Revised:  5/29/2018

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Understanding Threshold Calculations

References

State agencies may use their Direct Purchase Authority (DPA) to spend up to $50,000 (i.e. no more than $49,999.99) with a supplier each fiscal year without receiving prior approval from the Controlling Board.”  All POs and vouchers which have not referenced a Contract ID or CB Number are counted against the threshold. The threshold limit is calculated based on the supplier’s OAKS identification number.

 

• The information below does not cover the state’s Requisite Procurement Program.

 

Any individual purchase or contract, non-competitively selected or not otherwise exempted, that equals or exceeds the threshold requires Controlling Board approval.

 

For an individual purchase through DAS, or contract, non-competitively selected,  that is less than the aforementioned Controlling Board thresholds, this purchase or contract requires a Controlling Board approval Waiver of Competitive Selection or Agency Released Competitive Opportunity if the sum of A + B + C below is greater than or equal to the Controlling Board threshold. The following example illustrates the calculation of the Controlling Board threshold for non-institutional agencies.

 

• Refer to DAS Guidance about additional purchasing guidelines.

 

A	+B	+C	=D
Total amount of proposed purchase (non-competitively selected) from a particular supplier. This amount to be spent over the entire period of the contract.	Amount of all disbursements to the supplier during the fiscal year for purchases from the supplier that were non-competitively selected nor approved by the Controlling Board (including disbursements in the current fiscal year from prior fiscal year encumbrances).	Amount of all outstanding encumbrances for purchases from the supplier that were non-competitively selected nor approved by the Controlling Board.	$50,000 or more in total

 

 

• Purchases that have been made by competitive selection (defined in Section 125.01 (I) of the Revised Code) or that have been approved by the Controlling Board are NOT included in the calculation.

 

Cumulative spending activity for an Agency / Supplier / Fiscal Year is calculated, categorized and stored on a record in OAKS. Transactions are validated against that information to see if Thresholds have been exceeded.

 

• Pcard purchases made without referencing a Supplier ID must be calculated in the threshold manually (i.e., outside of OAKS FIN). Referencing a Supplier ID on a Pcard transaction will calculate in the supplier’s threshold, allowing agencies to track the amount spent on a supplier in a given Fiscal Year within OAKS FIN.

OAKS FIN Threshold Validations

There are 3 threshold checks that may occur in OAKS FIN:

 

• If a Requisition transaction causes Thresholds to be exceeded, the user will receive an error message indicating that Thresholds have been exceeded and that a Controlling Board Number is required.
• If a Voucher transaction causes Thresholds to be exceeded, the user will receive an error message indicating that Thresholds have been exceeded and that a Controlling Board Number is required. Therefore, a Requisition needs to be created and go through the proper approval process before the voucher can be entered and paid.
•  Interfaced Purchase Orders will need to go through Threshold logic as part of their edits and validation process. A PO status of “Thrsh Excd” indicates that Thresholds have been exceeded and a Controlling Board number is required.  If this happens, the PO must be cancelled and interfaced into the system again with a valid controlling board number.

 

The OAKS FIN validation logic to determine whether Controlling Board Thresholds have been exceeded for a requisition, purchase order and voucher are:

1. All Threshold logic is bypassed when the business unit is exempt from Controlling Board. These Agencies have no cumulative restriction on use of their Direct Purchase Authority.
2. If the transaction references a State Agency, or State Employee, all threshold logic can be bypassed.
3. If all transaction lines have a Contract ID, all Threshold logic can be bypassed. These transactions do not count towards Direct Purchase Authority Thresholds.
4. If all transaction lines have a Controlling Board Number, all Threshold logic can be bypassed. These transactions do not count towards Direct Purchase Authority Thresholds.
5. If all transaction lines are for a Controlling Board exempt Account code, all Threshold logic can be bypassed.
6. When transaction lines do not reference a Contract ID or a Controlling Board exempt Account Code:
1. If the sum of these lines is greater than the Agency’s Threshold, Controlling Board approval is required.
2. If the sum of these lines plus the cumulative spend for the Agency / Supplier / Fiscal Year, including all open encumbrances, is greater than the Agency’s Threshold, Controlling Board approval is required.

Checking Spending Thresholds

Run the reports below to inquire on encumbrance and spending totals with a specific supplier.

 

Controlling Board Threshold Report

Follow the steps below to run the Controlling Board Threshold Report.

 

• The Controlling Board Threshold Report is the only report that captures all Pcard spend.

1. MyOhio.gov > Business Intelligence > Launch Application.
2. Reporting Folders > BI Standard Reports > FIN > Procure to Pay > Vendor Analytics.
3. Select the “VA-0010 – Controlling Board Threshold Report”.
4. Enter desired search critera.
5. Click Finish.

Threshold Stat Information Inquiry

Follow the steps below to run the Threshold Stat Information inquiry.

• This inquiry will only capture Pcard spend when the supplier ID has been associated with the spend in the Pcard reconcile statement.
• This inquiry provides a view of an agency’s accumulated open encumbrances and amounts spent with a particular supplier for a given fiscal year. Dollar amount thresholds ($50,000 for each agency per supplier) are validated in OAKS as part of the editing process. Current dollar amounts that are included in the threshold calculation against encumbrances and vouchers are displayed. Dollar amounts displayed, but not counted toward the threshold amount, are Controlling Board Waiver amounts, Term Contract amounts, and Bid amounts. This summarized view of dollar amounts provides the user with a means to analyze and review any document threshold limitations an agency might be encountering.

• OAKS FIN > Main Menu > Suppliers > Supplier Information > Maintain > Threshold Stat Information

 

1. Enter search criteria (i.e., Business Unit, Fiscal Year, and Supplier ID).
2. Click Search.

• The Threshold Stat Info displays.

 

Agency Spending by Supplier ID Spending over $35,000 (OHAP082)

Follow the steps below to access the Agency Spending by Supplier ID for Spending over $35,000 (OHAP082).

 

• This is a scheduled report that runs every Friday and Monday. This report allows the agency to monitor suppliers that have spend over $35,000 in an effort to ensure appropriate action is taken before threshold is exceeded.

• OAKS FIN > Main Menu > Reporting Tools > Report Manager

 

1. Enter "OHAP082" in Name.
2. The Report Manager defaults to show the last 1 day of reports.

2. Change the number of days to view the desired report (e.g., to view the reports that generated over the last week, enter "7").
3. Click Refresh.

• The available reports display.

 

 

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