[Federal Register Volume 87, Number 193 (Thursday, October 6, 2022)]
[Notices]
[Pages 60664-60665]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21751]


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DEPARTMENT OF EDUCATION


Lowering the Per-Unit Acquisition Cost for Equipment Acquired by 
State Licensing Agencies for the Benefit of the Randolph-Sheppard 
Vending Facility Program

AGENCY: Office of Special Education and Rehabilitative Services, 
Department of Education.

ACTION: Notice.

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SUMMARY: The Department of Education (Department) is implementing an 
exception, approved by the Office of Management and Budget (OMB), to 
lower the per-unit acquisition cost for equipment acquired by State 
licensing agencies (SLAs) for the benefit of the Randolph-Sheppard 
Vending Facility Program (RSVFP). The per unit acquisition cost is 
lowered from the current $5,000 or the capitalization level established 
by the non-Federal entity for financial statement purposes to ``equal 
or exceed the lesser of $1,000 or the capitalization level established 
by the non-Federal entity for financial statement purposes.''

DATES: Applicable date: October 1, 2022.

FOR FURTHER INFORMATION CONTACT: David Steele, U.S. Department of 
Education, 400 Maryland Avenue SW, Room 5157, Potomac Center Plaza, 
Washington, DC 20202-2800. Telephone: (202) 245-6520. Email: 
[email protected].
    If you are deaf, hard of hearing, or have a speech disability and 
wish to access telecommunications relay services, please dial 7-1-1.

SUPPLEMENTARY INFORMATION:

Uniform Guidance Exception Granted

    On July 27, 2022, the Department requested an exception from OMB 
under 2 CFR 200.102(a) and (c) to adjust the requirements under the 
Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards (Uniform Guidance) definition of 
``equipment'' at 2 CFR 200.1 for a class of non-Federal entities. 
Specifically, the Department requested the limited exception, solely 
for equipment acquired by the SLA for the benefit of the RSVFP, to 
lower the per-unit acquisition cost threshold from the current $5,000 
or the capitalization level established by the non-Federal entity for 
financial statement purposes to ``equal or exceed the lesser of $1,000 
or the capitalization level established by the non-Federal entity for 
financial statement purposes.'' On September 2, 2022, OMB approved the 
exception and notified the Department. The exception is applicable only 
to equipment the SLA acquires under section 3(3) and section 7(c) of 
the Randolph-Sheppard (R-S Act) and under section 103(b)(1) of the 
Rehabilitation Act of 1973 (Rehabilitation Act) for the benefit of the 
RSVFP.
    This notice announces the lowering of the per-unit acquisition cost 
for equipment acquired by SLAs for the benefit of the RSVFP. This 
change is effective for SLAs on October 1, 2022 and applies to all 
equipment, acquired with either R-S Act set-aside funds under 34 CFR 
395.9(b) or State Vocational Rehabilitation Services (VR) program funds 
(both Federal and non-Federal) under section 103(b)(1) of the 
Rehabilitation Act and 34 CFR 361.49(a)(5), satisfying the lower per-
unit acquisition cost on or after that date. VR agencies need to ensure 
that prior approval is obtained for items meeting the revised equipment 
threshold in accordance with 2 CFR 200.407. RSA will provide training 
opportunities to States, as necessary, on the implementation of the 
exception.

Background

    The R-S Act, which authorizes the RSVFP, enhances employment 
opportunities for individuals who are blind by designating SLAs to 
train and license them to operate vending facilities (e.g., vending 
machines, cafeterias, snack bars) on Federal and other property.
    VR agencies that provide services to the blind serve as SLAs for 
purposes of administering the R-S Act and the RSVFP. Pursuant to 
section 103(b)(1) of the Rehabilitation Act, VR agencies may use 
Federal VR program funds for the ongoing acquisition of equipment and 
the purchase of initial stocks and supplies during the blind vendor's 
first six months of operation (see also 34 CFR 361.49(a)(5)). 
Specifically, Federal VR program funds, as well as some non-Federal 
funds used for matching purposes, may be used to acquire equipment 
throughout the operation of the vending facility. However, Federal VR 
program funds, as well as non-Federal funds used for matching purposes 
(except for set-aside and Federal vending machine income funds), may be 
used on initial stocks and supplies only during the first six months of 
a vending facility's operation (34 CFR 361.49(a)(5)(ii)). The VR agency 
acting as the SLA under the R-S Act has the authority to spend the 
Federal vending machine income and set-aside funds under 34 CFR 
395.9(b) on the maintenance, replacement, and purchase of equipment; 
however, there is no authority to spend these funds on supplies at any 
point during the operation of the vending facility.
    Based on the provisions in 2 CFR part 200, ``supplies'' are those 
items that fall under the $5,000 per-unit capitalization threshold 
identified in the definition of ``equipment'' (2 CFR 200.1). In the 
absence of a statutory or regulatory definition of ``equipment'' in the 
Rehabilitation Act or the R-S Act, RSA has relied on the definition in 
the Uniform Guidance at 2 CFR 200.1, which requires equipment to have a 
per-unit cost of either $5,000 or exceed the State's capitalization 
threshold, whichever is lower.
    The capitalization threshold has a direct effect on the 
classification of items as ``equipment'' or as ``supplies,'' and thus, 
what funds can be used for its purchase and when such funds may be 
used.
    The Uniform Guidance threshold of $5,000 became an issue as SLAs 
and blind vendors initiated the process of reopening vending facilities 
in the wake of extended closures caused by the COVID-19 pandemic and 
identified the need to repair/replace or purchase new commercial 
appliances. For blind vendors to operate a vending facility, SLAs are 
required to purchase commercial appliances needed to operate that 
vending facility, including, but not limited to, vending machines, 
commercial coffee makers, freezers, beverage dispensers, and cash 
registers, because these commercial appliances remain at the facility 
regardless of the vendor placed by the State to operate the facility. 
In many instances, these commercial appliances do not meet the Uniform 
Guidance definition of ``equipment,'' because the per-unit cost is less 
than $5,000. These items typically cost between $1,000 and $4,999 per 
item. Under the current definition of ``equipment,'' these costs would 
generally be considered supplies and would not be allowable purchases 
for the RSVFP with VR Federal grant funds and non-Federal matching 
funds, except during the first six months of the operation of any 
vending facility, and Federal vending machine income and levied set-
aside funds can never be used

[[Page 60665]]

for the purchase of supplies. The inability of SLAs to provide 
commercial appliances needed by blind vendors for the operation of 
vending facilities as ``equipment'' prevents States from fulfilling one 
of their crucial responsibilities under the RSVFP program and prevents 
them from expending funds as Congress anticipated under the program.
    Realizing the effect of the Uniform Guidance definition of 
equipment on the SLA's ability to purchase needed commercial appliances 
and supplies over $1,000 for blind vendors in the RSVFP, States brought 
this issue to RSA's attention in 2021, asking for flexibility to 
purchase such items with VR funds and Federal vending machine income 
and levied set-aside funds that could be used as non-Federal match for 
the VR funds. Blind vendors already had reduced income, or no income 
due to facility closures because of the pandemic and were not able to 
absorb these additional costs with their own income, nor was that the 
intent of the RSVFP.
    In response to the RSVFP blind vendor needs, the Department 
requested an exception on July 27, 2022, from OMB, under 2 CFR 
200.102(a) and (c), to adjust the requirements under the Uniform 
Guidance definition of ``equipment'' at 2 CFR 200.1 for the benefit of 
the RSVFP. Specifically, the Department requested the limited 
exception, solely for equipment acquired by the SLA for the benefit of 
the RSVFP, to reduce the per-unit acquisition cost threshold from the 
current $5,000 or the capitalization level established by the non-
Federal entity for financial statement purposes to ``equal or exceed 
the lesser of $1,000 or the capitalization level established by the 
non-Federal entity for financial statement purposes.''
    As stated above, OMB granted the exception on September 2, 2022, 
and the exception will take effect October 1, 2022, for all equipment 
satisfying the lower per-unit acquisition cost acquired by the SLA with 
either RSVFP levied set-aside or Federal vending machine income funds 
or VR program funds (both Federal and non-Federal).
    Accessible Format: On request to the program contact person listed 
under FOR FURTHER INFORMATION CONTACT, individuals with disabilities 
can obtain this document in an accessible format. The Department will 
provide the requestor with an accessible format that may include Rich 
Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, 
braille, large print, audiotape, or compact disc, or other accessible 
format.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. You may 
access the official edition of the Federal Register and the Code of 
Federal Regulations at www.govinfo.gov. At this site you can view this 
document, as well as all other documents of this Department published 
in the Federal Register, in text or Portable Document Format (PDF). To 
use PDF you must have Adobe Acrobat Reader, which is available free at 
the site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

Katherine Neas,
Deputy Assistant Secretary, Delegated the authority to Perform the 
functions and duties Of the Assistant Secretary for the Office of 
Special Education and Rehabilitative Services.
[FR Doc. 2022-21751 Filed 10-5-22; 8:45 am]
BILLING CODE 4000-01-P