FIACCT 07-03_00 Revenues- Dedicated Credits- Budgeting, Monitoring, and Lapsing

Department

An agency, division, department, commission, board, council, institution, officer, corporation, office, committee, authority, laboratory, library, unit, bureau, panel, or other administrative unit of the state.

For purposes of this policy, department does not include the legislative branch, higher education, a public education entity not administered by the State, or an independent agency as defined in UCA 63J-2-102(6).

Line Item or Line-Item Appropriation

A separate funding line in the annual appropriation act or any supplemental appropriation acts, or a separate funding line within specific legislation.

Appropriation Unit Code

A code assigned in FINET that rolls up to the line item funded in the appropriation acts.

Revenue Source Code

A FINET code assigned by State Finance to classify a revenue according to its source.

Revenue Budget Line

The level where detailed revenue budgets are established in FINET. For purposes of this policy, a revenue budget line is defined to include a minimum of a fund, agency, appropriation unit code, revenue budget level organization code, and a revenue source code.

Program

A function or service provided by a department for which the department receives revenue.

Work Program

The combination of appropriation, revenue, and expenditure budgets as recorded in FINET. For more information see the BUDGETS section of this manual.

Dedicated Credit Revenue

Revenues generated by a state agency that are recorded into an account for expenditure on a separate line item and program. For governmental funds, these are revenues recorded in the FINET revenue source codes from 2000–2999.

Exemption

An annual process used by a department and the Division of Finance to exempt dedicated credit revenue from lapsing.

Excess Revenues

Dedicated credit revenues over and above 125% of the original appropriated amount for each line item and revenue source code.

Lapsing

The process used by the Division of Finance at the end of a fiscal year to transfer excess Dedicated Credit revenues from the departmental accounts into the General Fund or other appropriate fund as free or restricted revenue.

A.

In preparing its annual budget request for the Governor’s Office of Planning and Budget (GOPB), each
department will include estimates for each dedicated credit revenue source. If a department fails to include the
estimate of a dedicated credit revenue source in its annual budget, the Division of Finance will lapse the revenue
to the General Fund or other appropriate fund as free or restricted revenue, as required by UCA 63J-2-202(1)(c).

B.

Following each legislative session the Division of Finance will obtain from the Office of the Legislative Fiscal Analyst (LFA) the detail of appropriated dedicated credit amounts by revenue source code within line item. The Division of Finance will forward to the departments their portion of the detail, from which the departments will
set up their original revenue budget lines in FINET. Within a line item, departments will obtain approval from the department’s LFA for any changes by revenue source code unless otherwise approved by the Division of Finance in writing. The Division of Finance will obtain confirmation of changes directly from the Office of the LFA.

C.

For each line item, departments will enter original revenue budget lines in FINET using the LFA’s detailed schedule of appropriated amounts by revenue source code within line item. All revenue budget lines should include a fund, agency, appropriation unit, revenue budget level organization code, and a revenue source code.

D.

After original revenue budget lines in FINET have been reconciled by the Division of Finance to the Legislative Fiscal Analyst’s detail, no department revisions or changes should be made until the original budget flag has been set in FINET unless requested by the Division of Finance.

E.

After the FINET original budget flag has been set, when a dedicated credit revenue is expected to differ significantly (up or down) from the current revenue budget line amount, the department should amend its work program by increasing or decreasing the appropriation and revenue budgets in FINET. When spending of dedicated credit revenue is impacted, expenditure budgets also must be modified in FINET. This applies to all dedicated credit revenues whether exempted from lapsing or not. The revised revenue budget line amount should
be a best-estimated, annual amount.

F.

All appropriation budget modifications must be approved by and coordinated through the Division of Finance, as detailed in the Budgets – Appropriation Budgets – Modifying policy in this section of the manual.

G.

Before fiscal yearend closeout, the Division of Finance will lapse excess dedicated credit revenue from the departmental accounts into the General Fund or other appropriate fund as free or restricted revenue (UCA 63J-2-202).

H.

Departments may expend excess dedicated credit revenues over 125% of the original line item and program appropriation amount only if the revenue is exempted from lapsing for one of the reasons listed below.

Agencies need not take any action to obtain the following exemptions:

• Revenues recorded into non-governmental funds (Internal Service Funds, Enterprise Funds, and Fiduciary Funds.)
• Revenues recorded into Capital Projects Funds and Debt Service Funds.
• Revenues appropriated as part of a line item that is designated as non-lapsing in the appropriation acts, or revenues specifically designated as non-lapsing by legislation.
• Revenues received by the Attorney General from billings for professional services.
• Revenues received by departments from the Division of Surplus Property for the sale of department property that are recorded in a dedicated credit revenue source code according to UCA 63A-9-801(3)(c).
• Revenues recorded into funds designated by statute as restricted special revenue funds.

Agencies must request in writing the following exemptions (see the procedures section below):

• Federal revenues and the related pass-through or the related state match paid by one department to another or revenues that reduce Federal revenue drawdowns.
• Revenues from contracts (a written legal agreement between a department and another party, where the department provides goods or services in return for payment at an agreed upon price).
• Programs whose revenues represent over 90 percent of the funding for that program.
• New revenue for the first fiscal year that a new program is established where the department did not include an estimate of the new revenue in its annual budget request because the revenue had not yet been established or authorized by the Legislature.
• Donations or gifts designated by the donor for a specific department purpose or program.

I.

Any expenditure in excess of amounts appropriated may not be used to permanently increase personnel within a department unless approved by the Legislature

J.

Departments and the Division of Finance should monitor dedicated credit original budgets to actual revenues, by line item and revenue source code, unless otherwise approved by the Division of Finance. For revenues in lapsing programs, the Division of Finance will notify departments if revenues exceed 125 percent of the original
budget amount by revenue source code within a line item, through monthly reports sent to agencies from January month end through fiscal year closeout.

Responsibility

Annual Budget Process

Action

Governor’s Office

Distribute instructions, forms, and other support materials to be used in the budget request process. Coordinate instructions and forms with the Division of Finance requirements.

Department

Complete forms and submit to Governor’s Office. Ensure that estimates of all dedicated credits are included in the budget request.

Leg. Fiscal Analyst

After each Legislative session, provide the Division of Finance with a detailed schedule of dedicated credit revenue by line item and revenue source code.

Division of Finance

Reconcile by line item, the Legislative Fiscal Analyst’s schedule to the appropriation acts. Resolve differences with the LFA’s Office. Forward the LFA’s line-item reconciled data (with revenue source detail) to each department.

Department

Review the LFA’s detailed schedule by line item and revenue source code. Work with the department’s Fiscal Analyst on any needed changes within line item. Request the Fiscal Analyst to notify the Division of Finance’s State Revenue Accountant of any
changes.

Process FINET revenue budget lines that agree to the Fiscal Analyst final agreed upon detail. Initially, process budget detail through the Division of Finance’s Budget Builder process. After Budget Builder data is loaded into FINET, process corrections or changes in FINET using Revenue Budget (RB) documents.

Leg. Fiscal Analyst

Notify in writing, by e-mail, or by an updated detailed schedule to the Division of Finance’s State Revenue Accountant, any LFA approved changes to the original detailed schedule of dedicated credit revenue.

Division of Finance

After departments have entered their revenue budget lines, reconcile to the finalized detail provided by the LFA’s office. Resolve differences with each department.

Document that all FINET dedicated credit revenue budget lines are correct and set the original budget flag in FINET no later than June 30.

Division of Finance

Beginning with the January month end in each fiscal year and initially using previous fiscal year approved dedicated credit exemptions, generate month end dedicated credit monitoring and exemption reports by line item and revenue source code, comparing
current year revenues to the amounts appropriated. Distribute applicable sections to each department. Identify nonexempt revenues that exceed 125% of the amount appropriated and highlight these excess revenues on the monthly reports for department follow-up.

Department

Using the month end monitoring and exemption reports, compare current year revenue to the amount appropriated by line item and revenue source code, identify revenues above current year appropriations, investigate, and determine needed actions.

Division of Finance

Using the previous fiscal year’s approved dedicated credit exemptions, annually prepare and distribute a turnaround document for use by each department in providing an updated, approved current year list of existing dedicated credit exemptions. For new or
previous non-exempt dedicated credit revenue, provide form FI 43, Dedicated Credit Monitoring Miscellaneous Exemption; or use form FI 44, Dedicated Credit Monitoring Program Funded by 90% Exemption to request new exemptions. Work with departments in resolving exemption questions.

Department

Update for the current year, approve, and return the turnaround document of existing dedicated credit exemptions to the Division of Finance. Note that a previous year new revenue exemption is not a valid exemption in the current year.

For a new or previous non-exempt dedicated credit revenue, prepare an exemption request using either form FI 43, Dedicated Credit Monitoring Miscellaneous Exemption or form FI 44, Dedicated Credit Monitoring Program Funded by 90% Exemption.

Approve and forward the request to the Division of Finance’s State Revenue Accountant.

Division of Finance

Review the updated turnaround document of existing dedicated credit exemptions received from each department. Review and approve new exemption requests. Update exemption data used to generate the dedicated credit monitoring and exemption reports.

Department

If projected or actual revenues for a program differ significantly (up or down) from the current revenue budget line amounts, modify the appropriation, revenue, and expenditure budgets in FINET. (Non-lapsing and exempt programs also should be increased.) Coordinate appropriation budget modifications through the Division of
Finance. See the policies on Budgets – Appropriation Budgets – Modifying and Budgets – Detail Revenue/Expense Budgets – Modifying in the BUDGET section of this manual for instructions.

Division of Finance

Identify a lapsing date just prior to the yearend agency closeout date and coordinated with all other yearend closing due dates. Publish this lapsing date as part of the yearend closing instructions.

At fiscal yearend and throughout the yearend closeout process, increase the frequency of the update and distribution of monitoring and exemption reports. Notify departments of specific excess revenues to be lapsed.

Department

Notify State Finance’s State Revenue Accountant which organization and appropriation units to use in lapsing excess dedicated credits.

Note: If State Finance is not notified, State Finance may use any valid organization and appropriation code.

Because the lapsing entry will be posted in FINET before closing packages are due, lapsing amounts should not be included in an agency’s closing package.

Division of Finance

On the lapsing date established, process a Journal Voucher (JV) in FINET to lapse excess revenues into the General Fund or other appropriate fund as free or restricted revenue.

The revenue source code is not reduced for lapsing amounts so that historical data by revenue source code reflects actual revenue. Instead, a separate lapsing dedicated credit revenue source code is used and recorded with a “negative revenue.”

After the JV in FINET is processed, notify departments of the JV lapsed revenue coding block and amount.

After the final cutoff for agency closeout, rerun the monitoring and exemption reports, and identify any needed final adjustments to the lapsed amounts. Coordinate these adjustments with the appropriate agency personnel and with the Division of Finance personnel processing the closing packages