Transcript Slide 1

Office of Operations
2009 Fall Conference
Navigating Uncertain Times
Fundamentals of
Governmental Accounting
Debbie Hilson
Mike Luft
Bill McCormick
October 21-22, 2009
Debbie Hilson
Manager, Appropriation Section
Bureau of State Accounting Operations
Email: [email protected]
Office of Operations 2009 Fall Conference
Central Accounting System (CAS)
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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.
Office of Operations 2009 Fall Conference
State Government Structure
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Executive – ALL State Departments
and Agencies
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Legislative – Assembly & Senate
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Judicial – Court Administration
Office of Operations 2009 Fall Conference
B u d g et O v erv iew
A p ril - M arch
Ag e n c ie s p r e p a r e
B u d g e t R e q u e s ts
fo r N e x t Y e a r
Budget
Reques ts
J une - S eptem ber
Budge t
C e r tific a te s
April - M ay
B udget Execut ion,
C ont rol and
A ccount abilit y
DOB
R e v ie w s
Exec utive
Review
Legis lative
Review
O c tober - D ec em ber
E x e c u tiv e
D e c is io n s
E x e c u tiv e
Budge t
R e le a s e d
F in a n c ia l
P la n
Ap p r o p r ia tio n s
E s ta b lis h e d
Le g is la tiv e
R e v ie w &
E n a c tm e n t
Office of Operations 2009 Fall Conference
J anuary - M arc h
NEW YORK STATE FINANCIAL CYCLE
Executive and
Legislative
Approval
Agency Budget
Requests
Appropriations,
Segregations,
Cost Center
PLAN
ESTABLISH
CONTROL
Financial
Statement
EVALUATE
Management
Reporting
Revenues
EXECUTE
Budgetary
Reporting
Encumbrances
and
Expenditures
Office of Operations 2009 Fall Conference
Statutes That Guide Us
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The State Constitution
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State Finance Law
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Article VII Appropriation Bills
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Article VII Language Bills
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Other Consolidated Laws
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Federal Laws and Regulations
Office of Operations 2009 Fall Conference
State Constitution
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Requires Annual Budget Submission
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Restricts Payments From State Treasury
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Defines Appropriation/Reappropriation
Office of Operations 2009 Fall Conference
State Finance Law – Key Fiscal
Provisions
 Article
2 - GENERAL FISCAL PROVISIONS
§ 2 - Definitions
§ 2A - Additional Definitions
§ 3 - Fiscal Year
§ 4 - Payments, Transfers and Deposits
§ 7 - Duties of Dept of Taxation & Finance
§ 8 - Duties of the Comptroller
§ 8B - Additional Duties of the Comptroller
 Article
6 - (§ 70 - 99-S) FUNDS OF THE STATE
 Article
7 - (§100-122-A) ACCOUNTS & AUDITS
Office of Operations 2009 Fall Conference
State Finance Law
Article 3 – The Budget
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§ 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
Office of Operations 2009 Fall Conference
Appropriation Accounting
In this segment, we will:
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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
Office of Operations 2009 Fall Conference
Executive Budget Submission
Legislative Session Begins
 Legislature convenes on the first Wednesday after the
first Monday in January.
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
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Third Tuesday after the first Monday in January,
except in years following gubernatorial elections when it
must be submitted by February 1.
Office of Operations 2009 Fall Conference
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.
Office of Operations 2009 Fall Conference
Article VII
Appropriation Bills
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Public Protection & General Government
Legislature and Judiciary
Debt Service
Education, Labor & Family Assistance
Health and Mental Hygiene
Transportation, Economic Development and
Environmental Conservation
Office of Operations 2009 Fall Conference
Article VII
Language Bills
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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.
Office of Operations 2009 Fall Conference
Budget Amendments
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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
Office of Operations 2009 Fall Conference
Appropriation Bills Become Law
Executive Budget Appropriations (those
recommended by the Governor) are Law
Immediately Upon Enactment by the Legislature
EXCEPT For:
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Legislature and Judiciary
Additions by the Legislature
Office of Operations 2009 Fall Conference
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:
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By a State Dept or Agency
For a Named Program
Payable From A Specified Fund/Account
For Specified Purposes, Activities or Projects
Office of Operations 2009 Fall Conference
Appropriation Periods
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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
Office of Operations 2009 Fall Conference
Deficiency Appropriation
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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.
Office of Operations 2009 Fall Conference
Appropriation Types –
State Operations
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Personal Service
Supplies and Materials
Travel
Contractual Services
Equipment and Maintenance
General State Charges including Employee
Fringe Benefits
Office of Operations 2009 Fall Conference
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
Office of Operations 2009 Fall Conference
Appropriation Types –
Debt Service
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Principal & Interest on State Debt
Principal & Interest on Public Authority Debt
Lease-Purchase and Contractual Obligations
for State Facilities and Programs Financed
with Non-State Debt
Debt-Related Expenses
Office of Operations 2009 Fall Conference
Appropriation Types –
Capital Projects
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State Construction Projects
State Assistance for Local Government
Projects
Construction Management (e.g. Design &
Supervision)
Office of Operations 2009 Fall Conference
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.
Office of Operations 2009 Fall Conference
Appropriation Details
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POLICING THE THRUWAY PROGRAM
Special Revenue Funds - Other / State Operations
Miscellaneous Special Revenue Fund - 339
New York State Thruway Authority Account
Personal service--regular........................... 27,714,000
Holiday/Overtime compensation………...……………5,835,000
Fringe benefits .....................................…….. 15,017,000
Indirect costs .......................................…………. 1,373,000
49,939,000
Office of Operations 2009 Fall Conference
Appropriation Example
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What is an Appropriation?
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POLICING THE THRUWAY PROGRAM $49,939,000
Budget Certificates Are Used to:
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Allocate or Segregate appropriated funds for specified
purposes, activities or objects:
Personal service--regular .............................. 27,714,000
Holiday/Overtime compensation………………………….. 5,835,000
Fringe benefits ...........................………………….….. 15,017,000
Indirect costs ..........................................…………. 1,373,000
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Control Spending from appropriated funds (e.g., quarterly
allocations) and to distribute lump-sum appropriations within
State agencies.
Office of Operations 2009 Fall Conference
Budget Certificates Required
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Pursuant to State Law – No Spending From an
Appropriation Can Occur Until Approved by The
Budget Director
Exceptions – Courts & Legislature
Office of Operations 2009 Fall Conference
Budget Certificate
EXECUTIVE DEPARTMENT - DIVISION OF BUDGET
CERTIFICATE OF APPROVAL OF AVAILABILITY
Purpose
__ Appropriation Add (SGR)
__ Appropriation Change (SGC)
__ Interchange (ITR)
Certificate Date:
Orig Chapter/Section/Law:
Reapprop Chapter/Section/Law:
Program Name:
Originating Organization: 01060
Batch No(s): 123456
______
04/01/09
0050/01/09
cccc/ss/200x
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
Internal No. 1234567
Organization Code:
01060
Fund/Subfund:
339-08
Program Code: A13600010
Authority:
090
Project Code: 01PROJECT
Office of Operations 2009 Fall Conference
Budget Certificate (cont’d)
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
Office of Operations 2009 Fall Conference
Budget Certificate (cont’d)
FEDERAL SECTION:
FEDERAL GRANT AWARD
CFDA NUMBER
PRIMARY INTERNAL NO.
GGGGGGGGGG
NNNNN
NNNNNN
CAPITAL PROJECTS SECTION:
CCP CODE
CCP
ACTIVITY & CLASS CODE
CCxxxxxxxxxx
PERIOD OF USE
20YR
(Note: CCP Code is assigned by DOB, Class Code is provided in appropriation act)
Office of Operations 2009 Fall Conference
Transactions That Affect
Appropriation Records
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Contract Encumbrance – Reservation of Unspent Balance
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Voucher Payments – Reduce Unspent Approp/Segr Balance
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Payroll Transactions
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Journal Vouchers - Transfer expenditures
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Refunds of Appropriation Expense (AC1286)
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Repayment of Appropriated Loan Receivable
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Bondable Capital Projects (Activity Codes)
Office of Operations 2009 Fall Conference
Restrictive Language MUST
Make Sense
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Embedded in Appropriations
Added to Language Bills
Office of Operations 2009 Fall Conference
Movement of Appropriation Authority
There are 3 types:
 Suballocations
 Interchanges
 Transfers
It is important to understand the differences
between them and the proper way to reappropriate
the available funds if necessary.
Office of Operations 2009 Fall Conference
Suballocations
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Authorizes the movement of authority between
agencies within the same fund and for the same
program expenditures as appropriated.
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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.
Office of Operations 2009 Fall Conference
Interchanges
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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).
Office of Operations 2009 Fall Conference
Interchanges
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State Operations and Aid to Localities
interchanges are authorized by Section 51 of
State Finance Law.
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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.
Office of Operations 2009 Fall Conference
Interchanges
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Capital Project interchanges are authorized by
Section 93 of State Finance Law.
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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.
Office of Operations 2009 Fall Conference
Transfers
Transfers authorize the movement of appropriation
authority between appropriations within or between
agencies, funds and/or programs.
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Transfers between two enacted appropriations
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Transfers requiring the creation of a new appropriation record in the receiving
fund or agency
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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.
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.
To continue the availability of funds, the appropriation receiving the
transfer must be reappropriated (rather than the donor appropriation).
Office of Operations 2009 Fall Conference
Bill McCormick
Manager, Revenue and Receivable
Accounting, and Check Control Section
Bureau of State Accounting Operations
Email: [email protected]
Office of Operations 2009 Fall Conference
Accounting for Revenues
♦ Taxes:
♦ General Fund vs. Dedicated
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Refunds
Check Replacements
Miscellaneous Receipts:
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Agency-Derived Revenues
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Statutory Authority to Collect
Statutory Authority to Deposit
Office of Operations 2009 Fall Conference
Accounting for Revenues (con’t.)
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Federal Grants – Payment Management
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Based on disbursements made
Relies on Grant Award contained in
Appropriation/Segregation records
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Revenue Contracts
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Repayment of Appropriated Loans Receivable
(ALR)
Office of Operations 2009 Fall Conference
How Revenues Are Recorded in CAS
Forms
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Report of Monies Received (AC909)
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Refund of Appropriation Expenditures (AC1286)
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Salary Refunds (AC230)
Office of Operations 2009 Fall Conference
Report of Moneys Received
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Wire transfers and checks
Agency operations (fees, fines, sales, taxes,
federal grants)
Sweep money from sole custody accounts not on
the CAS system
Unidentified receipts (object code 35390)
Revenue contracts or repayment agreements
Expenditure refunds relating to a lapsed
appropriation (object code 35327)
Reimbursements of accounts receivables (ALR’s &
Cash Advances)
Office of Operations 2009 Fall Conference
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.
Office of Operations 2009 Fall Conference
Acceptable Reasons for Refunds
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Payments made in error and a check will not be reissued (PMT)
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Refund of personal service expenses (SVC)
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Other than personal service reimbursements from non-state
entities (telephone, fax, photocopier usage) (NPS)
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Incorrect payee or amount and a check will be reissued (INC)
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Audit disallowances and recoveries (AUD)
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Treasury write-offs of checks returned (Treasury use only) (TSY)
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Reduction of cash advance accounts (ADV)
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All other refunds and reimbursements authorized in state
appropriation or statute (REI)
Office of Operations 2009 Fall Conference
Chart of Accounts
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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……………………………
Office of Operations 2009 Fall Conference
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
Office of Operations 2009 Fall Conference
Mike Luft
Manager, General Ledger Section
Bureau of State Accounting Operations
Email: [email protected]
Office of Operations 2009 Fall Conference
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?
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Office of Operations 2009 Fall Conference
GENERAL LEDGER ACCOUNTING
Funds Defined
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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
Office of Operations 2009 Fall Conference
GENERAL LEDGER ACCOUNTING
Accounts or Subfunds
An ACCOUNT is a subdivision of a fund
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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
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Policing The Thruway Account (339-08)
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Love Your Library Fund (339-LL)
Office of Operations 2009 Fall Conference
GENERAL LEDGER ACCOUNTING- FUND TYPES
GOVERNMENTAL FUNDS
 General
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Special Revenue
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Acquisition and construction of capital facilities
Debt Service
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Specific revenue sources
Legally restricted for specified purposes
Capital Projects
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Not required to be deposited to another fund
Resources and payment of P&I on GO, LP and other contractual
obligations
Permanent
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Legally restricted to available earnings
Office of Operations 2009 Fall Conference
FUND ACCOUNTING
REPORTING HIERARCHY
G O VE R N M E N T AL FU N D S G RO U P
G EN ERAL
FUND
SPEC IAL
R EVEN UE
C APITAL
PR O JEC TS
D EBT
SERVICE
STATE SPECIAL
REVENUE FUND 339
PO LICING THE
THRUW AY ACCO UNT - 08
Office of Operations 2009 Fall Conference
EXAMPLE
General Ledger Accounting
Fund Types (Cont’d)
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Proprietary Funds
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Enterprise
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Operate like a business
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Commissaries
Sheltered Workshops
Internal Service
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State agencies providing goods and services
for other State agencies
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OGS Centralized Services
Correctional Industries
Office of Operations 2009 Fall Conference
General Ledger Accounting
Fund Types (Cont’d)
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Fiduciary
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Private Purpose Trust
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Agency
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P&I benefit individuals, private organizations or other
governments
Agriculture and Milk Producers
Monies held in trust for someone else
Health Insurance
Lottery Prizes
Pension
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Monies held in trust for the members and beneficiaries
Office of Operations 2009 Fall Conference
Creating Funds & Accounts
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Legislation in Budget Bills or Special Acts
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State Finance Law – Article 6
Statutory authorization
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§ 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.
Office of Operations 2009 Fall Conference
Creating Funds & Accounts
Other Purposes
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Special Accounting Required
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Federal Grant funds
Agency Request
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Temporary until legislation is passed
Office of Operations 2009 Fall Conference
Sole Custody Funds
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Funds or Accounts held in the ‘Sole Custody’
of a State Agency outside of CAS
Patient or Inmate Funds
 HCRA Pools
 Commissary Accounts
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Annual Web-Based Reporting
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1,421 reports filed for Fiscal Year ending March 31, 2009
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)
Office of Operations 2009 Fall Conference
Financial Reporting
Office of Operations 2009 Fall Conference
OSC Website - Information for State Agencies
Procedure Manuals, Bulletins,
Fund ClassificationProcedure
Manual Manuals,
Bulletins, Fund
Classification Manual
Office of Operations 2009 Fall Conference
FUND CLASSIFICATION MANUAL
ALL
FUNDS
OF THE
STATE
Office of Operations 2009 Fall Conference
FUND CLASSIFICATION MANUAL
Office of Operations 2009 Fall Conference
Fund Classification Page
Office of Operations 2009 Fall Conference
OSC WEBSITE – USER PROCEDURE MANUALS
User
Procedures
Manuals
Office of Operations 2009 Fall Conference
USER PROCEDURE MANUALS
Office of Operations 2009 Fall Conference
OSC Website –
PRESS RELEASES & REPORTS
Press
Releases
Financial Reports
Financial Reports
Office of Operations 2009 Fall Conference
OSC Website - STATE FINANCIAL REPORTS
Office of Operations 2009 Fall Conference
Financial Statement Presentation
Office of Operations 2009 Fall Conference
Short-Term Investment Pool (STIP)
WHAT IS IT ?
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State Finance Law: Section 98-a
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Represents:
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State’s General Checking Account
Includes ALL Funds of the State Treasury
Office of Operations 2009 Fall Conference
Short-Term Investment Pool (STIP) (cont’d)
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Investment Policies
Interest is Shared with all Funds authorized
to receive interest
Distribution based on:
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Average Daily Balance
Average STIP Balance
Monthly Interest Yield
State Finance Law - If Temp Loans are
authorized, then agencies must request
interest !
Office of Operations 2009 Fall Conference
Questions?
Thank You
Office of Operations 2009 Fall Conference