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<p class="MsoNormal"><span style="font-family:Roboto">Hello everyone!<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto">As you may have heard, the maximum capitalization threshold for equipment purchases subject to Uniform Guidance increased from $5,000 to $10,000 beginning with FY 2026. The State
of Oregon’s capitalization threshold for all capital assets has previously been tied to this number. However, this change has allowed OSC to consider other options for the capitalization threshold for future years. This change would affect many sections of
the Oregon Accounting Manual (<i>OAM 15.60.10 Classification Capitalization</i>,
<i>OAM 15.55.00 Non-Capital Assets</i>, <i>OAM 15.60.30 Leases</i>, <i>OAM 15.42.00 Federal Grants</i>, etc.), the titles of several Comptroller Objects, and other resources.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto">Over the past several months, OSC has conducted research regarding this change in many ways. We began by reviewing the capital asset policies, thresholds, and methodologies for every
other state in the country. We noted there was minimal uniformity among states. We believe this allows us to utilize the freedom to question our processes and potentially find a new method for capitalization that fits Oregon best.
<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto">Additionally, we performed surveys with a group of 17 “pilot agencies” based on their capital asset value. Surveys included questions regarding the potential use of multiple thresholds
depending on the type of asset, decoupling from the Uniform Guidance, current and ongoing bond requests, and the acquisition of assets with both federal and non-federal dollars. As expected, their responses provided many helpful answers, but also spurred additional
questions and concerns that OSC had not considered since each agency is different in nature.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto">Subsequently, OSC is proposing a single capital asset threshold of $10,000, effective July 1, 2025 (FY 2026). The proposal was made based on the following key elements:<o:p></o:p></span></p>
<p class="MsoListParagraph" style="margin-left:1.0in;text-indent:-.25in;mso-list:l1 level1 lfo3">
<![if !supportLists]><span style="font-family:Roboto"><span style="mso-list:Ignore">1.<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-family:Roboto">Agency responses made it clear that multiple thresholds were unnecessary and potentially cumbersome causing errors among decentralized agencies. The majority of agencies indicated they would prefer
the simplicity of using one threshold for all capitalizable assets.<o:p></o:p></span></p>
<p class="MsoListParagraph" style="margin-left:1.0in;text-indent:-.25in;mso-list:l1 level1 lfo3">
<![if !supportLists]><span style="font-family:Roboto"><span style="mso-list:Ignore">2.<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-family:Roboto">Decoupling from the Uniform Guidance seemed to be very burdensome since:<o:p></o:p></span></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-.25in;mso-list:l1 level2 lfo3">
<![if !supportLists]><span style="font-family:Roboto"><span style="mso-list:Ignore">a.<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-family:Roboto">This would require agencies to retain two separate capital asset listings (R*STARS and another outside of R*STARS for federal purposes).<o:p></o:p></span></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-.25in;mso-list:l1 level2 lfo3">
<![if !supportLists]><span style="font-family:Roboto"><span style="mso-list:Ignore">b.<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-family:Roboto">The acquisition of assets with both federal and non-federal dollars would require agencies to bifurcate the asset for tracking purposes, and can cause significant confusion and extensive manual
labor.<o:p></o:p></span></p>
<p class="MsoListParagraph" style="margin-left:1.0in;text-indent:-.25in;mso-list:l1 level1 lfo3">
<![if !supportLists]><span style="font-family:Roboto"><span style="mso-list:Ignore">3.<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-family:Roboto">Some agencies rely heavily on bond funds to finance their significant capital asset acquisitions. $10,000 seemed to be the safest option since this amount would not impact their bondable requests.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto">The next step for this process is to seek feedback from all agencies over the next two weeks about this proposal to finalize a recommendation for CFO Kate Nass. Any additional input
you have would be extremely helpful. <b>Please submit any thoughts/feedback/concerns you have on this issue to
<a href="mailto:Brady.Stutzman@das.oregon.gov">Brady.Stutzman@das.oregon.gov</a> by Tuesday, 5/20/2025.<o:p></o:p></b></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto">Thank you so much for your feedback,<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto">Rob<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:Roboto"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><!--[if gte vml 1]><v:shapetype id="_x0000_t75" coordsize="21600,21600" o:spt="75" o:preferrelative="t" path="m@4@5l@4@11@9@11@9@5xe" filled="f" stroked="f">
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Description automatically generated" v:shapes="Picture_x0020_1"><![endif]><b><span style="font-family:Roboto;mso-ligatures:none">Robert
W. Hamilton, CPA <o:p></o:p></span></b></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-size:11.0pt;font-family:Roboto;color:#353535;mso-ligatures:none">State Controller</span><span style="font-size:16.0pt;font-family:Roboto;color:#353535;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-size:11.0pt;font-family:Roboto;mso-ligatures:none">Chief Financial Office</span><span style="font-size:16.0pt;font-family:Roboto;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-size:11.0pt;font-family:Roboto;mso-ligatures:none">971-719-3031<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:49.5pt;text-indent:-13.5pt"><a href="http://www.oregon.gov/DAS/financial/acctng"><span style="font-size:10.0pt;font-family:Roboto;color:blue;mso-ligatures:none">http://www.oregon.gov/DAS/financial/acctng</span></a><span style="font-size:10.0pt;font-family:Roboto;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><i><span style="font-size:10.0pt;font-family:Roboto;mso-ligatures:none">Pronouns: he, him, his<o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-left:.5in"><o:p> </o:p></p>
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