Interagency Agreements - Technical Guidance

Background

Under the Fiscal Rules, this is State Controller Contract, Grant, and Purchase Order Technical Guidance. State Agencies and Institutions of Higher Education {IHEs) may use the approved lnteragency Agreement forms under Fiscal Rule 3-5 as described in this technical guidance.

Authority

24-30-202 (1-4) and (5)(a), C.R.S (State Controller Authority)
State Fiscal Rules 1 CCR 101-1, Fiscal Rule 3-5 lnteragency Agreements

Purpose

The Office of the State Controller is providing technical guidance to standardize policies, procedures, and forms relating to the drafting, encumbering, execution, and administration of lnteragency Agreements.

Definitions

• Common Policy. Common Policy is policy adopted by the Joint Budget Committee that is consistently applied for State Agencies (Fiscal Rule 7-4). Agencies and IHEs should avoid entering into lnteragency Agreements for State programs covered by Common Policy (i.e., lnteragency Mail).
• lnteragency Agreement: An agreement between two or more State Agencies, two or more IHEs, or any number of State Agencies and IHEs that involve a transfer of funds from one State Agency or IHE to another. The term lnteragency Agreement does not include any agreement that has an entity that is not a State Agency or IHE as a Party to the Agreement that is not subject to Fiscal Rule 3-5.
• Intra-agency Agreement: An Intra-agency Agreement is a written agreement between divisions,
  boards, or entities within the same State Agency or IHE. The term Intra-agency Agreement does not include any agreement that has an entity that is not a division, board, or entity within the same State Agency or IHE as a Party.
• Memorandum of Agreement (MOA) / Memorandum of Understanding (MOU): MOA/MOU are
  agreements that do not involve payment or transfer of funds and are non-binding. Under these agreements, each Party is responsible for contributing its own efforts and resources, but neither Party exchanges funds, personal property, real property, personnel, services, liability, or makes any kind of financial commitment or obligation. State Agencies and IHEs shall not use MOU/MOA as a substitute for an lnteragency Agreement with other Agencies or IHEs when funds are exchanged. MOUs/MOAs are appropriate to document agreements between State Agencies and IHEs with political subdivisions, however, if the agreement involves funds, the Intergovernmental Agreement model should be used.
• Paying State Agency: The Agency or IHE that pays for and requests goods or services from
  another Agency through an lnteragency Agreement.
• Performing State Agency: The Agency or IHE that provide goods or services with State resources or contracts for the goods and services under the terms and conditions of an lnteragency Agreement.

Available Model lnteragency Agreements

• lnteragency Agreement. This model should be used for any lnteragency Agreements when either Party determines that the goods or services to be provided or any potential risk of nonperformance or nonpayment should require the inclusion of the terms and conditions provided in the lnteragency Agreement model. In the event the Parties are unable to reach a consensus on the model to use, the Paying Agency's or Paying IHE's decision shall control. This model is recommended for more complex agreements and requires the approval of the Parties and the approval of the Paying Agency Controller. Agencies and IHEs should consider using the lnteragency Agreement model for the following goods and services when funds are transferred.
  • New system implementation or modification to an existing system.
  • Statutory changes or program changes that require coordination and cooperation between two or more Agencies or IHEs.
  • When the agreement includes federal funds or pass through provisions (i.e., HIPM).
• Short Form lnteragency Agreement. This model is designed to include a cover page attached to a Statement of Work (SOW), and does not require department or controller signatures. It is recommended for goods and services that are easily definable, and when the Parties have an established record of performance and payment. Agencies and IHEs should consider using the Short Form lnteragency Agreement for the following goods and services.
  • Data sharing agreements, (i.e., health records).
  • Routine Inspections.
  • Software purchases from the Governor's Office of Information Technology (OIT).
• Modifications to lnteragency Agreements. Agencies and IHEs may make modifications to the model lnteragency Agreements without OSC approval as long as the modifications satisfy the requirements of Fiscal Rules 3-5.

Statement of Work

All lnteragency Agreements shall contain a SOW as required by the State Controller Contract, Grant, and Purchase Order policy entitled "Content - Mandatory Provisions in State Contracts." A one-page order form or work completion document can be used as the SOW as long as it meets the minimum standard required by policy. The SOW establishes mutually agreed upon goods, services, service levels, milestones, deliverables, monitoring methods, payment schedule, and organizational responsibilities. The purpose is to provide both Parties and the State Controller, a clear understanding of the deliverables to be provided and of the responsibilities of each Party.

Transferring and Encumbrance Funds

All lnteragency Agreements shall be encumbered when required by Fiscal Rule 3-5. An lnteragency Agreement represents an obligation in the Paying Agency's financial system. The Controller delegate at the Paying Agency may require an encumbrance on any lnteragency Agreement at their discretion.

• State Agencies and IHEs should submit interagency payments and transfers for goods and services using the Colorado Operations Resource Engine (CORE), Internal Transaction Initiator (ITI), and Internal Transaction Agreement (ITA), documents if both Agencies and IHEs are operating in CORE.
• Payment for lnteragency Agreements may be made in advance or on a reimbursement basis.
• Payments should not be made until after the lnteragency Agreement is approved.
• The Paying Agency remains responsible and accountable to the Legislature for the funds. Agencies and IHEs must reconcile their accounts at the end of the Fiscal Year. Agencies and IHEs cannot assign or transfer spending authority to another Agency or IHE through ane lnteragency Agreement.
• When an Agency or IHE has contractual obligations on another Agency's or IHE's contract, the two Agencies or IHEs should execute an lnteragency Agreement to define the rights, obligations, and spending authority of each Party. When one Agency or IHE has spending authority and is financing services for another Agency or IHE on their contract, the Parties should defer to the Fiscal Procedures Manual and consult the Office of the State Controller regarding encumbering and transferring funds.
• Agencies and IHEs cannot receive a profit from lnteragency Agreements unless authorized to do
  so by statute.

Approvals and Requirements

lnteragency Agreements are automatic No Risk Contracts pursuant to State Controller Policy, Review and Approval - Delegated Agencies.

• Agency and IHE Approval. Reviews and approvals for lnteragency Agreements should be at the lowest level possible commensurate with the complexity, importance, policy sensitivity, dollar amount, or other statutory requirements of the lnteragency Agreement.
• Controller Delegate Approval. The Paying State Agency or IHE Controller Delegate shall sign or approve lnteragency Agreements. The Central Contracts Unit (CCU) will review lnteragency Agreements as requested do to so. Under OSC Policy, lnteragency Agreements are considered "No Risk Contracts" by default.
• Void lnteragency Agreements. lnteragency Agreements entered into by Agency or IHE staff without the approval of the Paying Agency's Controller are void ab initio.
• Contract Management System (CMS). lnteragency Agreements are not required to be entered into CMS. However, an Agency or IHE may choose to enter lnteragency Agreements into CMS at its discretion. Agencies and IHEs should track deadlines and assign each lnteragency Agreement a program/contract manager.
• Term. lnteragency Agreements are exempt from the Procurement Code and therefore are not limited to five years. However, the need for an lnteragency Agreement should be reevaluated on a reoccurring basis.

Disputes

If the Parties are unable to resolve any disputes, the matter shall be submitted to the State Controller, whose decision shall be final in accordance with Fiscal Rule 3-5, Section 7.

 State Controller Policies

• View Policies & Guidance
• View Contract Policies