LAW
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Ohio Laws and Rules
(A) The county family service agency shall follow federal, state, and local regulations when seeking federal financial participation (FFP) for the costs associated with the rent or lease of property or equipment. The costs must be necessary and reasonable for proper and efficient performance and administration of the specific program financing the cost and must be in compliance with office of budget and management (OMB) Circular A-87, attachment B and Code of Federal Regulations (C.F.R.) 2 C.F.R. part 225.
(B) In determining the reasonableness of rental or lease costs, the county family service agency must ensure that the following factors are considered:
(1) Rental costs of comparable property, if any exist;
(2) Market conditions in the area;
(3) Alternatives available; and
(4) The type, life expectancy, condition, and value of the property/equipment being leased. The county family service agency shall review rental arrangements periodically to determine if circumstances have changed and other options are available.
(C) When the other party of a lease agreement is able to substantially influence the action of the county family service agency, rental costs under the lease are allowable only up to the amount that would be allowed had title to the property been vested in the county family service agency. Such leases include, but are not limited to, those between:
(1) Divisions of a governmental unit;
(2) Governmental units under common control through common officers, directors, or members; and,
(3) To the extent otherwise allowable, a governmental unit and a director, trustee, officer, or key personnel of the governmental unit or his/her immediate family, either directly or through corporations, trusts, or similar arrangements in which they hold a controlling interest.
(D) Rental costs under material equity leases are allowable under the same cost principles
(e.g. depreciation or use allowances, maintenance, taxes, insurances, and other allocable costs) that would apply if the county family service agency had purchased the property on the date the lease agreement was executed. A material equity lease is defined as a lease under which the county family service agency acquires a material equity in the leased property. A material equity lease is only revocable upon the occurrence of a remote contingency and has at least one of the following characteristics:
(1) The county family service agency has the right to purchase the property for a price that at the beginning of the lease is substantially less than the probable fair market value at the time it is permitted to purchase the property;
(2) Title to the property/equipment passes to the county family service agency during or after the lease period; or
(3) The term of the lease/leases (including initial term and renewal options) is equal to or more than seventy-five per cent of the economic life of the property.
Effective: 11/20/2006
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 5101.02