Although the Declaratory Order intended to expand purchasing and funding opportunities for districts, the question related to employee salary and benefits was not submitted, and therefore, the Declaratory Order did not contemplate nor deal with this question—it neither specifically included nor excluded employees from providing the technology services to his/her employing district.
There are concerns in terminating an employee such as reduced availability to students and staff members, potential union issues, loss of IPERS, benefits, etc. If a district wishes to pursue this, they would be well-advised to first consult legal counsel.
In addition, the individual would need to meet the IRS requirements for an independent contractor determined through an IRS form SS-8 ruling. It is the Department’s understanding that the IRS intends to take a close and careful look at these (high risk) situations due to abuse.
Costs associated with contracted technology services should be expensed, not capitalized unless, of course, the costs meet the capitalization criteria of GASB 51 (intangible assets) and the district’s capitalization threshold for entity-wide statements.