Grace Period Extended for Lump Sum Method of Paying Invoices for PPM Fund Allocations Less Than $300k

To Affected MPOs, RTPAs, and Counties:

Last July/August, Caltrans accounting office informed us they will not be able to pay invoices using the Lump Sum method of invoicing (payment for services not yet rendered) for Planning, Programming, and Monitoring (PPM) funds that are allocated for less than $300k. This was interpreted as a gift of public funds. This determination affected about 75% of the agencies that get PPM allocations. To give agencies time to adjust to the transition away from the Lump Sum invoice method to the progress invoice method (paying for services rendered), and to pursue a legislative solution to allow the Lump Sum invoice method to continue, a grace period was implemented which would allow agencies to invoice using the Lump Sum method for PPM funds programmed and allocated in the 16/17 year.

Since there is still an active pursuit of a legislative solution, Caltrans Divisions of Local Assistance and Local Programs Accounting have agreed to extend the grace period through FY 2017/18. Therefore, we will allow agencies to invoice using the Lump Sum method for PPM funds programmed and allocated in the 17/18 year for PPM funds allocated for less than $300k. Allocation of PPM funds that are equal to or greater than $300k must continue to use the progress invoice method as usual. Starting July 1, 2018, however, barring a legislative solution, all PPM funds will need to be invoiced using the progress invoice method.

For more information, contact your District Local Assistance Engineer.