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Contract Fund & Program Income Guidelines

How should a county account for funds received as a result of an election services contract (e.g., leasing equipment to a local political subdivision)?

Funds paid to a county election officer under an election services contract must be deposited in a separate fund in the county treasury.  Accordingly, the funds must be segregated from other funding such as general revenue.

SOURCE:  Tex. Elec. Code Ann § 31.100 (a) (Vernon 1997).

Do the funds require commissioners court approval?

The county election officer can make expenditures from the fund without budgeting or appropriation by the commissioners court.  Additionally, the commissioners court may not consider the availability of the election services contract fund in adopting the county budget for the office of the county election officer.  However, claims against the fund shall be audited and approved in the same manner as other claims against the county before they are paid.

SOURCE:  Tex. Elec. Code Ann § 31.100 (a) (g) (Vernon 1997).

How can the funds be spent?

Only actual expenses incurred as a result of providing the services outlined in the election services contract may be paid from the election services contract fund.  If the contract fees exceed the actual expenses, the difference must be returned to the contracting authority.

SOURCE:  Tex. Elec. Code Ann § 31.100 (b) (c) (Vernon 1997).

Can the county charge fees beyond the actual costs incurred as a result of providing the services in the election service contract?

Yes.  A fee for general supervision of the election may be charged by the election officer; however, the fee may not exceed 10 percent of the total amount of the contract, but may not be less than $75.  In addition, counties may charge up to 10 percent of the purchase price of the equipment for each day the equipment is leased.

SOURCE:  Tex. Elec. Code Ann §§ 31.100 (d); 123.032 (d) (Vernon 1997).

If the aforementioned fees result in a surplus in the election services contract fund (i.e., they do no offset actual expenses incurred as a result of providing the services in the election services contract), how can they be used?

Section 31.100 (f) of the Election Code permits surplus monies in the election services contract fund to be used to defray expenses of the county election officer's office in connection with election-related duties or functions with the following stipulations:

How should fees earned from an elections service contract be handled if the resources utilized to satisfy the contract were HAVA-funded?

The funds should be deposited in the election service contract fund consistent with state law.  However, fees earned as a result of grant-funded activities (also referred to as program income) should be tracked.  For example, if a county leased 10 DREs, 8 of which were HAVA-funded, 80% of the contract fees should be considered program income.

SOURCE:   Help America Vote Act Grant Award Agreement between the Counties and the Texas Secretary of State as Amended April 29, 2005, Section 20.

How can program income funds be expended?

The federal awarding agency, the Elections Assistance Commission (EAC), has the authority to allow grantees to use program income to augment activities consistent with the grant program, which the EAC granted in a letter to the Secretary of State’s Office dated December 28, 2005.  Accordingly, program income earned from HAVA-funded equipment and resources can be used to pay for on-going costs to operate and maintain the equipment such as license fees, maintenance, equipment upgrades and replacement, training of election staff and poll workers, storage, etc.

SOURCE:   OMB Circular A-102, Post-award Policies, 2, (e) (2); Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (“Common Rule”, 41 CFR 105-71.25(g) (2).