A. Sources of Funding
Funds utilized for capital improvements may be from many sources including state appropriations, revenue bond issues, capital improvement funds from Arkansas Development Finance Authority, institutional reserves, and gifts and grants.
B. Method of Finance
A Method of Finance shall be prepared in accordance with Arkansas Code Annotated §19-4-1407 (Appendix 5).
The request for approval of the Method of Finance (Appendix 6) shall be prepared by the institution using estimates normally furnished by the design professional. Pertinent information on appropriations and fund codes, a concise description of the project, the estimated total project cost, and the estimated dates of commencement and completion must be accurately presented on the Method of Finance before submission. Upon completion, the MOF is forwarded to the Office of the Vice President for Administration for review. Once the Vice President reviews and signs the MOF, it is then forwarded to the Arkansas Department of Higher Education for further processing.
Method of Finance (MOF’s) Less than $250,000:
MOF’s less than $250,000 cash funds are logged in and reviewed by the Arkansas Department of Higher Education and then signed by ADHE’s Senior Associate Director of Institutional Finance. After signature, the MOF is routed to the Arkansas Department of Finance and Administration (DFA) and signed by DFA’s Assistant Administrator.
Method of Finance (MOFs) $250,000 or More:
Per Arkansas Code Annotated §22-9-104 (Appendix 7), MOF’s with cash funds of $250,000 or more are logged in and reviewed by ADHE and then signed by ADHE’s Senior Associate Director of Institutional Finance. After signature, the MOF is routed to DFA and then sent to the ALC Review Committee prior to being signed by DFA.
* Arkansas Code Annotated §19-4-1407(a) states:
Before any state agency shall enter into any contract of employment with an architect or take any other affirmative action toward the construction or financing of any project as provided in this subchapter, it shall submit to the Chief Fiscal Officer of the State, in writing, a summary statement setting forth:
(1) A general description of the proposed project;
(2) Its estimated overall costs; and
(3) The method it proposes to use to finance its cost, which is to be a method of financing that must be approved by the Governor.
It is the institution’s responsibility to submit an accurate and complete MOF to the System office for signature; the System office will then forward to ADHE; from there the MOF will be forwarded to DFA for inclusion in the next available Legislative Council Review Committee agenda. The institution must also follow up on the MOF to ensure it is reviewed, approved, and returned to the campus with all proper signatures; the institution may not enter into any contract with a design professional, contractor, or begin construction until an MOF has been signed by DFA. Please see all related Arkansas Codes and ADHE procedure reminders: ADHE MOF Procedures Issued June, 2011 (Appendix 8).
C. Revisions to Method of Finance
Changes in project costs or changes in funding sources may require a revision to the Method of Finance. Contractor contracts, change orders, and amendments to professional services contracts cannot be approved if sufficient funds are not available on the MOF. Revised MOF’s shall be submitted, approved and distributed in the same manner as the initialMethod of Finance and shall reflect the same number as the original with a capital alpha suffix (this also includes date changes only).
*To ensure the most accurate and up-to-date information, please check for Arkansas Code changes by searching the code section on this free Arkansas Code Search:http://www.lexisnexis.com/hottopics/arcode/Default.asp