The School Board received proposed revisions on May 21 to district policies that align federal uniform grant guidance with Minnesota statute and district practice, including procurement thresholds, cybersecurity assurances and a higher equipment capitalization threshold for fixed assets.

Amy Scalarud, executive director of finance and business services, presented three policy items. She said the proposed uniform grant guidance policy updates include a procurement threshold alignment and an increase in the federal equipment definition used for capitalization from $5,000 to $10,000. She explained the changes are driven by updated federal guidance and by state statute differences: “The federal limit to require a sealed bid is $250,000. However, in Minnesota, we have state statutes that are more restrictive…and so the threshold in Minnesota is $175,000,” she said.

The nut graf: the revisions are technical but affect accounting and procurement practice and will flow into the district’s audit and asset reporting. Scalarud said the district will use $10,000 as the capitalization threshold going forward and will not retroactively reclassify assets, noting an effective date in the fixed‑asset policy to avoid prior‑period adjustments: the change “will keep within our accounting and auditing reporting anything that we've added in the past that was under 10,000, but we'll use that 10,000 going forward starting with this fiscal year.”

Scalarud also described other updates drawn from the federal guidance: updated mandatory disclosures for suspected fraud or conflicts of interest, added cyber‑security minimums and wording cleanups to align district policy with guidance and the U.S. Constitution. She said one procurement provision in the model policy — a provision intended to favor certain vendors — was removed from the district draft because it did not align with current practice and could conflict with recent federal executive orders.

Discussion vs. decision: Policy 701 (budget) was presented for a second reading; Policies 0721 (uniform grant guidance) and 704 (fixed assets) were presented for first reading. No policy votes to adopt new language were taken at the meeting; the board asked clarifying questions about disclosures and capitalization timing.

Background: the federal uniform grant guidance changes have filtered through sample policies from MSBA and the district’s finance committee. The proposed adjustments reflect federal updates and a desire to avoid conflicts with Minnesota law and audit complexities.

Looking ahead: staff said the procurement, disclosure and capitalization changes will move through the board’s adoption process and be reflected in the district’s 2025–26 budget and financial reporting as appropriate.