Contract Amendments
Occasionally it is necessary to amend a contract to revise the contract amount, service description, contract timing, or other terms. Although the contract is an agreement between the Partnership and the DSP, the initial contract and any subsequent amendments must be approved by NCPC since NCPC ultimately provides the funding for all Smart Start contracts. Contract expenditures must adhere to the contract terms in place at the time of the expenditure. Any changes in the terms of a contract must therefore be approved in writing by the Partnership and NCPC prior to expending any funds under the revised terms.
Signed original requests for amendment should be submitted in writing to the Partnership Contracts and Accounting Manager, with a full explanation of the nature and necessity of the change. If the requested change involves a change in the total amount of the contract, the request must include a Budget Change Request Form as well as a narrative justification of the change.
Amendments to increase the contract require a three-step approval process. The first stepis review and approval by the Partnership Program Coordinator and the Finance team, who may contact the DSP for further details or justification surrounding the request. Once approved by the Partnership, the request is presented to the Partnership’s board, before being submitted to NCPC for final approval. The Partnership staff will communicate the approval status to the DSP. A formal contract amendment is drafted and sent to the DSP with the final approval letter (notifying of NCPC’s approval). The contract amendment must be signed by the person authorized in the Pre-Contracting Information Form. The contract amendment includes the term(s) of the contract that changed and the effective date of the change. As with the initial contract, both parties must sign the amendment for it to be considered “executed”.
Because the approval process for contract amendments is lengthy, advance planning is required to ensure that the contract is amended prior to expenditures being made under the amended terms.
Contract amendments that increase or decrease the total approved budget cannot be made after May 15, 2009 due to NCPC’s deadline for contract amendments. The Partnership will need to receive amendment information from the DSP no later than April 30, 2009 in order to comply with this deadline. Historically, NCPC and DCD have required amendments to Subsidy by April 15, which means the Partnership would need the amendment information by March 31, 2009 in order to comply with this deadline.
Budget Changes
As discussed in Section III, any change in the total amount of a Smart Start contract requires amending the contract. A signed original Budget Change Request Form with accompanying narrative justification, must be submitted to the Partnership Contracts and Accounting Manager for approval of the contract amendment. See the Budget Change Request Form for:
- an explanation of types of expenses associated with each line item of the standard Smart Start budget form
- an example of the Budget Change Request Form
- instructions on completing the form
It is no longer necessary to submit a “soft copy” of the form to the Partnership via email. However, it may help expedite a budget change if the form is emailed to the Contracts and Accounting Manager. A signed hard copy is still necessary.
Budget changes that move amounts among line items but do not increase or decrease the total amount of the contract do not require amendment to the contract. Such changes do, however, require advance approval by the Partnership Program Coordinator to ensure the activity remains in compliance with the Contract Activity Description (CAD). The procedure for obtaining approval varies depending on the significance of the requested changes. The Partnership Program Coordinator must approve two types of changes in writing:
- A budget change that affects the total budget for an object class by more than 10% of the approved budget for that object class. (Object class totals are shown on line 13, 16, 26, 36, 42 and 48 of the budget form.)
- A budget change affecting a single line item with an approved budget of -0-.
NOTE: A written explanation for each line item changing is needed for these two types of budget changes. If the personnel line is changing, an updated worksheet showing the positions and salaries and/or contracted services is requested.
Once the change is approved, an email is sent to the DSP notifying them of the Partnership’s approval and the effective date of the approval. Because these changes do not require a budget amendment, final approval is generally granted more quickly than changes to the total amount of the contract.
Budget changes which do not change any object class total by more than 10%, and which do not affect any line items with an approved budget of -0- do not require advance written approval. However, such changes must be approved verbally by the Partnership Program Coordinator, and all changes must be documented using the Budget Change Request procedure no less frequently than quarterly.
Quarterly Budget Change Request forms, if applicable, are due on the following dates. When the due date falls on a weekend or a holiday, the forms should be submitted on the last working day prior to the due date.
- Friday, October 10
- Friday, January 9
- Friday, April 10
Changes to budget components other than the Smart Start-funded portion of the project should be reported using a separate Budget Change Request Form for each component (cash contributions from state, non-state cash contributions, in-kind or program income), and are processed similarly to Smart Start budget changes that do not involve a change in the total amount of the contract.
DSP staff is encouraged to monitor expenditures carefully to avoid excessive budget changes. The Partnership monitors expenditure rates closely and follows up with DSPs on activities whose expenditure rates vary from expectations.
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