpose for obtaining a state purchase exemption number is to be exempted from sales taxes on purchases. Educational and charitable organizations who request sales tax exemption numbers will need to first obtain 501(c) status. However, organization with a sales tax exempt status may still need to collect and pay sales taxes on items sold (KRS 139.497 provides an exception to 4-H and school sales).

Obtaining a County Extension Council and/or District Board tax exempt number should not be confused with obtaining 501(c) status. A purchase exemption number is obtained from Kentucky Department of Revenue and the 501(c) status is a Federal Internal Revenue Service designation for non-profit and charitable groups (i.e.: Extension Homemakers, 4-H Council and Clubs).

County Extension Offices and programs should take steps to always make purchases on a tax exempt basis.  This first requires for each specific purchasing entity, is to obtain tax exempt status.  Once tax exempt status is obtained several vendors (i.e. Wal-Mart, Dollar General, Amazon, Best Buy) require certain steps be taken with their company to set up that tax exemption number with them in order to use it.  Each vendor may have different requirements on how this process is done and it is the responsibility of the tax exempt entity and those working on its behalf to take those required steps.  Below are policy related details for tax exempt status and obtaining a tax exemption number.

• Tax Exemption Requirements 
  • Staff and volunteers making purchases on behalf of a tax exempt entity must use the tax exemption for all purchases.
  • County Extension Councils and District Boards should not use the University Tax Exempt Number. That number is to be used only for items purchased by the University of Kentucky. (Note: staff members making a personal payment for lodging may/should use the university tax exemption).
  • Purchase exemption numbers are provided to the organization paying the bills. Therefore, it is not appropriate to use the county government exemption number.
  • Extension groups should not attempt to share Tax Exempt Numbers. A number should only be used by the entity that has obtained it.
  • Purchase exemption numbers may not be used for personal purchases. Avoid giving the appearance of using it personally even though the purchase may be for the Cooperative Extension Service.
  • Reimbursement to staff, leaders, or other individuals must have tax deducted from the reimbursement (the only allowance would be in the rare circumstance where a tax exemption has been rejected).
• Obtaining a Kentucky Purchase Exemption Number:  
  • Go to http://revenue.ky.gov/ or telephone 502-564-5170.
  • From the Kentucky Department of Revenue site, follow these links: Form Search -> Use the search by form title or number-> Search for 51A125, Application for Purchase Exemption Form, or it can be found at: https://revenue.ky.gov/Forms/51A1251209.pdf.
  • Complete the form and return it to Division of Sales and Use Tax, Department of Revenue, P.O. Box 1274, Frankfort, KY 40602-1274. If the tax exemption number is for the Extension District Board, mark Special District in the appropriate spot. Tax exemption for County Extension Councils and program councils should be marked as educational.
  • Extension District Boards will need to provide a Notification of Existence form. This is on file at the County Clerk's office and is a form used to establish the District Board.
  • The purchase exemption number will be mailed to you.
  • For additional questions contact the Division of Sales and Use Tax, 502-564- 5170. 

During the course of Extension work, travel will be required to fulfill the duties of the job. Travel funding sources in a county office may include funds coming from various sources such as general travel fund lines (see g. County and State Travel Funds), professional improvement (see h. Professional Improvement Funds), or other state cost centers for state assignments.

UK Business Procedure E-5-1 applies to all travel reimbursements and the TRIP system will be used for all travel reimbursement requests. http://www.uky.edu/EVPFA/Controller/files/BPM/E-5-1.pdf

The following shall provide guidance to county employees traveling on behalf of Extension:

• CAFÉ Official Travel/Professional Leave – General Process 
  • At any time travel is required, for work purposes, which takes you away from your normal work location(s), it is strongly recommended that you submit a request for official travel/professional leave.
  • Examples include, but are not limited to:
    • Attending a conference/seminar as a participant or presenter
    • Leaving the state for any work-related reason
    • An extension agent traveling outside his/her assigned county  
  • This recommendation is for your protection to document your work status.  
• General Travel Information
  • Written approval must be secured prior to travel at the level required by department or division. Employees must disclose plans for combining personal with business travel.
  • Travelers must use the most direct and usually traveled routes, incur the lowest reasonable travel expenses, and exercise care to avoid impropriety and/or the appearance of impropriety. Expenses incurred by traveling alternate routes or using less economical sources are the responsibility of the traveler.
  • Travelers are strongly encouraged to utilize UK Travel Services.
  • Reasonable judgment must be given to travel only on dates that are necessary to complete University business.
  • Travelers are expected to return home on the same day that business concludes if transportation schedules allow arriving home by end of the calendar day.
  • Multiple trips without an overnight stay (day trips) may be reported on a single TRIP travel expense report on a monthly basis.
  • No reimbursements can be made prior to completion of the trip.
  • All receipts pertaining to the trip will be uploaded within the TRIP system for documentation and reimbursement (airfare, lodging, registration, parking, taxis, baggage fees, etc.).
  • All 3^rd party paid expenses must be submitted in the TRIP system, along with all receipts and required documentation, when personal reimbursements are required.
  • Travel expense reports that will result in zero reimbursement are not required to be submitted via TRIP (e.g. county vehicle used and all other travel expenses were paid by the county).
  • Travelers should submit all travel expense reports for monthly day trips by the 10^th of the following month.
  • Travelers should submit all overnight travel expense reports as soon as they return from the overnight trip.
  • Employees who do not complete and approve the TRIP travel expense report within these 60 calendar days will be reimbursed and the amounts considered taxable wages.
  • Travelers are strongly encouraged to utilize county credit cards when available to avoid out of pocket costs and reimbursements.
  • A listing of non-reimbursable expenses can be found in E-5-1 section VII.
• Air Travel
  • Travelers are strongly encouraged to utilize approved UK Travel Vendors (AAA, Avant & Concur) for arranging official University travel in order to take advantage of travel discounts and to be included in the University risk management tracking system.
  • Tickets purchased for commercial airline travel must be nonrefundable coach class or other similarly reduced airfare.
  • Alternate vendors can be used if:
    • Employee shows that a favorable airfare was obtained through the alternate vendor by submitting a valid cost comparison for tickets costing greater than $500 from Concur; and
    • Employee uses personal funds for booking.
    • Cost comparisons for airline tickets purchased from an alternate vendor are not required when the ticket costs less than $500. A copy of the approved business procedure exception (BPE attached) must be included with the employee’s travel expense report if an alternate vendor is used and the ticket costs less than $500.
  • Combined Business and Personal Travel:
    • When personal and business travel are combined on an airline ticket, the ticket must be purchased with personal funds.
    • Care should be given to ensure the county does not pay for travel expenses related to the personal portion of the trip (personal lodging, meals, rentals, etc.).
    • The traveler will be reimbursed the lesser of either the actual ticket value or the airfare cost comparison from Concur showing the lowest fare for what the ticket would have cost for official University business travel only (no personal travel included).
• Cost comparisons
  • A cost comparison is required when:
    • a ticket costing >$500 is purchased from an alternate vendor; or
    • business and personal travel are combined; or
    • an employee chooses to drive >400 miles one-way to destination.
  • Cost comparisons must be generated using Concur.
  • Cost comparisons must include the following:
    • show the first page listing of airfares/itineraries for the same dates of travel, the same travel destinations, and the same approximate times of departure as shown on the ticket purchased from the alternate travel vendor;
    • show the search parameters used and the airline matrix (all airfares) across the top of the screen; and
    • be printed and date-stamped on the same day as the ticket is purchased.
  • Failure to submit a valid cost comparison may result in your reimbursement reduced to the lowest historical airfare in the market.
• Personal Vehicles (mileage)
  • The traveler must have a Motor Vehicle Record (MVR) Release and Information Form on file with the University’s Risk Management Department.
  • Mileage from the traveler’s residence to workstation is considered commuting and is not reimbursable.
  • Mileage is reimbursed from the traveler’s workstation to the destination unless driving from the traveler’s residence is closer.
  • Mileage from the traveler’s residence to workstation is considered commuting and is not reimbursable.
  • Mileage rates are limited to federal, reduced federal, and state rates. Depending on the fund source provided, some rates may be unallowable.
• Rental Vehicles
  • The traveler must have a Motor Vehicle Record (MVR) Release and Information Form on file with the University’s Risk Management Department.
  • The most economical car feasible must be rented.
  • Mileage for rental cars will not be reimbursed. Only the actual rental car cost and gas are reimbursable expenses.
  • Insurance on domestic rental vehicles is provided by the University’s Actual Cash Value Comprehensive and Collision coverage plan. Collision deductible waiver (CDW) or any other additional insurance is not a reimbursable domestic travel expense.
  • Comprehensive, collision, and liability insurance on vehicles rented outside the United States, including the District of Columbia, Canada, and U.S. territories as defined in IRS Publication 570 is a reimbursable expense, per the University’s Risk Management Department.
• Driving Less/More than 400 Miles One-Way
  • When using ground transportation (personal vehicle, rental car, or motor pool vehicle), the maximum reimbursement for all travel expenses will be calculated as follows:
    • When the destination is 400 miles or less one-way from the traveler’s workstation or residence, expenses incurred while traveling to and from the destination are limited to tolls, subsistence, mileage for a personal vehicle, or actual costs for a rental car or motor pool vehicle. Any lodging expenses incurred when the traveler is en route to and from the business destination will not be reimbursed.
    • When the destination is over 400 miles one-way from the traveler’s workstation or residence, the maximum reimbursement, including any ground transportation costs (mileage for personal vehicle, actual costs for a rental car or motor pool vehicle), tolls, lodging and subsistence, is limited to no more than the normal expenses that would have been incurred if commercial air had been used. A valid airline cost comparison must be printed from Concur at least three weeks before travel, showing the lowest airfare for business travel. An Air vs. Auto Travel Expense Form must be completed and submitted with the TRIP travel expense report, comparing actual driving expenses to airfare expenses. The traveler will be reimbursed the lesser of either actual driving expenses or the comparative airfare expenses.
• Lodging
  • Reimbursement for lodging shall not exceed the cost of a single room rate. Employees sharing lodging shall be reimbursed a pro rata share of the room charge. Employees should request separate receipts with individual names listed.
  • The University does not pay lodging expenses for an overnight stay within forty (40) miles of the employee’s official workstation or home.
  • Telephone and internet costs for necessary official University business shall be reimbursed, unless the traveler is receiving a cell phone allowance.
  • An itemized original receipted bill showing a zero balance and method of payment must be attached to the TRIP travel expense report for all lodging reimbursements.
• Subsistence/Per Diem
  • Subsistence is only paid when the traveler’s authorized work requires an overnight stay. Lodging receipts or suitable documentation is required.
  • Subsistence payment for a meal requires the traveler to be in travel status for the entirety of the time frame established for that meal.
    • Breakfast: 6:30 a.m. – 9:00 a.m.
    • Lunch: 11:00 a.m. – 2:00 p.m.
    • Dinner 5:00 p.m. – 9:00 p.m.
  • Subsistence cannot be claimed for meals included in registration fees or otherwise provided at no cost to the traveler as part of the event.
  • A traveler attending a function such as a luncheon or dinner meeting may be reimbursed for actual meal cost instead of subsistence when the traveler’s attendance is required. The traveler must submit the receipt for the meal and a memorandum from a supervisor noting the traveler's required attendance.
  • Subsistence rates are based on the location where the employee stays overnight.
• The use of personal funds is required in the following cases:
  • When combining business with personal travel
  • When purchasing airfare via alternate vendors (Expedia, Travelocity, Orbitz, etc).  

Extension staff have business related requirements on a regular basis that require travel. Travel can occur within the County, the State, or out of State. In rare circumstances, sometimes travel could take employees out of the country. Travel may be covered from various funding sources, including county travel budgets, professional improvement budgets (see h. Professional Improvement Funds), state funding sources, and external funding sources, such as grants, etc.

County Travel is defined as that travel which occurs on a day to day basis. Examples include: travel to a local event, program, or collaborative meeting. This travel is primarily within the county but can also be out-of-county but within Kentucky to present programs, support committee meetings or attend District Staff. These funds may occasionally be used for out-of-state travel if programmatically connected and approved by the District Director.

State Supported Travel is defined as extension business travel which is supported by state funds. Examples include: State Fair, statewide committee work or task forces, new agent orientation and core training. Use of state supported travel funds is to be approved by the District Director.

• Out of State/Country requiring overnight travel requests should include (All overnight trips, agent retreats, trips involving clientele participation, or professional development trips not associated with Extension organizations, which are out of state/country, must be approved by the District Director and the Director of Extension):  
  • Clear educational objectives with easy to understand benefits to the county program.
  • A descriptive itinerary that clearly links to educational objectives.
  • Explanation of why the venue or location of the opportunity is the most desirable to meet the educational objectives.
  • Evidence that the outcomes and county benefits have been described and shared with county District Board members.
  • Evidence of approval of the local District Board (only for out-of-country trips).
  • If agent is traveling with clientele, a risk management plan must be provided.
  • For out-of-state/country requests, agents should request approval via the myUK system and must provide additional information and justification. If traveling on State Funds provide the UK Official Travel Form.
• Out of State with clientele not requiring overnight stay requests should include: 
  • Request authorization from District Director in myUK system.
  • Provide a risk management plan.
  • Provide clear educational objectives for the trip, plus an itinerary.
  • Explanation of why the venue or location of the opportunity is the most desirable to meet the educational objectives.
• Out of State travel agent only not requiring overnight stay requests should include (Border county agents traveling across state lines in the scope of their normal duties are not required to request permission): 
  • Request approval from District Director using myUK.
• Out of State travel multiple agents only not requiring overnight stay requests should include: 
  • Request approval from District Director using myUK.
  • Provide itinerary with educational objectives for the day.
  • Evidence that the program will provide benefit to local programs.
• Youth Trips out of county and/or overnight travel requests should include  
  • Any Extension event/program involving youth and travel outside the county or overnight lodging requires a risk management plan.
  • No travel pre-approval is necessary.
• Official Travel overnight with no reimbursement from County should include (this applies to agents who wish to travel out of the state or country with no county expenses): 
  • Request authorization from District Director thru myUK, clarifying who is sponsoring the trip.
  • Adhere to the same guidelines as out of state/country trips listed above, including justification for professional development trips not associated with Extension professional development organizations.
  • Seek approval from the Director of Extension

Agents serving in Leadership roles of Professional Associations and Multistate educational projects/ programs will receive special consideration for exceptions to these rules as determined by the District Director, Program Leader, and Director of Extension. Special considerations must not violate University Policy.

Professional improvement funds are only to be used for dues, travel, subsistence, and registration fees for involvement in the approved state and national professional associations listed below. PI funds should only be budgeted when all other obligations are met (staff salaries & benefits, program support, travel, office operations, etc.).

Approved Agent Associations

• KACAA & NACAA
• KAE4-HA & NAE4-HA
• KEAFCS & NEAFCS
• ESP (State & National)
• JCEP
• Fine Arts Agents do not have state and national associations like other program areas.  Their District Director and program area leader, will help identify appropriate professional improvement opportunities.

Approved Support Staff Associations

• ChiES

For annual budgeting purposes, PI is limited to $3,500 per agent and $1,500 per support staff. For those agents who participate in Epsilon Sigma Phi, the county may allocate up to $1,000 in additional PI funds. Any other use of PI funds is prohibited without prior approval from the respective District Director.

Professional Improvement Funds cannot be used to pay for tuition of courses offered as college credit (VAA is the exception). Likewise, PI funds cannot be used to pay for an individual’s Rotary, Kiwanis or other professional, civic or association dues.

• Professional Improvement Fund Management Requirements
  • An electronic request should be submitted to the District Director by agents before usage of funds. Support staff should file their request with their direct supervisor.
  • Arrangements must be made to keep the office open when staff members are absent for professional improvement.
  • For those attending state or national association conferences, any optional pre-conference events that offer no educational benefit to county programs are considered a personal benefit and are not eligible for reimbursement or payment from professional improvement funds.
  • Only those membership dues for professional associations that are included in a meeting registration should be submitted as a travel expense in the TRIP system. All other membership dues for professional associations will be paid for in the county. For example:
    • State Association meeting registration includes annual State/National association membership dues – submit as a registration receipt in TRIP.
    • State and/or National Association membership dues via a separate invoice (i.e. $100 Annual membership dues) – submit to the county as an expense.
  • All expenses must be paid by the employee and reimbursed by the dispersing party (county or state). An exception would be airline tickets and meeting registrations, which can be paid in advance by County Extension District Boards or County Extension Councils with the approval of the District Director.
  • Detailed receipts showing exact amounts spent will be turned in to the EDB/CEC and taken out of the appropriate line in the budget. EDB/CEC credit cards may not be used for subsistence. All expenses paid on behalf of the employee, should still be reported in the TRIP system as 3rd party.
  • All agents should have budgeted professional improvement funds in equal amounts within an office (with the exception that eligible agents may have the extra $1,000.00 for ESP).
  • Extension Agent professional development trips should be limited to two overnight out-of-state “program area” trips and the National ESP Conference per year and no more than one out-of-country every three years, regardless of the source of funds, with the approval of the District Director (any professional development trip not associated with an association, must be approved by the District Director and the Director of Extension).
  • Out-of-country professional development trips also count as an out of state trip in the year they are taken.
  • Travel for professional improvement must follow University Policy and travel guidelines.
  • Travel time to and from the destination is considered work time for hourly staff and should be treated accordingly.
  • Funding of one trip on professional improvement funds can be prorated over two fiscal years as long as the amount does not exceed $2,000 per year. Prepayment of registration and airfare may be made one fiscal year with other expenses occurring in another fiscal year.
  • Unused professional improvement funds cannot be carried over from one year to the next. Any transfer of funds from another account in the county budget during the same fiscal year must have District Director and Extension District Board approval.
  • Employees cannot be reimbursed without an actual detailed receipt (see Reimbursement of Travel Expenditures for details and exceptions).
  • Employees are responsible for keeping track of the balance of their funds and not over spending.
  • In the case of overpayment, the employee will reimburse the District Board or County Extension Council. Funds cannot be transferred from other lines to cover overages.
  • Claims for using professional improvement funds for travel and expenses must be approved by the District Director and follow University Travel Regulations.
  • Dues to local, or non-Extension professional organizations, cannot be paid using Professional Improvement funds. These are the responsibility of the employee and are viewed as personal benefits. Chamber of Commerce dues for an office/business membership may be paid from District Board funds.
  • Agent attendance at one national professional meeting per year will be approved, pending availability of funds and acceptable job performance.
  • Time at an approved meeting will be on official time. Agent attendance at other professional meetings will be reviewed on the merits of each case.
  • Agents are allowed time without expenses for district professional improvement meetings, before or after district staff meetings, or at regularly scheduled times not to exceed one-half day per month or six days per year.
  • Unless your work station is more than 4 hours away from the conference site, all support staff will be expected to report to your normal work station and work until noon the day of the conference. This example would be used for circumstances where overnight stay is required/needed due to a conference starting early the next morning.
  • Pre-conference attendance to CHIES Board of Director’s meeting or Conference Planning Committee meeting is allowable; however, this must be discussed with the supervising agent.
  • Support staff requests for professional improvement should be submitted for review, at least 30 days prior to the event to their supervising agent.

Circumstances may require advanced payment of travel expenses. Advanced payment for registration fees and travel on county funds applies to registration fees for in-service trainings, workshops, conferences, seminars, and airfare for approved business travel. Advanced payments should be made using county credit cards or other county funding sources to prevent staff from being out of pocket for travel expenses.

Before any advanced payments can be made, all appropriate approvals must be granted and all related procedures must be followed.

• Advance Payment Guidelines
  • Extension does not allow travel advances to staff.
  • Staff may not receive any reimbursements until the trip is completed and travel expense reports have been filed.
  • Prior approval by the District Director must be granted in order for advanced payment to be made.
  • Staff should use the “comments” section of the travel authorization system to request pre-payment, and include the purpose for the travel, and the itemized amount of the funds requested.
  • A Copy of the approved travel request must be attached to the monthly expenses for the month in which the travel takes place, as well as the month it was disbursed.
  • Advanced payment assumes the staff members’ intent to attend the meeting. The employee must seek a refund or credit if illness or personal emergency requires cancellation after fees have been paid. Excessive cancellations may result in the suspension of the privilege and/or requirement of the staff member to repay expenses in consultation with local Boards or Councils.

Many County Extension budgets include funds for program enhancement. These funds must be spent in an appropriate manner as outlined in this section. Program support funds may be used for program expansion and support, such as supplies for demonstrations and equipment used to expand a program. Examples might include the purchase of “packaged” programs for use in the county, visuals, digital cameras, videos, reference books, curricula, etc.

Extension agents and program assistants should prepare an annual budget for the allocation of these funds. Fiscal contacts should be involved in program support budget development.

Budgets must be submitted during the annual Extension Budget process and must follow requirements for budget review by County Extension Councils and Extension District Board. Final signed budgets will be submitted to the District Director.

• Guidelines for Program Support Funds 
  • Purchases must be properly budgeted and be for appropriate and relevant items.
  • Excessive funds should not be budgeted for program support. If agents carry over large amounts of program support each year, budget decreases should be considered.
  • All vital budget needs should be met before program support should be allocated. Increases in program funds should only occur when needed and if the budget allows.
  • All program support expenditures will be reviewed at the end of the fiscal year.
  • All program areas should be allotted an equal amount of funds for program support for each agent. Each agent within a county should have an equal funding amount.
  • Funds for program support can be expended only after employees submit receipts for legitimate expenses.
  • Program support funds may be appropriated for program assistants.
  • All equipment purchased should be properly inventoried according to policy.
  • Program support funds should not be used to replace funds needed by program councils (i.e. 4-H, Extension Homemakers, Agriculture Advancement Council).

Program support funds should not be used for expenses which benefit an individual such as a camp scholarship, but can be used for leader training materials and leader workshop expenses. If an individual leader receives funds for training, it would be expected that the leader repay with volunteer time spent in the county program. If this is not possible due to unforeseen circumstances, the volunteer may be asked by the Board or Council to reimburse any expenses. An example of allowed workshop expenses would be registration fees for a shooting sports certification or certification for a livestock or horse leader. Please note registration fees and materials can be covered, but lodging expenses, fuel, and meals may not be paid for with program support funds under any circumstances.

Program support funds should not be used for salaries, payments, bonuses, door prizes or gifts to individuals, whether an employee, volunteer, or client.

• Gift cards or other gifts for individuals may not be purchased with program support funds.
• Unnecessary or frivolous expenditures are not allowed and could lead to corrective action.

Itemized expenditure of funds must be submitted to the Extension District Board or Councils as appropriate with detailed receipts for all expenses kept on file.

• Detailed records should be entered into QuickBooks Online (QBO). The detail should explicitly outline what was purchased and its purpose.

Extension staff are all encouraged to develop themselves professionally through involvement in professional associations. Guidance on funding sources and expenditures should come from the section on Professional Improvement Funds. Proper approvals must be gained from the appropriate supervisor before registering for association related events and trips and before paying dues with Extension Funds.

As stated above all regular staff are encouraged to participate in professional development, and join associations. This includes administration, agents, and support staff/program assistants. Supervisors should support and encourage participation in professional associations when appropriate.

Expenditures should be made responsibly and fall within established budgetary guidelines. Overspending limits can lead to the employee having the responsibility of paying overages. Strict adherence to policies and guidelines established in Professional Improvement Funds should be followed.

County offices may find that they have personal service needs such as lawn care, cleaning, maintenance of equipment, etc. However, the office should examine budgetary options and program needs to determine if services are more practical to be handled by contract or by staff (either part-time or full-time).

• Personal Service Contract Requirements 
  • When seeking services, conflicts of interest should be avoided.
  • Services may be acquired on a contract basis if they are not provided by Extension staff.
  • When a contract for personal services of $20,000 or less is required, it is recommended that the office informally solicit proposals, make a determination of the best qualified contractor and establish a personal service contract.
  • When a contract for personal services greater than $20,000 is required, the office must conduct a formal bid process (KRS 424.260).[SC1] 
  • Personal service contracts for professional services must include the use of their own equipment and materials (not those owned by the Extension District Board).
  • Please note that if payment is over $600, an IRS Form 1099 should be given at the end of the calendar year. Consult a tax professional for questions or assistance on these matters.

A sample Personal Service Contract can be found at:

https://ces-manuals.ca.uky.edu/files/personal_service_contract_2017.pdf

When entering into a personal service contract, an Extension Office must utilize a clearly defined contract, which specifies the scope of work and respective dates work should occur over. The general University Service Contract may be found for reference at:

 https://www.uky.edu/hr/sites/www.uky.edu.hr/files/eForms/personsvcless10k.pdf

Federal Commercial Mail applies to all official mail mailed by Cooperative Extension Service offices, using a postal meter and bulk mail. Restrictions are specific to the Cooperative Extension Service and do not apply to “strait line federal agencies”. The person who signs the letter or enclosure is responsible for correctness.  U.K. (1861 institution) and K.S.U. (1890 institution) have different rules regarding letterheads and titles. U.K. uses "service" in the title, K.S.U. uses "program”.

All support staff and the office manager must complete the Federal Commercial Mail Course online. Contact Federal Commercial Mail Officer at UK for information. Federal Commercial Mail must adhere to all rules outlined in this section. All other postage purchases not pertaining to Federal Commercial Mail, must still be for relevant business purposes and should be appropriately budgeted. Disagreements with the local postmaster should be referred to the State Extension Mail Officer. Cooperative Extension employee’s penalty mail privilege is granted under the provisions unit E060, Section 3.0 of the Domestic Mail Manual.

• Regulations Concerning Federal Commercial Mail  
  • Federal Commercial mail is for official use only.
  • Material shall be related to official business.
  • It can only be used by state and county Extension employees and is limited to agents, specialists, and administration.
  • Assistants, intern, secretaries and leaders are not to co-sign or sign mail sent by Federal Commercial mail.
• Requirements for Use 
  • Official letterhead is required at the top of all mailings, including newsletters. Cooperative Extension Service must be at the top of the page. The public notification non-discrimination statement must be at the bottom of the page. Any changes must be approved by the Federal Commercial Mail Officer.
  • Content of mailing must relate to activities in furtherance of Extension work.
  • Anything can be sent from one employee to another and to leaders of Extension organized groups, but not to members of such groups.
  • The only authorized return address on the envelope is University of Kentucky---including your county name and address. Offices should use the local return address on the envelope and letterhead.
  • Use authorized envelops only.  
• Special Regulations
  • No advertising, buying, selling, dealers' lists, list of commodities that may be purchased though the Extension office, purchase of livestock, trade for anyone other than agencies of the Federal government, and soliciting is allowed.
  • Contests, prizes, and awards may be included. Do not use names of persons or firms sponsoring contest, or names of donors and amounts. Use "in appreciation to" instead of "sponsored by."
  • Any item in which there is a charge (i.e.: soil samples, publications) must have paid postage.
  • Information on commercial, religious, or political activities may NOT be sent.
  • No advertising or business of fairs, livestock shows and livestock sales except for information on displays and exhibits to persons enrolled in Extension program may be sent.
  • No established organizations' and associations' business may be sent. This includes State Department of Agriculture, University, breeder's associations, farm bureaus, soil conservation districts, DHIA, etc. This includes information on dues, called meetings, or promotion of the organization. This does not pertain to 4-H clubs and other groups organized and directly supervised by Extension agents in accordance to their Plan of Work. In order to assist in organizing, information and announcements of meetings can be mailed until the group is organized and officers are functioning.
  • No personal messages, holiday greetings nor farewells may be sent.
  • Prices cannot be listed except for cost of Extension events, meals of approved Extension meetings, 4-H Camp, soil samples, bulletins, and services.
  • Use of credit lines is allowed, but smaller type should be used.
  • Publications purchased from non-governmental agencies cannot be mailed.
  • Mail pertaining to free social and recreational activities sponsored solely by the Cooperative Extension Service may be mailed. Purpose should be stated that the activity is part of the educational program of Extension.
  • Any item that does not meet Federal Commercial mail requirements listed above can be mailed using postage stamps.  
• Mailing Lists
  • Mail lists should be updated every 95 days.
  • Mailing lists are NOT to be distributed outside the Cooperative Extension Service unless approved by the Associate Director of Cooperative Extension Service. They are not federal or public record or for use by any other federal agency. Agents should approve distribution of any list within the Cooperative Extension Service.
• Self-mailers
  • Self-mailers are letters, circulars, or newsletters sent without envelopes. They must use Cooperative Extension Service letterheads.
  • Fold to standard letter size, if possible, and fasten with a gummed fastener (preferred). 
  • No message should appear on the address side.
• Signatures 
  • All letters must be signed by an agent and must include the agent's title and typed name.
  • Secretary may sign the agent's name with permission, the secretary should not initial.
  • Rubber stamp signatures are allowed.
  • Signature or typed name may be omitted on postcards if space is limited.
  • Joint signatures are allowed only by persons with Federal Commercial mail privilege (agents, specialists, and administration only).
  • Signatures of non-authorized people should not appear.
• Use of Brand Names 
  • Avoid using trade and brand names.
  • If a brand name is used, use an appropriate disclaimer such as "The information given herein is supplied with the understanding that no discrimination is intended and no endorsement by the Cooperative Extension Service is implied."
• Postage Meters 
  • Postage meters that are used for Federal Commercial Mail must follow all Federal Commercial Mail regulations.
  • Meters should be set at least once every six months.
  • The Extension office can get a refund from the post office for spoiled metered mail. Use form 3533 from the post office. This must be done within a year.
  • County Extension Offices or Extension organizations may purchase a postage meter to use for non-Federal Commercial mail. Federal regulations for mail will not apply to mail metered on an independent meter. Offices need to check with local postmaster on regulations governing meter.
• Reducing Mail Costs 
  • Reduce the volume of mail.
  • Consolidate daily mail in office. Non-critical mail to the same address can be collected over 2-3 days and sent in one envelope.
  • Eliminate unnecessary mailings of newsletters, publications, etc. if they can be hand delivered. Do mailings less often. Eliminate duplicate mailing to a family.
  • Update mailing list every 95 days. Check for deaths, correct addresses, moves, etc.
  • Evaluate use of mail and newsletters. Are newsletters of value to receiver? Are newsletters of quality presentation and content? Are uses of recipes and craft patterns limited and of educational value?
  • Reduce size or weight of mail: 
    • Fold to standard envelop size when possible.
    • Design materials to fit into envelop (handouts, certificates, etc).
    • Use light weight packing materials.
    • Use lighter weight paper.
    • Use fewer sheets of paper. 
    • Less is better.
• Mail classifications: 
  • Use bulk mailings (a mailing of 200 pieces or more of like size items). Combine smaller mailings over 2-3 days to meet bulk requirement of numbers.
  • Use 3rd and 4th class to send out publications. (Exception: 1st and 3rd class rates are the same for the first 5 ounces.)
  • Anticipate deadlines to avoid first class mailing.
• Other suggestions: 
  • Check commercial parcel services and compare rates. Use the lowest rate.
  • Ask postmaster how to save money.
  • Uses presort. For specific instruction on bundling, check with the postmaster.
• Shipping Dangerous Materials 
  • The surface and air shipment of dangerous materials within the U.S. is regulated by the U.S. Department of Transportation's Hazardous Materials Regulations. International shipments are also controlled by the International Air Transportation Association's Dangerous Materials Regulations. These rules set the responsibilities for institutions and individuals shipping dangerous materials, which include the following hazard classes: explosives, compressed gases, flammable liquids and solids, oxidizers, reactive, poisons, infectious substances, radioactive materials, and corrosive materials. The regulations:
    • Require proper classification, packaging, labeling, and documentation of all shipments.
    • Require training for anyone who prepares or offers materials for shipment.
    • Set penalties and fines for noncompliance.  
  • Any faculty, staff, or student associated with the University of Kentucky who is involved in shipping hazardous materials is subject to these rules. While many of our laboratories are likely to be impacted, other units may be impacted and must be sensitive to common items that may meet the hazardous materials definition. For example, paint may be covered as a flammable liquid and shock absorbers as a compressed gas.
  • Noncompliance risks to the University of Kentucky, the unit, and the individuals involved in shipping are very significant. The worst scenario would be for an improperly shipped package to cause an airline disaster. A more likely event, the discovery of a leaking package could result in a large fine to the University. Even the technical violation of offering an improperly labeled container for shipment, or failure to train UK employees, could result in a citation or a fine. Individuals failing to comply with the regulations are subject to civil and even criminal prosecution.
  • Anyone needing assistance in preparing hazardous materials for shipment should contact the Hazardous Materials Management office (859-323-6280).  

Extension Offices may have the need to purchase or lease technology equipment and supplies. This may include physical computers (including laptops, notebooks, and tablets), hardware, software, and peripheral items such as external drives, copiers, printers, etc.

There are times where leases could offer the best options for an office. A networked copy machine is an example. It is the responsibility of staff and volunteers to always utilize UK licensed software when available, instead of purchasing it on their own.

District Extension Information Technology Contacts (DEITC) are available for consultation on technology needs and to make recommendations. Staff should always consult this resource when making technology decisions for the office.

• Purchasing, Leasing, and Setup 
  • Only software not available from the University, which has a relevant purpose for approved work may be purchased or leased.
  • Approved and budgeted minor purchases of replacement cords, flash drives and items which cost under $200.00, may be made at the local level without consulting the DEITC.
  • All new computers to be installed and maintained by the DEITC are recommended to be purchased through Dell Stores or Apple Stores and delivered to Agricultural Communications Services (252 Barnhart Building) or the purchasing county office.
  • Should a county have a new computer delivered to their office, purchase and delivery should be coordinated with the DIETC to ensure proper installation and setup.
  • The DEITC's have access to the UK Dell Premier portal, using the same discount pricing system main campus is afforded. It would be best for the DEITC's to generate the e-quote so they can provide an exact quote for Extension board approval.
  • County Extension Offices wishing to purchase Apple equipment may do so at UK's Apple site: http://store.apple.com/AppleStore/WebObjects/HEDCustom?qprm=20496
  • Please contact your DEITC to ensure proper configurations, installation, and setup once the equipment arrives. 

County Extension offices at times may have the need to build new facilities and/or improve current facilities in order to continue the proper implementation of Extension programs. These projects could take the form of primary building facilities, external structures such as pavilions or garages/workshops, and/or annex facilities. Building projects often require bidding. Steps in the bidding process are outlined above.

Agents should serve in an advisory capacity throughout the building project. All staff and volunteers involved should be made aware of the steps in the building process early on in order to ensure proper steps are followed throughout the process.

• Steps in the Building Process 
  • Work with program advisory groups and the County Extension Council to create a widely supported desire and a need for a facility or expansion of current facility. The County Extension Council will then meet with the Extension District Board to express the desire of the Extension leaders. At this time the process is in the early planning stages and is not bound by any fiscal constraints. This is a time to review all current and projected needs and develop a plan to serve the county for years to come.
  • The Extension District Board listens to the County Extension Council representative and within a reasonable time frame gives the council the approval to explore this capital construction process further or makes a decision not to proceed. If the board halts the capital construction process at this time they should provide to the full council the specifics of why the project cannot proceed.
  • If the board gives approval to the council to continue with the capital construction project, the council chairman should appoint a “Capital Construction Committee”. This committee will gather information pertinent to this project and will report back to the full council.
  • The County Extension Council will review the information from the Capital Construction Committee and will develop a plan for the Extension District Board.
  • Upon receiving the recommendation from the County Extension Council, the board will begin the process by first determining the most feasible construction and funding process. (Competitive sealed bids, or Design and build).
  • With either building processes, the board will then need to advertise for services in the local newspapers and other media outlets. The board will then pick a date and all proposals will be reviewed. The board can at that time award a contract or postpone the decision till a later date. Only the chairman of the Extension District Board must be present to open bids and present them. This must be done in an open meeting where all interested people can attend.
  • Once an architect or a company that will design and build is selected, they will meet with the District Board and the Capital Construction Committee to gather full information about the construction project. They will then proceed to develop plans for review and make recommended changes. The agency awarded the contract should provide the board an estimation of project cost.
• Funding Requirements and Steps 
  • The Extension District Board with estimated project costs will then determine the best funding process (bonds, leasing, short term borrowing). All of these funding decisions requires a debt notification to the State Local Debt Officer in the Governor’s Office of Local Development.
  • These applications can be obtained from DLG: http://dlg.ky.gov/finance/CitiesandSpecialDistricts
  • Bonds – No bonds or obligations may be issued by or on behalf of any special district without first notifying the State Local Debt Officer in writing. Bond notification must contain the following:
    • Completed Bond Form.
    • Amortization schedule with all principal payments made throughout the life of the bond.
    • Any other information necessary to complete the file.
  • Leases – No lease may be entered into without first notifying the State Local Debt Office in writing if the lease price exceeds $100,000 per KRS 65.944. No district shall enter into a lease agreement without the approval of the State Local Debt Officer. Notification using the Lease Summary form must include the terms of the lease and include the following:
    • Completed Lease Summary Form.
    • Amortization schedule with all principal payments made throughout the life of the lease.
    • Any other information necessary to complete the file.
  • Short-term Borrowing Act – The short term borrowing act (KRS 65.7701 to KRS 65.7721), governs short-term loans to special districts. This act requires short-term loans to be paid off within the same fiscal year (July 1- June 30) as borrowed. Notification to the State Local Debt Officer must occur prior to the loan being finalized and must include all KRS 65.7719 required terms. The Notification of Intent to Borrow form is to be used to notify the State Local Debt Officer of short-term borrowing.
  • Public Hearing – The Department for Local Government requires a public hearing for all leases exceeding $500,000 before they will approve the lease. The process for conducting a hearing shall follow the DLG prescribed format. 

Where an agent or county manager must relocate due to having been newly hired by CES or due to being transferred to a new county, CES may provide a moving allowance of up to $1,000 in its discretion. To be eligible for the allowance, within 1 year of their date of hire or within 1 year of their start date for their new position, the employee must confirm that they have updated their home address on MyUK and must provide a copy of the offer letter authorizing a moving allowance along with documentation of actual moving expenses to the CES Personnel Office.  The employee remains responsible for paying all moving expenses incurred.  Mileage associated with the move will not be considered when determining the amount of moving allowance.  Approved moving allowances will be processed through payroll and will be paid, less withholdings, on the first feasible pay date following submission and approval. Each situation for relocation can be unique, so there is not a set figure guaranteed, nor is there any guarantee of financial support.

Moving expenses will be reviewed on a case by case basis and must adhere to the University Policy established in E-7-8. Final decisions on relocation expenses will be determined by the Director of Extension.

Awards may be made to University of Kentucky staff for the purpose of recognizing outstanding work-related achievement, a significant contribution, or a major milestone such as length of service or retirement. The University’s policy aligns with IRS guidelines to ensure appropriate tax treatment of the award.

Definitions of the various types of awards are as follows:

• Employee recognition award: Any type of tangible personal property awarded to an employee under a formal, approved program. The award should be based upon objective criteria and presented on a basis that does not discriminate in favor of highly compensated employees.
• Employee on-the-spot recognition award: Any type of tangible personal property awarded to an employee in recognition of noteworthy work-related accomplishments which are not part of a formal program. Such awards should be of nominal value and presented on infrequent basis. An employee should not receive more than two such awards in a calendar year. Examples include, but are not limited to, flowers, fruit, a book, a plaque, or similar item.
• Employee length of service award: Any type of tangible personal property or non-negotiable gift certificate may be presented to an employee for meritorious length of service. The award must be given for a length of service achievement of at least five years of service and the recipient must not have received a similar length of service gift in any of the prior four years. The award should be part of a meaningful ceremony.
• Employee retirement award: Any type of tangible personal property or non-negotiable gift certificate for tangible personal property may be presented to an employee upon official University retirement as defined in AR 3:1 and AR 3:2. The award should be part of a meaningful ceremony.
• Non-negotiable gift certificate: A certificate that is inscribed with recipient’s name; not transferable; and cannot be redeemed for cash or used to reduce the balance due on the recipient’s account with the merchant. It can only be for tangible property and not services. Primarily limited to pre-arranged length of service programs where employee selects from multiple options based upon length of service years.
• Tangible Personal Property: Any type of property which can be moved (i.e., it is not attached to real property or land) and excludes cash and negotiable gift certificates.

Guidelines for Employee Awards and Gifts

• Supervisors must ensure that all awards and gifts are in compliance with policy and adhere to all guidelines outlined in this section.
• Employees should always seek approvals from their supervisor before purchases may be made.
• Tax dollars may not be used for employee or volunteer awards or gifts.
• Cash and cash equivalents may not be used for gifts or awards in Extension to avoid tax implications.
• Awards and gifts are capped at a maximum of $50 (not including shipping and potential engraving costs) in expenditures for Extension.
• No other gifts or awards may be given in recognition of employees for non-work related achievement or events such as weddings, baby showers, housewarmings, or separation from employment (other than official retirement), regardless of fund source. Personal funds should be used for such events.
• All other employee awards must comply with the per person limitations, funding sources and approval levels indicated. In addition, the award must comply with any requirements explained in this section.
• Employee memorial or illness flowers or monetary gift to designated charity are allowed on discretionary funds as explained in the Discretionary Expenses section above.
• Occasionally, departments may provide prizes and other gifts to encourage participation in an event or completion of a survey. Departments should follow the employee on-the-spot recognition award per person value of such tangible property gifts.
• Evaluate need for employee recognition program and forward request to appropriate supervisor. Request should include:
  • A description of the program
  • The purpose for the award
  • The criteria for selecting the recipient
  • The type of award (plaque, gift, etc.)
  • The dollar amount
  • The source of funds 

At times Extension employees may wish to decline payment for services rendered and desire that the funds be retained by an Extension group for use. Constructive receipt is a concept of tax law that taxes income at the time an individual has the right to receive the payment regardless of when it is actually received. If the individual has the right to receive the income for services rendered, the income is “constructively received” and is taxable. To avoid constructive receipt the faculty or staff member must never have the right to receive the income, i.e. the lack of the right to receive the income must be established before the services are rendered.

Guidelines to Avoid Constructive Receipt

• Staff should complete process for waiver of payment process before engaging in service.
• When an Employee is representing Extension and receiving payment, under no circumstances should they accept supplemental payments from another entity or organization.
• An employee wishing to donate services to the University instead of receiving payment must waive payment in advance of the services being rendered.
• The employee shall not be involved in decisions regarding the subsequent expenditure of funds. It shall fall under the authority of the group which receives the funds.
• The employee must complete the Waiver of Payment for Services Rendered form in advance of providing the services.
• The Director of Extension, or their designee, must approve the waiver of payment form.

While uncommon, there may be situations that require the processing of voids or stop payments. Voids are the cancellation of a check with, or without, reissuance and are completed when the original check is in hand. Stop payments are the cancellation of a check with, or without, reissuance and are completed when the original check is not available. An example could be for a lost or misplaced check.

Contact should be made with check recipients when checks have not been cashed within a reasonable amount of time to determine if there is a problem. If a check has not cleared after more than two months, it should be looked into and appropriate action taken to remedy the situation.

Guidelines for Dealing with Stop Payments and Cancellations:

• Determine when a check needs to be cancelled or reissued.
• Contact the appropriate financial institution to stop payment and reissue as necessary.
• Void the check in the financial system. If the check was included in a previous reconciliation, please contact Extension Business Operations for any assistance.
• Change the status of the check at the bank to either stop payment or void as necessary.
• Reissue the check, if applicable.
• Contact all relevant parties to update them on the status of the check.
• Checks can only be voided or stopped that have outstanding status at the bank.
• If a check has been cashed and the recipient verifies that they did not cash it, contact Extension Business Operations to assist with a forgery investigation.
• A ten day waiting period is required after the issuance of a check before a replacement check can be issued. This allows time for the original check to arrive in the mail.
• If a check is outstanding in accounting software, verify that it has not been cashed with the financial institution.
• Never proceed to reissue a check without verification.  

The Extension Office is required to maintain control of all items of furniture, equipment, vehicles and other moveable property assigned to the office, regardless of cost, and to maintain reasonable precautions in protecting all property under the office’s control regardless of value.

Equipment will be categorized as either capital equipment or minor equipment (see below). Capital equipment is any physical resource that benefits a program for more than one year, including buildings, fixed equipment, land, land improvements, moveable equipment, computer software, and vehicles. Minor equipment is moveable property having a useful life of two (2) years or longer, and which retains its identity as a separate and identifiable item.

Equipment should be purchased and recorded in the accounting system against the appropriate line item. With extension offices generally operating under the cash basis of accounting, external auditors will provide guidance as to necessary entries to record capital assets and accumulated depreciation as appropriate.

Equipment should be categorized in accordance with the following (unless instructed otherwise by the county’s fiscal court or external auditor):

It is highly recommended that the Extension District Board maintain a county vehicle policy in writing. This policy should describe who is permitted to drive county vehicles, define the proper use of county vehicles and provide guidance on IRS regulations regarding personal use.

All UK employees and certified volunteers permitted to drive county vehicles must have a University of Kentucky Motor Vehicle Record (MVR) on file with UK Risk Management.

Boards should understand any personal usage of vehicles can be considered a fringe benefit by IRS definition. It is the responsibility of the board to understand the IRS regulations upon the implementation of policies and track them for changes. Current IRS information can be found in Publication 15-B Employer’s Tax Guide to Fringe Benefits, found at:  https://www.irs.gov/pub/irs-pdf/p15b.pdf

Boards should be knowledgeable of and carry insurance policies for all county owned vehicles.  Consideration should be given to the types and amounts of coverages needed (see Chapter 1 section l. Insurance, for more details on types). Factors that are relevant in coverage include ensuring only authorized individuals drive the vehicle and that they are properly covered in any policy.

All UK employees permitted to drive county vehicles must utilize the KERS County Vehicle Mileage Records System and record miles driven, destinations and business purpose on a daily basis. The County Vehicle Mileage Report must be printed on a monthly basis, signed by the employee, signed by the county fiscal contact and submitted to the District Director for review.

Note: County Vehicle Mileage Log will not be submitted in TRIP as these miles are not reimbursed to the employee.

Written policies should address the following:

• Authorized drivers of vehicles (to include volunteers if necessary)
• Insurance requirements (to include volunteers if necessary)
• Personal use of vehicles
• Storage of vehicles
• Check-out procedures
• Commute Rule & De Minimis use
• Stewardship of the vehicles
• Vehicle purchase procedures
• Maintenance of vehicles
• Fueling of vehicles
• Mileage logs for vehicles
• Cleaning of vehicles
• Safe operation of vehicles
• Accident protocols
• Logos and branding of vehicles
• Proof of insurance and registration documents
• Use of official plates

The University of Kentucky, Martin-Gatton College of Agriculture, Food, and Environment, offers a Federal Excess Property Program. The University of Kentucky and the Martin-Gatton College of Agriculture, Food, and Environment, being a land grant institution is eligible to participate in the program. 

Vehicles, heavy equipment, farm equipment, office furniture, lab equipment, tools and various consumable supplies are among the types of property received. 

• The following activities are eligible to participate:  
  • Cooperative Extension Services 
  • Agricultural Experiment Stations
  • Schools of Forestry (McIntire-Stennis Cooperative Forestry Program)
  • Colleges of Veterinary Medicine.
• Requirements: 
  • Obtain prior approval from the FEPP Coordinator for all FEPP acquisitions, transfers, cannibalization, and disposals. 
  •  Acquire FEPP for immediate and direct use in approved NIFA projects and programs.
  • Provide additional justification for acquisitions at the request of the FEPP Coordinator.
  • Follow USDA and Federal regulations for accountability, control, and disposal of FEPP.
  • Report FEPP no longer needed for your program or unserviceable property.
  • Ensure property records and supporting information is available for reviews.
  • Never use FEPP for personal use. There are no exceptions.  

Property disposals must be completed as follows:

• University of Kentucky owned property: All equipment or furnishings on the UK inventory and bearing a UK property decal must be returned to UK for disposal. Contact the State Extension Office for guidance on disposing of UK owned property.
• County owned property: If an Extension District has been formed, the County Extension District Board has the authority to dispose of property acquired by the board under advisement by the local County Attorney. Other county-owned property can be disposed of with approval of the appropriating body that acquired the property. It is recommended that disposals be documented in the minutes of the meeting where the disposal is approved. Keep all documentation that pertains to the disposal of any property.
• Federal Surplus Property: must be returned to the Federal Surplus Property Office at UK for disposal. Contact the Federal Surplus Property Office for guidance on disposing of FEP owned property.

Note: Any lost or stolen equipment must be reported to the appropriate authorities and documented before removal from any inventory list. Stolen equipment should be reported to local law enforcement as appropriate and lost equipment should be reported to the district board.

Accountability for equipment, materials, and supplies when someone retires, transfers, resigns or leaves employment can be a serious problem. Ideally, the office procedure would have a check out system for everyone in the office and there would be an inventory done annually of all equipment using the Equipment Inventory Form.

All equipment, tools, books, teaching supplies and other items purchased with Program Support Funds are property of the District Board or of the County Extension Council, if there is no District Board. These items should be included in the office inventory.

Items purchased by program councils should be included in the inventory and identified as owned by the program council.

Here are some recommended steps:

• County Fiscal Coordinator should assume the responsibility for the office inventory.
• Using the Equipment Inventory Form and check the items being returned.
• Both the County Fiscal Coordinator and the employee leaving the office signs the form.
• If the County Fiscal Coordinator is leaving, then one of the other agents in the office assumes the responsibility at the direction of the District Director.

These steps are designed to encourage honesty and reduce perceived dishonesty.

In accordance with Commonwealth of Kentucky regulations, all equipment must be physically counted and verified annually. Each office is responsible for maintaining an inventory listing to control and record the physical location of all equipment.

See section “11. Forms” for a sample Equipment Inventory List and note that separate lists should be kept for county-owned and UK-owned property. Items that must be on this list include:

• Capital equipment – all equipment costing greater than, or equal to, $5,000
• Minor equipment – all equipment costing greater than, or equal to, $500 but less than $5,000.
• High Risk equipment – all equipment costing less than $500 but considered by the county extension office as “high risk” (e.g. laptops, mobile devices, specialty tools, kitchenware, cameras, etc.).

Development of the County Extension budget is the responsibility of all agents, the County Extension Council and Extension District Board in counties that have a board. Before January 31, all agents should be working together in consultation with the District Director, to identify budget needs. These budget needs should include travel, agent and support staff salary adjustments, equipment, supplies, facilities and programs costs. Extension District Boards are required by KRS 164.655(8) to file their budget with the county judge executive by April 15 of each year.

Following the agent discussions, preliminary budget conversations need to be held with the County Extension Council. If the county has an Extension District Board, the council should develop budget recommendations to be used by the district board KRS 164.655(8).

If an Extension District Board is organized without a tax, the County Extension Council and District Board should make plans for obtaining appropriation from the fiscal court. It is recommended that a budget review should be conducted by County Extension Council following the approval of the budget by the fiscal court or the Extension District Board. The purpose of this review is for the council to completely understand the final budget and disposition of the funds and to determine the board’s response to their recommendations KRS 164.655(8).

The annual budget guidelines document will be distributed to county offices and posted to the Extension Business Operations website. This document provides detailed information regarding the following items:

• Base Agent Contributions
• Support Staff Wages
• Employee Benefits Costs
• Base Program Costs
• Travel Costs
• Professional Improvement Costs
• Program Support Costs
• Marketing & Postage
• Budget & Reporting Deadlines
• County Categories

The budget guidelines document can be found at http://cafebusinesscenter.ca.uky.edu/county-moa.

Every year the State Local Finance Officer calculates a compensating tax rate and a 4% increase tax rate for each county. As will be evident after reviewing the following explanation, the rate adopted will affect the calculation of all future tax rates.

• The COMPENSATING RATE produces:
  • The same amount of revenue estimated to be produced by the prior year's adopted rate, and
  • Revenue from new property.
• New property does not affect the compensating rate. Exclusive of new property, the compensating rate usually drops when the valuation of property subject to taxation is up and usually rises when the valuation of property subject to taxation is down. Valuation of property subject to taxation is affected by assessment increases, decreases, and homestead exemptions.
• The FOUR PERCENT (4%) INCREASE RATE produces:
  • Four percent more revenue than the calculated compensating rate would produce.
• Any proposed rate exceeding the compensating rate requires the hearing process pursuant to KRS 68.245(5)(a)(b). In addition to the hearing process, any proposed rate in excess of the 4% rate is subject to recall.
• Caution: Pursuant to KRS 42.495, if any county reduces its general tax effort for any fiscal year below the level of FY 91-92, the county shall forfeit LGEA receipts on a dollar-for-dollar basis.
• KRS 132.0225 states in part, "A taxing district that does not elect to attempt to set a rate that will produce more than four percent (4%) in additional revenue exclusive of revenue from new property as defined by KRS 132.010, over the amount of revenue produced by the compensating tax rate as defined in KRS 132.010 shall establish a final tax rate within forty-five (45) days of the cabinet's certification of the county's property tax roll. Any taxing district that fails to this deadline shall be required to use the compensating tax rate for that year's property tax bills."

County offices must use the annual budget forms (Microsoft Excel format) that is found on the Extension Business Operations website. These forms are used to collect all pertinent budget information for the county office for a given fiscal year (July 1 – June 30). These forms also provide the required memorandum of agreement that must be signed by the appropriate individuals (District Director, District Board Chair or County Extension Council President).

The budget forms should be completed by March 15 and submitted to District Director for his/her review before final discussion with the District Board.

The budget forms document can be found at http://cafebusinesscenter.ca.uky.edu/county-moa

The budget development instructions document provides a general overview of the budget process as well as detailed instructions for the development of the annual budget. Topics covered in the instructions document include:

• Tax Revenues
• Other Revenues
• Salaries and Benefits
• Travel
• Professional Improvement
• Base Program Costs
• Office Operations
• Program Support Costs
• 5 & 10 Year Plans
• DLG Financial Disclosure Report

The budget instructions document can be found at http://cafebusinesscenter.ca.uky.edu/county-moa

Extension District Boards may over time acquire excess funds from carryover of tax dollars, donations, or gifts. It is essential to properly manage and plan for those funds in a way that is consistent with the Extension purpose and mission. Extension Boards are not for-profit entities, so a clear purpose and plan should be in place for all funds. Reserve funds are funds in excess of the annual operating budget.

• Forms of Reserve Funds  
  • Reserve funds are funds that would be designated for contingency needs. It is recommended that a reserve fund be held in an amount equal to six to twelve months of recurring operating expenditures.
  • Capital improvement funds are funds that would be designated for capital improvements.
  • Equipment Funds are funds that would be designated for equipment purchases.

Extension Boards, County Extension Councils, Program Councils, associated groups, and Extension Staff have the responsibility to serve as good stewards of tax payer dollars and all other associated funds. Funds received by Extension Districts are considered public funds when the District takes possession of said funds. The investment of donations, interest, bequests, etc., must all be handled in the same way as tax dollars. All Investments should adhere to KRS 66.480. Each board should have adopted a written investment policy as described in KRS 66.480(3).

• Management of Funds 
  • Boards should strive to ensure that all funds in banking institutions and investment vehicles remain at levels which allow them to be fully FDIC insured or covered by comparable coverages. Examples include, savings, checking, money market, CDs and other low risk investment vehicles.
  • When funds are being accumulated for specific purposes, such as building projects boards should seek a safe investment vehicle or account which can generate interest. Non-interest bearing accounts are not recommended for long term holding of funds.
  • Excess funds or carryover from a budget year should be reincorporated into the next year’s operational budget or moved into one of the boards approved reserve funds. Boards may divide carryover funds as needed in regards to placing funds into the operational budget or reserve funds.
  • Any monies over one year’s operating funds should be held in the capital improvement fund or equipment fund.
  • A budget should account for all funds available to the office. Likewise, reserve and excess funds should have a specified purpose.
  • All Extension District Boards must develop written plans for the expenditure of all reserve funds. These plans would include a 5 year plan and a 10 year plan.
  • Reserve bank and investment accounts must be reconciled on a monthly basis by the fiscal contact for the office.
  • District Boards should review accounts regularly to ensure funds are in the ideal location. At the end of each fiscal year (or as an investment matures) funds should be shifted or left in their current accounts as best suited for current needs.
  • The District Board should approve movement of funds between institutions or investment vehicles. Boards should also approve movement of funds into or out of funds such as capital improvement, reserves, and/or equipment funds. These decisions should be reflected in minutes.
  • Expenditure of funds should be approved by the board or follow the approved board budget for those funds. Always consider purchase and bid requirements before spending funds.

County Extension District Boards who are fiscally responsible for receiving and disbursing funds should adopt operating policies adhering to sound accounting principles.

Options for general bookkeeping and/or accounting of funds could include:

• Outsourcing of accounting and check writing to bonded professionals. (i.e. Accountants, bonded bank personnel, county treasurer)
• Office support/program staff may do the bookkeeping for the District Board. The support staff would work under the supervision of the county fiscal contact.
• Fiscal Contact agents should also be involved in the bookkeeping and accounting of funds. 

Accounting software stores business transactions in different line items as designated by the system’s chart of accounts. Line items are separated into two categories: revenues and expenses. For extension purposes, revenues include things like taxes, appropriations, donations, grants, program fees, etc. Expenses include things like salaries, benefits, travel, program support, office operations.

A complete list of all the transactions, both revenues and expenses, is compiled in a general ledger and is the fundamental building block for all other financial reports. Other financial reports that are used in extension include the statement of financial position, the statement of activities, the budget vs. actual report, etc.

In order to create more consistent and standardized recording and reporting of financial information across all extension districts, it is strongly encouraged that all districts utilize the recommended accounting system. Consult the Extension Business Operations website for more detailed information as it pertains to the standardized system.

Extension Business Operations (EBO) has developed a standard chart of accounts for use with the recommended accounting software. This chart of accounts is generic enough to allow for customization by county offices with guidance from EBO. Any changes or updates to the standard chart of accounts must be reviewed by EBO before they are made to ensure the changes do not impact the standardized financial reports.

A copy of the general chart of accounts can be found on the EBO website.

Reconciliations are an accounting process that provides assurance that documentation, recorded transactions agree, and that financial information is valid. It is a basic and fundamental internal control that all extension offices must have in place to protect against recording errors, fraud and mismanagement.

Each extension office must reconcile all bank accounts on a monthly basis. This reconciliation should be completed by fiscal contact. The reconciliation process will involve the following:

• COLLECT any supporting documentation pertinent for the account and month being reconciled (financial records, system reports, bank statements, etc).
• COMPARE supporting documentation to bank statements ensuring all transactions are allowable, reasonable, accurate, and approved for the account.
• CLEAR any discrepancies found during the reconciliation process by preparing the required correcting entries. For those discrepancies that require action outside your office, contact the appropriate individual to have the discrepancy corrected promptly.
• CONFIRM budget availability in budget vs. actual reports to ensure funds exist to cover all line items posted.
• CERTIFY the reconciliation for the month by having both the reconciler and the approver sign as appropriate. The reconciler in most cases will be the fiscal contact responsible for the account and the approver should be the treasurer responsible for the account.

With regard to the recording of funds received in the office, an understanding of what should be considered revenue versus what should be considered reimbursed costs is necessary. Revenues are funds received by the extension office from its normal business activities, usually generated in support of programs and services provided by extension. Reduction of expense are reimbursements received by the extension office as payment for expenses previously incurred and are not a result of programs and services provided by extension. Examples of each are as follows:

Revenues

• tax funds received to support extension programs
• grant funds received from sponsors to support extension programs
• gifts received from donors to support extension programs
• non-tax funds received as compensation for program related goods and services provided by the office

Reduction of Expense/Pass-thru

• refund/reimbursement for a previously incurred expense
• refund/reimbursement for expenses covered under a cost-share agreement
• receipt of soil test fees which ultimately are passed on to UK Regulatory Services

The primary purpose for categorizing revenues and reductions of expense appropriately is to avoid overstating revenues and expenses on financial statements. (For example, recording SNAP-Ed reimbursements from UK as revenues would overstate revenues and expenses since no goods or services were provided by the county office that warranted the payment and the expenses incurred were to be covered by UK through a cost-share agreement. Therefore, SNAP-Ed reimbursed costs should be recorded as reductions of expense.)

KRS 65A.030 establishes the audit reporting requirements for extension districts with a three-tier system. This system is defined by an extension district’s total annual revenues. The three tiers are as follows:

It is recommended that a different firm handle the District Board audit, if already handling the bookkeeping. It is a good business practice to have District Board funds audited when there is a change in treasurers. 

When an entity submits their first audit/attestation engagement, they officially start their four-year clock to submit their next audit/attestation. An entity has 12 months to complete the audit/attestation process. Once the audit/attestation has been received from the CPA, the district has two weeks to upload it to DLG. If the audit/attestation is not completed within the 12 month window, a representative should contact the DLG to request an extension.

Results of the audit/attestation must be reviewed with the District Board and documented in the minutes of the Board meeting. The audit should also be presented to the County Extension Council and District Director. Any recommendations from the audit should be addressed by the District Board and minutes should be sent to the appropriate District Director.

If assistance is needed, Extension Business Operations and the District Director will serve as a resource.

In order to maintain consistency across all county offices and to ensure our stakeholders are receiving the same financial information, the following is a list of the recommended financial reports with associated due dates:

As a general rule, the extension district must issue a Form 1099-MISC to each person it has paid at least $600 in rents, services (including parts and materials), prizes and awards, or other income payments. The deadline to issue the 1099 forms is January 31. Penalties for not issuing the 1099 forms when appropriate can often be substantial in nature.

To help with the process of issuing 1099’s, the office may choose to request a W-9 from any vendor they expect to pay more than $600 before they are paid. Doing so will provide all the required information needed for the 1099 (address, tax ID, etc). Keep in mind that collecting and storing individual social security numbers (SSN) is strictly prohibited.

Consult your local tax professional, or county attorney, for more detailed instructions on the process of issuing 1099’s to vendors.

The following actions must be completed at the conclusion of each month:

• Reconcile all bank accounts
• Reconcile any petty cash or change funds
• Review monthly transaction details report to ensure all transactions are posted to the correct month and line item
• Review budget vs. actual report to ensure all line items are within budget
• Review source documentation to ensure all required signatures and business purpose descriptions are noted

The following actions must be completed at the conclusion of the fiscal year (June 30):

• Record any accounts receivable (as required and directed by EDB Treasurer or auditor)
• Record any accounts payable (as required and directed by EDB Treasurer or auditor)
• Record any prepaid expenses (as required and directed by EDB Treasurer or auditor)
• Record any fixed assets (as required and directed by EDB Treasurer or auditor)
• Record any depreciation adjustments (as required and directed by EDB Treasurer or auditor)
• Review budget vs. actual report to ensure all line items are within budget
• Prepare all required year-end financial reports as shown above

Once all year-end reviews and reports have been completed, the fiscal year should be closed in the accounting system to prevent any changes to financial statements.

Each Extension entity will fall under one of the four plans for handling funds described as Option A, Option B, Option C, or Option D. All options provide financial accountability, budget transparency, group oversight and adherence to extension administrative regulations. The following four options are available for extension volunteer groups:

Option A: The entity will maintain control and have autonomy over their own funds and maintain an individual bank account with general oversight by the County Program Council and the appropriate county agent. Responsibilities for this option are outlined as follows:

Option B: All funds related to a program area in the county will be handled centrally by the county program council, with separate accounts established within Quicken, QuickBooks or similar electronic bookkeeping system for each related entity’s (club/group/etc.) funds. Oversight for adherence to procedures will be the responsibility of the appropriate agent and officers. Responsibilities for this option are outlined as follows:

Option C: All program council funds and funds of related sub-groups will be handled centrally by the county Extension District Board with a separate account established in a Quicken, QuickBooks or similar electronic bookkeeping system for each county program council and sub-group handled by the council. Oversight for adherence to procedures will be the responsibility of the appropriate agent. Responsibilities for this option are outlined as follows:

Option D: County Program Councils and/or related entities may apply for tax exempt status as a 501(c)(3) organization. The councils/entities are a program of the Land Grant institution and will function through a Memorandum of Understanding with Kentucky Cooperative Extension Service. There are at least two situations where it may be desirable for County Program Councils/entities to pursue 501(c)(3) tax exempt status:

• If the group conducts raffles, lotteries, or other forms of gaming as fund-raising activities.*
• If the group depends on grant funds that are awarded only to 501(c)(3) entities.**

The 501(c)(3) entity will:

• Maintain own bank account and EIN.
• Sign a Memorandum of Understanding with the Director of Cooperative Extension Service (see “Forms”).
• Prepare an annual budget, annual financial report, and annual audit.
• Follow extension administrative regulations as they pertain to financial operations of the entity.
• Submit the appropriate IRS 990-series tax form according to IRS requirements annually. Failure to file may result in penalties, fines or revocation of tax-exempt status.
• File copies of the IRS 990 series form as appropriate
• File copies of the IRS letter of determination of 501(c)(3) status with the county program council, county Extension council, and Extension District Board and send a copy to the Director of Extension’s Office.
• Provide letters to donors acknowledging contributions and/or provide documentation affirming tax-exempt status as requested.

* 4-H entities: If a 4-H entity wants to pursue grants that require 501(c)(3) status, the Kentucky 4-H Foundation is willing to accept grants on behalf of a county 4-H entity, making individual pursuit of 501(c)(3) status unnecessary. There will be a fee, currently 5%, for this service by the foundation. If a 4-H entity plans to handle grant funds through the foundation, choose Options A, B, or C.

** Extension Homemaker organizations: Homemaker Clubs may choose from Option A, B, C, or D. If Option D is chosen, the clubs may continue operating as non-profit organizations by pursuing 501(c)(3) status. Extension Homemaker organizations (clubs, counties or areas) that conduct numerous raffles or any other type of charitable gaming or receive grants awarded only to 501(c)(3) entities will need to choose Option D.

All groups must be financially accountable for the funds that they handle. Groups must prepare and file specific financial records based on the tax exempt path they choose (either the government exemption through the Extension district board or as a 501(c)(3) entity) and on the options they choose related to handling funds (see above).

The following general guidelines for accountability must be followed:

• Administration of all volunteer-led groups will be in accordance with their organization’s bylaws.  
• All groups must link to a Program Council and the Program Councils must link to the County Extension Council and Extension District Board.
• Each group must determine the source from which the group will derive tax-exempt status as described above.
• Each group handling funds will have sole responsibility for all funds and assets of the organization and will follow administrative regulations established by the Kentucky Cooperative Extension Service.
• No Extension employee shall have signatory authority over any assets of the volunteer-led group.
• An electronic bookkeeping system such as Quicken or QuickBooks should be used to keep financial records for the volunteer-led group, except those clubs or groups with less than $250 in annual income.
• Financial records must be maintained by the treasurer of the group or by an Extension employee in the Extension office.
• The financial activities and resulting financial statements of all groups should be conducted in accordance with generally accepted accounting principles. (See “Maintaining Auditable Records” below).
• All groups that have an average monthly balance of $100 or more should have their funds in a financial institution. Check for institutions that allow non-profit groups to maintain an account that has no minimum amount and activity requirement and no monthly service fee. Money not placed in a bank account should be held in a secure location.
• When the group’s funds are held in a financial institution, the account should be opened in the name of the group, using their Employer Identification Number (EIN). Under no circumstances should the account be opened in the name of an individual or using an individual’s Social Security number for the EIN number.
• The group should consider requiring dual signatures for expenditures over a pre-set amount if the group handles large amounts of money.
• The appropriate officer of each group must prepare the following: a budget, periodic financial statements, an annual financial report and an annual audit report (see “Annual Budget”, “Financial Reporting” and “Annual Audit” below).
• The annual financial report with all supporting documentation, should be audited annually by one of the following methods:
  • An audit conducted by an independent public accountant (required for District Boards)
  • An audit conducted by an Audit Committee (see “Audit Committee” below)
• If the group owns equipment (capital or minor equipment), the group must maintain an inventory list and conduct an annual verification of the inventory (see Property section above). Fiscal responsibility for these tangible assets rests with the individual group.

Records must be kept as follows:

• Annual budget: An annual budget must be developed and kept on file with anticipated income, expenditures, and account balances.
• Auditable Records: Auditable records are to be maintained for all transactions. Auditable records describe the business purpose of a transaction and provide support that the transaction occurred as stated.
• Bookkeeping: An electronic bookkeeping system should be maintained which classifies and accumulates financial information in a logical manner.

Revenues:

• Follow Cash Handling policies and procedures as detailed above.
• Acknowledge all money received with a written receipt.
• The receipt should be prepared in triplicate with the original given to the client, a copy filed with deposit records and a copy maintained in the receipt book.
• If a receipt is voided, the original receipt and associated copies should be kept in the receipt book.
• If a member/representative of a group turns in money collected from several people, one receipt may be written directly to that member if documentation is attached to the receipt listing: (1) individuals from whom the money was collected; and (2) the amount collected from each.
• Funds should be deposited according to Extension administrative regulations.
• Any undeposited funds should be in a secure location.

Expenditures:

• Follow Purchasing and Disbursements policies and procedures as detailed above.
• Financial commitments and expenses should be made in accordance with the policies established by the organization and the approved budget.
• Payments should be made only if a “Payment Voucher” is provided with the appropriate bill, invoice or receipt attached. The “Payment Voucher” and attached documents will become a permanent part of the treasurer’s records. This documentation should be filed in a manner allowing easy retrieval and should be maintained for the current year and three additional years.
• Expenses are to be paid through established checking accounts. It is not permissible to hold cash back from deposits and then use the cash to pay bills because it does not leave a record or provide proof of payment.
• All checks are to be signed by the appropriate officer(s) of the group. An individual is not to sign a check until sufficient documentation, funds are available, and the check has been filled out in its entirety.
• No one is to sign a blank check.
• The organization should consider having dual signature requirements for checks written over a specified amount.
• No Extension employee shall sign checks, make deposits for volunteer groups or have signatory authority over any assets of the group.
• When a check is voided, the check should be marked “void” and attached to the check stub.
• All checking account transactions are to be recorded in the check register at the time the transaction occurs. Entries are to be dated and be as detailed as possible showing the name of payee or deposit source and purpose of the expense.
• All check registers are to be reconciled with the bank statement monthly at the time it is received. These reconciliations are to be documented.

Annual Financial Reports

• Groups should examine and audit the financial statement balances, assets and the established accounting system.
• Groups are to generate an annual financial report, which summarizes all financial transactions (income and expenses) for the year and all account balances at the end of the year. This report should be compiled at the end of each program year by the treasurer.

Audit Reports

• Each group is to have its financial statements and related books and records audited at the end of each program year by either an Audit Committee or a Certified Public Accountant.
• Audit results and reports should be filed with the appropriate entities.

Equipment Inventory

• Fiscal responsibility for these tangible assets rests with the individual group.
• Groups must inventory all equipment on an annual basis, using the “Annual Inventory Report”:
  • Document the location of the item.
  • Provide a historical summary for both acquisition and disposal of items.
  • Include only assets with a useful life over one year and an initial value of $250 or more in order to avoid burdensome record keeping.

With regard to tax-exempt status for Extension volunteer groups, the following two options are available:

• Governmental Exemption – Because Extension District Boards are governmental subdivisions of the Commonwealth (KRS 164.620), Extension organizations may derive tax exemption through the Extension District.
• 501(c)(3) Tax-Exempt Status - An Extension organization may apply for separate tax-exempt status through the creation of a 501(c)(3) entity. This status may be required for the group to be eligible to apply for some grants or to raise funds through gaming and raffles.

There are two 501(c) classifications with the Internal Revenue Service that may apply to Extension organizations:

• 501(c)(3) is designated for charitable and educational organizations. Extension Homemakers, 4-H and Agriculture Advancement Councils and clubs may be interested in obtaining this designation.
• 501 (c)(25) is designated for corporations or trusts organized exclusively for acquiring foundations, holding title, and collecting income from real property. Non-profit corporations formed to borrow money to build Extension facilities will need this designation.

To apply for 501(c)(3) Status an organization must apply to the Internal Revenue Service using Form 1023 “Application for Recognition of Exemption”. To apply for 501(c)(25) Status an organization must apply to the Internal Revenue Service using Form 1024 “Application for Recognition of Exemption”. The non-profit corporation may also be required to provide an Employer Identification Number. This number is obtained by completing IRS Form SS-4 and is also used by banks as council or board account identification numbers and should be used instead of an individual's social security number.

Forms listed above can be obtained from the Internal Revenue Service: https://www.irs.gov/

As per KRS 238.535, any charitable organization conducting charitable gaming in the Commonwealth of Kentucky shall be licensed by the department. There may be exemptions from licensing requirements depending on the tax-exempt status of the organization and the amount of gross receipts. However, any charitable organization exempt from the process of applying for a license, shall notify the Kentucky Department of Charitable Gaming in writing, on a simple form issued by the department, of its intent to engage in exempt charitable gaming and the address at which the gaming is to occur. Refer to KRS 238.535 or the Kentucky Department of Charitable Gaming for detailed guidance.

The Kentucky Department of Charitable Gaming website can be found here.

Volunteer groups have specific responsibilities regarding accepting and acknowledging gifts and donations. Since contributions to tax-exempt organizations may be deductible, the exempt organization has a responsibility to acknowledge gifts/donations/contributions in the appropriate way.

While Extension related groups are encouraged to acknowledge every contribution, donations of over $250 must be given a written receipt, letter of thanks, email message, or form created for this purpose.  Groups organized as a 501(c), should always consult IRS regulations to ensure proper handling of donations. Include the following in the receipt or letter:

• Donor’s name
• Date the gift was received
• Amount of the monetary gift or a description of the item donated.
  • If the gift is not monetary (such as supplies, equipment or property other than real estate), the group should only verify the receipt of the donation and not assign any value to the gift. In this situation, it is the responsibility of the donor to determine the fair market value of the gift.
• Must have approval from the Dean of the College of Agriculture to accept gifts of real estate.
• Name and address of the organization receiving the gift (this is usually in the letterhead or header)
• A statement indicating whether any goods or services were provided in return for the contribution.
  • If the donor received something in return, then only the amount over the value of the benefit can be considered a contribution and deducted on tax forms. For example: If an individual purchases a $75 ticket to attend a fundraising dinner, the receipt should disclose the value of the dinner.  The remainder ($75-$40 = $35) is the amount of the contribution.

The source of the acknowledgement letter should be as follows:

• For contributions to Extension groups using the governmental exemption, a letter from the Extension entity receiving the donation is to be sent acknowledging the contribution. (See “Sample letter to Acknowledge Donation”) It is a good idea to enclose a copy of the letter from the Extension District Board that confirms the entity's association with the District Board and their tax-exempt status. (See "Draft Letter to Confirm Tax Exempt Status of Extension District Board".) This letter from the District Board can be used for several years or until a donor asks if the letter is still current.
• For contributions to a 501(c) Extension group, a letter from the tax-exempt group is to be sent to the donor acknowledging the donation.

The Audit Committee should be composed of at least three members and its purpose is to review the accounting records and financial statements prepared by the treasurer for accuracy and reasonableness. Committee members are not to include the treasurer, anyone related to the treasurer or anyone involved in the financial affairs of the group.

The audit committee should review the following on an annual basis:

• Ensure that the bank statement is reconciled on a monthly basis. Make sure the financial report postings are current, accurate and complete.
• Examine all voided checks. If a voided check is not on file, verify that the check has not cleared the bank.
• Total all funds received. Verify that cash receipts were written and that funds received were listed on the financial reports.
• Total all deposits. Verify that the amounts listed on the Deposit Form (if applicable) and deposit slips agree with the amounts listed in the electronic record keeping reports and the total in the check register and the bank statements.
• Total all expenditures. Verify that a payment voucher with attached bill/ invoice is on file for each expenditure and that the expenditure was appropriate. Verify that all expenditures were paid by check, not in cash.
• Examine the Annual Financial Report. Verify that the amounts listed agree with the amounts in the electronic record keeping reports and the total in the check register and the bank statements.
• Examine the group’s Annual Inventory Form and make sure that all property/equipment has been properly accounted for and documented. A letter or receipt should be on file for each gift of property received, documenting donor, date, value and any restrictions placed on the donation by the donor.
• Complete the “Audit Checklist and Report” and file with the appropriate group as outlined in the “Financial Guidelines for Kentucky Cooperative Extension Service County Groups.”

TBD - In progress

Refer to the University's Business Procedures Manual.

TBD - In progress

Refer to the University's Business Procedures Manual.

• Gifts should only be accepted if they have a relevant business purpose or readily be able to be converted to cash 
• No member of the administration, faculty or staff shall form, or assist in forming, any entity, corporate or otherwise, for the purpose of soliciting or receiving any gift, without prior written approval of UK Philanthropy.
• No member of the administration, faculty or staff shall establish any account on behalf of the University in a banking institution into which gift funds are, or may be, deposited.
• Due to specific IRS regulations and case law regarding private inurement, University employees cannot donate to funds over which they have expenditure authority and receive a charitable gift tax acknowledgment.

Before any county staff apply for a grant, they must inform the other staff in the office. The County Extension Council, Program Council and District Board must also approve and support the grant before application is made. It is important that the specifics about the commitments that need to be made by the local office are discussed. Details to discuss before applying include:

• New personnel to be hired to implement the program.
• Amount of office space, operating costs, and materials, etc. needed.

Grant proposals should be for a program that is consistent with the purposes and goals of the Cooperative Extension Service. Grants should be used to extend and expand existing or new Extension programs. Grants should be written with a purpose and not for the reason of just acquiring additional funding.

The University of Kentucky’s EIN should not be used by county offices for grant applications.  Further, only the EIN of the applying entity should be used.  Alternative EIN numbers do not belong to the applying entity, and thus should not be utilized.

Develop a budget based on realistic costs. Include personnel costs, office operating expenses, program materials, etc. If the amount of the grant is $5,000 or more, approval of the District Director is required to determine appropriate amount of agent-time commitment.

Grants which result in the hiring of a UK employee must be approved by the Dean and Director of Cooperative Extension Service PRIOR to submission and will be handled through the College’s normal grant process, which includes development of a contract between UK’s Office of Sponsored Project Administration (OSPA) and the granting agency.

Agents are not authorized to sign as the fiscal agent for the University for grants submitted through the UK Office of Sponsored Project Administration.

If the grant requires an agency match, the District Director and appropriate Assistant Director must be involved. Agents do not have the authority to commit the value of their own time or other agency resources as a match. Furthermore, a person’s time may already be committed as match on another grant.

The use of local tax funds for the purpose of cost share should be consistent with the intended purpose and budgeting of funds. District Directors should be consulted when cost share considerations are given with the intended use of public funds. 

A separate fund or account should be established in order to track the grant funds. Grant funds may be handled by the District Board, County Extension Council or Program Council. Implementation of the grant must stay within the approved budget.

The District Board Treasurer or Program Council Treasurer pays all bills. An accounting of the grant funds is prepared on a regular basis (monthly, quarterly, annually) according to the agreement with the grantor. Funds to pay personnel costs are to be transferred to UK. Any equipment that is allowed to be purchased under the grant will be inventoried and maintained by the county Extension office according to the agreement with the grantor.

An agreement on how to give credit to Extension and the grantor needs to be made in advance. At the end of the grant period, a final report of program accomplishments and a financial accounting is prepared and submitted to the grantor.

Depending upon the business need, an Extension district may elect to pay an allowance to an individual employee, provide the use of an office owned phone, or reimburse incremental business expenses for cellular devices. These guidelines promote prudent fiscal practices, but also allows each office the reasonable flexibility to provide cell phones and other portable electronic resources to employees when there is a legitimate business need. These guidelines are intended to protect the county office and associated employees from tax liability by ensuring compliance with the Internal Revenue Code and its corresponding regulations.

Boards should understand any personal usage of county owned cell phones can be considered a fringe benefit by IRS definition. It is the responsibility of the board to understand the IRS regulations upon the implementation of policies and track them for changes. Current IRS information can be found in Publication 15-B Employer’s Tax Guide to Fringe Benefits, found at:  https://www.irs.gov/pub/irs-pdf/p15b.pdf

Allowances

Under this option, employees are responsible for purchasing the cell phone and related service contract with their personal funds. The allowance is intended to provide reimbursement for the business use of the personal device, but is not intended to fund the cost of the device nor pay the entire monthly service fees. The assumption is that most employees also use the device for personal use. Guidelines for allowances are as follows:

• Offices must conduct annual reviews of the necessity of allowances for cellular uses for business purposes.
• A personal bill should be submitted for documentation purposes within the office.
• Care should be given to ensure the reimbursement does not exceed the cost of business use; and boards should understand the tax implications for payments above business use cost.
• Boards should consult with tax professionals for understanding of when issuance of a 1099 form could be relevant. 
• Annual renewal authorizations should be required.
• Allowances must be eliminated should the bona-fide business purpose no longer exist.

Office Owned Phones 

Cellular device purchases and contracts where the Extension District is the official billing entity should be approved only for those situations where there is substantial documented business need for providing an employee with phone and service. In these cases, employees do not receive an allowance or expense reimbursement, and the equipment is the property of the office, used solely for business purposes, and returned to the department daily after the employee’s work shift. It is recommended that employees using an office owned phone keep a call log to document all calls made using the phone in order to ensure compliance with IRS regulations.

Incremental business expense reimbursement 

Employees may submit expense reimbursements to the Extension district for occasional, incremental business expenses on personally owned phones. The employee must provide a copy of the employee’s bill, clearly listing the incremental costs that are above and beyond the employee’s normal calling plan (e.g., excess minutes, roaming charges). Notate on the bill who was called and the business purpose of calls where reimbursement is being requested. Once reviewed and approved as appropriate, the county may reimburse the employee for the allowable incremental business expenses.

Computer resources and internet services are for conducting the business of the Cooperative Extension Service. Access to and use of these computing resources is granted to University of Kentucky Cooperative Extension Service employees for conducting official business. Appropriate, ethical and legal use of computing resources is the responsibility of each individual. Unauthorized use of computing resources will result in disciplinary action appropriate to the violation. Examples of inappropriate activities are:

• Conducting an illegal or unauthorized act
• Transferring or sharing access with other individuals
• Not maintaining the security of the system
• Spending excessive work time on the computer for personal or recreational purposes
• Accessing inappropriate material
• Using the computer for commercial purposes

Use of social media provides another way for Extension to communicate with the public. For college guidelines on social media refer to the college Marketing Resources web site.

The University of Kentucky Policy Governing Access and Use of University Information Technology Resources explicitly states in Section V the guidelines for using technology, computer resources and the responsibility of each user (the entire policy can be found here: http://www.uky.edu/Regs/files/ar/ar10-1.pdf).

The College of Agriculture participates in a range of computing networks. Many members of the University community including faculty, staff, and students use electronic mail (email) in their day-to-day activities. Email services are provided on University-owned computing and networking systems to further the University's mission of research, instruction, and public service. Use of email should be consistent with this mission and this policy.

The county's email address has special significance. Often a single copy of a message is sent only to the county's address instead of sending copies to each of the individuals in the county. It should be the assigned duty of one individual to check the county's mail periodically (at least daily), and to share any incoming messages with the appropriate individuals in the office. This may be done either by posting a printed copy of the message for all to see, or by forwarding an electronic copy to the appropriate individual(s).

Email accounts are created once the employee is entered into the payroll system. Once the employee information is established into the payroll system, it will automatically generate the email/link blue set up request. Once the email account is created, you will receive your email/link blue set up instructions from your appropriate district administrative support associate.