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Office of Operations 2010 Fall Conference New York State Government Accounting Bureau of State Accounting Operations Tom Mahoney Director Melody Goetz Assistant Director [email protected] [email protected] State Government Revenue Accounting Budget Overview Fund Accounting Appropriations OSC Website State’s Financial Condition STIP Central Accounting System (CAS) The Office of the State Comptroller (OSC) is responsible for the operation and development of the NYS Central Accounting System (CAS). The CAS is the hub of financial activity in the State; it is used for accounting for all revenues of the State, controlling agency appropriations and spending levels, processing 18 million financial transactions annually, issuing 15,000 payments daily, reflecting the results of these transactions in more than 700 reports for a wide range of users, and generating critical input to the audited financial statements for the State. State Government Structure Executive – ALL State Departments and Agencies Legislative – Assembly and Senate Judicial – Court Administration Budget Overview April - March Agencies prepare Budget Requests for Next Year Budget Requests June - September Budget Certificates April - May Budget Execution, Control and Accountability DOB Reviews Executive Review Legislative Review October - December Executive Decisions Executive Budget Released Financial Plan Appropriations Established Legislative Review & Enactment January - March NEW YORK STATE FINANCIAL CYCLE Executive and Legislative Approval Agency Budget Requests Appropriations, Segregations, Cost Center PLAN ESTABLISH CONTROL Financial Statement Management Reporting EVALUATE Revenues EXECUTE Budgetary Reporting Encumbrances and Expenditures Statutes That Guide Us The State Constitution State Finance Law Article VII Appropriation Bills Article VII Language Bills Other Consolidated Laws Federal Laws and Regulations State Constitution Requires Annual Budget Submission Restricts Payments From State Treasury Restricts Payments from Agency (sole custody) Accounts Defines Appropriation and Reappropriation State Finance Law – Key Fiscal Provisions Article 2 - GENERAL FISCAL PROVISIONS Definitions Additional Definitions Fiscal Year Payments, Transfers and Deposits Duties of Dept of Taxation and Finance §8Duties of the Comptroller § 8B - Additional Duties of the Comptroller § 40 – Period of Appropriations § § § § § 22A 347- State Finance Law – Key Fiscal Provisions - continued Article 6 - (§ 70 - 99-S) FUNDS OF THE STATE Article 7 - (§100-122-A) ACCOUNTS AND AUDITS State Finance Law Article 3 – The Budget § 20. Division of the Budget § 21. Auxiliary Powers of Executive Department § 22. The Budget; Contents § 22-a. Synopsis of Requests for Appropriations; Submittal by Budget Director § 22-b. Report of the Legislature on the Enacted Budget § 22-c. Capital Program and Financing Plan § 23. Plans and Estimates § 24. Budget Bills § 25. Reappropriation Bills § 26. Maintaining Capital Assets § 27. Scheduled Maintenance Appropriations Appropriation Accounting In this segment, we will: Discuss Executive Budget Submission Discuss Fundamental Principles for accounting and controlling authorized State spending Examine the nature of an appropriation, its characteristics and underlying principles Executive Budget Submission Quick Start Budget Discussion November 5th Legislative Session Begins Legislature convenes on the first Wednesday after the first Monday in January. Executive Budget Submission continued Budget Due On or before the 2nd Tuesday following the annual meeting of the legislature. On or before the February 1st in each year following the election of Governor and Lieutenant Governor. Bottom Line Third Tuesday after the first Monday in January, except in years following gubernatorial elections when it must be submitted by February 1. Article VII Bills As part of the Executive Budget, the Governor presents to the Legislature a number of appropriation and language bills which provide the legal authorization for spending from Funds of the State and the means to finance such spending. Article VII Appropriation Bills Public Protection and General Government Legislature and Judiciary Debt Service Education, Labor and Family Assistance Health and Mental Hygiene Transportation, Economic Development and Environmental Conservation Article VII Language Bills Along with the submission of the Appropriation Bills, the Governor also submits legislation to amend State laws governing programs and revenues. This Legislation is needed to implement the State’s Financial Plans for the upcoming fiscal year, and beyond. Budget Amendments The State Constitution permits the Governor to amend or supplement the Executive Budget within 30 calendar days after its submission or, with the consent of the Legislature, at any time before the close of the legislative session. Such revisions, additions or deletions, conveyed to the heads of the fiscal committees in a memorandum, reflect necessary corrections or responses to new situations or conditions arising after the preparation of the Executive Budget. Appropriation Bills Become Law Executive Budget Appropriations (those recommended by the Governor) are Law Immediately Upon Enactment by the Legislature EXCEPT Legislature and Judiciary Additions by the Legislature These must be signed by the Governor Appropriation - Defined An appropriation is a statutory authorization to make expenditures during a specific State fiscal year, and to make disbursements for the purposes designated, up to the stated amount of the appropriation: By a State Dept or Agency For a Named Program Payable From A Specified Fund/Account For Specified Purposes, Activities or Projects Appropriation Periods State Constitution – 2 Year Life Maximum State Finance Law - Section 40 Provides Liability Periods, Appropriation Periods and Lapse Dates Budget Bills Oftentimes NOTWITHSTAND State Finance Law and Permit Liabilities ‘Heretofore’ Or ‘Hereafter’ To Be Paid From Current Year Appropriations Deficiency Appropriation A deficiency appropriation is used to meet actual or anticipated obligations not foreseen when the annual budget and any supplemental budgets were enacted. It might add to a previously authorized appropriation anticipated to be inadequate, or provide a new appropriation to finance an existing or anticipated liability for which no appropriation exists. A deficiency appropriation typically applies to the fiscal year during which it is made. OSC – Appropriation Management The Appropriation (Budget) Management function ensures that agencies do not obligate or disburse funds in excess of those appropriated or segregated. This function also provides agencies with tools for managing appropriations, for example, organization, program, project and cost center levels. Appropriation Management consists of structuring the budget and allocating and controlling funds In Accordance With State Laws. Budget Certificates Required Pursuant to State Law – No Spending From an Appropriation Can Occur Until Approved by The Budget Director Exceptions – Courts and Legislature Budget Certificate EXECUTIVE DEPARTMENT - DIVISION OF BUDGET CERTIFICATE OF APPROVAL OF AVAILABILITY Purpose __ Appropriation Add (SGR) __ Appropriation Change (SGC) Originating Organization: Batch No(s): __ Interchange (ITR) ______ Certificate Date: 04/01/09 Orig Chapter/Section/Law: 0050/01/09 Reapprop Chapter/Section/Law: cccc/ss/200x Program Name: 01060 123456 Amends Certificate Dated: MM/DD/YY Bill Page & Line: 233/1-12 Bill Page & Line: PPP/LL POLICING THE THRUWAY State Operations Program Total $49,939,000 Interchange From Internal # 123456 $0 Suballocations & Transfers $0 Total Certificate Amount $49,939,000 For services and expenses . . . in accordance with the following schedule: APPROPRIATION ATTRIBUTES Organization Code: 01060 Fund/Subfund: 339-08 Program Code: A13600010 Authority: 090 Internal No. 1234567 Project Code: 01PROJECT Budget Certificate (continued) Cumulative Interchanges Approp Appropriation Approp Appropriation Transfers & Total Previous Line Title Object Amount Suballocations Available Allocation Personal Service - Reg 41 27,714,000 27,714,000 0 Personal Service Temp 42 0 0 0 Overtime/Holiday Comp 46 5,835,000 5,835,000 0 1,458,750 1,458,750 33,549,000 0 8,387,250 8,387,250 Total Personal Service 33,549,000 0 Curent Change Allocation 6,928,500 6,928,500 0 NPS-Supplies & Materials 53 0 0 0 0 NPS-Travel 54 0 0 0 0 NPS-Misc Contractual Services (55, 56) 5 0 0 0 0 NPS-Equipment Acquisition 57 0 0 0 0 NPS-Fringe Benefits 58 15,017,000 15,017,000 0 3,754,250 3,754,250 NPS-Indirect Costs 594 1,373,000 1,373,000 0 343,250 343,250 16,390,000 0 4,097,500 4,097,500 0 12,484,750 12,484,750 49,939,000 (12,484,750) 37,454,250 49,939,000 0 49,939,000 Total NonPersonal Service 16,390,000 0 TOTAL ALLOCATED TOTAL UNALLOCATED TOTALS 49,939,000 0 49,939,000 State Finance Law: Section 24 For all non-federal state operations appropriations by fund type, which at a minimum shall include general fund, special revenue-other funds, capital projects funds, and debt service funds; for personal service appropriations, separate appropriations shall be made for regular personal service, temporary personal service, and holiday and overtime pay; SFL: Section 24 (continued) for nonpersonal service appropriations, separate appropriations shall be made for supplies and materials, travel, contractual services, equipment, and fringe benefits, as appropriate. Budget Reform Appropriation Model – Personal Service State Funds Personal Service Personal Service – Regular Temporary Service Holiday/Overtime Comp Federal, Capital, Debt Service Personal Service Budget Reform Appropriation Model – Non Personal Service State Funds Non Personal Service Supplies & Materials Travel Contractual Services Equipment Fringe Benefits Indirect Costs Capital Projects Grants Debt Service Federal, Capital, Debt Service Non Personal Service Capital Projects Grants Debt Service Current CAS PROGRAM LINE IS APPROPRIATION Details below are Segregations ADMINISTRATION PROGRAM ....................... 4,911,000 Special Revenue Funds - Other / STATE Operations Miscellaneous Special Revenue Fund - 339 Alcoholic Beverage Account PERSONAL SERVICE Personal service--regular ..................... 1,340,000 Holiday/overtime compensation .................. 5,000 Amount available for personal service …… 1,345,000 Budget Reform Model In SFS - Each of these is an Appropriation ADMINISTRATION PROGRAM ............................... 4,911,000 Special Revenue Funds - Other / State Operations Miscellaneous Special Revenue Fund - 339 Alcoholic Beverage Account PERSONAL SERVICE Personal service--regular ............................... 1,340,000 Holiday/overtime compensation .......................... 5,000 Amount available for personal service …… 1,345,000 NONPERSONAL SERVICE Supplies and materials ....................................... 117,000 Travel .................................................................... 37,000 Contractual services ........................................ 2,083,000 Equipment .......................................................... 592,000 Fringe benefits ................................................... 694,000 Indirect costs ........................................................ 43,000 Amount available for nonpersonal service ... 3,566,000 Appropriation Types – Local Assistance Used for GRANT Payments to: Local Governments School Districts Not-for-Profit Organizations Financial Assistance To, Or On Behalf Of, Individuals Local Assistance Appropriation ADMINISTRATION PROGRAM…………….... 467,000 General Fund / Aid to Localities Local Assistance Account - 001 For services and expenses of stabilization grants of up to $50,000 to support the operating expenses of small and mid-sized arts organizations .. 467,000 Appropriation Types – Debt Service Principal and Interest on State Debt Principal and Interest on Public Authority Debt Lease-Purchase and Contractual Obligations for State Facilities and Programs Financed with Non-State Debt Debt-Related Expenses Debt Service Appropriation DEBT SERVICE FUND-GENERAL DEBT SERVICE FUND--311 For payment to the Housing Finance Agency and the Urban Development Corporation for payment of bonds issued to finance the State's housing programs……………..63,000,000 Appropriation Types – Capital Projects State Construction Projects State Assistance for Local Government Projects Construction Management (e.g. Design & Supervision) Capital Projects Appropriation Federal Capital Projects Fund - 291 Hazardous Waste Purpose DEPARTMENT OF ENVIRONMENTAL CONSERVATION For the federal share of the cleanup of hazardous waste sites pursuant to the provision of the federal comprehensive environmental response, compensation and liability act of 1980 reauthorization or amendments thereto including personal service (and other incidental expenses) and suballocation to other state departments and agencies (09FS04F7)……………………………………………10,000,000 Budget Certificate (continued) FEDERAL SECTION: FEDERAL GRANT AWARD CFDA NUMBER PRIMARY INTERNAL NO. GGGGGGGGGG NNNNN NNNNNN CAPITAL PROJECTS SECTION: CCP CODE CCP ACTIVITY AND CLASS CODE CCxxxxxxxxxx PERIOD OF USE 20YR (Note: CCP Code is assigned by DOB, Class Code is provided in appropriation act.) Transactions That Affect Appropriation Records Contract Encumbrance – Reservation of Unspent Balance Voucher Payments – Reduce Unspent Appropriation/Segregation Balance Payroll Transactions Journal Vouchers - Transfer expenditures Refunds of Appropriation Expense (AC1286) Repayment of Appropriated Loan Receivable Bondable Capital Projects (Activity Codes) Restrictive Language MUST Make Sense Embedded in Appropriations Added to Language Bills Movement of Appropriation Authority There are 4 types: Suballocations Interchanges Transfers Allocations (New in 2011) It is important to understand the differences between these and the proper way to reappropriate the available funds if necessary. Suballocations Authorizes the movement of authority between agencies within the same fund and for the same program expenditures as appropriated. The appropriation authority maintains its original appropriation identity including program name and program code. It is not added to an existing appropriation within the receiving agency. To continue the availability of funds, the original appropriation must be reappropriated. OSC will extend the lapse date of the original appropriation and all suballocations associated with it. Interchanges Movement of authority between appropriations within an agency and fund. Appropriation authority which has been interchanged takes on the identity of the receiving appropriation. To continue the availability of funds, the appropriation receiving the interchange must be reappropriated (rather than the donor appropriation). Interchanges State Operations and Aid to Localities interchanges are authorized by Section 51 of State Finance Law. Allows for interchanges within the same agency, fund/subfund and program without limit. Allows for interchanges among programs within the same agency and fund/subfund as long as the total amount appropriated for any program does not increase or decrease by more than the aggregate of 5% of the first $5 million, 4% of the second $5 million and 3% of the amounts in excess of $10 million. Interchanges Capital Project interchanges are authorized by Section 93 of State Finance Law. Allows for interchanges within the same agency, comprehensive construction program (CCP) and purpose without limit. Allows for interchanges among purposes within the same agency and CCP as long as the total amount appropriated for such purpose does not increase or decrease by more than the aggregate of 25% of the first $5 million, 20% of the second $5 million, 15% of the third $5 million and 10% of the amounts in excess of $15 million. Transfers Transfers authorize the movement of appropriation authority between appropriations within or between agencies, funds and/or programs. Transfers between two enacted appropriations The amount transferred-in is additive to the receiving program appropriation. The appropriation attributes and period of availability (including lapse date) of the receiving appropriation remain unchanged. Transfers (continued) Transfers requiring the creation of a new appropriation record in the receiving fund or agency The receiving appropriation will be assigned a lapse date pursuant to §40 of the State Finance Law that made may be different than the lapse date of the appropriation from which the transfer was made. These types of transfers are problematic to administer and should be discouraged. Transfers (continued) To continue the availability of funds, the appropriation receiving the transfer must be reappropriated (rather than the donor appropriation). Apportionments (NEW in 2011) Needed to accommodate special language in Appropriations that cannot be assigned to Rulesets established within SFS. These do not have specific statutory authority but are necessary to satisfy SFS Committment Control rules. Apportionments Appropriation Ruleset #1 State Funds Model Uses Level 4 of Account KK Tree Appropriation Ruleset #2 Federal, Capital & Debt Funds Model Uses Level 3 of Account KK Tree Personal Service – Regular Temporary Service Holiday/Overtime Compensation Supplies & Materials Travel Contractual Services Equipment Fringe Benefits Personal Service Non Personal Service Fringe Benefits Indirect Costs Indirect Costs Capital Projects Capital Projects Grants Grants Debt Service Debt Service Apportionments (The PS amount must be apportioned to a separate appropriation line in SFS) Federal Capital Projects Fund - 291 Hazardous Waste Purpose DEPARTMENT OF ENVIRONMENTAL CONSERVATION For the federal share of the cleanup of hazardous waste sites pursuant to the provision of the federal comprehensive environmental response, compensation and liability act of 1980 reauthorization or amendments thereto including personal service (and other incidental expenses) and suballocation to other state departments and agencies (09FS04F7)…………………10,000,000 Melody Goetz Assistant Director Bureau of State Accounting Operations Accounting for Revenues Taxes: General Fund vs. Dedicated Refunds Check Replacements Miscellaneous Receipts: Agency-Derived Revenues Statutory Authority to Collect Statutory Authority to Deposit Accounting for Revenues (continued) Federal Grants – Payment Management Based on disbursements made Relies on Grant Award contained in Appropriation/Segregation records Revenue Contracts Repayment of Appropriated Loans Receivable (ALR) How Revenues Are Recorded in CAS Forms Report of Monies Received (AC909) Refund of Appropriation Expenditures (AC1286) Salary Refunds (AC230) Report of Moneys Received Wire transfers and checks Sweep money from sole custody accounts not on the CAS system Unidentified receipts (object code 35390) Reimbursements of accounts receivables (ALR’s & Cash Advances) Agency operations (fees, fines, sales, taxes, federal grants) Revenue contracts or repayment agreements Expenditure refunds relating to a lapsed appropriation (object code 35327) Refund of Appropriation Refund of Appropriation (AC1286) is used by agencies to request a credit to an active appropriation, for expenditures made from that appropriation. These represent a reversal of the original voucher. Acceptable Reasons for Refunds Payments made in error and a check will not be reissued (PMT) Refund of personal service expenses (SVC) Other than personal service reimbursements from non-state entities (telephone, fax, photocopier usage) (NPS) Incorrect payee or amount and a check will be reissued (INC) Audit disallowances and recoveries (AUD) Treasury write-offs of checks returned (Treasury use only) (TSY) Reduction of cash advance accounts (ADV) All other refunds and reimbursements authorized in state appropriation or statute (REI) Chart of Accounts The State’s system for accounting is very complex and includes dozens of accounting codes that includes agency, cost center, fund, subfund (account), year program, authority, project, activity, object, etc., etc., etc., etc… Transaction Account Codes 1xxxx 2xxxx Assets Liabilities – Vouchers Payable, Retainage (OSC) 3xxxx 4xxxx 5xxxx Taxes & Revenues Personal Service NonPersonal Services (Dept Operations) 6xxxx 7xxxx Grants Capital Projects FUND ACCOUNTING What is a fund? Why do we have funds? How can I get information on my funds? How are funds affected each year? What are my responsibilities once a fund is assigned to my agency? GENERAL LEDGER ACCOUNTING Funds Defined The State Finance Law Defines and Mandates the Use of Seven Fund Types Accounting Standards set by GASB Separate Accounting Entity Self-Balancing Set of Accounts Used to Record Financial Information Used to Provide Financial Reports to Interested Parties GENERAL LEDGER ACCOUNTING Accounts or Subfunds A SUBFUND is a subdivision of a fund Specific financial transactions and financial resources are recorded and managed Cash is separate and not commingled with another account Example: State Special Revenue Fund-339 Policing The Thruway Account (339-08) Love Your Library Fund (339-LL) GENERAL LEDGER ACCOUNTING - FUND TYPES GOVERNMENTAL FUNDS General Not required to be deposited to another fund Special Revenue Specific revenue sources Legally restricted for specified purposes Capital Projects Acquisition and construction of capital facilities GENERAL LEDGER ACCOUNTING - FUND TYPES GOVERNMENTAL FUNDS (continued) Debt Service Resources and payment of P&I on GO, LP and other contractual obligations Permanent Legally restricted to available earnings Fund Accounting Reporting Hierarchy Governmental Funds Group General Fund Special Revenue State Special Revenue Fund 339 Policing the Thruway Account - 08 Capital Projects Debt Service General Ledger Accounting Fund Types (continued) Proprietary Funds Enterprise Operate like a business Commissaries Sheltered Workshops Internal Service State agencies providing goods and services for other State agencies OGS Centralized Services Correctional Industries General Ledger Accounting Fund Types (continued) Fiduciary Private Purpose Trust P&I benefit individuals, private organizations or other governments Agriculture and Milk Producers Agency Monies held in trust for someone else Health Insurance Lottery Prizes Pension Monies held in trust for the members and beneficiaries Creating Funds and Accounts Legislation in Budget Bills or Special Acts State Finance Law – Article 6 Statutory authorization § 92-g. Motorcycle safety fund. 1. There is hereby established in the joint custody of the state comptroller and the commissioner of taxation and finance a special fund to be known as the "motorcycle safety fund". fees collected pursuant to paragraph (c-1) of subdivision two of section five hundred three of the vehicle and traffic law . Moneys of the fund, following appropriation by the legislature, shall be made available to the department of motor vehicles only for the administration and implementation of the motorcycle safety program established pursuant to section four hundred ten-a of the vehicle and traffic law. Creating Funds and Accounts Other Purposes Special Accounting Required Federal Grant funds Agency Request Temporary until legislation is passed Sole Custody Funds Funds or Accounts held in the Sole Custody of a State Agency outside of CAS Patient or Inmate Funds HCRA Pools Commissary Accounts Annual Web-Based Reporting 1,400 reports filed for Fiscal Year ending March 31, 2010 Updated each year for legislative/administrative changes Reported in the Comptroller’s Annual Reports SFL §107 requires custodians to report month end cash balance to the State Treasurer for inclusion in the State Registry (See Accounting Bulletin A-597) Short-Term Investment Pool (STIP) - WHAT IS IT ? State Finance Law: Section 98-a Represents: State’s General Checking Account Includes ALL Joint Custody Funds of the State Treasury Short-Term Investment Pool (STIP) (continued) Investment Policies Distribution based on: Average Daily Balance Average STIP Balance Monthly Interest Yield State Finance Law - If Temp Loans are authorized, then agencies must request interest! Interest is Shared with all Funds authorized to receive interest Financial Reporting OSC Website Resources for State Agencies OSC Website - Information for State Agency Representatives Fund Classification Page Information for State Agencies OSC WEBSITE – Information for State Agencies USER PROCEDURE MANUALS Bulletins FORMS Find Information About Find Information About…. College Savings Program Employment Opportunities at the Comptroller’s Office Freedom of Information Law (FOIL) Government Audits Government Transparency Legal Opinions Local Government Leadership Institute Local Government Training Clearinghouse NYS & Local Retirement System NYS Debt Management NYS Financial Reports NYS Public Authorities Oil Spill Fund Protecting Your Money Procurements Reporting Government Fraud OSC Website STATE FINANCIAL REPORTS Cash Basis Reports Annual Report on State Funds: 2002 through 2010 Monthly Reports on State Funds Receipts and Disbursements: 2001 through 2010 GAAP Reports Questions? Thank You