3-1: Budget and major revenue requirements

Effective: July 1, 1994
Revised: September 23, 2026
References: Utah Code 63J-1-102, Utah Code 63J-1-104, Utah Code 63J-1-105, Utah Code 63J-1-201, Utah Code 63J-1-206, Utah Code 63J-1-209, Utah Code 63J-1-217, Utah Code 63J-1-601, 3-3: Budget modifications and closeout

Purpose

This policy outlines the requirements for agencies to develop budgets in Vantage Financial, the state financial system, to ensure compliance with legislative appropriations and state law.

Definitions

Agency – Any agency, board, bureau, commission, office, department, or other administrative subunit of the executive, legislative, and judicial branches of state government.

Appropriation budget – The total budget available to spend for an appropriation unit. This is the level at which spending is controlled statewide. It may include:

State fund and account appropriations
Federal funds
Dedicated credits
Expendable receipts
Revenue transfers
Carry forward or nonlapsing beginning balances

Appropriation unit – Represents a program defined by the legislature within a line item. It’s used to organize funding for budgeting and tracking in Vantage Financial and may include both appropriated and non-appropriated funds.

BGAA – Budget Generation and Adjustment Authorization transaction in Vantage Financial.

Budget execution plan – The agency’s approved operating budget stored in the statewide financial system through BGAA transactions in Vantage Financial. It documents planned revenues, expenditures, and appropriations and is used to manage and control budget activity throughout the fiscal year.

Detailed revenue and expenditure budget – The working budget agencies use day-to-day. Revenue budgets are set up for each type of revenue collected. Expenditure budgets are set up for each type of spending. These budgets allow transactions to be processed in Vantage Financial and help agencies manage their operations.

EAC – The Legislative Executive Appropriations Committee.

Expendable receipt – Funds collected by a government agency from non-state or external sources (such as grants, private donations, or specific program rebates) that are designated for specific expenditures. Unlike regular tax revenue, they aren’t typically limited by standard legislative appropriations.

GovOps – The Department of Government Operations.

GOPB – The Governor’s Office of Planning and Budget.

LFA – The Office of the Legislative Fiscal Analyst.

Line item/Item of appropriation – A specific appropriation approved by the legislature in an appropriations bill that defines how funds may be used. As the highest level of budget authority in the financial system, it may include both original and supplemental appropriations. Each line item is divided into one or more authorized programs and may also include legislative intent language or other financial conditions that agencies must follow.

Major revenue types – Revenue categories defined in law, including: free revenue, federal revenue, restricted revenue, dedicated credits, and expendable receipts. Each category has rules for how the money can be used.

State finance – The GovOps Division of Finance.

Policy

A – Agencies must operate within the line item appropriation budget

1 – This section applies to all funds requiring an annual legislative budget, including the General Fund, Income Tax Fund, Transportation Fund, Transportation Investment Fund, Debt Service Funds, and Alcoholic Beverage Services Fund. Agencies who use funds without an annual legislative appropriation may be required to establish a zero-based budget, depending on the fund type.

2 – Each year, the legislature creates line item appropriation budgets by setting total funding levels and defining the schedule of programs those funds support. This budget:

establishes the maximum spending authority authorized by the legislature;
establishes a line item’s authorized programs; and
sets the maximum amount agencies may collect and spend for a line item.

2a – State finance, in coordination with the LFA, is responsible for setting up this structure and the applicable matching appropriation unit codes in Vantage Financial.

3 – State finance establishes original and supplemental legislative appropriation budgets in Vantage Financial and sends them to agencies for review and approval. Legislative appropriation budgets establish the agency’s authorized spending level but aren’t initially budgeted by individual revenue and expenditure categories.

4 – Agencies may reallocate appropriated spending authority between programs within the same line item through an approved budget execution plan using BGAA transactions. However, agencies cannot transfer this authority between different line items or funds without clear authorization from the legislature.

4a – Agencies must complete budget modifications according to state finance policy 3-3: Budget modifications and closeout.

B – Agencies must create detailed revenue and expenditure budgets

1 – Agencies must create detailed revenue and expenditure budgets in Vantage Financial for all fund types, regardless of whether the fund is legislatively appropriated. Detailed budgets are separate from appropriation budgets and are established after appropriation budgets are available for the new fiscal year.

1a – Detailed budgets must identify anticipated activity using the applicable accounting elements, including fund, department, appropriation unit, department unit or group, and revenue source or expenditure object.

1b – Agencies create detailed revenue budgets using BGR45 transactions in Vantage Financial and detailed expenditure budgets using BGE44. Agencies have flexibility in structuring their detailed budgets within applicable appropriation and funding requirements.

2 – Each year, agencies must review their budget structure and develop complete and accurate detailed budgets for the new fiscal year. Agencies are responsible for determining the appropriate distribution of their budgets and ensuring that all anticipated revenue and expenditure activity is properly budgeted.

2a – Agencies must complete their detailed budgets and enter them into Vantage Financial within the timeline established by state finance, typically by mid April, but no later than May 15, as required by Utah Code § 63J-1-209.

3 – For appropriated funds, detailed revenue and expenditure budgets must equal the associated appropriation budget at the beginning and end of the fiscal year.

3a – State Finance reviews detailed revenue budgets for appropriated funds to ensure they do not exceed authorized appropriation limits. Agencies must work with state finance to resolve identified issues.

4 – Revenue budgets must reflect the agency’s best estimate of expected annual revenues, and agencies must update them when estimates change significantly.

C – Agencies must follow revenue budgeting requirements

2 – Agencies must record revenue using the correct major revenue category defined by law because each revenue type has different statutory requirements for its use. Agencies must understand these requirements and secure proper budget approval before spending beyond their legislative limits or available funding.

3 – Agencies must use free revenue only as appropriated.

4 – Agencies must use restricted revenue for its specific purpose.

5 – If multiple revenue types, including dedicated credits, fund a line item, agencies must spend their authorized dedicated credits within the current fiscal year. Unless specified otherwise, agencies must allocate any unused spending authority proportionally among the remaining revenue sources, as permitted by laws governing the use of specific funding sources.

D – Agencies must follow dedicated credit spending requirements

1 – Agencies must spend dedicated credits only as authorized by legislative appropriations.

2 – Agencies must base revenue budgets on their best estimate of expected dedicated credit collections, even when estimated collections exceed planned expenditures.

3 – Agencies must use dedicated credits for their intended purpose and must not use them to add permanent staff without authorization.

4 – Agencies that receive excess dedicated credits can spend up to 25% over their appropriated budget if they:

submit a budget execution plan (BGAA transaction) with the additional expenditure in Vantage Financial for state finance approval; and
meet the statutory exceptions in Utah Code 63J-1-105 to spend beyond the 25% limit.

5 – Excess dedicated credits lapse at fiscal year-end as provided by law unless authorized to remain nonlapsing or exempted from lapsing.

E – Agencies must follow expendable receipt spending requirements

1 – Legislative appropriations don’t limit expendable receipts. However, to spend expendable receipts above the appropriated amount, agencies must submit a budget execution plan (BGAA transaction) in Vantage Financial for state finance approval.

2 – If expendable receipt collections exceed 125% of the appropriated amount, agencies must report the excess amount, receipt source, and intended use to GOPB and the LFA within 60 days of submitting the budget execution plan. The LFA will report the excess dedicated credits to EAC.

F – Agencies must follow federal revenue spending requirements

1 – Agencies may spend federal revenue up to 125% of the appropriated amount without extra approval, as long as the additional funds don’t require new permanent employees, state matching funds, or additional requirements for the state.

2 – Before spending federal revenue from new grants or grants that exceeds 125% of the appropriated amount, agencies must receive approval from the governor, Judicial Council, State Board of Education, EAC, or the full legislature. The entity providing approval depends on thresholds outlined in Utah Code 63J-5 Part 2.

2a – Agencies must comply with the following reporting requirements:

Agencies that report to the governor must initiate a request for a new grant or grant that exceeds 125% of the appropriated amount by entering the request in grants.utah.gov.
GOPB may approve certain grants on behalf of the governor. Grants approved by the governor are reported to EAC.
Grants requiring approval from EAC or the full legislature are reported to EAC.
After the Governor, Judicial Council, State Board of Education, EAC, or full legislature approves additional federal grant authority, agencies must submit a budget execution plan (BGAA transaction) in Vantage Financial. Agencies must attach documentation showing proof of approval to the transaction, such as an EAC report, resolution, appropriation, or intent language, for state finance review and approval.

G – Agencies must follow revenue transfer spending requirements

1 – Agencies may transfer funding to another agency only when the transfer is authorized by statute, an appropriations act, or other legislative authorization and is consistent with the purpose and scope of the applicable appropriations and line items.

2 – Agencies must not use revenue transfers to divert an appropriation or an appropriation surplus in violation of Utah Code 63J-1-206(2)(c)(i).

3 – Agencies receiving revenue transferred from another agency may spend the revenue only for the authorized purpose and up to the amount appropriated as transfer revenue.

4 – After closeout each year, state finance will report transfer revenue exceeding the appropriated amount to GOPB and LFA. LFA may report the transfer to EAC when determined necessary.