006.09.06 Ark. Code R. § 001 - Revisions to the Financial Management Guide
INTRODUCTION
The purpose of the Financial Management Guide, hereafter referred to as "Guide," is to provide adequate internal control and accountability over financial and administrative affairs of Arkansas State Government. The Guide also provides assistance to agencies in gathering and maintaining information needed for management decision-making and all financial reporting. The policies and procedures in this Guide are the minimum requirements that State agencies must meet. An agency may adopt additional policies and procedures in greater detail or use additional or alternative supporting documentation, as long as the agency meets the required minimum standards.
The Director of the Department of Finance and Administration, hereinafter referred to as "Director," is required by the General Provisions of the Public Finance Law (ACA § 19-1-207 ) to exercise supervision over the general accounting system of the State and of State agencies. The Director also serves as the Chief Fiscal Officer of the State.
The Director of the Department of Finance and Administration is authorized to promulgate rules and regulations necessary to discharge the duties of the Department of Finance and Administration by Arkansas Code Annotated (ACA) § 19-1-208. In addition, the DFA Director is required under ACA § 19-1-209(a) to publish such regulations issued by him for compliance with the State's Accounting and Budgetary Procedures Law. This requirement is met by publishing the "Financial Management Guide." The Guide resides on the Department of Finance and Administration's (DFA) web site at http://www.state.ar.us/dfa/accounting/index.html and is also available in printed form upon request. Requests for printed copies of the Guide may be made in the form of an e-mail to the DFA-Office of Accounting (DFA-OA) at acctuser@dfa. state, ar. us or by writing to the Office of Accounting at P.O. Box 3278, Little Rock, AR 72203.
The Department of Finance and Administration-Office of Accounting (DFA-OA) is charged with ensuring that the accounting functions of the State's Financial Management System are conducted in a manner consistent with Arkansas Law. The primary statutory responsibilities, functions, and authority of the Office of Accounting are contained in the State General Accounting and Budgetary Procedures Law (ACA Title 19, Chapter 4), the State Revenue Stabilization Law (ACA Title 19, Chapter 5.), and the State Revenue Classification Law (ACA Title 19, Chapter 6).
The mission of DFA-OA is to carry out its statutory responsibilities in a service-oriented manner while maintaining a high degree of fiscal integrity and to improve management of financial resources statewide by providing to all activities of State government a fully adequate accounting and reporting system.
All agencies of the State of Arkansas must comply with this Guide unless otherwise exempted from certain provisions by specific legislation contained in the Arkansas Code or the Constitution of the State of Arkansas.
The Department of Finance and Administration adheres to the spirit and letter of the Freedom of Information Act of 1967 as stated in ACA§ 25-19-101 et seq. Please contact the Office of Accounting if you have questions about the Financial Management Guide.
You can e-mail the office at acctuser@dfa.state.ar.us or call (501) 682-1675 or write:
Department of Finance and Administration Office of Accounting
P.O. Box3278 Little Rock, AR 72203
About the Guide
This Guide is published and maintained on the Department of Finance and Administration, Office of Accounting (DFA-OA) web site at http://www.state.ar.us/dfa/accounting/index.html. The format of the Guide, to the extent possible, is: law, followed by policy (regulation) and then by procedure.
The Arkansas Accounting and Budgetary Procedures Law, Title 19, Chapter Four and various other Arkansas laws that have a direct impact on State financial management practices appear in the form of Arkansas Code. The Arkansas Code appears in normal, non-bolded and non-italicized type. The numbering system used is keyed to the numbering of the Arkansas Code of 1987 Annotated The title, chapter, subchapter and section of the code references are contained within the number. Thus, in the designation " 19-4-905," the "19" indicates the provision is in Title 19, the "4" indicates chapter 4 and the "9" in 905 means sub-chapter 9, with the "05" indicating the fifth section of the sub-chapter. Following the printed code, or excerpts of the code (excerpts include quotation marks at the beginning and end of the excerpts), will be policies (regulations) and/or procedures. The entire Title 19 Chapter four is included in this document whether or not a regulation exists to address each particular sub-title of the Code.
At the beginning of the code, the code number appears-example: 19-4-905.
At the beginning of a policy (regulation) (R), the number of the policy (regulation), numbered in sequence, identifies the code it accompanies-example: Rl- 19-4-905. The text of policies (regulations) and procedures appear in bold print and italics.
The appendices are identified with numeric designations that are reflective of the Guide language that referenced the applicable document (appendix).
All appendices are numbered with a "P" at the beginning and refer to a form, process or link to other information. The number following the "P" identifies the Arkansas Code and/or regulation to which the appendix applies-example: Pl- 19-4-905.
Appendices contain such items as:
Index of forms and appendices
Forms
Examples
Instructions
Key to abbreviations and acronyms
Glossary of terms
Frequently asked questions (FAQs)
The purpose of the appendices is to provide pertinent material that is subject to frequent change, particularly items that are related to the State's Financial Management System. To the extent possible, processes, particularly those demonstrating transactions in the Arkansas Administrative Statewide Information System, hereafter referred to as "AASIS," will be referred to in the text, but located outside the body of this document as appendices with links to them. This will permit the ability to change and update procedures and processes to conform to changes in the system without making policy changes.
In addition to changes in material located outside of this document (appendices), references to computer system screen titles, transaction codes and General Ledger accounts may be changed (updated) from time to time in the Guide as deemed necessary. These changes are considered to be technical in nature and, therefore, will not necessitate invoking the rule making process.
Categories of Agencies
The use of this Guide will vary with the particular accounting software utilized by an agency to record transactions in its books of original entry. There are three types of agencies for the purpose of use and access within the State's Financial Management System. They are:
USER AGENCY-An agency that has direct online access to AASIS. All types of transactions are entered on a real time basis by the agency.
SERVICE BUREAU AGENCY - Generally, a small agency that utilizes the Service Bureau within the DFA-Offtce of Accounting to enter transactions into AASIS and provide reports. These agencies do not have direct access to AASIS.
REPORTING AGENCY-An agency that utilizes a 'stand alone" accounting system as its original books of record for its accounting transactions. The agency transfers, deposits, checks and processes journal entries to AASIS through an electronic interface process for budgetary control purposes. Some reporting agencies have limited online access such as deposit and journal entry functions.
Title 19 PUBLIC FINANCE
This chapter shall be referred to and may be cited as the "General Accounting and Budgetary
Procedures Law" of Arkansas.
History. Acts 1973, No. 876, § 1; A.S.A. 1947, § 13-327.
History. Acts 1973, No. 876, § 2; A.S.A. 1947, § 13-328.
With respect to all matters for which penalties have not otherwise been provided for in this act, any person who shall knowingly violate any of the provisions of this act shall be guilty of a misdemeanor and upon conviction shall be fined in any amount not to exceed one thousand dollars ($1,000).
History. Acts 1973, No. 876, § 29; A.S.A. 1947, § 13-355.
The Chief Fiscal Officer of the State is empowered to make, amend, and enforce such reasonable rules and regulations, not inconsistent with law, as he shall deem necessary and proper to effectively carry out the provisions of this chapter and the public policy as set forth in § 19-4-102. Rules and regulations promulgated shall be published in an administrative procedures manual and distributed to the various State agencies.
History. Acts 1973, No. 876, § 28; A.S.A. 1947, § 13-354.
Rl-19-4-104 Adoption of Rules and Regulations
Policies of the DFA-Office of Accounting are adopted under the provisions of the Arkansas Administrative Procedures Act. Refer to Arkansas Law ACA § 25-15-201 et seq.
R 2-19-4 -104 Open Government Policy
The Department of Finance and Administration-Office of Accounting conducts its business in accordance with the Freedom of Information Act as outlined below:
General
The Freedom of Information Act was adopted in 1967 to ensure that citizens are informed about the actions of the State. The law applies to any bureau, commission, or agency of the State, or any political subdivision of the State, including municipalities, counties, townships, school districts, boards of education, and all other boards, bureaus, commissions, or organizations in the State of Arkansas, except grand juries, supported wholly or in part by public funds or expending public funds. ACA § 25-19-101 etseq.
Open Meetings
Except as otherwise specifically provided by law, all meetings, formal or informal, special or regular, of the governing body of a State public entity (as delineated above) shall be open to the public. Public notice of meetings must be given in advance. Alternative procedures are established for special and emergency meetings.
Executive sessions, closed to the public, are allowed only in certain limited circumstances such as when certain confidential personnel matters are being discussed If an executive session is permissible, the person presiding over the meeting must announce the specific purpose of the executive session in public before going into session. Strict adherence to open meeting requirements is essential to an informed citizenry, maintaining credibility and trust in government. ACA § 25-19-106
The Department of Finance and Administration shall consult with the Legislative Auditor and the director of the budget function of the Bureau of Legislative Research throughout each stage of planning and implementation for any new statewide accounting system. This required consultation and involvement is to ensure that those capabilities to provide the required services to members and committees of the General Assembly are incorporated into the system. History. Acts 1999, No. 973, § 2.
Assembly. The Governor, or Governor-elect, shall:
History. Acts 1973, No. 876, § 3; A.S.A. 1947, § 13-329.
The General Assembly, and the Joint Budget Committee thereof, shall:
The General Assembly, the Legislative Council, and the Joint Budget Committee shall consider the Governor's, or Governor-elect's, recommendations and determine the comprehensive program and financial plan to support the services to be provided the citizens of the State, while keeping authorized expenditures within the estimated receipts and other available resources. History. Acts 1973, No. 876, § 8;
History. Acts 1973, No. 876, § 17; 1981, No. 741, § 2; 1985, No. 365, § 8; A.S.A. 1947, § 13- 343.
Rl-19-4-206 General Conservation Activities
In any year that changes in Constitutional Officers will occur, the Chief Fiscal Officer of the State, through the DFA-Office of Budget and Office of Accounting, will survey the condition of the various State budgets and take whatever actions he/she deems necessary in order to conserve appropriate portions of the applicable budgets to ensure adequate funding will be available for incoming officers.
R 2-19-4 -206 Governor-Elect Transition Guidelines
The administration of funds, as may be appropriated by the General Assembly and provided to an individual who has been elected to a first term as Governor for the use in preparing for his or her forthcoming administration, must comply with the provisions of ACA § 25-16-205 and this policy.
General Limitations
The expenditure of funds is limited to direct expenses of the activities relating to the new office holder preparing to take office in January following the general election. Only those expenses incurred from the date of the general election until the date of inauguration, which are directly related to assuming the office, shall be considered eligible for payment. No transition funds will be used to pay a salary to a newly elected official prior to his or her assuming the office.
Specific Guidelines
A budget for proposed use of such funds must be prepared by the Governor-Elect and presented to the Director of the Department of Finance and Administration prior to the release of transition funds. The individuals) authorized to disburse the funds will be designated in writing by the Director of the Department of Finance and Administration (DFA). Person(s) authorized to approve the following items must be designated in writing by the Director of DFA: employment and payroll documents, purchasing documents, contracts, invoices for payment, and travel reimbursement requests.
All employees of the transition team are exempt from the overtime pay requirements of the Fair Labor Standards Act (FLSA) and, therefore, are not eligible for overtime pay. The business affairs of the transitional team must comply with the policies, regulations and procedures established by the Director of the Department of Finance and Administration for the conduct of State business. All financial transactions shall be recorded on the State's Financial Management System, and all original documentation shall be kept on file in the Office of the Chief Fiscal Officer of the State.
The Chief Fiscal Officer of the State shall carry out the following duties and responsibilities:
History. Acts 1973, No. 876, § 6; A.S.A 1947, § 13-332.
To accomplish his duties and responsibilities, the Director of the Department of Finance and Administration, in cooperation with the Legislative Council, shall design budget information forms so that comparative data of the last fiscal year, the current fiscal year, and the next biennium are presented so that State agencies can best express budgetary and program information that will be most useful to the Governor, or Governor-elect, and the General
Assembly in order to facilitate program formulation, execution, and accountability by:
The Director of the Department of Finance and Administration, in cooperation with the
Legislative Council, shall:
History. Acts 1973, No. 876, § 6; A.S.A. 1947, § 13-332.
Immediately after July 1 of each even-numbered calendar year, or earlier if determined necessary, the Director of the Department of Finance and Administration shall:
History. Acts 1973, No. 876, § 6; A.S.A. 1947, § 13-332.
The Chief Fiscal Officer of the State shall prepare the described preliminary budget report so that it shall include the following:
History. Acts 1973, No. 876, § 6; A.S.A. 1947, § 13-332.
The Chief Fiscal Officer of the State, in cooperation with the Legislative Council, shall devise the necessary procedures, forms, and timetables to assure the same comprehensive review of all
State agency requests for capital expenditures as outlined in this subchapter for operating budgets. In addition, the Chief Fiscal Officer of the State shall institute the necessary budgetary and accounting controls over those capital budgets approved by the General Assembly to assure full compliance with all applicable State laws. History. Acts 1973, No. 876, § 6; A.S.A. 1947, § 13-332.
History. Acts 1993, No. 358, § 1.
Except as otherwise provided for in this chapter, the offices of the Auditor of State and the Treasurer of State shall continue to perform the duties imposed by law upon these offices. History. Acts 1973, No. 876, § 27; A.S.A. 1947, § 13-353.
The Auditor of State shall act as disbursing officer for the appropriations made for:
History. Acts 1973, No. 876, § 27; A.S.A. 1947, § 13-353.
The Auditor of State shall issue his or her warrants in payment of the vouchers presented to him or her by the Chief Fiscal Officer of the State only after he or she shall have satisfied himself or herself that the provisions of this chapter have been complied with. For this purpose, the Auditor of State shall have the authority to conduct any further examination and pre-audit of the vouchers which he or she may deem necessary. A single warrant may contain payments from multiple appropriations, classifications of appropriation, and funds.
History. Acts 1973, No. 876, § 27; A.S.A. 1947, § 13-353; Acts 2001, No. 1453, § 5.
Warrants are instruments utilized by the State to pay for obligations incurred in the purchasing of goods or services from outside sources. Warrants are initiated in AASIS by utilizing either the purchase order or the direct invoice method.
Rl-19-4-40 Warrant Cancellations
A warrant must be cancelled when either the warrant contains incorrect information (i.e. vendor name, address, payment amount, etc.) or the vendor loses or does not receive the warrant issued to them for payment. The following procedures supply the necessary information to complete a warrant cancellation whether the warrant is for an outside vendor or for payroll to a State employee. PLEASE NOTE: For a chart reflecting forms that must be submitted in all instances of warrant cancellation actions, please see Pl-19-4-403.
Non-Payroll Warrant Cancellation
Department of Finance and Administration-Office of Accounting (DFA-OA) is responsible for the cancellation of all Non-Payroll Warrants. All forms must be sent to DFA-OA where they will be processed and forwarded to the Auditor of State-Warrant Division.
There are two general categories for Non-Payroll Warrant Cancellations, those to be re-issued and not to be re-issued. These categories may include warrants that the agency have in hand or those that are lost or forged See: P 4-19-4 -403b
PLEASE NOTE: Generally, Automatic Clearing House (ACH) warrants cannot be cancelled ACH Warrants are payments that are made by direct deposit into a vendor's commercial bank account. If an agency requests the cancellation of an ACH warrant and that request cannot be processed, the agency must then contact the vendor for a refund of the ACH warrant. Once the agency receives the refund, a refund to expenditure must be completed and a deposit prepared and sent to the Treasurer of State-Warrant Division to record the receipt of funds for both the prior year and the current fiscal year warrants. Appropriation will be restored for current fiscal year warrants only.
An "Affidavit of Forged Warrant" Form, P 2-19-4 -403, must be completed by the vendor and submitted to the issuing agency for Non-Payroll Warrant Cancellations when the vendor purports the warrant has been lost or forged The original "Affidavit of Forged Warrant" must then be sent either by mail, inter-office mail, or personal delivery to DFA-OA-Reconciliation Manager. The "Affidavit of Forged Warrant" will not be accepted by DFA-OA-Reconciliation Manager until the 15' day after the issuance of the warrant. The agency personnel must contact the Treasurer of State-Warrant Division either by phone or by e-mail to verify that the warrant has not been redeemed just prior to the submission of the form.
Upon receipt of the "Affidavit of Forged Warrant" Form, the DFA-OA-Reconciliation Manager will review and enter any action necessary in AASIS (i.e. voiding of warrant, reversal of payment). The "Affidavit of Forged Warrant" will then be delivered to the Treasurer of State-Warrant Division to be held in the event that the corresponding warrant is redeemed If the Treasurer of State-Warrant Division has the original "Affidavit of Forged
Warrant" and the original warrant is redeemed, the Treasurer of State-Warrant Division can then return the warrant and the "Affidavit of Forged Warrant" to the bank to attempt to receive a refund of the moneys. If the commercial bank does not refund the moneys to Treasurer of State-Warrant Division, Treasurer of State-Warrant Division will notify the agency that the warrant was not collectable. It is the agency's responsibility to collect the amount of the warrant from the vendor. If after six months the agency is unable to collect, a claim will be filed with the Claims Commission to reimburse the Treasurer of State from the agency's funds and appropriation.
If the original warrant is redeemed prior to an "Affidavit of Forged Warrant" being filed with the Treasurer of State-Warrant Division and the reissued warrant is also redeemed, the Treasurer of State-Warrant Division will attempt to receive a refund of moneys for the original warrant from the commercial bank. If the commercial bank denies the "Affidavit of Forged Warrant," the agency will be charged for both the original and the reissued warrant. The agency must then contact the vendor to collect the overpayment. Once the overpayment has been collected, the originating agency will deposit the refund in the originating fund and complete a refund to expenditure. If the original expenditure was for the current year, the general ledger account to use is 6080001000 Refund to Expenditure - Current Year. The agency then must submit a "Refund to Expenditure" Form, P 3-19-4 -403, to DFA-OA-Reconciliation Manager. The "Refund to Expenditure" Form is then used to adjust the appropriation for the current year. If the original expenditure was for prior year, the general ledger account to use is 6990003000 Prior Year Refunds to Expenditures. There is no adjustment of appropriation for prior year.
Non-Payroll Warrant Cancellation with Reissue Prior Year
All prior year warrant cancellations with reissue require the Auditor of State-Warrant Division to issue a duplicate warrant. These warrants will reflect the same warrant number and date as the original but will have "Duplicate" stamped on the actual warrant. To cancel a prior year warrant that is being reissued, the agency must submit a "Non-Payroll Warrant Cancellation" Form, P 4-19-4 -403, P 4-19-4 -403b, (Instructions) an original "Affidavit of Forged Warrant" Form, P 2-19-4 -4 03, and an original "Bond for Reissuing Warrant" Form, P 5-19-4 -403, to DFA-OA. When a prior year warrant cancellation is submitted with a request for reissue and the Auditor of State- Warrant Division issues a duplicate warrant, no journal entries are made.
Current Year
Current year warrant cancellations can either have a duplicate warrant processed by the Auditor of State-Warrant Division or a new warrant can be issued. Duplicate warrants for current year warrant cancellations will only be processed if an "Affidavit of Forged Warrant" and "Bond for Reissuing Warrant" has been submitted with the "Non-Payroll Warrant Cancellation" Form. Also the agency must note on the "Affidavit of Forged Warrant" that the warrant is, if in fact, a forgery. When a current year warrant cancellation is submitted with a request for reissue and the Auditor of State-Warrant Division issues a duplicate warrant, no journal entries are made.
If a current year warrant is cancelled, a new warrant can be issued by the agency DFA-OA-Reconciliation Manager will notify the agency when the warrant has been cancelled. If a current year warrant is damaged or unacceptable at a commercial bank, the agency must send the original warrant and the "Non-Payroll Warrant Cancellation" Form to DFA-OA-Reconciliation Manager, and a new warrant will be issued to the vendor by DFA-OA-Reconciliation Manager.
Non-Payroll Warrant Cancellation with Reissue (Continued)
Note: All forms must be submitted to DFA-OA-Reconciliation Manager. Prior Year Warrant Cancellations with Reissue Forms Needed:
P 2-19-4 -403- Affidavit of Forged Warrant (Original)
P 5-19-4 -403- Bond for Reissuing Warrant (Original)
Non-Payroll Warrant Cancellation without Reissue Prior Year
For a prior year warrant cancellation (void), the agency must submit a "Non-Payroll Warrant Cancellation" Form, P 4-19-4 -403, either the original warrant or an "Affidavit of Forged Warrant," P 2-19-4 -403, and a "Prior Year Non Payroll Warrant Cancellation Journal Entry" Form, P 6-19-4 -4 03, to DFA-OA-Reconciliation Manager. If the moneys were expensed from a fund that is supported by General Revenue and a portion of the moneys should not be reclaimed, a "Prior Year Non-Reclaimable Certification" Form, P 7-19-4 -403, or http://www.state.ar.us/dfa/accounting/acc forms.html - fundsmust also be submitted to DFA-0A. Instructions for the "Prior Year Non-Reclaimable Certification" Form can be found at P 7-19-4 -403b. If the "Prior Year Non-Reclaimable Certification" Form is not submitted, all moneys will be reclaimed at month end Prior year warrant cancellations require journal entries to be created and the warrant to be voided by DFA-OA-Reconciliation Manager. Document type "ZW," will be used in creating the journal entry. The following entry is made as of current date to the originating fund:,
DR 1100001000 Cash in State TreasuryCR 6990002000 Prior Year Warrants Cancelled
The Prior Year Warrant Cancelled general ledger account posting is a non-budget relevant posting that does not reestablish appropriation.
The Business Area is used in the reference field for the posting of the prior year warrant cancellation; the short text will reflect "PY Warrant Cancel" and the text field will contain the warrant number.
If the original payment was from a fund that is supported by General Revenue, an additional entry will be made by DF-OA Funds Group Manager at month end reclaiming the moneys. The agency will need to provide a contact person, phone number (with area code) and e-mail address in the space provided on the "Non Payroll Warrant Cancellation" Form that is submitted to DFA-OA-Reconciliation Manager.
Current Year
For a current year warrant cancellation the agency must submit a "Non-Payroll Warrant Cancellation" Form, P 4-19-4 -403, and either the original warrant or an "Affidavit of Forged Warrant" to DFA-OA-Reconciliation Manager.
The warrant will be cancelled in AASIS and the original invoice(s) will be reversed by DFA-OA-Reconciliation Manager, if a new warrant is to be issued. A duplicate warrant can be issued for a current year warrant only if the original is reported as a forgery.
Payroll Warrant Cancellation
Department of Finance and Administration - Office of Personnel Management (DFA-OPM) is responsible for the cancellation of all payroll warrants. All forms must be sent to DFA-OPM where they will be processed
PLEASE NOTE: Generally, ACH warrants cannot be cancelled ACH Warrants are payments that are made by direct deposit into a vendor's commercial bank account. If an agency requests the cancellation of an ACH warrant and that request cannot be processed, the agency must then contact the employee for a refund of the ACH warrant. Once the agency receives the refund, a deposit is to be made to the originating fund by the agency and a refund to expenditure must be completed to the originating fund to record the receipt of funds for both the prior year and the current fiscal year warrants. Appropriation will be restored for current fiscal year warrants only.
An "Affidavit of Forged Warrant" Form, P 2-19-4 -403, must be completed by the employee and submitted to the issuing agency for Payroll Warrant Cancellations where the employee is claiming that the warrant is lost or that the warrant has been forged The original "Affidavit of Forged Warrant" must then be sent either by mail, inter-office mail, or personal delivery to DFA-Office of Personnel Management-Payroll Section (DFA-OPM-PS). The "Affidavit of Forged Warrant" will not be accepted by DFA-OPM-PS until the 6thday after the issuance of the warrant and after the agency contacts the Treasurer of State-Warrant Division either by phone or by e-mail to verify that the warrant has not been redeemed
Upon receipt of the Affidavit of Forged Warrant" Form, DFA-OPM-PS will review and enter any action necessary in AASIS (i.e. voiding of warrant, reversal of payment). The "Affidavit of Forged Warrant" will then be delivered to the Treasurer of State-Warrant Division to be held in the event that the corresponding warrant is redeemed If the Treasurer of State-Warrant Division has the original "Affidavit of Forged Warrant" and the original warrant is redeemed, the Treasurer of State-Warrant Division can then return the warrant and the "Affidavit of Forged Warrant" to the bank to attempt to receive a refund of the moneys. If the commercial bank does not refund the moneys to the Treasurer of State-Warrant Division, Treasurer of State-Warrant Division will notify the agency that the warrant was not collectable. It is the agency's responsibility to collect the amount of the warrant from the vendor. If after six months the agency is unable to collect, a claim will be filed with the Claims Commission to reimburse the Treasurer of State from the agency's funds and appropriation.
If the original warrant is redeemed prior to an "Affidavit of Forged Warrant" being filed with the Treasurer of State-Warrant Division and the reissued warrant is also redeemed, the Treasurer of State-Warrant Division will attempt to receive a refund of moneys for the original warrant from the commercial bank. If the commercial bank denies the "Affidavit of Forged Warrant," the agency will be charged for both the original and the reissued warrant. The agency must then contact the employee to collect the overpayment. Once the overpayment has been collected, the originating agency will deposit the refund in the originating fund and complete a refund to expenditure. If the original expenditure was for the current year, the general ledger account to use is 6080001000 Refund to Expenditure - Current Year. The agency then must submit a "Refund to Expenditure" Form, P 3-19-4 -403, to DFA-OA-Reconciliation Manager. The "Refund to Expenditure" Form is then used to reinstate the appropriation for the current year. If the original expenditure was for prior year, the general ledger account to use is 6990003000 Prior Year Refunds to Expenditures. There is no adjustment of appropriation for prior year.
Payroll Warrant Cancellation with Reissue
Prior Year
For prior year payroll warrant cancellation, the agency must submit to DFA-OPM-PS a "Request for Reverse Payment Void, " P 8-19-4 -403, a copy of the "Remuneration (REM) Statement," "Affidavit of Forged Warrant" and an additional two copies of each form. If the warrant cancellation is considered a forgery, the agency must also submit a "Bondfor Reissuing Warrant, " P 5-19-4 -403. DFA-OPM-PS will forward the "Affidavit of Forged Warrant" to DFA-OA-Reconciliation Manager for the determination of whether a duplicate warrant can be reissued.
If a duplicate warrant is issued by the Auditor of State- Warrant Division, no cancellation is required.
PLEASE NOTE: Should the employee cash the original warrant for which the "Affidavit of Forgery" papers have been signed, criminal charges can be filed against the employee by the individual or business entity that cashed the warrant or accepted it for deposit.
Current Year
For current year payroll warrant cancellation, the agency must submit to DFA-OPM-PS an "Affidavit of Forged Warrant" and attach one copy. If the warrant cancellation is for a forgery, the agency must also submit a "Bondfor Reissuing Warrant." DFA-OPM-PS will forward the "Affidavit of Forged Warrant" to DFA-OA-Reconciliation Manager to make the determination of whether a duplicate warrant can be reissued.
If a duplicate warrant is issued by the Auditor of State- Warrant Division, no cancellation is required.
Outlawed Warrants
Refer to Rl- 19-4-703 "Outlawed Warrant Process" in this Guide. Questions concerning the outlawed warrant process should be directed to DFA-OA Reconciliation Manager. A list can be provided detailing all warrants that were outlawed by DFA-OA upon request.
History. Acts 1973, No. 876, § 27
History. Acts 1973, No. 876, § 27; A.S.A. 1947, § 13-353.
History. Acts 1973, No. 876, § 27
History. Acts 1991, No. 421, §§ 1-3.
Rl-19-4-407 Electronic Warrants
Overview
Electronic warrants must be formatted to comply with Automated Clearing House (ACH) requirements. Circumstances occasionally arise that require deletions or reversals from the ACH transmittal file after it is created by the Statewide accounting system The difference between a reversal or deletion of an ACH item is determined based upon the timing of the request. If an ACH item has not been distributed to the Federal Reserve by the bank, the ACH item will be deleted. If an ACH item has been distributed to the Federal Reserve, it will be reversed if possible. ACH items are distributed to the Federal Reserve two (2) business days prior to the effective date if the bank has the item at that point. For example, if an ACH item is transmitted and the Request for Reversal/Deletion of an ACH Item form is faxed to the bank on Monday and the ACH item has an effective date of Thursday or later, the ACH item will be deleted. If an ACH item is transmitted and the Request for Reversal/Deletion of an ACH Item form is faxed to the bank on Monday and the ACH item has an effective date of Wednesday or earlier (but no earlier than five (5) business days prior), the ACH item will be reversed.
Deletions/reversals from an ACH file can only be processed by the Department of Finance and Administration - Office of Accounting (DFA-OA). In order to request a deletion/reversal of an ACH, the agency must properly complete the "Request for Reversal/Deletion of an ACH Item" form and submit the form via fax to DFA-OA. The "Request for Reversal/Deletion of an ACH item" form must be signed by two authorized agency personnel who are on file with DFA-OA as authorized personnel. Requests for deletion/reversal of an ACH item must be processed immediately following knowledge of an error.
Please Note: To comply with National Automated Clearing House Association (NACHA) Rules, the Reversal/Deletion Request must be received by the bank in time to be processed within five (5) business days of the original entry settlement date. (The cutoff time is 5:00 PM CST on the 5th business day after settlement.)
After two DFA-OA authorized personnel review and sign their approval to the "Request for Reversal/Deletion of an ACH item" form, DFA-OA will contact the bank and submit a formal request for a reversal/deletion of an ACH item. Pending bank approval, the monies will be returnedto the Vendor ACH Return Account, the Payroll ACHReturn Account or the Income Tax ACHReturn Account.
If the monies are returned to the Vendor ACH Return Account, the requesting agency will be notified by DFA-OA and issued a check from the Vendor ACH Return Account to be processed as a refund to expenditure to the fund, fund center, commitment item, wbs element and/or internal order of original issuance.
If the monies are returned to the Payroll ACH Return Account, a check will be issued to the Payroll paying fund and deposited into the Treasurer of State's office.
If the monies are returned to the Income Tax ACH Return Account, a check will be issued to DFA-Revenue-Individual Income Tax and deposited into the Treasurer of State's office as a refund to expenditure.
Changes to the file after it is sent to the bank
The purpose of this process is to delete or reverse an ACH item once the file has reached the bank. This must be done within five (5) working days of the settlement or pay date of the deposit.
The requesting agency must complete the "Request for Reversal/Deletion of an ACH item" form and submit via FAX to the DFA-OA. Two persons from the approved agency personnel list must sign the request form prior to submission to the DFA-OA.
DFA staff will approve the request for submission to the bank. Designated Office of Accounting staff will fax the official "ACH Reversal/Deletion Request" form to the bank for processing.
Deletion of an item is possible if done prior to 5 PM on the day of transmittal of the ACH file by the Auditor of State. If an item is deleted, it will not be presented for reimbursement to the Treasurer of State, and Bank of America will return no money to the State. Cancellation of the electronic "warrant" will be necessary. No further payments should be issued until the DFA - Office of Accounting confirms the reversal.
Reversal of an item is at the discretion of the receiving bank. If the reversal is honored, money will be returned to the Treasurer of State's bank settlement account and subsequently transferred to either the Vendor ACH Return Account or the Payroll ACH Return Account. At that point a check will be written to reimburse the agency for the funds or the Payroll Paying Account and deposited as a refund to expenditure, either current or prior year.
History. Acts 1993, No. 540, §§ 1-5; 1995, No. 232, § 8.
History. Acts 1973, No. 876, § 12; A.S.A. 1947, § 13-338.
INTERNAL ACCOUNTING CONTROL UTILIZING AASIS SECURITY ROLES
Rl-19-4-501 It is the objective of the State of Arkansas to assure proper internal accounting controls are in place, to safeguard the State's assets and to prevent fraud, errors and defalcations (theft and embezzlements). The Arkansas Administrative Statewide Information System (AASIS) utilizes various accounting roles in order to provide for an adequate segregation of duties to facilitate better business practices and enable an adequate system of internal accounting controls sufficient to accomplish the prevention of fraud, errors and defalcations. Each agency, board or commission that has online access to AASIS shall have a security liaison that is knowledgeable regarding the business and accounting practices of their respective entity, and have a working knowledge of internal accounting controls. Each security liaison will ensure that a particular individual does not have conflicting or an excessive number of security roles assigned
R 2-19-4 -501 The security liaison will assign roles to any new accounting team employee upon his/her commencement of employment. New role assignments or revisions to current role assignments will be submitted to the AASIS Security Administrator for review and entry into the AASIS system. If a conflict or an excessive number of security role assignments are discovered in the review process, the AASIS Security Administrator will forward the request to the Department of Finance and Administration, Office of Accounting, CAFR Section (DFA-OA-CAFR Section) for approval of a proposed solution or design of mitigating controls to be implemented.
Changes to current role assignments should be evaluated by the Agency Security Liaison to determine that internal control conflicts will not be created and that excessive roles are not assigned to one individual.
Upon termination or any change in status of employment, the Agency Security Liaison shall immediately remove all roles no longer applicable to an employee's job duties. There shall be a process in place at each agency to audit the change in role assignments by comparing the human resources data forms to changes in AASIS role assignments.
The Agency Security Liaison shall assess security roles annually.
R 3-19-4 -501 When circumstances dictate, temporary security role assignments may be utilized by requesting that a security role assignment be granted for a specific time period, even though the assignment would appear to be allowing an individual to have excessive security roles. In the event an agency does not have sufficient staffing to assign security roles so that all park and post capabilities are met, they may request documents be posted by the DFA-OA-Service Bureau Manager. These items must be documented and reviewed by the individual that would otherwise have been required to park or post the documents or their immediate supervisor, as a mitigating control. This documentation must be retained in the files of the agency for review until the individual transaction records involved are destroyed
R 4-19-4 -501 Cash Receipts Internal Control
Strict control needs to be maintained during the processing of cash receipts to ensure that they are properly accounted for. The term "cash" includes currency, coin, checks, moneys orders and credit card receipts. Collecting, recording, depositing and reconciling cash receipts should be separated among different individuals. No one person should be in a position to misdirect the accounting or posting of a receipt. Additionally, the internal control procedures should prevent the misappropriation of funds once in the control of the agency.
Where staffing levels do not permit separation of duties, compensating controls such as strict individual accountability and thorough management review and supervision should exist to help safeguard assets and ensure that accounting records are complete and accurate. Any system adopted should include completely separating the handling of cash or checks from the recording function whenever possible. The compensating control procedures must be submitted to the Department of Finance and Administration-Office of Accounting for written approval.
Cash Received in Person
A receipt must be issued for each payment received. The following minimum standards shall be met. Receipts are to be pre-numbered by the printer, and a printer's certificate obtained and retained for audit purposes. Such certificate shall state the date printing was done, the numerical sequence of receipts printed and the name of the printer.
The pre-numbered receipts shall contain the following information for each item receipted:
Date
Amount of receipt
Name of person or company from whom moneys was received
Purpose of payment
Fund(s) to which receipt is to be credited
Signature of employee receiving moneys
The original receipt shall be given to the party making payment. One duplicate copy of the receipt shall be maintained in numerical order in the receipt book. Additional copies of the receipts are optional with the State agency, board or commission or institution and may be used for any purpose they deem fit.
The use of mechanical receipting devices, such as cash registers, which accomplish the same purpose as pre-numbered receipts, is acceptable and is encouraged. All checks and other negotiable instruments must be endorsed immediately with a restrictive endorsement stamp.
Cash must be kept in a safe or other locked storage device until deposited
Cash Received Through the Mail
The mail must be opened in a monitored environment. All checks should be numbered, marked or endorsed as soon as possible.
A list of cash (cash log) must be prepared in duplicate. The list shall include sufficient detail to allow an audit trail of an individual receipt.
One copy of the cash log shall be kept in the area and the other should accompany the deposit. Cash must be stored in a safe or other locked storage device until deposited.
Balancing of Cash Receipts
All cash receipts must be balanced daily by mode of payment by comparing the total of the cash to the cash register totals, to the pre-numbered receipts totals and to the totals of the moneys received by mail.
All voided transactions are to be approved and initialed by the supervisor. Agencies using the Arkansas Administrative Statewide Information System must run a ZCAJO Cash Journal report on a weekly basis. Enter the cash journal number, document status of "D" and the posting date range. This will generate a list of all deleted documents from the cash journal for the period specified This list shall include the initials of the supervisor acknowledging authorization of all deleted cash receipt transactions and be available for audit purposes. Over/short amounts must be separately recorded, and investigated and resolved to the extent possible.
Preparation of Deposits
Someone not involved with collecting, recording or reconciling must prepare the deposit. Cash must be recorded on the deposit slip in the appropriate space.
An adding machine tape of checks must be included with the deposit slip if the number of checks exceeds the space available to list the checks on the deposit slip.
Good internal controls dictate daily deposits to Treasury and/or a commercial bank account. Weekly deposits are allowable if an agency receives only minimal amounts of cash and/or checks. However, in the last week of the month all deposits keyed into the State's accounting system must be delivered to the Treasurer of State or the commercial bank for deposit prior to noon on the last business day of the month.
Reconciliation of Cash Collected
Bank accounts should be reconciled by an employee independent of the collecting, depositing or recording functions on a monthly basis. Correcting journal entries must be made to the agency's books of record to correct prior month's errors in the current month.
The Chief Fiscal Officer of the State shall:
History. Acts 1973, No. 876, § 12; 1985, No, 365, § 1; A.S.A. 1947, § 13-338.
History. Acts 1973, No. 876, § 12; 1977, No. 486, § 2; A.S.A. 1947, § 13-338.
PLEASE NOTE: Refer to 19-5-104
The financial management system shall, at all times:
Rl- 19-4-504 Overview of the Financial Management System
The State of Arkansas implemented a new financial management system on July 1, 2001. The system is designed to be a database resource management tool that encompasses many types of information for management use in addition to accounting data, such as budgeting, purchasing and human resource management in an integrated fashion. The system is commonly referred to as AASIS, the acronym for "Arkansas Administrative Statewide Information System." The current operating platform is SAP software. The system replaced several of the previous automated systems used by the State since 1971. Upon conversion to
AASIS, the State has the ability to report financial results on an individual agency or statewide basis on the modified or full accrual basis of accounting in order to comply with financial reporting requirements promulgated by the Governmental Accounting Standards Board (GASB). The system is utilized on-line by most agencies and departments of Arkansas State Government. There are some small agencies that do not have the resources to utilize the system. For those small agencies, boards and commissions, the DFA-Office of Accounting created the 'Service Bureau" Section to process all transactions and produce financial reports.
Reporting agencies, (e.g. colleges and universities, certain constitutional offices, War Memorial Stadium Commission, Arkansas Highway & Transportation Department, etc.) do not use AASIS as their original books of record. They have their own separate and independent accounting systems. These systems must have the capability to present the reporting agency's trial balances and related financial statements on both the modified accrual and full accrual basis of accounting in order to facilitate preparation of the Comprehensive Annual Financial Report (CAFR) of the State of Arkansas in accordance with the requirements of GASB 34. Reporting agencies interface certain items within AASIS for budgetary control and for other financial reporting purposes. Each reporting agency, excluding the colleges and universities, shall make adjusting journal entries to agree with AASIS trial balance to their books of record, preferably on an interim basis, but not less frequently than annually as of June 30th of each fiscal year.
R 2-19-4 -504E-Commerce, Electronic Records and Signatures
ACA § 25-31-101 et seq., known as the "Arkansas Electronic Records and Signatures Act" andACA § 25-32-101 et seq., the "Uniform Electronic Transactions Act" details the definitions and guidelines relating to the authority and the use of electronic records, signatures and transactions. Acceptance and/or disbursement by State agencies of State funds via electronic means, including Internet transactions, also referred to as electronic commerce (e-commerce) must, at a minimum, be conducted in accordance with the above referenced Arkansas Code sections, the Arkansas Shared Technical Architecture Program policies which can be viewed at http://www.techarch.state.ar.us and other applicable laws, regulations and policies contained in this Guide. E-commerce includes, but is not limited to, acceptance of credit cards and debit cards, use of purchase cards, receipt and transmittal of purchase orders and invoices.
An agency may establish additional policies and requirements, as long as the agency meets the minimum requirements contained in the Arkansas Code. For example, ACA § 19-11-222 provides for the State Procurement Director to have exclusive jurisdiction over the establishment and maintenance of an electronic commerce procurement solution, to include planning and administration, consistent with the established financial systems of the State. The Department of Finance and Administration-Office of State Procurement (OSP) maintains, on its web site, links to State procurement laws and regulations, including those applicable to e-commerce. http://www.arkansas.gov/dfa/purchasing/lawsandregs.html
Electronic warrants issued in payment for goods and/or services received by the State and its agencies, boards and commissions are discussed in detail in section Rl- 19-4-407 of this Guide.
Vehicle tag renewals and fishing and hunting licenses can be obtained via the Internet from the Department of Finance & Administration - Revenue Division and the Arkansas Game and Fish Commission, respectively. Links to these e-commerce transactions can be found at http://www. accessarkansas. org/
Other examples of efficient use of e-commerce:
Each agency director or his designee shall serve as the security officer with responsibilities including, but not limited to, designating authorized electronic signatures, controlling and continuing maintenance of the assigned signature authority and maintenance of the source documentation to support the electronic signatures and records in compliance with the Arkansas code. E-commerce transactions initiated and/or entered into by the State's agencies, boards or commissions must have terms and conditions mutually agreeable by all parties involved with the transactions) and shall have adequate documentation in order to provide a suitable audit trail for use by internal or external auditors of the State.
It is the intent of the General Assembly that the State Accounting System, as authorized in this subchapter, shall be established in conformity with generally accepted accounting principles as recognized by the Governmental Accounting Standards Board, the American Institute of Certified Public Accountants, the Financial Accounting Standards Board, and any successor governing boards. However, the Chief Fiscal Officer of the State shall consult the Legislative Joint Auditing Committee before proposing, adopting, or recommending compliance with any of the generally accepted accounting principles that conflict with law. It is further recognized that the State Accounting System should comply with recognized principles of accounting for and reporting of public moneys in order to properly and fairly discharge to the taxpayers our responsibility of adequately accounting for their moneys.
History. Acts 1973, No. 876, § 12; 1979, No. 833, § 3; A.S.A. 1947, § 13-338; Acts 2001, No. 1453, § 6.
Rl-19-4-505 Internal Control and Ethics Requirements
State government agencies must have an established system of internal control that provides reasonable assurance that objectives have been achieved in:
General
The General Accounting and Budgetary Procedures Law of Arkansas (ACA § 19-4-101 et seq.) sets the policy for the State of Arkansas to provide an adequate accounting for all fiscal transactions and provide methods of internal accounting control by establishing and supervising the accounting systems of State agencies. The Chief Fiscal Officer of the State is empowered to make, amend, and enforce such reasonable rules and regulations, not inconsistent with law, as he shall deem necessary and proper to effectively carry out these provisions.
ACA § 19-4-501 requires the Chief Fiscal Officer of the State to establish a comprehensive financial management system for appropriated and cash funds of agencies. This system shall conform to generally accepted governmental accounting principles.
ACA § 19-4-505 requires that the State's Accounting System be established in conformity with generally accepted accounting principles as recognized by the Governmental Accounting Standards Board, the American Institute of Certified Public Accountants, the Financial Accounting Standards Board, and any successor board. Statement on Auditing Standards #55 and #78 issued by the American Institute of Certified Public Accountants set the standards for an adequate system of internal control. Statement on Auditing Standards #99 sets the requirement for considering fraud in a financial statement audit.
Internal Control Process
Purpose
To preserve the trust and respect that the public has for the governing process, government entity managers should take the necessary steps to minimize the risk of fraud, waste and abuse occurring within their entity. Fraud can range from minor employee theft to misappropriating of assets and fraudulent financial reporting. The establishment of a strong internal control environment where written policies and procedures are enforced, internal controls are appropriately implemented and employees are educated about fraud and its consequences is one of the best deterrents and methods of curtailing fraud For internal controls to be effective, they must be periodically evaluated for effectiveness and changed as business processes are changed
To some extent, everyone in an organization is responsible for ensuring the internal control system is effective. However, the head of each State agency has the ultimate responsibility because he or she has been entrusted with achieving the organization's mission. To the extent that the head of the agency authorizes other individuals to manage the activities of the organization, those managers then become responsible for the portion of the internal control system that they administer. Managers establish policies and plans, make decisions and create the work atmosphere that influences the internal control system. Therefore, managers should also be held accountable for failures of the internal control system.
Because departments in State government vary in size, complexity and degree of centralization, no single method of internal control is universally applicable. Managers should use this section as a framework for developing their internal control systems, consistent with their department's operations and agency mission.
Definition of Internal Controls
The expanded focus of both the public and private sectors on internal control has increased the sensitivity of government management, internal and independent auditors, legislators, regulators, academics and the general public to the need for effective internal control to manage an entity's activities.
The National Commission on Fraudulent Financial Reporting, known as the Treadway Commission, was created in 1985 by the joint sponsorship of different accounting professional organizations. The Treadway Commission had as its major objective to identify the factors of fraudulent financial reporting and to make recommendations to reduce its incidence. The Commission's Report (Report of the National Commission on Fraudulent Financial Reporting - National Commission on Fraudulent Financial Reporting, 1987) emphasized the importance of the control environment, codes of ethics, competent and involved audit committees and an active and objective internal audit function. Additionally, the Commission called for the sponsoring organizations to work together to integrate the various internal control concepts and definitions and to develop a common reference point. Based upon this recommendation, a task force under the auspices of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) was formed to study internal control. The COSO study and the resulting report (Internal Control-Integrated Framework) was initiated to provide a common understanding of internal control among all parties and to assist management to exercise better control over an enterprise. It is the COSO definition of internal control that is considered the formal definition today.
Internal Control is defined as a process, effected by an entity's board of directors, management and other personnel designed to provide reasonable assurance regarding the achievement of objectives in the following categories:
Although this formal definition refers to internal control as a process, it should be viewed as a series of actions that permeate the entire State Government of Arkansas. Internal controls exist in the basic management processes of planning, executing and monitoring. It should not be viewed as an add-on to these basic management processes but should be viewed as an integral part of them and should be placed at strategic points in these processes to ensure that objectives are achieved
Internal control is at the core of State government fulfilling its mission and achieving its goals while providing safeguards to protect governmental resources. Management of each agency is responsible for implementing appropriate internal control activities that are appropriate to their agency's processes while keeping in mind that effective internal controls benefit rather than encumber management. Costs of implementing internal controls should not exceed the potential loss from fraud or the value of assets that the controls are established to safeguard.
It is vital that everyone understand the concept and importance of internal controls, especially since virtually every State employee has a role in how well the State of Arkansas executes the concept of internal control.
Internal Control consists of five interrelated components. These components are:
Control Environment
The control environment can be best summarized as the attitude that management has about internal controls. If management believes that internal controls are important, is committed to implementing controls and communicates this view to employees, then internal controls are more likely to function effectively. However, if management views internal control as not important or as an obstacle, then this attitude will likely be communicated to employees through management's actions. With this attitude, employees will likely view internal controls as "red tape" to be "cut-through" in order to get the job done. An effective control environment is an intangible factor that sets the foundation for all other components of internal control.
Risk Assessment
All agencies have certain risk involved in meeting their objectives and providing services to internal customers (other State agencies) and external customers (taxpayers of the State). This is based upon the premise that opportunity and risk are related; therefore, State government is exposed to risk by simply fulfilling the opportunity that it has to better serve the citizens of the State. By this definition, it can be seen that risk should not be viewed negatively but simply inherent to the decision of doing business.
Risk assessment is the process used to identify, analyze and manage the potential risks that could hinder or prevent an agency from achieving its objectives.
A risk assessment shall be performed by each agency once every two years. After completion, the assessment shall be forwarded to the DFA-Offtce of Internal Audit. (DFA-OIA) See Appendix Pl- 19-4-505.
Control Activities
Control Activities are the policies, procedures, techniques and mechanisms that enforce management's directives, such as the process of adhering to requirements for budget development and execution. They help ensure that actions are taken to address risks. Internal Control Activities should be an integral part of an entity's processes for planning, implementing, reviewing, ensuring accountability for government resources and achieving effective results.
Internal Control Activities occur at all levels and functions of the entity. They include a wide range of diverse activities such as approvals, authorizations, verifications, reconciliations, performance reviews, maintenance of security and the creation and maintenance of related records that provide evidence of execution of these activities as well as appropriate documentation. Control Activities may be applied in a computerized information system environment or through manual processes.
Click for examples of internal control activities Appendix P 2-19-4 -505
Click for internal control questionnaire Appendix P 3-19-4 -5 05
Information and Communication
For an agency to run and control its operations and achieve its desired objectives, communications relating to both operational and financial data is needed at all levels of an agency in a relevant, reliable and timely fashion.
In addition to internal communications, management should ensure that there are adequate means of communicating with and obtaining information from external parties that may have a significant impact on the agency achieving its goals.
Pertinent information should be identified, captured and distributed in a form and timeframe that permits people to perform their duties efficiently.
Additional points related to communication are made as follows:
Personnel should know their job responsibilities and how their activities relate to the work of others;
A means should exist to permit upward communication within any agency; and Employees should be confident that reprisals will not result from communicating significant information.
Monitoring
Subsequent to implementing internal controls, agencies should periodically monitor and evaluate their effectiveness to ensure that the controls are functioning properly. Potential weaknesses in internal control structure may be identified by Legislative Audit, Internal Audit or by employees of agencies. When members of management are notified of these weaknesses, they should take corrective action to resolve the identified problems in their internal control structure. Although monitoring is a separate component of internal control, it is easy to see how it relates to the component of internal control environment previously discussed.
To support monitoring activities, the DFA-OIA will maintain a database of agency audit findings and will provide agency management with routine reports of all outstanding findings. As audit findings are corrected, agency management must submit documentation of corrective action for the findings to be removed from the database.
As audit findings are brought to the attention of agency management, they will provide information to the DFA-OIA within 30 days of being notified of the finding. Agency audit findings may result from Legislative Audit reports, Internal Audit reports or examinations by the Federal Government, etc. (Findings from sub-recipient audits that receive State or federal funds from agencies are not required to be reported). The information for each finding must be presented on the Audit Finding Form. Click for the Audit Finding Form P 4-19-4 -505
Internal Control and Fraud
To preserve the trust and respect that the public has for the governing process, government agency leaders should take the necessary steps to minimize the risk of fraud, waste and abuse occurring within their agency. The establishment of a strong internal control environment where written policies and procedures are enforced, internal controls are appropriately implemented and employees are educated about fraud and its consequences is one of the best deterrents and methods of curtailing fraud.
The impact that strong internal controls has in deterring fraud and limiting exposure if fraud does occur is irrefutable; however, a strong system of internal controls is no absolute guarantee that all cases of fraud will be prevented. Why? Because the best system of internal control can't prevent collusion between two or more people who are in positions to circumvent the internal control mechanisms, or prevent managers or individuals in key leadership capacities from unduly influencing those responsible for the internal control activities. Therefore, it is important for State government employees to recognize fraud when it is occurring and report the fraudulent activities to the appropriate authority.
Occupational fraud and abuses can be defined as the use of one's occupation for personal enrichment through the deliberate misuse or misapplication of government resources or assets. Occupational fraud and abuses include misappropriation of assets in the form of cash theft, fraudulent disbursements, theft or personal use of inventory or other non-cash assets. Fraud can also take the form of bribery and corruption when kickbacks, gifts or gratuities are offered to government employees from contractors or vendors to influence decisions of government agents or employees.
Anti-Fraud Program
The fundamental elements of an effective anti-fraud program that should be established by each agency are:
It is each agency's responsibility to create a culture of honesty and high ethics. Such a culture is rooted in a strong set of core values (or value system) that provides the foundation for employees as to how the agency conducts its business. It also allows an entity to develop an ethical framework that covers (1) fraudulent financial reporting, (2) misappropriation of assets, (3) corruption, as well as other issues.
Creating a culture of honesty and high ethics should include the following:
Setting the Tone at the Top
The cornerstone of an effective antifraud environment is a culture with a strong value system founded in integrity. The value system is reflected in a code of ethics. The code of ethics should reflect the core values of the entity and guide employees in making appropriate decisions during their workday. The code of ethics might include such topics as ethics, confidentiality, conflicts of interest, intellectual property, sexual harassment and fraud. Each agency shall develop a code of ethics which shall be communicated to each employee. Each employee shall sign a statement that they have received and understand the code of ethics. The Code of ethics shall be included in an employee handbook or policy manual so that it can be referred to when needed.
Click for an example of a Code of ethics Appendix P 5-19-4 -505
Creating a Positive Workplace Environment
Without a positive workplace environment, there are more opportunities for poor employee morale, which can affect an employee's attitude about committing fraud against an entity. Factors that detract from a positive work environment and may increase the risk of fraud include:
Hiring and Promoting Appropriate Employees
Each employee has a unique set of values and personal code of ethics. When faced with sufficient pressure and a perceived opportunity, some employees will behave dishonestly rather than face the negative consequences of honest behavior. The threshold at which dishonest behavior starts, however, will vary among individuals. If an entity is to be successful in preventing fraud, it must have effective policies that minimize the chance of hiring or promoting individuals with low levels of honesty, especially for positions of trust. Proactive hiring and promotion procedures may include:
Training
New employees should be trained at the time of hiring about the entity's values and its code of ethics. This training should explicitly cover expectations of all employees regarding (1) their duty to communicate certain matters, (2) a list of the types of matters, including actual or suspected fraud, to be communicated along with specific examples, and (3) information on how to communicate those matters. In addition to training at the time of hiring, employees should receive refresher training periodically thereafter.
Confirmation
Management needs to clearly articulate that all employees will be held accountable to act within the entity's code of ethics. All employees within senior management and the finance function, as well as other employees in areas that might be exposed to unethical behavior (for example, procurement, disbursement and receipting), should be required to sign a code of ethics annually.
Requiring periodic confirmation by employees of their responsibilities will not only reinforce the policy but may also deter individuals from committing fraud and other violations and might identify problems before they become significant. Such confirmation shall include statements that the individual understands the entity's expectations, has complied with the code of ethics and is not aware of any violations of the code of ethics. The confirmation shall reiterate the employee's obligation to report fraud, waste and abuse of government resources. At the time of performing annual employee performance evaluations, a signed confirmation should be obtained from the employee that they have read and understand the entity's code of ethics.
Discipline
A thorough investigation should be conducted for each alleged incident of fraud If allegations of fraud are substantiated, then appropriate and consistent actions should be taken against violators. When allegations of fraud are brought to entity management, these allegations shall be reported to the DFA-OIA. The DFA-OIA will coordinate the review of the allegations to determine if the allegations are substantiated
Expectations about the consequences of committing fraud must be clearly communicated throughout the entity. For example, a strong statement from management that dishonest actions will not be tolerated, that violators will be terminated and referred to the appropriate authorities clearly establishes consequences and can be a valuable deterrent to wrongdoing.
State employees also have the option of reporting allegations of fraud directly to the DFA-OIA. They can contact the DFA-OIA at (501) 682-0370 or complete a Fraud Reporting form and mail to the DFA-OIA.
State agency management must be familiar with the Arkansas Whistle-blower Act and their responsibility not to take adverse action against a public employee because the public employee or a person authorized to act on behalf of the employee communicates in good faith the existence of waste of public funds, property or manpower, including federal funds, property, or manpower administered or controlled by a public employee, or a violation or suspected violation of a law, rule or regulation adopted under the law of this State or a political subdivision of the State to an appropriate authority. Click for the Fraud Reporting Form P 6-19-4 -505
Click for Arkansas Whistle-blower Act
Evaluation Processes and Controls
Neither fraudulent financial reporting nor misappropriation of assets can occur without a perceived opportunity to commit and conceal the act. Organizations should be proactive in reducing fraud opportunities by (1) identifying and measuring fraud risks, (2) taking steps to mitigate identified risks and (3) implementing and monitoring appropriate preventive and detective internal controls and other deterrent measures.
Identifying and Measuring Fraud Risks
Management has primary responsibility for establishing and monitoring all aspects of the entity's fraud risk-assessment and prevention activities. Fraud risks often are considered as part of an agency-wide risk assessment program, though they may be addressed separately. The fraud risk-assessment process should consider the vulnerability of the entity to fraudulent activity (fraudulent financial reporting, misappropriation of assets and corruption) and whether any of those exposures could result in a material misstatement of the financial statements or material loss to the organization.
The nature and extent of management's risk assessment activities should be commensurate with the size of the entity and complexity of its operations. For example, the risk assessment process is likely to be less formal and less structured in smaller entities. However, management should recognize that fraud can occur in organizations of any size or type. Accordingly, management should develop a heightened "fraud awareness," an appropriate fraud risk-management program and appropriate oversight.
Managing the risk of fraud is the same in principle as managing any other business risk. When considering fraud risks in specific operations, agency management must determine which operational areas are most susceptible to fraud risk. Areas with previous losses, areas handling cash and areas distributing and administering grants are examples of areas that may be more susceptible to fraud.
The fraud risk assessment shall be performed by each agency once every two years.
Mitigating Fraud Risks
Once risk areas are identified by management, it is necessary to evaluate the adequacy of existing internal control activities and determine if further controls or changes to existing controls are required to reduce or eliminate the risk. Although there may be high risk fraud indicators in certain instances, other compensating measures may exist to mitigate the weakness in controls. It may be possible to reduce or eliminate certain fraud risks by making changes to the entity's activities and processes. For example, the risk of misappropriations of funds may be reduced by implementing a central lockbox at a bank to receive payments instead of receiving moneys at the entity's various locations. The risk of corruption may be reduced by closely monitoring the entity's procurement process, etc.
Developing an Appropriate Oversight Process
To effectively prevent or deter fraud, an entity should have an appropriate oversight function in place. Agency management is responsible for overseeing the activities carried out by employees and typically does so by implementing and monitoring processes and controls such as those previously discussed.
Management is encouraged to utilize an internal audit function in carrying out their oversight responsibility. An effective internal audit team can be extremely helpful in performing aspects of the oversight function. Internal auditors have the opportunity to evaluate fraud risks and controls and to recommend action to mitigate risks and improve controls.
Internal auditors can be both a detection and a deterrence measure. Internal auditors can assist in the deterrence of fraud by examining and evaluating the adequacy and the effectiveness of the system of internal control, commensurate with the extent of potential exposure or risk in the various segments of the organization's operations. In carrying out this responsibility, internal auditors should, for example, determine whether:
Agencies that are governed by a board or commission are also encouraged to establish an audit committee to support the oversight function. One way that public officials can enhance accountability and demonstrate proper stewardship over public funds is to establish and support an adequate internal environment within their organizations. A critical element of the internal control environment is an effective audit committee that provides oversight of matters of financial reporting, auditing and internal control. An effective audit committee can provide several important aspects of control, including: ensuring the independence of the internal auditing function and ensuring appropriate action is taken on audit findings. The audit committee serves in a unique capacity as an important communication link among external and internal auditors and operating management and as a means of reducing the risk of management override of key elements of the agency's internal control structure.
A governmental accounting system must make it possible both to:
History. Acts 1973, No. 876, § 12; 1979, No. 833, § 3; A.S.A. 1947, § 13-338.
Rl- 19-4-506 Reporting Capabilities of System
AASIS has the ability to produce many reports. A table which outlines the available reports is located at appendix Pl-19-4-506. The table is categorized by report type and includes the following: financial and accounts payable reports, funds management reports, accounts receivable reports, asset management reports, fiscal control reports, human resources reports and procurement reports. More information can be found on these reports at www, aasis. state, ar. us
R 2-19-4 -506 General Reporting and Year End Closing Procedures
Purpose
This portion of the Guide establishes the State reporting policies and procedures governing the accumulation of accounting data for reporting purposes and the preparation of the State of Arkansas Comprehensive Annual Financial Report (CAFR). PLEASE NOTE: A table of reports available from AASIS is in appendix Pl- 19-4-506.
Applicability & Responsibility
Each of the State of Arkansas' agencies, boards, commissions, departments and institutions is primarily responsible for the collection, maintenance, recording and transmission of financial information and other necessary disclosures to permit the Department of Finance & Administration - Office of Accounting - CAFR Section (DFA-OA-CAFR Section) to prepare financial statements and the related footnotes in accordance with Generally Accepted Accounting Principles (GAAP) and official pronouncements of the Governmental Accounting Standards Board (GASB). Each agency, board, commission, department and institution is also required to provide supplementary information and statistical summaries as requested to allow the DFA-OA-CAFR Section to compile schedules and disclosures to be presented in the CAFR The DFA-OA-CAFR Section is responsible for assisting each entity with its compliance with these reporting requirements, including:
Each agency, board, commission, department and institution is responsible for:
Audit or any external financial auditor commences field work, so the DFA-OA-CAFR Section agency liaison can assist with accounting issues which may arise and make arrangements to be present at the audit exit conference in order to be knowledgeable of audit findings which are communicated by the auditor so resolution or solutions can be accomplished on a timely basis.
Component Units
Governmental accounting standards prescribe two methods for reporting component units of the State in the CAFR. Depending on the component unit's relationship with the State, it is either blended or reported discretely.
Blended component units are reported as part of the primary State government just like a normal State agency, board, commission, department or institution.
Discretely reported component units are reported in a column separate from the primary State government. Component units discretely reported must submit audited financial statements to DFA-OA-CAFR Section.
DFA-OA-CAFR Section personnel assigned to agencies identified as (or having) component units will work with agency personnel to provide additional information and assistance as needed to satisfy reporting requirements.
Governmental accounting systems should be organized and operated on a fund basis. A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations. History. Acts 1973, No. 876, § 12; 1979, No. 833, § 3; A.S.A. 1947, § 13-338. ACA § 19-4-508 -516 Repealed.
History. Acts 1973, No. 876, § 12; A.S.A. 1947, § 13-338; Acts 2001, No. 1453, § 8.
Rl-19-4-518 General Ledger Chart of Accounts
The Financial Management System General Ledger Chart of Accounts contains the asset, liability, fund equity, revenue, expense, operating transfer, other financing sources/uses and prior period adjustment accounts necessary for operating purposes and financial statement presentation for the State of Arkansas. These accounts record the dollar value of the business transactions completed by State agencies.
The general ledger accounts are generic in nature and are established and titled for use by all State agencies. The general ledger accounts will not be set up to record specific transactions of an individual agency unless extraordinary circumstances justify the request.
The following is a general discussion concerning general ledger accounts, their characteristics and purposes. Procedures related to uses for specific transactions are located in other sections of this Guide. Types of General Ledger Accounts:
Asset Accounts
Assets are a probable future economic benefit obtained or controlled by a particular entity as a result of past transactions or events. These economic resources can be tangible or intangible.
Assets are recorded in the general ledger account number range 1000000000 to 1999999999.
Asset accounts may have budget relevant commitment items.
Run AASIS report SKI43 800003 6 to obtain the commitment item for all accounts.
Liability Accounts
Liabilities are probable future sacrifices of economic benefits, arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events. The term does not include encumbrances.
Liabilities are recorded in the general ledger account number range 2000000000 to 2999999999.
The commitment items for all liability accounts are non-budget relevant, also referred to as statistical. One exception to the statistical posting is on the sales/use tax liability, which is non-statistical.
Fund Equity Accounts
Equity accounts are the difference between a fund's assets and liabilities. In governmental funds, it is referred to as fund balance.
Fund equity is recorded in the general ledger account number range 3000000000 through 3999999999.
The commitment items for all fund equity accounts are non-budget relevant, also referred to as statistical.
Revenue Accounts
Revenues are inflows or other enhancements of assets during a period from delivering or producing goods, rendering services or carrying out other activities that constitute an agency's operations. Revenues are recognized in the accounting period in which they become measurable and available for modified accrual and when they become measurable and earned for full accrual. Moneys receipted should be recorded as revenue upon the first receipt. Generally movements of moneys between State agencies or an agency's fund groups should not be recorded as revenue. They should be recorded as transfers. The Governmental Accounting Standards Board (GASB) requires that, if goods or services are provided between agencies and the value is approximately what it would be to receive the same goods or services from an outside source, the transaction be recorded as an expense to the paying agency and revenue to the receiving agency.
Revenues are recorded in the general ledger account number range 4000000000 through 4999999999.
The commitment items for all revenue accounts are non-budget relevant, also referred to as statistical.
Expense Accounts
Expenses are outflows, consumption of assets or incurrence of liabilities during a period from delivering or producing goods, rendering services or carrying out other activities that constitute an agency's operations. Expenses are generally recognized in the period when incurred regardless of the timing of the related disbursements with the following exception. Certain expenses are recognized when due for modified accrual such as debt service payments, claims and judgments, accrued leave and net pension obligations. Moneys that are moved between State agencies or fund groups are generally not an expense but a transfer. However, the Governmental Accounting Standards Board (GASB) requires that, if goods or services are provided between agencies and the value is approximately what it would be to receive the same goods or services from an outside source, the transaction be recorded as an expense to the paying agency and a revenue to the receiving agency.
Expenses are recorded in the general ledger account number range 5000000000 through 5999999999.
Expense accounts may have either budget relevant or non-budget relevant commitment items. Run AASIS report S_KI4_ 38000036 to obtain the commitment item for general ledger accounts.
Period ending accrual entries are made to non-budget relevant general ledger accounts that are ties to statistical commitment items. However, all warrants, checks and inter-agency transfers for expenses must be coded to budget relevant general ledger accounts with a non-statistical commitment item.
Operating Transfer Accounts
Operating transfers are used to record transfers of funds. They are legally authorized transfers from a fund receiving revenue to the fund through which the resources are to be expended. They include inter-fund transfers (transfers between two or more State agencies) and intra-fund transfers (transfers within a State agency).
Operating transfers are recorded in the general ledger account number range 6000000000 through 6999999999 along with Other Financing Sources/Uses and Prior Period Adjustments.
At the present time, all Operating Transfers have non-budget relevant commitment items.
Other Financing Sources/Uses Accounts
Other Financing Sources/Uses Accounts are used to record inflow/outflow of resources that are not revenue/expense.
Other Financing Sources/Uses are recorded in the general ledger account number range 6000000000 through 6999999999 along with operating transfers and prior period adjustments.
All Other Financing Sources/Uses accounts for use by agencies other than certain accounts set up for use by DFA Employee Benefits Division only are non-budget relevant.
Prior Period Adjustments
Prior Period Adjustments are the net effect of changes resulting from the correction of errors which occurred in prior fiscal years. No Prior Period Adjustment shall be recorded by an agency without prior authorization from Department of Finance and Administration - Office of Accounting (DFA-OA).
Prior period adjustments are recorded in the general ledger account number range 6000000000 through 6999999999 along with operating transfers and other financing sources/uses.
All Prior Period Adjustment accounts are non-budget relevant.
AASIS Reports S_ALR 87012333, S_ALR 87012326 and S_ALR 87012328 all can be used to produce lists of the Chart of Accounts. In order to receive an accurate report, Chart of Accounts and Company Code must both reflect ARK.
Contact DFA-OA for additional information concerning the Chart of Accounts.
R 2-19-4 -518 Journal Entries
Journal entries are used to change the posted value of a general ledger account balance or sub-ledger balance that is specific to a single business transaction. Generally, these include correcting the posting of a cash receipt, check or warrant to an improper account. Journal entries are also used to adjust the ending or beginning balance of an account so that the general ledger, as well as sub-ledgers is maintained in accordance with Generally Accepted Accounting Principles (GAAP), State policies, and audit requirements, such as year-end accruals for financial reporting.
Most transactions do not originate in the general ledger but rather in one of the modules (sub-ledgers) that feed the general ledger, such as the Accounts Payable and Accounts Receivable modules. In order to maintain module integrity, proper audit trails and to comply with external audit requirements, it is imperative that adjustments or corrections be made in the module from which a transaction originated whenever possible. Thus, adjustments or corrections made directly in the general ledger should be relatively few in number. In AASIS, a journal entry is prepared, checked and parked by one staff member; and it is approved and posted by another staff member. The approving staff member is responsible for ensuring that each journal entry is:
PLEASE NOTE: Do not use simple one and two word explanations, such as "correction error," "transfer," "recovery," etc. It is critical that an accurate and meaningful description be provided for accounting, reporting and audit purposes.
PLEASE NOTE: the CFO or his designee shall approve in writing journal entries to record anything other than a summarized monthly recording of cash receipts or commercial bank activity.
PLEASE NOTE: Agencies not using AASIS shall retain original copies of journal entries processed, complete with original authorization signatures and supporting attachments, for audit verification and review.
Recurrins Entries
Recurring accounts payable and accounts receivable entries may be entered by agency personnel when normal operation of the State's accounting system resumes each fiscal year, as well as during the fiscal year. Items that require payment before mid-July should be paid as a direct invoice for the July payment only. Refer to AASIS web site at http://www.aasis.state.ar.us/ and their transaction training tutorials for detailed instructions regarding the proper procedures to enter recurring entries.
Recurring entries must be reviewed and approved in writing by the agency Chief Fiscal Officer (CFO). A list of recurring entries can be obtained and printed with transaction ZF15 in the State's accounting system. The listing must be forwarded to the DFA - Office of Accounting-CAFR Section with the agency's CFO's signature and the date of the review prior to processing. Requests to change or delete recurring documents must also be sent to the DFA - Office of Accounting-CAFR Section by the agency CFO. Include the document number and a reason for the change or deletion.
The DFA - Office of Accounting is responsible for the processing of recurring entries. Office of Accounting personnel will review for unauthorized entries. Unauthorized recurring entries will be deleted prior to the monthly posting of the recurring entries.
Expenditure Error Corrections
An Expenditure Error Correction is made by entering a journal entry that reclassifies an expense paid to/from:
* The wrong fund.
* The wrong funds center.
* An incorrect commitment item.
* An incorrect general ledger account.
* An incorrect Work Breakdown Structure (WHS) Element.
* An incorrect Internal Order.
* Or any combination of the list above.
Certain restrictions apply to Expense Error Corrections:
* No prior fiscal year expenses may be corrected through an Expense Error Correction.
* Expense Error Corrections cannot be made between funds held at the Treasurer of State and a cash fund.
* Expense Error Corrections cannot be made between Treasury appropriations and cash appropriations.
* Expense Error Corrections cannot be made between business areas. Errors of this type must be handled on a case by case basis by the Department of Finance and Administration-Office of Accounting (DFA-OA).
Error corrections that do not cross funds
If the correction is only a reclassification of general ledger expense accounts or cost center and the expense accounts have the same commitment item (character code), fund and funds center (appropriation), a two-sided journal entry is needed Debit the correct general ledger expense account and credit the incorrect general ledger expense account. This posts the expense to the correct general ledger account/internal order/WBS element and deducts the expense from the wrong general ledger account/internal order/WBS element without expensing the item a second time and overstating the business area's expenses. There is no funds transfer generated. The affected business area may park and post this type of expense error correction.
Error corrections from one Fund and Funds Center to another Fund and Funds Center
If the expense to be corrected is incorrectly posted to an inappropriate fund, funds center (appropriation) and/or commitment item (character code), a four-sided entry is needed. These expense error corrections involve funds center (appropriation) restoration and must be posted and sent to the Auditor of the State by DFA-OA. The first two sides of the entry debit the correct general ledger expense account and cost center/fund/funds center (appropriation) combination and credit the incorrect general ledger expense account and cost center/fund/funds center (appropriation) combination. The last two sides of the entry reduce cash in the fund that should have paid the expense and restores cash in the fund that incorrectly paid the expense.
See: P 3-19-4 -518
Elements needed for the journal entries are:
* The original document number that was incorrect as a reference number. This number is used as a search criterion when displaying or changing documents in the State's Accounting System.
* A brief description providing justification for the expenditure correction.
* Use document type ZE for all expense error corrections.
The transaction to process error corrections is FB50. The document generated by this transaction must be parked. The document is not complete when parked, and the current appropriation amounts will not be updated until the document is approved and posted. After parking the expense error correction documents, the agency must notify DFA-OA-Funds Group via e-mail with the parked document number or the "Expense Error Correction Request" Form to complete the processing.
Service Bureau agencies should complete the "Expense Error Correction Request" Form and submit it to DFA-OA-Service Bureau (DFA-OA-SB). DFA-OA-SB will enter and park the document and then notify DFA-OA Funds Manager.
After the document has been reviewed for correctness and the reference document has been reviewed, the error correction will be posted and adjustments can be seen in the State's accounting system depending on the type of error correction being processed.
Expense Error Correction Matrix
|
Changes fund |
Does not change fund |
Changes funds center (same fund) |
Changes funds center (different fund) |
Add or change WBS Element or Internal Order (same fund) |
Changes Commitment Item (same fund) |
Changes Commitment Item (different fund) |
|
|
Two line journal entry - parked and posted by agency Example: DR Expense CR Expense |
Do not use |
Use |
Do not use |
Do not use |
Use |
Do not use |
Do not use |
|
Two line journal entry - parked by agency, posted by DFA - OA Example: DR Expense CR Expense |
Do not use |
Do not use |
Use |
Do not use |
Do not use |
Use |
Do not use |
|
Four line journal entry - parked by agency, posted by DFA - OA Example: DR1100001006 CR Expense DR Expense CR1100001005 |
Use |
Do not use |
Do not use |
Use |
Do not use |
Do not use |
Use |
History. Acts 1973, No. 876, § 12; A.S.A. 1947, § 13-338; Acts 2001, No. 221, § 4; 2003, No. 1463, § 8; 2005, No. 237, § 2.
For the purpose of establishing the proper accounts, for budgetary control, for accounting, and for other provisions of this chapter, the appropriations of the General Assembly shall be classified under one (1) or more of the classifications prescribed in §§ 19-4-521 - 19-4-525. The purposes for which these appropriations may be used are defined as prescribed in §§ 19-4-521 - 19-4-525, but not necessarily limited thereto. However, the State's financial management system may invoke additional budget control using features of the system that are in addition to the appropriations of the General Assembly.
History. Acts 1973, No. 876, § 12; 1977, No. 813, § 1; 1979, No. 833, §§ 1, 2; 1981, No. 741, § 1; 1981, No. 924, § 1; 1983, No. 628, § 1; 1985, No. 365, §§ 2, 3, 12; A.S.A. 1947, § 13-338; Acts 2001, No. 1453, §9.
The personal services classification shall be for regular full-time, part-time, and extra-help employees, employer matching costs, employer special or extra compensation, overtime earnings, and other employee benefits that are legally authorized:
History. Acts 1973, No. 876, § 12; 1977, No. 813, § 1; 1979, No. 833, §§ 1, 2; 1981, No. 741, § 1; 1981, No. 924, § 1; 1983, No. 628, § 1; 1985, No. 365, §§ 2, 3, 12; A.S.A. 1947, § 13-338; Acts 1987, No. 646, § 1; 1999, No. 1280, § 11; 2001, No. 1453, § 10; 2005, No. 251, § 2.
History. Acts 1973, No. 876, § 12; 1977, No. 813, § 1; 1979, No. 833, §§ 1, 2; 1981, No. 741, § 1; 1981, No. 924, § 1; 1983, No. 628, § 1; 1985, No. 365, §§ 2, 3, 12; A.S.A. 1947, § 13-338; Acts 1987, No. 646, § 2; 1997, No. 342, § 40; 1997, No. 1211, § 29; 2001, No. 163, § 1; 2001, No. 1453, § 11.
Rl-19-4-522Continuing Professional Education
Continuing Professional Education - For the efficiency and effective operations of the agency, a division at their discretion may pay for continuing professional education for their employees as long as the courses do not lead to a degree.
This classification shall be applicable to all appropriations made by the General Assembly from State, federal, or other moneys for educational assistance, welfare grants, rehabilitation services, aid to counties and municipalities, and to all other special appropriations which have for their purpose the appropriating of State, federal, or other moneys for public benefits.
History. Acts 1973, No. 876, § 12; 1977, No. 813, § 1; 1979, No. 833, §§ 1, 2; 1981, No. 741, § 1; 1981, No. 924, § 1; 1983, No. 628, § 1; 1985, No. 365, §§ 2, 3, 12; A.S.A. 1947, § 13-338.
History. Acts 1973, No. 876, § 12; 1977, No. 813, § 1; 1979, No. 833, §§ 1, 2; 1981, No. 741, § 1; 1981, No. 924, § 1; 1983, No. 628, § 1; 1985, No. 365, §§ 2, 3, 12; A.S.A. 1947, § 13-338; Acts 2001, No. 1453, § 12.
Rl- 19-4-524 Construction and Permanent Improvements
The Arkansas Building Authority ("ABA") was established to oversee and manage capital improvements, real estate transfers and leases. ABA has established policies and guidelines governing the acquisition, construction, equipping, maintenance and operation of public buildings and other real property. The Boards of Trustees of the University of Arkansas, Arkansas State University, University of Central Arkansas, Henderson State University, Arkansas Tech University, Southern Arkansas University and other governing boards of public institutions of higher education with the approval of the Department of Higher Education, as well as the State Highway Commission, are not required to obtain approval or any other form of advice for projects from Arkansas Building Authority (ABA). All other agencies, departments and institutions should refer to ABA policies and procedures in addition to the guidelines provided herein. The ABA policies and procedures, known collectively as ABA Minimum Standards and Criteria, are located on ABA's web site, http://www.arkansasbuildingauthority.com. (ACA § 22-2-101 et seq., ACA § 6-62-302 )
State agencies, departments and institutions are required to obtain legislative authorization prior to the construction and or acquisition of any lands, buildings, structures, utility systems or similar facilities to be financed in whole or in part by State Treasury Funds, Cash Funds, Federal Grants, Revenue Bonds, or Revenue Notes provided by law, agency or institutional receipts, donated funds from private sources or a combination of the above sources. (ACA § 22-2-108(2) (B), ACA § 22-2-108(7) (B), ACA § 22-9-103(b), ACA § 22-9-104 )
Construction Approved by the General Assembly (During Session)
All State agencies, except the Arkansas State Highway and Transportation Department, must submit a Method of Financing (MOF), Pl- 19-4-524, to the Department of Finance and Administration-Office of Accounting-Funds Group (DFA-OA-FG) before entering into any contract or making any commitment of funds against a construction and permanent improvements appropriation. (ACA § 19-4-1403, ACA § 19-4-1407, ACA 22-2-102 )
Construction Not Approved by the General Assembly (Between Sessions)
If prior legislative authorization has not been received and a State agency, department or institution, excluding the Arkansas State Highway and Transportation Department, desires to make a capital expenditure for construction and/or acquisition of lands, buildings, structures, utility systems or similar facilities between sessions of the General Assembly, the agency, department or institution must submit a request for such expenditure to the Chief Fiscal Officer of the State. The request must include a MOF Form. The request shall be reviewed for approval by the Chief Fiscal Officer of the State. Project requests $250,000 or less may be reviewed by the Governor. Project requests in excess of $250,000 require the Chief Fiscal Officer to submit the MOF to the Legislative Council for its review. Upon favorable review, the requesting agency, department or institution may proceed with the capital expenditure. (ACA § 19-4-1407, ACA § 22-9-103, ACA § 22-9-104 )
MOF Processing
Upon certification of the availability of appropriations, if applicable, and funds, the DFA-OA approves the MOF. A copy of the approved MOF is returned to the originating agency. The agency making the request is responsible for providing its contracting parties with a copy of the MOF. (ACA § 19-4-1403, ACA § 19-4-1407, ACA § 19-4-1409 )
If the project's estimated costs or funding sources change, a revised MOF must be submitted Revisions to approved MOF shall be submitted in the same form and manner as that of the original MOF. (ACA § 19-4-1407 )
Processing of Payments
Payments to contractors may be made at the conclusion of the contracted work or may be in the form of progress payments. Progress payments are payment for a portion of work completed on public construction contracts in connection with estimates submitted by a prime contractor to the State agency, department or institution. Such estimates shall be reported by measurable units of the contract completion and compared to the actual progress of project completion. Prior to payment, the estimate must be approved by the architect, contractor or his representative.
When a contractor submits a properly prepared estimate of work completed on a construction project and such request for payment conforms to the provisions of the construction contract and laws of the State of Arkansas, the following allowable time for the processing of the estimate is permitted, excluding time required for transmittal to each party, for each of the respective parties involved:
* Architect or other design professional - Five (5) working days
* State agency or institution of higher education exempt from ABA review & approval - Five (5) working days
* Department of Finance and Administration - Five (5) working days
Each of the parties above is to make a notation on the request for payment completed to indicate the date and time of receipt as well as a notation to indicate the date and time of forwarding for further processing to aid in the investigation of delays in processing, if necessary.
In the event that a delay occurs during payment processing, the agency where the delay occurs is responsible for notifying the contractor that payment has been delayed and the related reasons. If the delay is attributable to one of the parties listed above, a penalty of 8% per annum of the amount of the request for payment shall be assessed against the parties responsible for the delay. The Chief Fiscal Officer of the State shall direct such payment rendered to the contractor. (ACA § 19-4-1411 )
Retainage on Public Construction Contracts
An invoice for payment must include the total amount of the estimated completed project to date less total previous payments. The contractor is entitled to 90% of the progress payment when due. The remaining 10% is held by the State agency to assure faithful performance of the contract. After the architect and/or engineer certify the construction project is 50% complete, no additional retainage will be withheld. Because the retainage is not applicable to those materials and/or equipment required by the construction contract to be stored on the job site or in a bonded warehouse, the invoice for payment must provide enough detail to identify the portion of the payment attributable to such materials and/or equipment from the balance of the invoice total. (ACA § 22-9-604 )
Upon completion of a contract, the originating agency will notify DFA-OA-Funds Group of the conclusion of the contract; no further expenditures or obligations will be incurred and all unexpended or unobligated funds will be blocked Within thirty (30) days after the contract has been substantially completed, the portion of the progress payments withheld by the State agency for retainage shall be paid to the contractor. (ACA § 22-9-601 et seq, ACA § 19-4-1410 )
PLEASE NOTE: Only the provisions of this regulation related to payment and retainage are applicable to projects of public institutions of higher education where funds from private sources exceed $5 million dollars and are sufficient to finance 80% of the estimated cost of such project. (ACA § 19-4-1413 )
Recording
Assets Under Construction should be recorded on each agency's books of record If the agency is using the State's accounting system, expenditures for Assets Under Construction should be recorded using Work Breakdown Structure (WBS) Elements. All WBS Elements containing construction cost should be settled to an Assets Under Construction Asset Shell when the asset is complete or at the end of each fiscal year if the asset is not complete at the end of the fiscal year. For additional information on the use of WBS Elements see Appendix P 2-19-4 -524.
History. Acts 1973, No. 876, § 12; 1977, No. 813, § 1; 1979, No. 833, §§ 1, 2; 1981, No. 741, § 1; 1981, No. 924, § 1; 1983, No. 628, § 1; 1985, No. 365, §§ 2, 3, 12; A.S.A. 1947, § 13-338; Acts 2001, No. 1453, § 13.
ACA§ 19-4-526 Repealed
Except as limited by appropriations and funding by the General Assembly and other provisions of law, state agencies shall have the authority and responsibility to administer their programs as authorized by the General Assembly and shall be responsible for their proper management. History. Acts 1973, No. 876, § 9; A.S.A. 1947, § 13-335.
Rl-19-4-601Appropriations
A funds center (appropriation) is the legal authority provided by the Arkansas General Assembly to disburse funds for programs and services administered by business areas (individual State agencies, boards or commissions). A funds center code identifies the
programs and services to be provided plus the authorization to carry out the programs and/or services. ACA 19-4-520 through 19-4-525 provides a detailed analysis of the various classifications of funds centers (appropriations) and the restrictions regarding their usage. ACA 19-4-701 defines the fiscal periods of the State and the time period of a funds center. The funds center cycle is summarized as follows:
The business area (State agency) prepares the initial biennial budget request in the State's Budget System Pl- 19-4-601 Business Area/ Cost Center Ranges & Functional Areas Table. The Department of Finance and Administration-Office of Budget (DFA-OB) and the Office of Personnel Management-Classification and Compensation Division (OPM-CCD) review the request and assist the business area in its preparation.
Budget requests are presented to the Governor or Governor-Elect for review and recommendations.
Budget requests with the executive recommendations are presented to the Legislative Council/Joint Budget Committee for recommendation or referral to a sub-committee. Legislative recommendations are entered into the State's Budget System by the DFA-OB and OPM-CCD and transmitted to the Bureau of Legislative Research to draft appropriation bills.
The appropriation bill is presented to the General Assembly and can be amended while under consideration.
The Joint Budget Committee reviews all appropriation bills as introduced and takes one of the following actions: pass, hold or refer to committee.
If the appropriation bill is passed by the General Assembly, it goes to the Governor for approval or veto. If approved, the bill becomes law. The Governor's Office sends signed bills to the Secretary of State where Act numbers are assigned
If either the General Assembly or the Governor rejects the appropriation bill, it may be amended and resubmitted or a new bill may be drafted if the deadline for filing appropriation bills has not passed.
In the interim (between sessions of the General Assembly), the Chief Fiscal Officer of the State has the authority to establish and/or increase certain funds center accounts as outlined in the various appropriation acts. All such establishments and increases of funds centers must meet with guidelines established by both the Legislature and the Chief Fiscal Officer of the State.
Fiscal Controls
ACA§ 19-4-608 establishes fiscal controls to prevent deficit spending each fiscal year. Each business area shall prepare an annual operations plan which contains proposed expenditures and anticipated resources on aperiodic basis for the ensuing year. Agencies which receive
general revenue must prepare a quarterly operations plan. Other agencies may prepare an operations plan for any given period (monthly, quarterly, or annually). Prior to the beginning of each fiscal year, the Chief Fiscal Officer of the State provides an estimate of the general revenue funding available for each business area. When the "General Revenue Forecast" is revised, the Chief Fiscal Officer of the State will announce the new forecast and provide, by letter, notification to all business areas which receive General Revenue. The actual notification for the business areas will be prepared and distributed by the DFA-OB. A change in the "General Revenue Forecast" could be an increase or a decrease. The business areas will then provide by letter, worksheet or e-mail the adjustments for their annual operations plan using the Budget Quad coding structure (fund, funds center, commitment item, functional area) to the agency's assigned Budget Analyst in the DFA-OB. Business areas also must include new or revised Certifications of Income to inform the DFA-OB of the amount of revenue that is expected to be collected by the business area. The available funds center will be adjusted to the level of expected revenue.
See the Annual Operations Plan, "Rl- 19-4-608 " for more detailed information.
Funds Management - Budget Structure (Quad)
The Funds Management module ofAASIS is used to ensure compliance with the fiscal laws of the State. There are four elements of master data in the Funds Management module: Funds Center - represents the purpose authorized in the appropriation act and establishes budget control. Funds centers may be further divided into sub-funds centers. The appropriation acts will authorize non-spendable commitment items for some business areas. Special non-spendable commitment items are broken down to sub-funds center/sub-appropriation. A sub-funds center/sub-appropriation is established to transfer budget from the special commitment item to a spendable commitment item. The sub-funds center is used to ensure that the amounts transferred to the spendable commitment items are adequately tracked and are not commingled with the amounts originally appropriated in the spendable commitment items. The funds center is hierarchical in structure.
The funds center account code is a three-digit alpha/numeric, numeric or numeric/alpha code, which identifies a business area's authority to disburse funds. An alpha/numeric code reflects a cash/bank funds center/appropriation (A01). Numeric and numeric/alpha codes reflect a funds center/appropriation in which the funds are deposited in the State Treasury (001,1AA). A sub-funds center is the same numeric or numeric/alpha code with a fourth alpha character (001M).
Commitment Item - represents the funds center/appropriation breakdown by line-item detail. This level is where the funds center is classified in accordance with the expenditure breakdown in ACA 19-4-521 through 19-4-525. Expenditure commitment items begin with the number 5. The first three digits of the commitment item usually correlate to the first three digits of the general ledger account. The last two numbers of the commitment item reflect the existing classification such as salaries or operating expenses. The commitment item is a seven-digit numeric code. The commitment item is determined by the general ledger account.
Transaction S_KI_ 38000036 provides a list of all general ledger accounts along with the assigned commitment items.
PLEASE NOTE: Go to P 2-19-4 -601 for the "Commitment Items Table."
Fund - represents cash/bank and Treasury funds as outlined in the Funds Group located at Rl- 19-5-101. fund is defined as a fiscal and accounting entity with a self-balancing set of accounts which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations.
Functional Area - groups business areas by activity. Each business area is assigned to a functional area. These functional areas are:
|
ADMN |
Financial/Administrative/Internal Services |
|
CCOL |
Community Colleges |
|
CNST |
Constitutional/Judicial |
|
COMM |
Commerce Promotion/Regulation |
|
EDUC |
Public Education |
|
HHS |
Health/Human Services |
|
PROF |
Professional/Service Boards/Commissions |
|
REC |
Recreation/Humanities |
|
RETR |
Government Retirement Systems |
|
SFTY |
Public Safety/Corrections |
|
TCOL |
Technical Colleges |
|
TRAN |
Highway/Transportation |
|
UNIV |
Universities |
|
VTCH |
Vocational Technical Institutes |
For CAFR reporting purposes, a slightly different set of functional areas are used. These functional areas are:
Education
Health and human services
Transportation
Law, justice and public safety
Recreation and resources development
General government
Labor, commerce and regulatory
Debt service
Capital outlay
See Pl- 19-4-601 for a list of business areas along with functional area and cost center range.
Expenditures cannot exceed the budget at the fund/funds center/commitment item/functional area level.
Commitment Items Transfers and Increases
Amounts appropriated in each commitment item are established by the Legislature and can be transferred in the following circumstances:
There are times during the fiscal year when it may be necessary to request adjustments to existing funds centers or establish new funds centers for various reasons. The most common situation of this type would be a transfer of appropriation from a non-spendable commitment item to a spendable commitment item. These transfers are tracked through a sub-funds center if there is more than one commitment item to the appropriation. All commitment items, which are not classified in ACA 19-4-521 through 19-4-524, are considered special and shall be used only for the specific purposes for which such commitment items are made.
Blocked or Inactive Funds Centers
Part or all of the entire budget quad may be blocked or held inactive for one of two reasons:
Lack of funding
Business area discretion
The block will be released as funds become available or, if voluntarily blocked, when the business area requests the release.
Cost Objects
Cost objects (WBS Elements, Internal Orders and Cost Centers) are used in the controlling module ofAASIS to monitor actual transactions against planned revenues and expenditures in detail using cost elements (general ledger accounts). A cost element (general ledger account) cannot be assigned to more than one commitment item (referred to as character code in the previous accounting system). However, many general ledger accounts can be assigned to a single commitment item. With the general ledger account being assigned to the commitment item master record, a system user does not have to decide which account should be used with which commitment item during a transaction posting. See Pl- 19-4-601 Business Area/ Cost Center Ranges & Functional Areas Table.
The following rules apply to cost objects:
Each fund/funds center must be represented by at least one unique cost object.
Many cost objects can be assigned to one fund/funds center. For example, cost centers 123000,124000 and 125000 can all be assigned to fund HSC1111 and funds center 1AA.
A cost object cannot be assigned to more than one fund/funds center. So as noted in the example above, cost centers 123000,124000 and 125000 can only be assigned to fund HSC1111 and funds center 1AA.
WBS (Work Breakdown Structure) elements are used to account for revenues and expenditures for grants received by the State without the creation of additional funds or cost centers. The system also makes it possible to record expenditures on construction projects in accordance with their legislative approved budget if appropriated and to capitalize the related costs for reporting in conformity with generally accepted accounting principles. These may be either statistical or non-statistical in nature. If a WBS element is statistical (informational only, does not have a funds management assignment), budget is reduced based upon the cost center associated with the transaction. A non-statistical WBS element (has a funds management assignment) reduces budget based upon the fund and the funds center assigned to the WBS element. Generally, WBS elements used to account for grant activity are statistical, and non-statistical WBS elements are used with construction projects. See P 2-19-4 -524 for additional information on WBS Elements.
Internal orders are used for unique situations to an agency such as recording training costs for individual classes or for accumulating data for cost allocation purposes. All internal orders are statistical.
Cost centers record revenues and expenditures associated with the agency's management structure. Cost centers cannot be statistical. The fund/funds center is derived automatically when a user enters a cost center. The use of an Internal Order or Statistical WBS Element will not override the cost center. In the event a non-statistical WBS element is used in conjunction with a cost center, the WBS element fund/funds center assignment will override the cost center fund/funds center assignment.
Budget Transfers and Adjustments
Changes in operating conditions may result in the need to adjust the original budget. Appropriation transfers are used to move budget between funds centers, commitment items, funds and functional area. Maintaining the budget includes executing and controlling the budget to prevent deficit spending. Generally, appropriation transfers require special language authorization usually contained in the agency's appropriation act. This special language will either give the Chief Fiscal Officer of the State or the Arkansas Legislative Council authority to review a transfer. If the Arkansas Legislative Council is identified as the authorizing agent in the act, the Performance and Evaluation and Expenditure Review Committee (PEER) must review the transfer when a legislative session is not in progress. In the event that a legislative session is in progress, the Joint Budget Committee must review the transfer.
Certain transfers can be approved by the Chief Fiscal Officer of the State. These types of transfers consist of contingency transfers for Institutions of Higher Education and Budget Classification Transfers as specified in ACA 19-4-522 which meet the 5% or $2,500 rule (These are transfers that do not exceed 5% of the affected maintenance and operation commitment items, up to a maximum of $2,500. The $2,500 limit is cumulative by appropriation per fiscal year). For these types of transfers, budget changes are entered and parked by agency personnel using transaction FR69 (Park Budget Transfer). Agencies shall then contact the DFA-OB with the parked document numbers. The assigned Budget Analyst will review and, if approved, transmit the document number to the Department of Finance and Administration-Office of Accounting (DFA-OA) Funds/Appropriation Manager for final approval and posting at which point the budget is updated
Transfers that do not meet the 5% or $2,500 rule require PEER review. Transfers that must be reviewed by the Performance and Evaluation and Expenditure Review Committee (PEER) are parked by the DFA-OB Budget Analyst and posted by the DFA-OA-Funds/Appropriation Manager after review by the Legislative Performance Evaluation and Expenditure Review Committee (PEER).
Budget Reservation
AASIS provides three methods to set aside appropriation for future expenses:
History. Acts 1973, No. 876, § 9; A.S.A. 1947, § 13-335
Appropriations for retirement benefits, refunds, and social security requirements of the teacher and public employees' retirement systems shall be excluded from the provisions of this subchapter.
History. Acts 1973, No. 876, § 11; A.S.A. 1947, § 13-337.
the provisions of §§ 19-4-601, 19-4-602, and 19-4-605 - 19-4-609 shall not apply to these institutions; they shall be governed by the provisions of this section and by procedures established under authority of § 6-61-209.
History. Acts 1973, No. 876, § 11; 1977, No. 486, § 1; A.S.A. 1947, § 13-337; Acts 1995, No. 1296, § 69.
History. Acts 1973, No. 876, § 9; A.S.A. 1947, § 13-335; Acts 2001, No. 221, § 1; 2003, No. 1463, §§1,9.
ACA § 19-4-605 through ACA § 19-4-606 [Repealed.]
State to substitute his or her individual judgment as to the operation or necessity of any program of any State agency for the judgment of the executive head or board or commission charged with the responsibility for the operation and control of that agency.
History. Acts 1973, No. 876, § 9; A.S.A. 1947, § 13-335; Acts 1997, No. 1354, § 36; 2001, No. 221, §3.
In order to provide proper fiscal controls, the Chief Fiscal Officer of the State shall assure the implementation of the procedures set out in this section:
History. Acts 1973, No. 876, § 9; A.S.A. 1947, § 13-335; Acts 2001, No. 1453, § 14.
Rl-19-4-608 Agency Annual Operations Plan
Agencies must submit an Annual Operations Plan in May of each fiscal year to the Department of Finance and Administration-Office of Budget (DFA-OB). (ACA § 19-4-607 ) An Annual Operations Plan contains an agency's proposed expenditures and anticipated resources for the ensuing fiscal year. The Annual Operations Plan is prepared using the State's budgeting system and upon review by the Department of Finance and Administration Offices of Budget and Accounting, the approved plan will be transferred into the Arkansas Administrative Statewide Information System (AASIS). Forms and instructions are available on the DFA-OB web site at http://www. state, ar. us/dfa/budget/budget index, html.
The S_ALR_87013611 Cost Centers Actual Plan Variance report in AASIS can be used to monitor and compare actual vs planned expenditures. http://aasis. state, ar. us/Reports/reports fifm. htm
If at any time during the fiscal year changes to the Annual Operations Plan result in an increase or decrease in the appropriation and/or funding allocated for expenditure, corresponding adjustments to the Annual Operations Plan must be made in the detail plan in AASIS. (ACA § 19-4-608 ) These changes may be made by accessing transaction KP06 - Activity Input Planning. Although budget is not checked at this level, proper plan maintenance is required for accurate evaluation of agency expenditure variances. Training courseware is available at the following web site: http://aasis.state,ar.us/Training/Courses/default.htm.
PLEASE NOTE: Agencies that do not have access to AASIS should contact their Budget Analyst in the DFA-OB for assistance.
History. Acts 1973, No. 876, § 13; A.S.A. 1947, § 13-339.
History. Acts 1973, No. 876, § 13; 1977, No. 486, § 3; 1979, No. 833, § 4; 1985, No. 365, § 4; A.S.A. 1947, § 13-339; Acts 2001, No. 71, § 1; 2001, No. 1453, § 15; 2005, No. 645, § 1.
Rl- 19-4-702 Payment of Prior Year Obligations
The processing of prior year obligations in the current fiscal year is allowable if the obligations do not exceed funds center (appropriation) or funds available for that fiscal year at the close of business June 30, XXXX, and sufficient funds center (appropriation) and fund is available in the current year. (ACA 19-4-702 ) Funds center availability is determined at the funds center commitment item level. Sub-funds centers should be certified at the authorizing funds center commitment item level. Available funds should be determined at the appropriate fund for disbursement level or the agency's legal or "high level" fund. The "high level" fund will be the fund designated by three alpha characters followed by four zeros if a Treasury fund, and three numeric characters followed by four zeros if a cash fund. However, the first three digits of the fund must be the same on the invoice and the certification. Business areas that share a legal (high level) fund must certify only their portion of the total fund balance as of June 30, XXXX.
A "Prior Year Obligation" is one for which goods/services were received and accepted prior to June 30, XXXX, for which no remittance had been made. These payments must be identified and recorded as an Accounts Payable for the prior year. When entering the transaction into the State's accounting system a prior year obligation must be identified by adding a preceding "Y" reference to the vendor's invoice number in the reference field. For example, if the invoice number is ABC123, you should put YABC123 in the reference field. Those obligations that are created when goods or services are received over a period of time which spans June 30, XXXX, are not considered a "Prior Year Obligation."
Goods and services purchased with a P-Card should be expensed in the year they are received To ensure proper recording of expenditures, it is recommended that the P-Card not be used for purchases during the dates of June 10 - June 30 of each year. Any P-Card purchases not paid by warrant prior to the last day of the Fiscal Year must be handled as "Y Vouchers" when paid the following Fiscal Year. For more information on P-Cards, go to http://www. arkansas.gov/dfa/procurement/documents/pcardman_ 051905.pdf
Certification Required
Prior year obligations must be certified by the disbursing officer with a certification letter. With the certification letter, the disbursing officer is stating that the expenditures have been reviewed, the cumulative amount of all "Y" invoices processed have been monitored and the invoices have not exceeded the balances available as of June 30 of the prior year. A certification letter must be retained by each agency listing the invoice(s) to be paid The letter will designate the appropriate business area (agency), funds center (appropriation),
commitment item (character code) and fund (cash in Treasury or cash in bank). Each certification letter will state the funds center and fund codes and that the balance of each for the previous year was sufficient to pay the invoice. The certification letter will be retained at the agency for review by the Division of Legislative Audit of the Legislative Joint Auditing Committee and other interested parties.
Exempt from Certification
There are several circumstances when the certification process is not necessary. However, the invoices must still be coded as a "Y" invoice when the payment is made in the next fiscal year. Items paid from carry-forward appropriations, grant payments, construction appropriations and employee matching payments (insurance, social security, retirement, etc.) do not require certification. Items that, because of the billing methods, contain charges for both fiscal years such as: gas card purchases, utility bills, and travel expenses do not require certification. Payroll that commences in the closing period of one fiscal year and ends in the following fiscal year does not require certification.
Expenditures Limited to Budget
If there were insufficient funds or funds center available as of June 30 of the prior year, the invoice cannot be paid and must be submitted to the Arkansas State Claims Commission for payment. The Arkansas State Claims Commission will pay the invoice from the Claims Commission's revolving Claims Payment fund and then request a transfer of funds from the agency. The vendor must file a claim for payment of the invoice, and the agency has the chance to deny or accept liability. If the agency accepts liability, the claim is paid from the Claims Commission's revolving Claims Payment fund
Agency's Responsibility to Relieve the Liability Once the Transfer Has Been Made If the liability of the invoice was originally recorded on the agency's books in the GRIR (Goods receipt/Invoice receipt) account, the agency will have to relieve the GRIR account once the funds have been transferred to the Claim Commission. To relive the GRIR account, the agency would reverse the GR in the current year and record a journal entry debiting a non-budget relevant expense account and crediting the claims transfer out account.
If the invoice was originally recorded by another process other than the PO process (FB60), the liability would be recorded on the agency's books in the accounts payable account. The agency would relive the accounts payable account by:
* Reversing the FB60 invoice.
* Recording a journal entry debiting a budget relevant expense account and crediting the claims transfer out account.
* If the invoice was originally recorded using the PO process and the GR and IR was processed, the liability would be recorded on the agency's books in the accounts payable account. The agency would relieve the accounts payable account by:
* Reversing the MIRO document and clearing it using transaction F-44 (manual vendor clearing).
* Reversing the GR in the current year once the MIRO document has been cleared.
* Recording a journal entry debiting a non-budget relevant expense account and crediting the claims transfer out account.
After the agency has made the necessary steps to relieve the liability, the agency must notify the Claims Commission so the appropriate journal entry can be made on the Claims Commission's books.
Claims Commission's Responsibility Once the Agency Has Relieved the Liability After the agency has notified the Claims Commission that they have relieved the liability on the agency's books, the Claims Commission must record a journal entry debiting the claims transfer in account and crediting a non-budget relevant expense account.
No warrant issued by the Auditor of State shall be payable by the Treasurer of State unless it shall have been presented for payment within the twelve (12) months immediately following the close of the fiscal year or other appropriate fiscal period against which appropriation the warrant was charged.
History. Acts 1973, No. 876, § 13; A.S.A. 1947, § 13-339.
Rl-19-4- 703Outlawed Warrant Policy
Authority
Arkansas Code 19-4-703, Redemption of Warrants, states: "No warrant issued by the Auditor of State shall be payable by the Treasurer of State unless it shall have been presented for payment within the twelve (12) months immediately following the close of the fiscal year or other appropriated fiscal period against which appropriation the warrant was charged "
Purpose
Warrants that are outstanding at the end of the State Fiscal Year on June 30 and have been issued more than 12 months will be considered to be "outlawed " (i.e. Warrants issued in FY 2002 and still outstanding the first day of FY 2004).
The Treasurer of State- Warrant Division cannot redeem an outlawed warrant. The Auditor of State-Warrant Division cannot reissue an outlawed warrant.
The payee of the outlawed warrant must file a claim with the Arkansas State Claims Commission in order to be compensated
The fund of original disbursement of the outlawed warrant will receive a restoration of the cash balance as a result of the warrant being "outlawed " If the fund of issue or its components are inactive, then the fund/components will be reactivated temporarily for the initial posting followed immediately with a transfer of funds to a current active fund/component.
If the fund is supported by general revenue, the moneys will be reclaimed in part or whole and transferred to the General Revenue Allotment Reserve Fund or other designated fund as dictated by State Law.
Process
The outlawed warrant process begins with the production of a report from the Treasurer of State-Treasury Management System on or about July 10thof each year. This allows for the processing of any warrants that may be in transit through the commercial banking system as of June 30. Federal banking requirements dictate that, if a warrant is presented for payment to a financial institution by close of business on June 30th , the warrant must be redeemed by the State of Arkansas and cannot be outlawed.
The Auditor of State-Warrant Division and Treasurer of State-Warrant Division reconcile outlawed warrant differences between their respective systems. An adjusted report is provided to the DFA-OAfor validation and further reconciliation to outstanding warrants in AASIS. Journal entries are created with document type "ZO" for the initial outlawed warrant posting for funds and components that are currently active. The following entry is made as of current date:
DR 1100001000 (Cash in State Treasury)
CR 6990001000 (Prior Year Warrants Outlawed)
The outlawed warrant general ledger account is a non-budget relevant posting that does not adjust appropriation.
The warrant number is used in the reference field for the posting of the outlawed warrants. The warrant number may also be found in the text column of the document.
If the creation of a warrant affects multiple funds, an individual document with a debit and offsetting credit is posted for each fund.
DFA-OA-Funds Group will be responsible for the "General Revenue Reclaim" (the restoration of cash balance) that is returned during the outlaw process if the original expenditure was from a fund that is supported by general revenue. DFA-OA-Funds Group will create and park a document to reclaim these funds, and they will immediately be posted following the initial posting of outlawed warrants. The document type used for these reclaims is "ZL."
PLEASE NOTE: If a warrant is outlawed, the vendor must request a refund of their moneys by completing and submitting a claim to the Arkansas State Claims Commission. The form can be found at htty://www.claimscommission.ar.sov/claimforms, asp
History. Acts 1973, No. 876, § 13; 1985, No. 365, § 6; A.S.A. 1947, § 13-339.
History. Acts 1973, No. 876, § 13; 1985, No. 365, § 6; A.S.A. 1947, § 13-339.
State agencies, including exempt agencies, may enter into contracts which contemplate the payment of interest, late charges, but only when such late charges are incurred sixty (60) days after payment is due or carrying charges under such regulations as may be promulgated by the State Procurement Director.
History. Acts 1973, No. 876, § 25; 1985, No. 365, § 13; A.S.A. 1947, § 13-351; Acts 1997, No. 1066, § 1.
Notwithstanding the fact that no disbursements may be made during any fiscal period in excess of the appropriations made available by the General Assembly for the fiscal period, it is provided that contracts for improvements including major repairs, alterations, and construction of new buildings and facilities may be let to the extent of the appropriations made available for those purposes for the biennial period. However, no such contracts may be let in amounts exceeding the probable funds available or which are estimated to become available during the period.
History. Acts 1973, No. 876, § 13; A.S.A. 1947, § 13-339.
In the event any State agency shall incur obligations in such manner that the funds allocated or belonging to the agency are depleted and the agency is unable to pay all of its outstanding commitments without incurring a deficit, then the Chief Fiscal Officer of the State may suspend all exemptions under the Arkansas Purchasing Law, § 19-11-201 et seq., with respect to the agency. Under these circumstances, the Chief Fiscal Officer of the State may notify the agency that all future obligations of any kind whatsoever must be approved by the Chief Fiscal Officer of the State before they become valid obligations against the funds of the agency.
History. Acts 1973, No. 876, § 13; A.S.A. 1947, § 13-339.
History. Acts 1973, No. 876, § 13; A.S.A. 1947, § 13-339.
History. Acts 1973, No. 876, § 13; 1977, No. 486, § 3; 1979, No. 833, § 4; 1985, No. 365, § 5;A.S.A. 1947, § 13-339; 2001, No. 1453, § 16; 2005, No. 1172, § 1.
PLEASE NOTE: Refer to Pl- 19-5-101 for instructions and forms.
Rl- 19-4-710 Inter agency/Interfund Transfers
Generally Accepted Accounting Principles (GAAP) defines transfers as flow of assets such as cash or goods without equivalent flows of assets in return and without a requirement for repayment. GAAP also directs that interfund loans that are not expected to be repaid within a reasonable period be reclassified as transfers.
The initial inflow of cash to the State is recorded as revenue by the receiving agency. Subsequent movements of cash, such as a transfer of grant funds being passed to another agency, distributions of general revenue to agencies, etc. are recorded as transfers out by the transferring agency. The agency receiving the cash records the receipt of funds as a transfer in. Subsequent payments to employees and vendors would be coded to the appropriate budget relevant general ledger account code. Transfers of cash between divisions of an agency or between agencies should not be done by warrant. Exception to this process must be approved in writing by DFA-OA.
Legal fund transfers must be approved and posted by the DFA - Office of Accounting- Funds Group. The procedure for recording these transfers is explained in Rl- 19-5-101 -TRANSFERS - Fund Transfer Procedures.
Interfund Services or Commodities Provided and Used
GAAP defines interfund services or commodities provided and used as when one fund provides services or goods to another fund which is then charged for these services/goods received GAAP further directs using this classification when the amount of an interfund charge equals or approximates the external exchange value of the services rendered
Questions that should be asked to determine if a transaction meets the definition of interfund services provided and used are as follows:
To process payments for interfund services or commodities provided using fund transfers, contact your CAFR liaison for assistance. The liaison will provide you with a template and instructions on how to enter the information. The completed template should then be submitted to the DFA-Offtce of Accounting -Funds Group for posting.
For additional information on interagency transfers, please refer to the Frequently Asked Questions (FAQ's) at http://www.state.ar.us/dfa/accounting/word/faqs.doc
In the event that a State agency or its responsibilities, or a part of its responsibilities, is transferred by law within a biennium to another agency, the Chief Fiscal Officer of the State shall transfer all or part of the line-item appropriations, personnel positions, and moneys necessary to accomplish the transfer of responsibilities, subject to the same restrictions and procedures applicable to the original appropriations and funds from which transferred. History. Acts 1973, No. 876, § 13; 1977, No. 486, § 3; 1979, No. 833, § 4; 1985 No. 365, § 5; A.S.A. 1947, § 13-339.
Rl-19-4-711 AGENCY CLOSE OUT
Process
The administrative head of any State agency, board, commission or institution planning to cease operations shall notify the Chief Fiscal Officer of the State in writing of such intent. The notice shall indicate whether:
The agency is being transferred to another agency as specified in ACA 25-2-104 through 25-2-107.
The agency is being abolished, and the operations will cease. The Chief Fiscal Officer of the State will review related legislation and/or executive orders to determine what action should be taken to satisfy obligations, protect the interests of the State and preserve the records of the agency.
Instructions will be issued from the Chief Fiscal Officer of the State to the administrative head of the agency in question and letters of instruction to any department/institution that may be receiving the employees, authority, assets, liabilities and/or records of the closing agency. The instruction will designate the Department of Finance and Administration (DFA) personnel assigned (contact people) who will work with the closing and/or receiving agency and specify what general actions must be taken and lay out a timetable for completion.
Assignments may include:
The DFA contacts will work with the closing and/or receiving agency on all transactions/actions to be accomplished. A "check list" of action, indicating date accomplished will be maintained and submitted by each DFA Office assigned to the DFA-OA upon completion of assignment.
The DFA-OA will prepare a final report for the Chief Fiscal Officer of the State and obtain signatures of administrative heads of agency being closed/receiving agency for all legal documents to ensure the interests of the State are protected. See Pl- 19-4-711 for a sample checklist.
R 2-19-4 -711 NEW AGENCY
State agencies newly created by Acts of the State Legislature and signed by the Governor of Arkansas will be created on the books and records of the State of Arkansas, Treasurer of State and Auditor of State by the Department of Finance and Administration-Office of Accounting (DFA-OA).
The Department of Finance and Administration-Office of Accounting-Funds Group (DFA-OA-FG) will review the appropriation which created the agency, determine their sources of funding and grants their authority for spending levels.
The DFA-OA -Funds Group staff will assign the following items within AASIS to conduct and record the agency's financial transactions: business area number, funds center, funds and cost centers.
The DFA-OA-FG staff will also notify the DFA-Office of Budget, DFA-OA-CAFR Section and the AASIS Support Center of the agency's creation.
The DFA-OA will also notify the Treasurer of State and the Auditor of State's office that a new State agency has been created. Details of their fund and appropriation structures will be provided as necessary to each entity.
The DFA-Office of Budget will assign a Budget Analyst to work with the agency in the design and implementation of an operating budget for the current and future fiscal years.
The DFA-OA-CAFR Section will assign a liaison to the newly created agency.
The AASIS Support Center will assign professional security roles to each AASIS user upon request of the Security Liaison. Each user will also be assigned an ESS security role for employee self service functions.
At the direction of the Chief Fiscal Officer of the State the new agency is set up as an online agency commonly referred to as a user agency, a service bureau agency or a reporting agency based upon the agency's resources.
Human resource issues/actions can be found at http://www.state.ar.us/dfa/opm/index.html. The following sample "check lists" for accounting and non-human resource issues are available online:
See P 2-19-4 -711 for checklist for new agency creation
As used in this subchapter, unless the context otherwise requires:
History. Acts 1975, No. 5, §§ 1, 2; A.S.A. 1947, §§ 13-356, 13-357.
History. Acts 1975, No. 5, § 4; A.S.A. 1947, § 13-359; 2001, No. 1453, § 17.
History. Acts 1975, No. 5, § 7; 1975, No. 265, § 1; 1977, No. 713, § 14; A.S.A. 1947, §§ 13-356.1, 13-362; Acts 1997, No. 540, §39; 1997, No. 1000, § 17; 1997, No. 1179, § 3; Init. Meas. 2000, No. 1,§ 19.
ACA§ 19-4-804 Repealed
Rl-19-4-805Management of Cash Funds
Agency Bank Reconciliations
Arkansas Code 19-6-103 states that "All taxes, licenses, fees, permits, or other income collected by any board, agency, or commission by virtue of the authority of the State of Arkansas which are designated by law to be deposited in a depository other than the State Treasury are classified as "Cash Funds " and are declared to be revenues of the State to be used as required and to be expended only for such purposes and in such manner as determined by law." Arkansas Code 19-4-801(2) defines Cash Funds "as all moneys, negotiable instruments, certificates of indebtedness, stocks and bonds held by or owned by any State Agency which are not on deposit with or in the trust of the State Treasurer."
Cash expenditures must have legislative authorization (appropriation) and are subject to Accounting, Procurement, State Printing and Arkansas Building Authority regulations unless exempt under Arkansas Code 19-4-803, as amended.
All agencies, other than institutions of higher learning, shall request and abide by the recommendations of the State Board of Finance as to the best investment decisions of any idle cash balances. The institutions of higher learning shall have the right to determine the depositories and the nature of investments of any of their Cash Funds which are not currently needed for operating purposes.
All cash activity must be recorded in AASIS using the proper transactions. This includes interest earned on investments. Various sections of the Financial Management Guide contain instructions for most types of transactions that occur in a Cash Fund and should be reviewed for the correct accounting procedure for those transactions.
The AASIS balance at month end must be reconciled to either the check register or the bank statement depending upon whether the agency is a user agency (an agency with direct access to AASIS) or Department of Finance and Administration- Office of Accounting-Service Bureau (DFA-OA-SB) agency (an agency who uses DFA-OA-SB to record transactions in AASIS-they do not have direct access). The following procedures must be followed when reconciling the AASIS balance at month end:
User Agencies
There are two different business processes that determine the method to be used for month-end reconciliations performed by user agencies: those with commercial bank accounts that are held and managed at the agency location and those with local accounts held and managed at local offices at multiple locations.
User Agency (Accounts Held at Agency Location)
If an agency has a commercial bank account(s) that is held at the agency location, transactions must be entered in AASIS on a "real time" basis. This means that transactions should be recorded on a daily basis. At any time, a trial balance pulled from AASIS should equal the balance held at the commercial bank account plus or minus any reconciling items (i.e. outstanding checks, deposits in transit, interest, etc.).
These accounts must be reconciled to the commercial bank account statement on a monthly basis using the "Cash in Bank Reconciliation" Form, Pl- 19-4-805. Instructions for the use of this form are provided with the form.
PLEASE NOTE: A journal entry to correct any reconciling item, caused solely by a difference in when the transaction is recorded in two different periods by the perspective parties, must be made in the month following the event that caused the reconciling item to be created.
After the reconciliation is completed, the agency must submit a copy of the first page of the bank statement and the "Cash in Bank Reconciliation" Form to DFA-OA-Fund Reconciliation. These shall be received by DFA-OA-Fund Reconciliation by the 15' of each month.
User Agency (Accounts Held at Local Offices at Multiple Locations)
If an agency has commercial bank accounts held at local offices at multiple locations, with approval from the DFA-OA-Fund Reconciliation, the agency can make an entry at month end for the total of transactions that occurred during that month. These entries must be made in the month that the transactions) occurred.
These accounts must be reconciled to the commercial bank account statement on a monthly basis using the "Cash in Bank Reconciliation" Form. Instructions for the use of this form are provided with the form.
PLEASE NOTE: A journal entry to correct any reconciling item, caused solely by a difference in when the transaction is recorded in two different periods by the perspective parties, must be made in the month following the event that caused the reconciling item to be created.
After the reconciliation is completed, the agency must submit a copy of the first page of the bank statement and the "Cash in Bank Reconciliation" Form to DFA-OA-Fund Reconciliation. These shall be received by DFA-OA-Fund Reconciliation by the 15th day after the cutoff date of the statement period.
DFA-OA-SB Agencies
If an agency uses DFA-OA-SB to record transactions in AASIS, the agency must send in transactions on a "real time" basis to be entered This includes both incoming and outgoing cash transactions for both appropriated and non-appropriated accounts.
The agency must reconcile its check register to the commercial bank account statement at month end and submit a copy of the reconciliation and the commercial bank account statement to DFA-OA-SB by the 15' of the following month. DFA-OA-SB will reconcile the agency's account balance with AASIS utilizing the reconciliation.
PLEASE NOTE: A journal entry to correct any reconciling item, caused solely by a difference in when the transaction is recorded in two different periods by the perspective parties, must be made in the month following the event that caused the reconciling item to be created. ALSO NOTE: This section shall not apply to institutions of higher education which maintain full accounting records separate and apart from AASIS. Receipts and disbursements of such agencies shall be submitted in summarized form for general review and reference.
R 2-19-4 -805Agency Investments)
If an agency has investments, interest earned or any other transactions occurring must be recorded in AASIS on a monthly basis. When a monthly statement is received, the statement must be submitted to DFA-OA-Fund Reconciliation by the 15' of each month. If the investment statements are received quarterly, semi-annually or annually, those statements must also be submitted by the 15' of the following month.
The agency must reconcile the investment statement balance to AASIS balance to verify that all transactions have been recorded If the agency determines that there are reconciling items, a "Cash in Bank Reconciliation " Form must be completed and submitted with copies of the investment statements to DFA-OA-Fund Reconciliation.
PLEASE NOTE: This section shall not apply to institutions of higher education which maintain full accounting records separate and apart from AASIS.
History. Acts 1975, No. 5, § 10; A.S.A. 1947, § 13-365; Acts 2003, No. 656, § 1.
Rl- 19-4-806 Imprest Fund Accounts
Authority
"Imprest" fund accounts may be established and maintained by State government agencies,boards, commissions and institutions. Authority to establish such accounts is authorized in ACA 19-4-806, ACA 19-4-1802 and 19-4-904(d). Record keeping and documentation requirements of such accounts are prescribed by ACA 19-4-1108 and ACA 19-4-815. The authority to establish imprest accounts is vested in the Chief Fiscal Officer of the State. All requests to establish, increase or decrease the authorization of such accounts must be submitted on an "Imprest Fund Request" Form, Pl- 19-4-806.
Imprest fund accounts authorized for agencies, boards, commissions and institutions include:
Under no circumstances may imprest accounts be used to circumvent purchasing regulations or make payroll advances.
All cash and cash equivalents must be recorded on AASIS or the agency's original book of record.
If an agency has an internal audit function, each imprest fund account must be audited no less than each biennium If the agency does not have an internal audit function, then each imprest fund account must be reviewed by management personnel on an annual basis. The review must include, at a minimum, tying the reconciliation balance to the amount reflected on the AASIS trial balance or the agency's original books of record and verifying that reconciling items are cleared within a two month period.
Purpose
A petty cash account is a small account that may be utilized to pay for minor expenses such as postage due, freight, etc. It should generally be used to pay for:
Establishment
If a Treasury Fund is used to establish a Petty Cash Fund, a warrant must be issued. When recording the warrant, expense code 5120010000 should be used. A journal entry must be made to reclassify this warrant from expense using a Non-Budget Relevant (NBR) general ledger account to the petty cash or imprest bank funds general ledger account. The journal entry would be as follows:
For petty cash held at agency
Debit 1010103000 Petty Cash
Credit 5080029000 NBR Other Expenses and Services
For petty cash held at a financial institution
Debit 1100002100 Imprest Bank Funds
Credit 5080029000 NBR Other Expenses and Services
If a commercial bank account is used to establish a Petty Cash Fund, the following entry will be made:
For petty cash held at agency
Debit 1010103000 Petty Cash
Credit 1100002000 Non-AASIS House Bank or the agencies AASIS House Bank
For petty cash held at a financial institution
Debit 1100002100 Imprest Bank Funds
Credit 1100002000 Non-AASIS House Bank or the agency's AASIS House Bank
Agencies that use AASIS to process checks and warrants will need an agency vendor number set up by the Department of Finance and Administration-Office of State Procurement (DFA-OSP). The title should include the agency name, agency employee "Custodian" and "Petty Cash." More detailed instructions are located following the section on Travel Advance Revolving Fund.
If the petty cash funds are held at the agency, the general ledger account is 1010103000. If they are held at a financial institution, the general ledger account is 1100002100. In either case, the general ledger account should remain at the set amount unless the amount of the petty cash fund is changed. In the event that the established amount needs to be increased, petty cash should be debited and cash in bank credited if a commercial bank account is funding the petty cash increase.
Control
In order to properly control a petty cash system certain restrictions and regulations must be established and maintained. The minimum requirements include:
One person (Custodian) is to be responsible for the fund. This person must be appointed by the agency head or designee.
One person other than the Custodian shall authorize disbursements.
Petty cash vouchers shall be numbered with the prefix representing the fiscal year (such as FY03), a hyphen, and number beginning with 1 (one) each year and progressing upward, sequentially, until the end of the fiscal year.
The Custodian and the person, who authorizes the disbursement, must not have access to bank accounts, cash receipts and/or general accounting records.
Petty cash funds shall not be used to cash personal checks, make personal loans, or reimburse individuals for travel expenses.
Petty cash vouchers shall be reconciled monthly and internally audited
Accounting for and Replenishing
Prior to making petty cash disbursement, a petty cash voucher must be completed and signed by the person responsible for authorizing the disbursement. The petty cash voucher used must contain, at a minimum, the following information:
* Petty cash voucher number
* Date
* Name of the person receiving the cash (expended by)
* Business area number
* Amount of the disbursement
* A description of the disbursement (purpose or product)
* The cost center code to be charged
* The general ledger codes to be charged
* The initials of the person approving the disbursement
* The initials of the person receiving the cash
* The signature of the person disbursing the funds.
A receipt, sales slip or other evidence of indebtedness must support all petty cash vouchers. See Appendix P 2-19-4 -806 to view a sample of an acceptable petty cash voucher. In the case of recurring items such as postage due, a summary sheet, P 3-19-4 -806, may be used in lieu of a petty cash voucher.
The petty cash voucher must be entered in an Imprest Account Journal, and the original copy shall be retained as documentation to replenish the fund See Appendix P 2-19-4 -806 to view a sample petty cash journal. The petty cash replenishment postings are always made for the amount of actual expenditure from the fund, with the agency name, agency employee "Custodian" and "Petty Cash" as payee on the warrant or check. Petty cash accounts will be replenished as needed and at the end of each fiscal year so that expenses for one year will not carry over to the following year.
At all times petty cash accounts must have a total of cash and/or expenditure receipts equal to the amount reflected at the trial balance level. Issues from and reimbursements to the fund will be subject to audit or inspection by the Department of Finance and Administration and the Division of Legislative Audit at any time.
Moneys and transaction documents of petty cash accounts should in no way be combined with change fund accounts or cash receipts.
Purpose
An agency/institution that receives cash for sales or services will find it necessary to have a "Change Fund" account.
Establishment
If a Treasury Fund is used to establish a Change Fund, a warrant must be issued When recording the warrant, expense code 5120010000 should be used. A journal entry must be made to reclassify this warrant from expense using a Non-Budget Relevant (NBR) general ledger account to the change fund general ledger account. The journal entry would be as follows:
For change fund established by Treasury Fund
Debit 1010102000 Change Funds
Credit 5080029000 NBR Other Expenses and Services
If a commercial bank account is used to establish a Change Fund, the following entry will be made:
For change fund established by commercial bank
Debit 1010102000 Change Funds
Credit 1100002000 Non-AASIS House Bank or the agency's AASIS House Bank
Control
The Change Fund should be small and must be maintained completely separate from any Petty Cash Fund accounts or cash receipts kept by the agency.
Good accounting practices require that the amount of the Change Fund is verified daily, and all overages and shortages are shown in the Imprest Account Journal.
Accounting for and Replenishing
No expenditures are to be made from the Change Fund
On June 1, 20XX, the agency must reimburse any shortages by charging the appropriate expense.
Purpose
Some State agencies and institutions of higher learning have a need for an Activities Revolving Fund to cover the costs of travel expenses to out-of-town games, contests and events, including emergency purchases away from the immediate locale of the institution. The costs of lodging and commercial transportation should be "direct billed" when possible using the Arkansas Agency Travel Card Limitations on advances are governed by Rl- 19-4-1008 "Travel Advance Revolving Funds". For those expenses not direct billed, an "Activities Revolving Fund" may be established and used to purchase goods or services such as:
* Commercial or chartered transportation for official staff and team/group members to and from out-of-town events/contests in which the school is participating;
* Meals and lodging for official staff and student participants while attending out-of-town events;
* Emergency medical services for official staff and participants injured in the course of school related activities;
* Emergency equipment repair or replacement costs;
* Out-of-town official recruitment expenses;
* Any goods or services which place human life or State property in jeopardy unless purchased immediately;
* Payments to students or others working in concession stands and selling tickets to events and to or on behalf of students and/or student athletes for meal allowances when they are required to be on campus during official institutional student holidays in accordance with institutional policy and NCAA regulations;
* Payment to officials and security guards for events;
* Payments to or on behalf of prospects for official expenses associated with a campus visit including travel, meals and entertainment expenses in accordance with institutional policy and NCAA regulations.
Establishment
Activities Revolving Fund accounts are to be applied for and maintained as cash funds on deposit with a financial institution with disbursements made in the form of a check, warrant or electronic deposit rather than cash (currency). The "Imprest Fund Request" Form must be used to request the establishment of an Activities Revolving Fund The amount authorized for each Activities Revolving Fund will be determined by the particular needs of the agency/institution. The initial funds to establish the revolving fund are provided by the benefiting agency/department and must be charged to Commitment Item 02 (Operating Expenses). Another entry is required to reclassify the expense using a NBR general ledger account that will not restore appropriation and record the cash in the imprest fund The entry is as follows:
Debit 1100002100 - Imprest Bank Funds
Credit 5080029000 - NBR Other Expenses & Services
Control
The administrative head of the agency/institution or his/her designated agent is responsible for approving all advances of funds and all expenditures from the fund established for the activities of each applicable department for student events. The minimum requirements include:
* One person (Custodian) is to be responsible for the fund.
* A person other than the Custodian shall authorize disbursements.
* The Custodian and person authorizing disbursement must not have access to bank accounts, cash receipts and/or general accounting records.
* Activities Revolving Funds are not to be used to cash personal checks or make personal loans.
* Revolving fund accounts should be reconciled monthly and internally audited.
* All issues from and receipts to the fund must be supported by signed documents that shall be retained until audited by the Division of Legislative Audit or an independent accounting firm.
Accounting for and Replenishing
Upon receipt of the warrant or check to establish the fund, the fund Custodian will cause a ledger to be established and maintained which reflects:
* The initial amount of the fund and date established;
* Each issue of funds indicating the date issued, issue document number and check number, individual receiving the funds and amount;
* Each receipt of reimbursement indicating the receipt number, individual making the reimbursement, date of reimbursement or receipt and amount;
* Balance of cash in bank.
The Custodian responsible for administering the fund must have on hand at all times either cash in bank and/or signed receipts for travel advances outstanding equal to the amount established for the fund Issues from and reimbursements to the fund will be subject to audit or inspection by the Department of Finance and Administration and the Division of Legislative Audit at any time. The ledger and supporting documentation as specified herein for all entries made thereon must be maintained in proper order for audit purposes. The persons who received advances will reimburse the Activities Revolving Fund through a deduction from their travel reimbursement (Submitted on Form TR-1).
PLEASE NOTE: Moneys or transaction documents of Activities Revolving Fund should in no way be combined with petty cash accounts, change fund accounts or cash receipts.
Purpose
A Travel Advance Revolving Fund is established to provide travel funds for employees who have no other means to pay for travel on official business in connection with their jobs. Travel advances are to be issued and repaid in accordance with Rl- 19-4-1008, "Travel Advance Revolving Funds".
Establishment
Travel Advance Revolving Fund accounts are to be applied for and maintained as cash funds on deposit with a financial institution with disbursements made in the form of a check, warrant or electronic deposit rather than cash (currency). The "Imprest Fund Request" Form is used to request the establishment of a Travel Advance Revolving Fund The initial funds to establish the revolving fund are provided by the benefiting agency/department and must be charged to Commitment Item 02 (Operating Expenses) and GL # 5120010000 (Imprest Fund Establishment).
A journal entry must be made to reclassify this warrant from expense to the travel advance general ledger account. The journal entry would be as follows:
Debit 1100002100 Imprest Bank Funds
Credit 5080029000 NBR Other Expenses & Services
The general ledger account 1100002100 should remain at the set amount unless the set amount of the Travel Advance Fund changes.
Control
The administrative head of the agency/institution or his/her designated agent is responsible for approving all advances of funds and all expenditures from the fund. The minimum requirements for administering the fund include:
* One person (Custodian) is to be responsible for the fund.
* A person other than the Custodian shall authorize disbursements.
* The Custodian and person authorizing disbursement must not have access to bank accounts, cash receipts and/or general accounting records.
* Travel Advance Revolving Funds are not to be used to cash personal checks or make personal loans.
* Revolving fund accounts should be reconciled periodically and internally audited.
Accounting for and Replenishing
Upon receipt of the warrant or check to establish the fund, the fund Custodian will cause a ledger to be established and maintained which reflects:
* The initial amount of the fund and date established;
* Each issue of funds indicating the date issued, issue document number and check/warrant number, individual receiving the funds and amount;
* Each receipt of a warrant/check indicating the warrant/check number, individual for whom the warrant/check was issued, date of warrant/check and amount;
* Balance of cash in bank.
The Custodian responsible for administering the fund must have on hand at all times either cash in bank and/or signed receipts for travel advances outstanding equal to the amount established for the fund Issues from and reimbursements to the fund will be subject to audit or inspection by the Department of Finance and Administration and the Division of Legislative Audit at any time. The ledger and supporting documentation as specified herein for all entries made thereon must be maintained in proper order for audit purposes. Replenishment will be accomplished when the employee to whom funds were advanced repays travel advances through a deduction from their travel reimbursement (submitted on Form TR-1). The replenishment in the form of a warrant/check will be payable to the travel advance fund
Moneys or transaction documents of the Travel Advance Revolving Fund should in no way be combined with petty cash accounts, change fund accounts or cash receipts. A vendor number must be assigned to the custodian of the petty cash accounts. It must be a vendor number created by DFA-Office of State Procurement (DFA-OSP). Questions should be sent to DFA-OSP.
To establish a vendor number, use the following link:https://www.ark.ors/dfa/osp/aasis forms/vendor maintenance form fl0021.html.
ACA§ 19-4-807 -809 Repealed
History. Acts 1991, No. 21, § 1.
ACA§ 19-4-811 -812 Repealed
The responsibility for recovery of erroneous or improper payments shall be with the State agency head, the bonded disbursing officer, or his designated bonded assistant; and the Chief Fiscal Officer of the State shall not be liable under his surety bond for any erroneous or improper payments so made.
History. Acts 1991, No. 21, § 1.
Requirements for supporting documentation for disbursements shall be determined as follows:
History. Acts 1991, No. 21, § 1; 2001, No. 1453, § 21.
History. Acts 1991, No. 21, § 1; 1997, No. 541, § 1; 2001, No. 1453, § 22.
Each State agency which is authorized by law or under the purchasing procedures of this State to enter into contract for the procurement of property, commodities, or services shall keep on file in its respective place of business a copy of such contract for public inspection or audit and shall make a copy of any such contract available to the Chief Fiscal Officer of the State when so required by him or her.
History. Acts 1991, No. 21, § 1; 2001, No. 1453, § 23.
PROFESSIONAL AND CONSULTANT SERVICES CONTRACTS
Rl-19-4-816 Contracts for Procurement of Commodities and Services
Act 1315 of 2003 repealed ACA § 19-4-1701 - 19-4-1717, et seq. relating to professional and consulting service contracts between the State of Arkansas and all of its agencies, boards, commissions, departments and institutions. The responsibilities for the maintenance of policies and procedures for this area have thus been assigned by State law to the Office of State Procurement. The State Procurement Director is authorized by ACA § 19-11-243 to adopt regulations regarding the competitive bidding process, requests for proposals, approval of professionals, etc. The regulations relative to professional and consultant services contracts can be found on the Office of State Procurement's web site at: http://www.state.ar.us/dfa/procurement/proagency. html
ACA§ 19-4-901. Rules and regulations generally.
The Chief Fiscal Officer of the State shall promulgate rules and regulations with respect to travel and travel allowances and prescribe the forms and procedures for reporting, approving, and paying such travel allowances for all officers and employees of the State government or for other persons who are authorized to carry out official duties in connection with the business of the State.
History. Acts 1973, No. 876, § 16; A.S.A. 1947, § 13-342
Authority, Chief Fiscal Officer, Rules and Regulations
Rl- 19-4-901 Rules and Regulations Generally
The Chief Fiscal Officer of the State is authorized by ACA 19-4-901 to promulgate rules and regulations with respect to travel and travel allowances and prescribe the forms and procedures for reporting, approving and paying such travel allowances for all officers and employees of State government or for other persons who are authorized to carry out official duties in connection with the business of the State.
History. Acts 1973, No. 876, § 16; A.S.A. 1947, § 13-342; Acts 2001, No. 1453, § 24.
ACA 19-4-902 places the authority and responsibility of authorizing and approving travel expenses with the board or commission in charge or to the administrative head of the agency, department or institution.
Rl-19-4-902 Responsibility and Accountability for Travel Authorizations and Disbursement
It shall be the responsibility of the administrative head of each agency, board, commission or institution to keep on file in the place of business of the agency, subject to audit, originals of all supporting documents and required receipts for expenses incurred in connection with the travel authorizations and disbursements for persons traveling on behalf of the governmental entity. The documents on file may be in the form prescribed under the provisions of ACA 19-4-815(b) if approved by the Division of Legislative Audit.
In large governmental units, it may not be feasible for the administrative head of the agency, department, or institution to act as travel administrator. In this case, he or she may designate other responsible officials to act as his or her agent(s) and to be referred to as travel administrator. The approval of these designated agents will be considered to reflect the approval of the board, commission or head of the agency, department or institution. The
designation of agents as travel administrators shall be made in writing and kept on file in the agency/institution.
History. Acts 1973, No. 876, § 16; 1974 (Ex. Sess.), No. 16, § 1; 1977, No. 462, § 1; 1979, No. 890, § 1; 1985, No. 365, § 7; A.S.A. 1947, § 13-342; Acts 1987, No. 81, § 1; 1991, No. 1222, §§ 1,2; 1997, No. 795, § 1.
Rl- 19-4-903 Standard Reimbursements for State Employees and Officials
Officials and employees may be paid travel expenses when required to travel away from their "official station" on State business. "Official station" is the geographic location or "address" where the employee normally reports for duty and/or spends the majority of his/her productive time and must be designated as such in writing by the employer. An employee's "residence" shall be the city or town in which the individual has an abode or dwelling place. An employee
whose resident city is a location other than his/her "official station" shall not be allowed mileage to travel between them except as provided for under Special Authorizations.
All employee travel reimbursement claims must be completed for payment to the individual traveler. One employee may not include on his travel payment request the expenses of another employee.
No expenses for meals or lodging will be allowed within the city or town of the employee's " official station" unless 'special authorizations," under ACA 19-4-903, are authorized by the agency head or travel administrator.
State employees loaned from one State agency to another may be reimbursed for travel expenses by the agency benefiting from the travel.
Limits for Meals and Lodging
Please note that travel reimbursement is NOT a per diem and is to be claimed for A CTUAL EXPENSES FOR MEALS AND LODGING NOT TO EXCEED THE MAXIMUM ALLOWABLE RA TES AS LISTED IN THE FEDERAL TRA VEL DIRECTORY, http://www.gsa.gov/Portal/gsa/ep/contentView.do?programId=9704&channelId=-15943&ooid=16365&contentId=17943&vageTvveId=8203&contentTvve=GSA BASIC&vrogr amPage=%2Fep%2Fprogram%2FgsaBasic.isp&P=MTT, PLUS APPLICABLE SALES TAX. (Sales tax rate must be stated on Travel Reimbursement (TR-1) forms or equivalent in instances where the sales tax causes the maximum per diem rate(s) to be exceeded) PLEASE NOTE: Special allowances in certain cities that exceed the daily "normal" or 'State-wide" limits may be claimed in other locales of the County where the listed City is located In other words, the special rates for reimbursement apply "County-wide."
Meals
Reimbursement for meals is allowed only in connection with overnight travel whether in State or out of State unless 'special authorizations," under ACA 19-4-903, are authorized by the agency head or travel administrator. The maximum full day meal allowance will be the Federal-per-diem rate depending on the destination location. For partial days, meals charged must be in proportion to the time in travel status and may not exceed the maximum for applicable meal(s) stated in the Federal Travel Directory for the location(s). Although receipts for meals are not required by this rule, the administrative heads of agencies, departments and institutions may require them. See the Federal-per-Diem site @ http://www.gsa.gov/Portal/gsa/ep/contentView. do?contentId=17943&contentTvpe=GSA BASIC .
PLEASE NOTE: The "IE" allowances as stated in the Federal Travel Directory are for incidentals. Those are not part of the daily allowance for travelers in the State of Arkansas.
Incidentals are specifically defined and provided for and must be listed separately and explained on the Travel Reimbursement Request Form (TR-1).
Partial days' meal allowances
For partial days in travel status where no lodging cost is incurred, the traveler is allowed to claim up to 75% of the daily allowance for meals. This occurs only when the traveler spent the night and had meals on the day of departure or return. The daily travel allowance at the destination location shall be used in the calculation of the limit for partial days. In accordance with the State travel regulations, actual expenses only are allowed, and the charges must be in proportion to the time in travel status not to exceed that allowed by the Federal Travel Regulations. Lodging
Reimbursement for lodging is limited to the single room rate. If a room is occupied by more than one person, the single room rate must be noted on the receipt. The maximum daily allowance will be limited to the Federal-per-Diem rate depending on the location for both in State and out of State travel. Lodging costs exceeding the rates listed in the Federal Travel Directory may not be paid without a letter of authorization by the administrative head of the agency and must include a justification as to why it was in the best interest of the State to exceed the standard reimbursement rate. Such letter of authorization must be filed in the agency files with the travel payment document for the trip for each occurrence of such overage. Except for institutions of higher education exempt under ACA 19-4-903(a) (2), a report of these special authorizations in a format prescribed by the Department of Finance and Administration may be required See the Federal-per-Diem site @ http://www.gsa.gov/Portal/gsa/ep/contentView. do?contentId=l 7943&contentTvpe=GSA BASIC
Transportation
Travel may be achieved by plane, train, bus, taxi, private vehicle/aircraft, rented or State-owned automobile whichever method serves the requirements of the State most economically and advantageously.
Reimbursement for out-of-state travel will be the lesser of coach class airfare or the established rate of private car mileage based on map mileage when driven.
The minimum miles traveled per day while in travel status in reaching or returning from a destination to be eligible to collect a night's lodging must be 400 miles. The requirement to travel a minimum of 400 miles daily has no effect on in-state travel nor does it affect travel outside the state where the destination is less than 400 miles from the employee's "official station". The requirement applies to trips where the destination is 400 miles or more from the "official station". It addresses the period of time the employee(s) spends "en-route" or in "travel status " reaching the destination. Travelers by commercial air shall utilize coach accommodations, except in those instances where first class accommodations would be more economical for the State. Instances where first class fare is utilized will require detailed justification and must be approved by the travel administrator.
Reimbursement for Use of Privately Owned Vehicle
Private vehicle mileage shall be reimbursed and computed, using map mileage, between the travel site destination and the employee's official station or residence, if leaving directly from the residence, whichever is less. Mileage reimbursement for official use of a private motor vehicle may be claimed, listed separately on the TR-1, within the vicinity of any locale.
When privately owned motor vehicles are used for travel on official business, the owner may claim reimbursement at the rate per mile established by the Chief Fiscal Officer of the State in effect during the time the travel occurred. See P 2-19-4 -903. The shortest major highway route (electronic map mileage) will determine the maximum mileage allowed. The source for map mileage used by the agency personnel shall be designated by the administrative head of the agency and shall be used exclusively on all mileage claims.
The State will reimburse for official miles driven only. The State assumes no responsibility for any maintenance, insurance, operational costs, accidents or fines incurred by the owner of the vehicle while on official business for the State.
When a privately owned aircraft is used for travel on State business, the rate of reimbursement will be the rate as established by the Chief Fiscal Officer of the State, under the provisions of ACA 19-4-903, during the time the travel occurred. See P 2-19-4 -903a.
Use of Travel Agencies
Travel agencies may be used to obtain transportation, lodging and related travel expenses.
Miscellaneous Expenses
Miscellaneous expenses, whether or not directly connected with travel (such as postage, small emergency supplies, etc.), may be allowed with adequate justification when necessary to the performance of official duties. Receipts are required
Items Not Reimbursable
Except for those provisions enumerated in ACA 19-4-904, expenses for personal entertainment, tips, flowers, valet service, laundry, alcoholic beverages, cleaning, movies or other similar services are not reimbursable. Communication expenses shall be allowed only when necessary for the transaction of official business and properly receipted
Expenses for rental of space, decorations, entertainment or other arrangements in connection with banquets held solely for the benefit of employees are not reimbursable.
Petty cash funds cannot be used to make travel advances or reimbursements. If the agency has a petty cash fund, incidental expenses incurred by the traveler such as postage and procurement of minor supplies essential to the performance of State business may be reimbursed from petty cash funds upon presentation of proper receipts. If the agency has no petty cash funds, such items may be reimbursed using the TR-1 form with proper and sufficient documentation.
Exempt Persons and Agencies
There exists certain provisions in State law for the payment of some travel related expenditures for State supported colleges and universities and some other specific institutions that are responsible for the care and/or group activities of students, inmates and wards of the State. The administrative head of agencies and institutions to which these provisions apply is to be cognizant of and shall properly adhere to such provision of special legislation.
R 2-19-4 -903 More Restrictive Policies
Under authority of ACA 19-4-903, the administrative heads of the various departments, boards, commissions and institutions of the State of Arkansas may promulgate and enforce regulations governing travel that are more restrictive than those promulgated by the Chief Fiscal Officer of the State.
R 3-19-4 -903 Taxable Use of State Vehicle
Personal use of a State vehicle is considered a taxable benefit. Refer to IRS Publication 15b for conditions and methods. The responsible administrative head shall ensure that the Payroll Unit of each agency, department and institution performs proper reporting for taxable use of State-owned vehicles.
State employees and officials who drive State-owned motor vehicles for personal use, whether limited to commuting from and to their residence, are subject to receiving an amount on their wage statement W2 form for the value of the uses of the vehicle. Various conditions and factors determine the method and amount of such value. Internal Revenue Service (IRS) Publication 15b http://www.irs.gov/pub/irs-pdf/pl5b.pdf5sets out the valuation rules. When computing the value of the personal use of a State vehicle to determine the benefit amount to be reported on the annual Statement of Wages, any reimbursements made under the provisions ofACA 19-4-903(b) (2) (A) may be subtracted from the total taxable benefit for vehicle usage.
See IRS Publication 15-B "Employer's Tax Guide to Fringe Benefits" for information related to the taxable use of State-owned vehicles by State employees. http://www.irs.gov/pub/irs-pdf/pl5b.pdf
R 4-19-4 -903 Reimbursable Use of State Vehicle
Reimbursement for the Use of State-Owned or Leased Motor Vehicles for Transportation To and/or From an Employee's Residence ACA 19-4-903(b) (2) (A) states that "any employee of the State of Arkansas, who utilizes, but whose job does not require the employee to utilize, a State-owned motor vehicle for transportation to or from his permanent residence from or to his official station on a daily basis shall reimburse the fund from which the operating expenses of the motor vehicle are paid at the rate of $0.15 cents per mile for each mile or portion thereof in excess often (10) miles each way" provided that all State-owned or leased vehicles shall be for official business use only.
The administrative head of each State agency, board, commission, department and institution shall be responsible for determining which of their employees utilize a State-owned or leased vehicle for transportation to and/or from their permanent residence to their official place of duty that exceed the distance often (10) miles each way by the shortest route. A permanent record of such employees shall be established in each agency containing the following:
Each agency will establish a system of billing employees for reimbursements required and receipting for payments received from the employees. All reimbursements collected will be deposited promptly (at least monthly) to the general ledger account from which the operating expense of the particular motor vehicle is paid by the agency.
Each State agency, board, commission, department and institution shall be responsible for maintaining records prescribed herein and copies of transactions concerning mileage reimbursement for audit purposes.
MV-1 The Personal Mileage Reimbursement (MV-1) Form P 3-19-4 -903 was created to assist agencies with the reporting of mileage reimbursement (monthly) for personal auto use on the MV-3 Form. The MV-1 Form is not required to be submitted to DFA-OIS (quarterly). It is used by the agency for the purpose of tracking and collecting reimbursements.
The cost of meals, lodging, and mileage of State employees who are designated by a supervisor or agency director to attend official or special board meetings or other functions recognized as being in the performance of their official duties may be paid either as reimbursement to the employee or on direct billing, in the case of meals and lodging, subject to approval of the superior.
History. Acts 1973, No. 876, § 16; 1981, No. 741, § 3; 1985, No. 365, § 7; A.S.A. 1947, § 13-342; Acts 1997, No. 250, § 174.
Rl- 19-4-904 Exempt Persons and Agencies
In accordance with ACA 19-4-904, the limitations of rules placing limits on meals and lodging expenses shall not be applicable to the constitutional or elective officials and their employees, or official guests of the State. The provisions of this regulation shall not be used to supersede or set aside the provisions of law providing for fixed allowances, established amounts for per diem, or to special travel privileges provided for by ACA 19-4-903 and other law for specific purposes where such allowances exceed those authorized in this regulation.
R 2-19-4 -904 Specific legislation
Specific legislation exists that provides for travel allowances for some agencies and institutions for specific purposes that are not afforded to State government in general. It is the responsibility of the administrative head of each agency/institution to be cognizant of and strictly apply the special travel expense provisions ofACA 19-4-904 and other State law.
R 3-19-4 -9 04 Expenses for Non-State Employees
Volunteers, Non-State Employees and Official Guests
A non-State employee or an official guest of the State, whose activities or services benefit the State, may be allowed reimbursement for actual expenses for meals, lodging, transportation and incidental expenses when submitted on a TR-1. Travel reimbursement for these individuals may be approved with a written explanation of the activities by the administrative head or designee of the agency. It is the responsibility of the travel administrator to ensure these individuals are not being reimbursed from any other source for their travel expenses. Federal employees who travel for the State agency shall be regarded as a State employee and shall be reimbursed as such. The TR-1 form should show that this employee is on the payroll of the Federal Government and assigned to this agency.
Every agency/institution that utilizes the services of volunteer workers who perform duties similar to State employees is authorized to provide reimbursement for meals, lodging and travel subject to the same rules and regulations governing State employees. Volunteers may utilize agency vehicles in the performance of their duties subject to those rules and regulations governing the use of State vehicles by paid staff
An agency director may be reimbursed for his/her expenses for the purchase of meals for official guests. The expense(s) must be claimed as an incidental expense, and a letter of explanation must be attached to the TR-1 in the files stating how the person for whom the expenditure was made benefited the agency in his/her visit
Expenses of Students
In accordance with ACA 19-4-904(d) State supported institutions of higher education may provide travel expenses for a group or number of students who, when accompanied by those who instruct the students in the fundamentals of a competitive sport and direct team strategy, must travel and be recognized as a cohesive unit representing not only their institution but exemplifying the State of Arkansas in their behavior, attitudes, interests, presentation and conduct. In these circumstances the payment of group travel expenses, including those of students and employees, may be authorized as follows:
Meals and lodging, transportation, entertainment within reasonable limits to ease the pressure on students of their objectives, costs of group activities including gratuities, laundry, cleaning and favors and other personal expenses to be paid from auxiliary funds not inconsistent with standards, rules, regulations or prohibitions established by recognized national or State governing associations pertaining to the respective students and employees and the institutions they are representing.
Wards of the State
Expenses incurred by employees in connection with the transportation of residents or inmates of State institutions or for the apprehension and return of escaped prisoners, parole violators or other wards of the State will be regulated by the circumstances, and necessary actual expenses will be allowed. The employee will claim these expenses on their Statement of Travel Expenses.
R 4-19-4 -904 Special Travel Authorizations
Occasionally it may become necessary for an employee to perform unanticipated duties outside the normal work schedule. In the event that such duties require the employee to commute from his residence to the place of performance of the duties and back via private vehicle, the employee may be paid mileage reimbursement. A written statement signed by the employee's supervisor shall be retained in the file, attached to the applicable TR-1 form, stating that the time worked was authorized, the reasons the time was worked and travel authorized and the consequences had the duty not been performed is required.
In accordance with ACA 19-4-904, the cost of meals, lodging, mileage and incidental expenses of State employees who are designated by his/her supervisor to attend official or special board meetings or other functions recognized as being in the performance of their official duties, regardless of the location of such functions in relationship to the official station, may be paid either as reimbursement to the employee or on direct billing, subject to approval of the agency director. Such approval shall be in writing and shall be included in the documentation (attached to the TR-1 form) for the reimbursement or payment of such expenses.
R 5-19-4 -904 Honorary Board, Commission and Committee Member Travel and Expenses
Stipends and/or expense reimbursement to all boards and commissions (excluding the State Highway Commission and the Game and Fish Commission) are authorized and governed by ACA 25-16-901 -908. Each State board, by a majority vote of the total membership of the board cast during its first regularly scheduled meeting of each calendar year, may authorize payment to its members of a stipend, not to exceed the amount allowed by ACA 25-16-903 -905, per official meeting attended.
When it is required of a board member to perform separate duties in connection with the official business of the agency and these duties are required at times other than official board meetings, then expense reimbursement will be allowed if approved by the board in accordance with ACA 25-16-902. Claims must be on a TR-1 or equivalent.
The expense reimbursement for board or commission members shall not exceed the rate established for State employees.
The administrative head of an agency, department or institution may, for the convenience of the board and commission members, pay for their meals and lodging when on official business for the State and claim reimbursement for their expenses on a TR-lform or equivalent.
R 6-19-4 -904 Recruitment and Relocation Expense
The administrative head of a State organization or his/her authorized representative may approve relocation expenses of existing State employees. Further, ACA 19-4-522(e) allows State-supported colleges and universities to utilize maintenance and operation appropriations for the payment of moving expenses of employees, including new hires. When it becomes essential that an agency permanently transfer a State employee from one location to another within the boundaries of the State of Arkansas or, in the case of State-supported colleges and universities, hire a new employee regardless of their location, reasonable payment for movement of household effects shall be made in accordance with the procedures prescribed herein.
The transfer and reimbursement of costs incurred by the individual must be directed and approved in writing by the administrative head of the board, commission, department, institution or agency. Full identification of the individual, the position transferred from and to and reasons the transfer is necessary must be contained in the directive.
The payment for relocation must be solely for the convenience of the State in order to satisfactorily perform its function(s).
Under no circumstance will moving expenses be paid for newly hired employees except for State-supported colleges and universities. All other new employees are responsible for any moving expenses they incur while relocating in the area of a new job.
The term household effects as used herein does not apply to the movement of recreational vehicles, boats and other items not normally used in the home. Packing, crating, loading and unloading of household effects, as necessary, in addition to actual transportation expenses in accordance with Internal Revenue Service regulations are acceptable as part of the moving expense and may be paid. Please refer to Publication 535 at the following web address:http://www.irs.gov/pub/irs-pdf/p535.pdf
Reimbursement of costs for employee moving expense will be allowed only when the distance from the employee's place of residence, old duty station and new duty station meet the guidelines of the Internal Revenue Service in effect at the time of the relocation for allowable moving expense.
R 7-19-4 -904 Procedures for TR-1 (Travel Reimbursement)
The Travel Reimbursement Instructions Form (TR-1), Pl- 19-4-904 or http://aasis.State,ar.us/Forms/formFItrvlexpensereimbursmnt.htm, is the standard form to be utilized by all State officials, including board members and employees, for the purpose ofclaiming reimbursement for travel expenses incurred by the traveler for meals, lodging and mileage on personal vehicles used in connection with the official business of the State. Electronic equivalents of this form may be used so long as the elements of information required on the official form are included. This form is also to be used for recording any miscellaneous expenses incurred by the traveler. An itemization of all expenses incurred by the claimant will appear on this form. All travel advances will be deducted on this form.
When non-State employees and other official guests of the State are authorized to render service on behalf of the State and for "wards of the State" (inmates, foster children, patients or other persons in the care of the State), their names and expenses will be set out on form TR-1 or electronic equivalent. If, in addition to his expenses, a non-State employee performs official service for which he/she is paid a fee, the travel reimbursement process is not to be used to pay the fee, but his/her invoice for professional services is to be paid in the usual manner on the general expense document with the proper professional invoice attached. The following procedures will be utilized in submitting claims for reimbursement:
All travelers requesting reimbursement must complete a TR-1 form or equivalent.
All forms must be prepared electronically, typewritten or in ink and may be processed electronically where that capability exists on the State central accounting system or the system used by the agency or institution. The original bearing the traveler's signature shall be filed with the Agency; the traveler should retain a copy.
Changes to the official TR-1 may be made to include additional information, but no parts can be deleted
When charges for transportation, lodging and conference registrations are not billed directly to the State, the following documentation is required for reimbursement:
Reimbursement for transportation must be supported by an original (or, in accordance with ACA 19-4-815(b), confirmation number in the case of electronic tickets) vendor document describing the travel and indicating the cost
Reimbursement for lodging must be supported with a hotel document indicating the lodging specifics.
A descriptive vendor document must support reimbursement for conference registrations.
Primary responsibility for authenticating travel reimbursement claims rests with the administrative head of the agency or their designee(s).
All claims for reimbursement of expenses must be itemized and attested to by the claimant and approved by the administrative head of the agency or his designee(s).
Travel Expense Reconciliation Form
A "Travel Expense Reconciliation " Form, Pl- 19-4-904 or electronic equivalent, must be attached to each "Travel Reimbursement Request" Form when presented for payment in those cases where all travel expenses were not paid by the employee. The traveler will indicate on this form expenses not paid by him/her that were direct billed or charged to the agency. The original will be retained in the agency's permanent files as proof that the allowable daily maximum(s) for travel has not been exceeded
The receipts provided to the traveler at the time of purchase, particularly for lodging and commercial transportation, must support the "Travel Expense Reconciliation " Form filed in the agency.
R 8-19-4 -904 Rule 7 Direct Billing of Expenses
Travel expenses for lodging, commercial transportation (airfare, bus, rail and rental vehicles) and conference registration may be direct billed to the State using the Arkansas Agency Travel Card.
Direct Billing for Transportation
When common carriers (airplane, rail, rental auto or bus) are needed to transport persons on State business, the agency should make the travel arrangements and have the agency billed directly using the Arkansas Agency Travel Card Program (Sponsored Business Travel Card Account). However, if this is not possible due to circumstances beyond the control of the traveler, he/she may make and pay for the arrangements and request reimbursement. An employee may not be reimbursed for transportation expenses (tickets) prior to travel occurring except in cases where it is economically advantageous for the State and with the prior approval of his/her travel administrator.
When expenses are direct billed to the State, the traveler shall obtain and attach to the "Travel Reconciliation "Form, Pl- 19-4-904, receipts which detail the expense charged (airline ticket, hotel bill, vehicle rental documentation, registration confirmation) whether or not the traveler paid (out-of-pocket) some of the expenses for the trip.
R 9-19-4 -904 Rental Vehicles
The administrative head or travel administrator shall authorize in writing the use of rental vehicles only when it is more economical than taxi, airport shuttle, etc. or where due to unavailability of other modes of transportation use of rental vehicles is the most practical mode of travel. Agencies must use the statewide vehicle rental contract if one is in force. If a statewide contract is not in force when travel occurs, agencies will use the lowest available rates. The Office of State Procurement issues contracts for vehicle rental and should be contacted for information about contract arrangements.
The cost of both physical damage and liability insurance purchased in conjunction with the rental of a vehicle from a vehicle rental company may be paid where the vehicle rental is billed direct to and in the name of the agency, charged on the Agency Travel Card or paid by the traveler and claimed as a reimbursable expense on his/her Travel Reimbursement Request TR-lform
PLEASE NOTE: Go to
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complete code section and list of agencies and number of vehicles authorized.
History. Acts 1983, No. 490, §§ 1, 2; 1985, No. 649, § 44; 1985, No. 888, §§ 22, 23; A.S.A.
1947, §§ 13-342.1, 13-342.3; Acts 1987, No. 921, § 19; 1989, No. 790, § 1; 1989 (1st Ex. Sess.), No. 252, § 9; 1993, No. 447, § 9; 1997, No. 540, § 40; 1997, No. 948, § 3; 1999, No. 646, § 56; 1999, No. 1164, § 156; 1999, No. 1398, § 28; 2001, No. 739, §§ 2, 3; 2001 No. 1669, § 29; No. 1800, § 2.
The Chief Fiscal Officer of the State may direct all State agencies to maintain records with respect to all State-owned motor vehicles and may require that the agencies file reports on the vehicles covering the operating costs thereof.
History. Acts 1973, No. 876, § 16; A.S.A. 1947, § 13-342.
Rl-19-4-907 Motor Vehicle Acquisition and Reporting
Introduction
The purchase, utilization and reporting with regard to State-owned motor vehicles is governed by ACA§ 19-4-903, 19-4-905 through 19-4-907, ACA§ 22-8-101 through 22-8-210 and ACA§ 25-1-110. In addition, The Governor's Policy Directive # 3 establishes criteria for the specifications, identification and utilization of vehicles. Refer to the Directive for provisions for waivers from the criteria, http://www.arkansas.gov/governor/policv directives/policy gpd3. html
All requests for waivers must be in writing and submitted to the Director of the Department of Finance and Administration-Office of Information Services (DFA-OIS). PLEASE NOTE: The DFA-OIS is the office responsible for Motor Vehicle Acquisition and Reporting. Procedures governing the purchase of Motor Vehicles are located on the DFA-OIS web site athttp://www.state.ar.us/dfa/ois/ois vehicle guide.html
PLEASE NOTE: Procedures governing the lease of motor vehicles are located on the DFA-OSP web site at http://www. arkansas.gov/dfa/procurement/pro_index. html.
As used in this subchapter, unless the context otherwise requires, the term "credit card" means only those credit cards issued to State agencies, boards, or commissions for which the State agency assumes responsibility for payment.
History. Acts 1979, No. 676, § 1; A.S.A 1947, § 12-2378; Acts 2003, No. 656, § 2.
This subchapter in no way changes the maximum daily allowance for meals and lodging authorized in this chapter for an individual traveling on official State business within or beyond the borders of this State, nor does it change any special authorizations, exemptions, or limitations set forth in this chapter.
History. Acts 1979, No. 676, § 2; A.S.A. 1947, § 12-2378.1.
ACA§ 19-4-1003 -1004 Repealed
The Chief Fiscal Officer of the State shall promulgate rules and regulations with respect to the obtaining and utilization of credit cards in payment of products and services and prescribe the procedures for reporting, approving, and paying for products and services purchased with State-owned oil company credit cards. He shall also prescribe the necessary records to be maintained and the supporting documentation to be provided with each voucher presented for payment of these charges. History. Acts 1979, No. 676, § 4; A.S.A. 1947, § 12-2378.3. Arkansas
Rl-19.4.1006 Federal Excise Tax - Motor Fuel
Federal excise taxes are levied on the sale of gasoline and dieselfuel. A general exemption exists for State government entities, including agencies, boards, commissions, constitutional offices, colleges and universities.
Updates, additional information and instructions on federal excise taxes may be found in the Internal Revenue Service (IRS) Publication 378 (Fuel Tax Credits and Refunds) and Publication 510 (Excise Taxes). These documents may be found on the IRS web site athttp://www.irs.gov/
GASOLINE AND/OR GASOHOL
State agencies and institutions may avoid payment of fuel taxes by taking advantage of the tax exemption on Gasoline and/or Gasohol (Alternatives 1 and 2) or request a refund of tax paid under Alternative 3.
Alternative 1 - "Preferred Vendor"
The preferred method is to utilize the Wright Express fuel cards for all individual gasoline purchases for all agencies and institutions who report under the State's primary Tax Identification Number (TIN). The Office of State Procurement has established an account with Wright Express as the "ultimate vendor" for all agencies reporting under the State's primary TIN All agencies under the State's primary TIN may get a fuel card, and the excise taxes will have been deducted from the bill monthly when presented for payment. This is the preferred method because the agency does not have to file any forms to receive the excise tax credit.
An ultimate vendor, as defined in the Internal Revenue Code (IRC) section 6416(a) (4, is treated as the person (and the only person) who paid the excise tax and thus is eligible for refund of excise tax on tax-excluded sales of gasoline to State and local governments for the State or local governments' exclusive use, but only if such ultimate vendor is registered under IRC section 4101.
Alternative 2
If the vendor is not registered under IRC section 4101, the purchasing State agency or institution may notify the fuel supplier of the State's exempt status and request that the amount due be reduced through a credit memo or credit entry on the vendor's invoice. This specific identification of the gross, excise tax and net amount on the vendor's invoice will satisfy the requirement prescribed by the IRS. The entity that actually paid the tax to the government is eligible for the refund if it purchases tax-paid gasoline and subsequently sells it at a tax-excluded price directly to a State or local government. A certificate, as described in Internal Revenue Bulletin Notice 2005-80, must be secured from the State or local government by the entity who paid the tax.
This is the preferred method for utilizing the exemption when fuel is purchased in bulk from a fuel supplier or by use of gasoline credit cards other than ones issued by Wright Express under the State's primary TIN. A blank certificate that the State agency or institution is required to provide to the person who paid the tax is found at Addendum Pl- 19-4-1006. The certificate should be completed and signed by the agency or institution head. The certification should be presented to the vendor, whether a credit card company or a bulk dealer.
Alternative 3
As an alternative to a tax-excluded purchase of gasoline, a State or local government is eligible to file its own claim for refund on the tax-paid purchase of gasoline. Under IRC section 6421(c), if gasoline is sold to any person for a purpose including a sale to a State or local government, the Federal government shall pay (without interest) to such person an amount equal to the product of the number of gallons of gasoline sold multiplied by the rate at which tax was imposed on such gasoline by IRC section 4081. As stated under Treas. Regs. §48.6421-3(ii), a claim for payment of a governmental unit or exempt organization described in §48.6421-1 (c) or §48.6421-2(c) must be filed no later than three (3) years following the close of its taxable year.
If excise tax is paid, the State may receive refunds of the tax paid by filing Form 8849 which can be found at http://www.irs.gov./. If this method of claiming the exemption is used, detailed records must be maintained to support the amounts claimed and should include the following:
Claims must be filed quarterly if the amount of the claim is $750.00 or more. If the amount of the claim is less than $750.00, the amount may be carried forward and filed in a succeeding quarter when the cumulative amount of excise taxes to be claimed exceeds $750.00. If you cannot file a claim for at least $750.00 after the fourth calendar quarter, the form must be filed as an "annual" claim after the end of the year. All claims must be filed no later than three (3) years following the close of the taxable year in which taxes were paid
The claim information must be submitted to the Office of State Procurement to file as only one Form 8849 per tax identification number may be filed. Once Form 8849 is filed with the IRS, they will refund the amount of excise taxes paid to the agency. The receipt is to be treated as a "refund to expenditure" because the Federal government as the taxing authority is both the ultimate receiver of the tax and ultimate refunding agent. The receipt, when properly recorded, will restore the appropriation in the amount of such receipt.
DIESEL
The refund provision for sales ofundyed dieselfuel to a State or local government for the State or local government's exclusive use can be found under Treas. Regs. §48.6427-9. A registered ultimate vendor must obtain a properly executed exemption certificate from the State or local government. See Pl- 19-4-1006, "Sample Exemption Certificate."
Note that, unlike gasoline refunds, there is no provision for a State or local government to receive refund or credit of dieselfuel tax paid to its supplier. The only way to avoid tax is through a tax excluded purchase from a registered ultimate vendor.
As an alternative to the purchase ofundyed dieselfuel, the State may purchase tax-free dyed diesel fuel for its exclusive use. Submission of an exemption certificate to the State's supplier is not required for the purchase of dyed dieselfuel. An executed certificate may be requested from DFA-OA. This certificate will suffice for all State agencies utilizing the State's primary TIN. Those offices and institutions not using the State's TIN may complete the blank Certification Statement shown as addendum Pl- 19-4-100 6.
Rl-19-4-100 7State Travel Card Use
Procedures for Authority to Use Credit Cards
Approval for use of all credit cards rests with the Chief Fiscal Officer of the State. The State of Arkansas' "Arkansas Procurement Card," "Arkansas-Sponsored Business Travel Card" (SBTC), and oil company cards in force on December 31, 2002, are approved No other retail credit cards issued in the name of State agencies and institutions may be used after the adoption of these travel regulations and must be cancelled as soon as practical and billings are paid. Directors of State agencies, boards, and commissions and presidents and chancellors of institutions of higher education may request from the Chief Fiscal Officer of the State, in writing, authority to establish an agency commercial account. Requests shall state:
* Purpose, intended use of card
* Number and type of cards
* Detail method of controls
* Justification
The Office of Accounting and the Office of State Procurement shall review requests to establish agency credit cards and provide the Chief Fiscal Officer of the State their recommendation.
The Chief Fiscal Officer of the State shall not be liable for any unauthorized expenditure through the use of credit cards.
The administrative head of the board, commission, agency, department, or institution shall be responsible for ensuring that only authorized charges are paid as the result of the use of any authorized credit card and the collection for any unauthorized expenditures that may occur. The administrative head of the board, commission, agency, department or institution may appoint a travel administrator to administer travel functions within their activities. However, the responsibility for taking corrective action for any abuses discovered rests with the administrative head of the board, commission, agency, department or institution. Individuals on State business shall use the Arkansas Business Travel Card-Individual Account (BTA) or provide themselves with sufficient funds or personal credit cards for necessary travel expenses. Nothing in this regulation removes the responsibility of the administrative head of an agency from being required to report to the Chief Fiscal Officer of the State and the Division of Legislative Audit incidences of fraud and/or theft as required by law.
PLEASE NOTE: For more specific information on the Travel Card Program refer to the State Procurement web site @ http://www.accessarkansas.org/dfa/purchasing/index. html. An exception to provision(s) established in this rule shall only be granted by the Chief Fiscal Officer of the State based on written request and justification from the administrative head of an agency or institution. All requests for exceptions should be addressed to the State Procurement Director, who will make a recommendation to the Chief Fiscal Officer of the State regarding such request(s).
History. Acts 1979, No. 676, § 6; A.S.A. 1947, § 12-2378.5; Acts 1995, No. 1258, § 1; 2001, No. 1453, §26.
Rl- 19-4-1008 Travel Advance Revolving Funds
In accordance with ACA 19-4-1008, the Chief Fiscal Officer of the State may approve the establishment of a revolving fund by an agency, department, board, commission or institution to be used to make advances of expense funds for authorized travel by officials, employees of State agencies, boards, commissions, and institutions of higher learning and students when travel is in conjunction with institution-sponsored events or programs.
The Chief Fiscal Officer of the State shall not be liable for any unauthorized expenditure through the failure of any official, employee or student to reimburse revolving funds for travel advances. The responsibility of ensuring that only authorized expenditures are paid by the use of any advance from an established revolving fund and the collection of advances made from a revolving fund ultimately rests with the administrative head of the board, commission, agency, department or institution.
The administrative head of the board, commission, agency, department or institution may appoint a travel administrator to administer travel functions within their activities. However, the responsibility for taking corrective measures for any abuses discovered rests with the administrative head of the board, commission, agency, department or institution.
Establishment of a Revolving Fund
A Travel Advance Fund is established by submitting a request to the Department of Finance and Administration-Office of Accounting. The administrative head of every board, commission, agency, department or institution that wishes to establish and operate a travel advance revolving fund shall do so in accordance with the policies set forth by, and with the approval of, the Chief Fiscal Officer of the State. In addition, a custodian must be designated who will be responsible for operating, maintaining and processing all transactions in the account(s). All Travel Advance Funds in operation on the effective date of this rule are hereby approved.
Policy
The cost of registration and conference fees may not be included in the travel advance request. State personnel who hold an approved State travel card are discouraged from using the Revolving Travel Fund. Should it become necessary for a cardholder to apply for a travel advance, a letter of request from the traveler's immediate supervisor will be submitted to the Travel Advance Fund Custodian justifying the advance by explaining why anticipated expenditures may not be charged to the traveler's credit card.
AMOUNTS TO BE ADVANCED:
Travel Advance Revolving Funds may be utilized to make advances of amounts not to exceed 50% of the total anticipated travel expenses, not including those expenses that are direct billed to the agency or charged on the Sponsored Business Travel Card.
Within Arkansas:
Anticipated meals (airfare, lodging, vehicle rental) should be direct billed using the 'Sponsored Business Travel Card."_
Within the Continental United States:
Anticipated meals and taxi (airfare, hotel, and vehicle rental) should be direct billed using the 'Sponsored Business Travel Card "
Outside the Continental United States:
Where the travel destination of the traveler and/or group does not provide access to the Sponsored Business Travel Card (SBTC) or other electronic means of accessing funds, the cash advance may be 75% of total anticipated travel expenses less airfare and hotel which may be direct billed using the Sponsored Business Travel Card.
When the travel destination of the traveler and/or the group does provide access to the Sponsored Business Travel Card (SBTC) or other electronic means of accessing funds, the cash advance should not be authorized but in no event will it exceed 50% of the total anticipated travel expenses. Airfare and hotel may be direct billed.
PLEASE NOTE: Travel advances for student/client/group activities as defined by ACA 19-4-904(d) may be made for 90% of the anticipated expenses that are not to be direct billed to the institution.
Specific exceptions to this policy may be addressed via e-mail to the director, Office State Procurement at OSP&dfa. state, ar. us subject: travel advance. State agencies, boards, commissions and institutions of higher learning shall require employees and/or students to file an agreement authorizing the agency/institution to recover any amounts advanced for travel expense purposes from the amounts claimed and allowed the employee or student as reimbursement for actual expenses incurred or add them to the receivable account of the student.
Procedure for Obtaining a Travel Advance
The traveler completes the "Revolving Travel Fund Repayment Agreement" Form Pl- 19-4-1008.
The traveler obtains approval of his/her supervisor as indicated on the form and forwards the completed forms to the Travel Advance Fund Custodian.
Travel advance requests, including those submitted by mail, should be processed with advance check prepared within five (5) working days after receipt provided that travel advance check should not be released more than 10 working days prior to planned travel. Employees should be notified when travel advance checks are available, and/or the advance checks should be routed to the traveler.
Repayment of travel advances: travel advances will be repaid according to the following guidelines:
* A "Travel Reimbursement" form, TR-1 or equivalent, should be filed within five (5) working days after the traveler completes his/her travel. The total amount of the travel advance to be repaid to the Travel Advance Fund must be stated in the space provided on the TR-lform when submitted. All TR-1 forms indicating an amount due the Travel Advance Fund must be routed through the Travel Advance Fund Custodian for verification of proper "amount due". Failure to submit the TR-1 or equivalent to the proper unit in a timely manner or failure to indicate an amount due the Travel Advance Fund may result in the traveler being permanently barred from utilization of the Travel Advance Fund-
* After submission of form TR-1, two warrants/checks will be issued as follows:
The sum of the two warrants/checks will equal the amount of the total reimbursement claimed and approved
* Anyone who has been issued a State travel card and who obtains a travel advance without first obtaining written authorization from his/her supervisor may be permanently barred from using the Travel Advance Fund
* If the traveler is no longer employed by the issuing organization and the travel advance has not been repaid by the borrower, the amount of the travel advance will be deducted from his/her final payroll check. If the travel plans by a current employee are cancelled after a travel advance was made, the travel advance must be repaid within five (5) days of the cancellation date.
History. Acts 1973, No. 876, § 15; 1979, No. 833, §§ 6, 7; A.S.A. 1947, § 13-341; Acts 1991, No. 21, §2; 2001, No. 1453, § 27.
ACA§ 19-4-1102 Repealed
History. Acts 1973, No. 876, § 15; 1979, No. 833, §§ 6, 7; A.S.A. 1947, § 13-341; Acts 2001, No. 1453, § 29.
Rl-19-4-1103 Expense Items with Special Considerations and Limitations
Resolutions of Boards and Commissions
Any indebtedness or expense incurred in connection with an approved resolution of any State board or commission shall be made a part of the permanent minutes. Certified copies of the resolution or minutes authorizing the indebtedness or expense shall be attached to the disbursement document executed for payment of the same. When purchasing bonds for investments, excerpts from the board or commission meeting authorizing the purchase, or a letter from the person authorized to buy when funds are available, should be attached to the disbursement document as the supporting documents.
Each disbursing document shall have attached a copy of the certified resolution authorizing the investment. Purchasing procedures must be followed where applicable.
Agency Membership Dues
Generally, agency membership may be paid when such membership is in the name of the agency, and such membership is not in a community organization. In the event that any membership due is in the name of an individual, or a membership, whether in the name of an individual or a State agency, is in a community organization, the department head or independent agency director must approve, in writing, the payment of such due. The approval shall justify the payment, explaining how the payment for said membership is in the best interest of the State agency and necessary to carrying out the purposes of the agency. Such approval shall be included in the documentation (attached to the disbursing document) of the agency's financial records and made available for audit purposes.
Educational Subsidies
Within limits, an agency may subsidize an employee's tuition and related expenses for enrollment at an institution of higher education for a particular course that will enhance the employee's performance in their present job assignment. The agency shall not pay for a collegiate course that leads to, or participates in, a degree program for the employee unless the State agency has specific legislation providing for such payment.
Prior approval in writing from the agency head must be obtained for each employee before an agency becomes obligated to pay that employee's tuition and/or other related expenses. The approval document shall justify the payment, explaining how the payment for tuition and related expenses is necessary to the performance of the duties of the employee, why it is in the best interest of the State agency and necessary to carrying out the purposes of the agency. Such approval shall be included in the documentation (attached to the disbursing document) of the agency's financial records and made available for audit purposes.
Payment of Witness Fees
When an agency, board, commission or institution is authorized by law to subpoena witnesses for hearings and/or to obtain depositions, the agency, board, commission or institution may pay the witness:
A verified statement of expenses for loss of time and miles traveled must be signed by the witness. The expenses for loss of time and mileage must be stated separately on the statement. This form must be present as documentation for the disbursement document. The minimum rates for fee and mileage are specified by ACA 2002, Court Rules: Rules of Civil Procedure, Rule 45 (d) (e)
Disposition of Witness Paid State Employees
The disposition of fees regarding witness, juror or party litigant fees and reimbursements shall be as follows:
Pursuant to Ark. Code Ann. § 21-4-213, an employee serving as a juror in a State or federal court is entitled to retain court fees or reimbursement for necessary services or appearances, and such services or necessary appearances in any court will not be recorded as annual leave.
An employee is entitled to his or her salary if subpoenaed as a witness to give a deposition or testimony in State or federal court, at a hearing or before any body with power to issue a subpoena in a matter that is within the employee's scope of employment or outside the employee's scope of State employment, and the employee is either not serving as a paid expert witness or is not a party to the matter.
An employee is required to take annual leave to attend the deposition, hearing or appear in court only if the matter is outside of the employee's scope of State employment, and the employee is serving as a paid expert witness or is a party to the matter.
Pursuant to Ark. Code Ann. § 16-43-806, an employee serving as a witness to give a deposition or testimony in State or federal court, at a hearing or before any body with power to issue a subpoena is entitled to retain his or her witness fees that may be tendered to him or her under State or federal law or court rules only if the matter is outside the employee's scope of State employment, or the employee is a party to the matter other than as a representative of the State employer.
An employee is entitled to retain any mileage fees that may be tendered to him or her under State or federal law or court rules only if the matter is within the employee's scope of State employment, the employee uses a personal vehicle for travel in obeying the subpoena and the employee's employer does not reimburse the employee for travel expenses or the matter is outside the employee's scope of State employment, and the employee does not use a State-owned vehicle for travel in obeying the subpoena.
If an employee is subpoenaed as a witness to give a deposition or testimony in State or federal court, at a hearing or before any body with power to issue a subpoena on a non-work day, the employee may retain any witness and mileage fees tendered to him or her unless a State vehicle is used to obey the subpoena.
If an employee is subpoenaed as a witness to give a deposition or testimony in State or federal court, at a hearing or before any body with power to issue a subpoena in a matter that is within the employee's scope of employment and is a paid expert witness, the employee is required to reimburse his/her agency the total amount tendered to him/her. The agency will deposit the money as a "non-revenue receipt."
State employees are required to reimburse their agency for any mileage fees that may be tendered to him or her under State or federal law or court rules only if the matter is within the employee's scope of State employment, the employee uses a State-owned vehicle for travel in
obeying the subpoena and the employee's employer reimburses the employee for travel expenses or the matter is outside the employee's scope of State employment, and the employee uses a State-owned vehicle for travel in obeying the subpoena.
It shall be the duty of the Chief Fiscal Officer of the State to design the State's financial management system to provide reasonable assurances that financial transactions conform to the provisions of law and regulation. He or she shall not be required to pass upon the propriety of any financial transaction if it is found to conform to the provisions of this subchapter. However, the Chief Fiscal Officer of the State may perform examinations of transactions to determine the propriety of the transactions in conformity with applicable laws and regulations. History. Acts 1973, No. 876, § 15; A.S.A. 1947, § 13-341; Acts 2001, No. 1453, § 30.
Before any voucher for the disbursement of funds in the State Treasury is presented to the Auditor of State for the issuance of his or her warrant thereon, it shall be recorded in the State's financial management system in accordance with procedures established by the Chief Fiscal Officer of the State. The Auditor of State shall have the authority to perform an examination, under the procedures established in this section, as he or she deems advisable before issuing his or her warrant in the payment of the voucher.
History. Acts 1973, No. 876, § 15; 1985, No. 324, § 2; A.S.A. 1947, § 13-341; Acts 2001, No. 1453, §31.
The responsibility for recovery of erroneous or improper payments shall be with the State agency head or the bonded disbursing officer, or his designated bonded assistant; the Chief Fiscal Officer of the State, the Auditor of State, or the Treasurer of State shall not be liable under their surety bonds for any erroneous or improper payments so made.
History. Acts 1973, No. 876, § 15; A.S.A. 1947, § 13-341.
Supporting documents for the disbursement of state funds shall include the following:
History. Acts 1973, No. 876, § 15; 1977, No. 486, § 4; A.S.A. 1947, § 13-341; Acts 1997, No. 14, § 1; 1997, No. 860, § 4; 1999, No. 391, § 38; 1999, No. 714, § 1; 2001, No. 1453, § 32; 2003, No. 656, § 7; 2005, No. 1149, § 1.
History. Acts 1973, No. 876, § 15; A.S.A. 1947, § 13-341; Acts 1997, No. 541, § 2; 2001, No. 1453,§ 33.
Rl-19-4-1108 Public Records
The law defines public records as writings, recorded sounds, films, tapes, electronic or computer-based information or data compilations in any medium required by law to be kept or otherwise kept and which constitute a record of the performance or lack of performance of official functions which are or should be carried out by a public official or employee, a governmental agency or any other agency wholly or partially supported by public funds or expending public funds.
All public records shall be open to inspection and copying by any citizen of the State of Arkansas during the regular business hours of the custodian of the records, except as otherwise specifically provided by law.
Refer to Arkansas Code AC A 25-19-105 for exceptions, charges for providing copies of records and required response time to requests for copies andACA 25-19-109 for special requests for electronic information.
R 2-19-4 -1108 Records Retention
All records that are public property are required to be maintained by the agencies that generate the documents. The type of business record in question and the business process it supports determines the length of retention. Generally, all records should be maintained a minimum of three fiscal years. All records and supporting documentation must be maintained until they have been audited and may not be destroyed until permission has been granted by the Division of Legislative Audit. Other records such as records for grants are maintained according to State or Federal laws.
Public records can only be destroyed after permission is granted by the Division of Legislative Audit.
Storage of records in electronic form is permissible in some cases. Refer to Arkansas Law ACA 19-4-815, 19-4-1108, 25-32-112, 13-4-203, 25-32-117, 25-32-118.
Effective January 1, 2006, the Executive Chief Information Officer shall promulgate rules and guidelines governing the retention and management of public records and issue periodic updates as necessary. Each State agency shall comply with these rules and guidelines by the earlier of July 1, 2007, or when the line item appropriation is established to comply with this requirement.
Contact for Information: Division of Legislative Audit, Arkansas History Commission, the Executive Chief Information Officer or your Assistant Attorney General.
Each State agency which is authorized by law or under the purchasing procedures of this State to enter into contracts for the procurement of property, commodities, or services shall keep on file in their respective places of business copies of these contracts for public inspection or audit and shall make a copy of any such contract available to the Chief Fiscal Officer of the State when so required by him or her.
History. Acts 1973, No. 876, § 15; A.S.A. 1947, § 13-341; Acts 2001, No. 1453, § 34.
History. Acts 1973, No. 876, § 14; A.S.A. 1947, § 13-340.
History. Acts 1973, No. 876, § 14; A.S.A. 1947, § 13-340; Acts 1993, No. 1073, § 17.
In the event the executive head of any State agency shall designate some full-time employee to act as his or her agent in the disbursement of funds under his or her control, then that agent may act without furnishing additional bond if the executive head of that agency shall notify the Chief Fiscal Officer of the State and the Auditor of State in writing of such designation.
History. Acts 1973, No. 876, § 14; A.S.A. 1947, § 13-340; Acts 2001, No. 1453, § 35.
History. Acts 1973, No. 876, § 14; A.S.A. 1947, § 13-340.
The original copy of all checks drawn in connection with the disbursement of public funds for which the disbursing officer is responsible shall bear the manual signature of the disbursing officer or his or her authorized agent, or may contain or bear a mechanically produced facsimile signature of the disbursing officer or his or her authorized agent. Where the Chief Fiscal Officer of the State has determined that the executive head of a State agency has established adequate internal administrative procedures and controls pursuant to law, which determination shall be made only after the Chief Fiscal Officer of the State shall have consulted with the Legislative Auditor, he or she may grant an exemption from manual signatures to allow for a computer-produced digitized signature of the disbursing officer or his or her authorized agent. History. Acts 1973, No. 876, § 14; 1979, No. 833, § 5; A.S.A. 1947, § 13-340; Acts 1997, No. 1087, § 1; 2001, No. 1453, § 36.
History. Acts 1973, No. 876, § 14; A.S.A. 1947, § 13-340.
It shall be the duty and responsibility of the head of the agency for which appropriations are authorized and of the agency's disbursing officer to:
History. Acts 1973, No. 876, § 14; A.S.A. 1947, § 13-340; Acts 2001, No. 1453, § 37.
ACA§ 19-4-1208 Repealed
The disbursement of funds authorized by the General Assembly shall be limited to the appropriations and the funds made available for the support of such appropriations. The restrictions of the Arkansas Purchasing Law, § 19-11-201 et seq., the Uniform Classification and Compensation Act, § 21-5-201 et seq., the Revenue Stabilization Law, § 19-5-101 et seq., and regulations promulgated by the Department of Finance and Administration authorized by law shall be strictly complied with in the disbursement of the funds. History. Acts 1973, No. 876, § 14; A.S.A. 1947, § 13-340.
History. Acts 1973, No. 876, § 14; A.S.A. 1947, § 13-340; Acts 2001, No. 1453, § 39.
Rl- 19-4-1210 Disbursement of State Funds
Limitations on Disbursements
Arkansas law (ACA 19-4-1209 ) states: "The disbursement of funds authorized by the General Assembly shall be limited to the appropriations and the funds made available for the support of such appropriations. The restrictions of the Arkansas Purchasing Law, § 19-11-201 et seq., the Uniform Classification and Compensation Act, § 21-5-201 et seq., the Revenue Stabilization Law, § 19-5-101 et seq., and regulations promulgated by the Department of Finance and Administration authorized by law shall be strictly complied with in the disbursement of the funds."
If, during any fiscal year, it is determined that the proposed disbursements exceed the amount approved for that year, the necessary reductions in proposed disbursements shall be made upon direction of the Chief Fiscal Officer of the State.
Adequate internal administrative procedures and controls shall be established by each State agency executive administrator to ensure prompt and accurate payment of obligations.
Each State agency executive administrator shall ensure that:
* Services, materials, supplies and equipment received comply with specifications indicated on purchase documents;
* Quantities received, as indicated on the invoice, agree with those shown on the receiving report;
* Unit prices agree with those indicated on the purchase documents;
* The extensions and footings of the invoice are correct;
* The check or warrant is prepared in sufficient time to take advantage of all available discounts being offered;
* Sufficient legislative authorization for expenditures and funds is available for payment of the obligation;
* The obligation was incurred in conformity with all purchasing and fiscal laws applicable to State agencies.
Procurement Codes
Procurement codes are used to assist in the tracking of procurement activity. Proper use of the codes enables the Department of Finance and Administration-Office of State Procurement (DFA-OSP) to automatically track purchases by category and provide required reports. Procurement codes must be included in all transactions paying for goods and services purchased by the State. Inquiries regarding further definition of these codes should be directed to DFA-OSP.
Procurement codes can be found in Appendix 3 of the Procurement Laws and Regulations located on the DFA-OSP web site at http://www. state, ar. us/dfa/procurement/pro index, html. Updates to the procurement codes can be found on the DFA-OSP Web site: http://www. state, ar. us/dfa/procurement/pro index, html.
Material Master and Vendor Master
DFA-OSP maintains the "material master" list which is common to all agencies that lists all goods and services purchased by the State and gives a description of the goods and/or services, shelf life, material unit price, material group, unit of measure and re-order point. Requisitions and purchase orders (PO) must reference a "material master entry." DFA-OSP maintains the "vendor master" list which is common to all agencies and lists all vendors for the State. A "vendor master entry" is required for any PO item, request for quotation of goods or services or request for proposals and payments.
All disbursements should generally utilize previously established vendor master record numbers, which is linked to the vendor's master record. However, a "one time" vendor may be utilized when the vendor is expected to only be paid once, or the vendor is expected to be paid on a very infrequent basis.
More information on "material master" or "vendor master" can be found on the DFA-OSP Web site: http://www.arkansas.gov/dfa/purchasing/.
General Rules
Payments of invoices will be made based on the vendor's due date and payment terms.
Payments can be made to a vendor from multiple funds and funds centers.
Different payment methods are available - warrant by mail, warrant by Automated Clearing House (ACH) and check.
Warrants will have the invoice number, vendor account number and a 50-character text field on the remittance advice. The Auditor of State will print and mail warrants or mail direct-deposit advices with remittance statements.
Process Overview
The Accounts Payable Technician will enter and park the invoice or credit memo in AASIS. The document will be in the system but will not be posted until it has been approved for payment.
The Accounting Supervisor will review the invoices that have been entered and post them for payment. The payment run will be initiated to generate payments to vendors. (The Accounts Payable Technician and Accounting Supervisor cannot be the same person.) The Accounting Supervisor will monitor the invoice entry and payment process as well as initiate the setup of recurring entry documents.
The Department of Finance and Administration-Office of Accounting-Service Bureau (DFA-OA-SB) will generate the warrant file and route the warrant file to the Auditor of State for processing of warrants.
R 2-19-4 -1210Vendor Invoice with a Purchase Order
PLEASE NOTE: It is the recommendation of the Department of Finance and Administration-Office of Accounting (DFA-OA) to use the "vendor invoice with a purchase order" process whenever possible instead of the direct-invoice payment method
Purchase Requisition
The first step in the procurement process is to requisition the purchase. Transaction ME 51 is used to create the purchase requisition. The Agency Procurement Technician or State Procurement Specialist will make the requisition.
The purchase requisition:
* Establishes a commitment of appropriations when the requisition is created.
* Creates a unique requisition number for each requisition.
* Allows users to suggest several potential vendors for items.
* Tracks the progress of the requisition through AASIS.
The Agency Procurement Manager or State Procurement Manager will approve the requisition to be a legal expenditure of the State using transaction ME55. Invalid requisitions must be deleted to relieve commitment of budget. All approvals and rejections are date-stamped and logged by user ID.
Purchase Order
Once the purchase requisition has been entered and approved, the Agency Procurement Technician or State Procurement Specialist solicits quotes or selects the vendor using transaction ME41 or ME49 respectively and then creates the Purchase Order (PO) using transaction ME21N.
The Agency Procurement Manager or State Procurement Manager will approve the PO using transaction ME28 (RELEASE /APPROVE PURCHASING DOCUMENTS). Once the PO has been approved, the Agency Procurement Technician or State Procurement Specialist prints and sends the purchase order to the vendor.
Materials or Services Received
When the materials or services are received, the Agency Receipt Technician posts the receipt of the materials or services against the PO by using transaction MIGO (GOOD RECEIPT PURCHASE ORDER). The posting of the receipt of goods produces a posting in the GR/IR account. This posting creates the accrued liability and the expense of the goods until such time as the invoice is received and posted.
The MIRO (LOGISTICS INVOICE VERIFICATION) transaction is posted upon receipt of the vendor invoice, the entry into the accrued liability in the GR/IR clearing account is reversed and the entry to record the liability in the accounts payable account is made. MIRO is an automated 3-way match between the purchase order, goods receipt and invoice. If the match fails, the invoice is blocked for payment. Once the problem is resolved, the invoice is released for payment. After the document is posted the document number, verifying that the transaction has been posted, must be written on the vendor's invoice.
PLEASE NOTE: Transactions in the GR/IR process do not reduce funds or appropriations but are only used to record the liability transactions of the invoice.
Invoices
An invoice is the evidence of an obligation as originally transmitted to the paying State agencies, whether in the form of a paper (hard copy) or whether electronically transmitted by data file, fax or e-mail that can be verified as an official obligation of the agency. Original invoices are necessary to issue payment. Paying from original invoices provides some assurance that an invoice is not paid twice and that the invoice has not been altered. If the original invoice is lost, the vendor shall be contacted to provide one of the following: A photocopy of the original invoice with the declaration:
"I hereby certify this duplicated invoice is an exact and true copy of the original invoice and that no payment has been received as payment of this invoice through the
date of my signature."
Signed:
Name Printed:
Title:
Date:
Or, an additional original invoice with the same invoice number without any comments. The method of delivery of the duplicate invoice is irrelevant. Electronic transmission will be acceptable.
PLEASE NOTE: Under no circumstance is an agency to self-generate an invoice or billing statement for the vendor.
R 3-19-4 -1210 Vendor Invoice without a Purchase Order
A purchase that has been made outside the Purchase Order System within AASIS may be made by the use of specific "Direct Invoice Payment" transactions in the system. Invoices that are not routine vendor payments, but rather small occasional purchases, reimbursements of employee expenses, etc. may be paid by using the direct pay invoice method.
Repetitive Expenditures
Repetitive expenditures such as utility billings, rent and other items of this nature can be paid with the direct pay invoice method; however, it is advisable to use the "funds reservation" to encumber the expected amount of expense for the annual expenditure.
The direct invoice payment method can be referenced to the "funds reservation" on the payment document to reduce the encumbrance. After the document is posted the document number verifying the transaction has been posted must be written on the vendor's invoice.
PLEASE NOTE: Do not use the direct invoice payment method when a purchase order is required because entering an invoice directly into the financial accounting side that is intended to be against a purchase order will charge appropriations twice and does not link to the purchase order.
PLEASE NOTE: Detailed instructions for the procurement process for AASIS can be found athttp://www.aasis.state.ar.us/ .
SUPPORTING DOCUMENTATION
Cross referencing between the original evidence of indebtedness (invoice, contract, etc.) and the processing numbers assigned by AASIS is essential.
There must be maintained in the files of the agency, at a minimum, the following elements of information/documents related to all disbursements:
For the "Direct Payment" Process
Original evidence of indebtedness as enumerated in ACA § 19-4-814 with the vendor number and AASIS document number appearing on the face of the document.
For the "Purchase Order/Credit Memo" Payment Process
The invoice and "goods receipt" with the vendor number and the AASIS document number appearing on the face of the documents.
DFA-OA-SB agencies may use the "Direct Invoice/Credit Memo" form returned by the Service Bureau as a cross-reference document, write the appropriate processing numbers (document number, etc.) on the invoice or other original evidence of indebtedness and retain for audit purposes.
Agencies that useAASIS (User Agencies) may print a copy of the screen when payments are processed to use as a reference form. The invoice or other appropriate number should be entered on the face of the original evidence of indebtedness.
The documents shall be filed either in numerical sequence, by document number (assigned by AASIS) or, if agencies file by vendor, by numeric sequence, by document number for each vendor in order in the applicable vendor folder.
Reporting agencies shall, at a minimum, maintain their documentation process in a manner similar to the payment process as recorded on AASIS so the documentation can be traced back to their original books of entry through the batch process posting and ultimately to the original invoice or payment document that supports the payment.
This subchapter is intended to be supplemental and in addition to the fiscal laws of this State and shall repeal only such laws and parts of laws as are specifically in conflict with it.
History. Acts 1983, No. 781, § 5; A.S.A. 1947, § 13-378.
Funds disbursed by the Arkansas State Highway and Transportation Department and the
Arkansas State Game and Fish Commission and the funds appropriated in the general appropriation bill provided for in the Arkansas Constitution, Article 5, § 30 shall be exempt from this subchapter.
History. Acts 1983, No. 781, § 6; A.S.A. 1947, § 13-379.
History. Acts 1983, No. 781, § 3; A.S.A. 1947, § 13-376.
If the Chief Fiscal Officer of the State fails to perform his duties as mandated under the provisions of this subchapter and within the time limitations set forth in it, he shall be guilty of misfeasance of his office and may be removed from office in the manner provided by law. History. Acts 1983, No. 781, § 4; A.S.A. 1947, § 13-377.
History. Acts 1983, No. 781, § 2; A.S.A. 1947, § 13-375; Acts 2001, No. 1453, § 40.
In all instances wherein the State has any interest whatsoever in construction work requiring bids, the notice provisions of §§ 22-9-201 - 22-9-204 shall be strictly complied with and observed. Nothing in this subchapter shall be construed to amend or repeal these statutes, except those emergency procedures provided by §§ 22-9-201 - 22-9-204.
History. Acts 1973, No. 876, § 22; A.S.A. 1947, § 13-348; Acts 1999, No. 776, § 3.
Southern Arkansas University, respectively, are exempt from the requirements of this section requiring filing of such contracts with Arkansas Building Authority.
History. Acts 1973, No. 876, § 22; 1977, No. 813, § 2; A.S.A. 1947, § 13-348; Acts 1997, No.
294, § 1; 2001, No. 214, § 1; 2001, No. 961, § 3.
The provisions of this subchapter shall not be applicable to the State Highway Commission and the Arkansas State Highway and Transportation Department.
History. Acts 1973, No. 876, § 22; 1977, No. 813, § 2; A.S.A. 1947, § 13-348.
History. Acts 1973, No. 876, § 22; A.S.A. 1947, § 13-348.
History. Acts 1973, No. 876, § 22; 1985, No. 365, § 11; A.S.A. 1947, § 13-348; Acts 1987, No. 758, § 1; 1995, No. 1319, § 1; 1997, No. 1193, §2; 1999, No. 219, § 2; 2001, No. 214, §§ 2, 3; 2001, No. 961, §§ 4, 5; 2003, No. 364, §§ 4, 19; 2005, No. 859, § 1. ACA§ 19-4-1406 Repealed
History. Acts 1973, No. 876, § 22; 1975, No. 985, § 1; A.S.A. 1947, § 13-348.
History. Acts 1973, No. 876, § 22; A.S.A. 1947, § 13-348; Acts 2001, No. 1453, § 41.
History. Acts 1973, No. 876, § 22; A.S.A. 1947, § 13-348.
Upon completion of each contract awarded for the fulfillment of a project authorized by the General Assembly:
History. Acts 1973, No. 876, § 22; 1975, No. 985, § 1; A.S.A. 1947, § 13-348.
History. Acts 1973, No. 876, § 22; 1977, No. 813, § 3; 1979, No. 833, § 9; A.S.A. 1947, § 13- 348; Acts 2001, No. 214, § 4; 2001, No. 961, § 6; 2003, No. 364, § 6.
History. Acts 1973, No. 876, § 22; 1977, No. 641, § 1; A.S.A. 1947, § 13-348.
History. Acts 1997, No. 961, § 1.
History. Acts 2001, No. 1547, § 1
History. Acts 2001, No. 1626, § 1; 2003, No. 364, § 7; 2003, No. 1315, § 2; 2005, No. 859, §3.
Rl- 19-4-1415 Procedures for Approval of Design Professionals
Authority and General Requirements
The Arkansas Building Authority (ABA) maintains oversight in the selection process of design prof essionals for capital improvement projects. Issues regarding design professionals under ABA's jurisdiction should be directed to the ABA State Architect or the ABA State Engineer within the ABA Design Review Section.
All contracts for design professional services (architectural, engineering, land surveyors, interior design, landscape architects, specialized building related consultants and environmental consultants) must first be submitted to ABA for recommendation and approval. The contract shall then be forwarded to Department of Finance and Administration-Office of Procurement (DFA-OP).
Contracts under the jurisdiction of ABA shall not be sent directly to DFA-OSP. Agencies not under ABA jurisdiction shall seek approval in accordance within their own internal policies and then forward the contract to DFA-OP.
State Agency Defined
A State agency is defined under the authority of ABA as any board or commission, agency, department, institution of higher education including colleges, universities, and vocational-technical schools or other State institutions. However, "State agency " shall not include any county, municipality, school district, subdivision, or unit thereof of the State of Arkansas, nor shall the term 'State agency " mean or include the Arkansas State Highway and Transportation Department, the State Highway Commission, or the lands, buildings or structures acquired as investment assets of Arkansas Teachers Retirement System. (ACA § 22-2-102(5), 22-2-103(a) )
Special Provisions
While the boards of trustees of the University of Arkansas, Arkansas State University, University of Central Arkansas, Henderson State University, Arkansas Tech University, and Southern Arkansas University, respectively, are exempt from review, consultation, assistance, advice and approval by ABA for capital improvements, they remain subject to applicable laws governing public works including ACA § 22-9-101 through 22-9-702 and ACA § 19-4-1401 through 19-4-1415. Upon approval of the Department of Higher Education, the governing boards of all other public institutions of higher education shall be exempt from review and approval by ABA for design professionals provided that prior to granting such approval the department shall have reviewed and approved policies and procedures adopted by the governing board with respect to bidding and construction of capital improvement projects. While these entities may be exempt from ABA's jurisdiction, the applicable laws on public works and capital improvements shall be adhered to with respect to the design professional. The ABA may enter into an agreement with any of the above exempt institutions to provide reviews and approval of all capital improvements. Once an entity enters into an agreement with the ABA, the mandates under the Arkansas Building Authority Minimum Standards and Criteria (ABAMSC) become applicable to the institution's project.
ABA Regulations
State agencies under ABA jurisdiction must adhere to the Arkansas Building Authority Minimum Standards and Criteria (ABAMSC), which can be found at www, arkansasbuildingauthority. com. The regulations pertaining to the selection of design professionals is located in ABAMSC §6-100 through 106. The fee schedules and other issues regarding the contracting of design professionals can be located in §6-200 through §6-222. Exception: Entities utilizing alternative delivery methods shall follow the selection and contract award process as stated in ACA § 19-4-1415.
Code Provisions
ACA § 22-9-101 and § 22-2-113 set forth when registered design professionals shouldbe utilized for State capital improvement projects.
Payments
Capital improvement payments are processed through the State of Arkansas' accounting system. Agencies are solely responsible for making timely payments pursuant to their professional services agreement.
PLEASE NOTE: Details of Construction (bidding/contract awards/project observations), Design Services (architectural/engineering/other consultants), Real Estate Services (leasing/sale & purchase of property), etc. may be viewed on the Arkansas Building Authority Web site at: http://www.arkansasbuildingauthoritv. com
History. Acts 2003, No. 1476, § 1.
PLEASE NOTE: Also refer to Rl- 19-4-524.
The Chief Fiscal Officer of the State shall prescribe and establish a uniform system of perpetual inventory for property and equipment with a central control being established and maintained in the department. In connection therewith, the Chief Fiscal Officer of the State shall:
History. Acts 1973, No. 876, § 26; A.S.A. 1947, § 13-352; Acts 2001, No. 1453, § 42.
It shall be the responsibility of the executive head of each State agency to keep and maintain a record of all property of the agency, belonging to the State of Arkansas. The executive head of each agency shall be held accountable for all State property under his control and shall be responsible for keeping and maintaining a record of all the property.
History. Acts 1973, No. 876, § 26; A.S.A. 1947, § 13-352.
The Chief Fiscal Officer of the State, in order to expedite the necessary work of any State agency or to eliminate duplication and promote economy and efficiency, may do the following:
History. Acts 1973, No. 876, § 26; A.S.A. 1947, § 13-352.
Rl- 19-4-1503 Property Management Responsibility
It is the responsibility of the executive head of every State agency, board or commission regardless of whether they participate in AASIS to maintain a record of all property of the agency belonging to the State of Arkansas.
All new acquisitions shall be promptly added to the detail of capital assets and all items transferred, lost, stolen, destroyed or sold must be promptly removed from the detail of capital assets. General information and guidance on capital assets is located in the Capital Asset Guidelines, Pl- 19-4-1503 (Capital Assets Guidelines).
Also included in the appendix are asset category definitions, capitalization/tracking thresholds, depreciation methodologies and examples of expenditures for each class of assets. All user agencies and service bureau agencies shall record their capital assets on AASIS based on established tracking and capitalization thresholds located in the Capital Asset Guidelines. Detailed instructions on adding or removing capital assets are located under Asset Management on the AASIS web site at http://www.aasis.state.ar.us/Training/CourseWare/CWareAM. htm. Reporting agencies shall record their capital assets on their books of record based on established tracking and capitalization thresholds located in the Capital Asset Guidelines.
Capital Assets Defined
Capital assets include: land, land improvements, buildings, building improvements, construction in progress, equipment, infrastructure, easements, works of art, historical treasures and any other tangible or intangible assets used in operations with an initial useful life in excess of one year.
PLEASE NOTE: Capital assets may include leased assets. For guidance on the potential capitalization of leased assets, see Rl- 19-11-238 for guidelines on leases of tangible personal property (equipment) and Rl- 22-2-114 for guidelines on leases of office space, buildings, structures, parking lots and grounds.
Capital assets purchased should be recorded and reported at their historical costs, which include the vendor's invoice, sales tax, initial installation cost, modification cost, attachments, accessories or apparatus necessary to make the asset usable and render it in service. Historical costs also include ancillary charges such as freight and transportation charges, site preparation costs and professional fees. Capital assets donated should be recorded at fair market value at the time of donation.
PLEASE NOTE: The book value of assets shall never be increased to reflect appraised value, insurance value, etc.
Low Value Items
Although capital assets costing less than the capitalization/tracking threshold as detailed in the Capital Asset Guidelines Appendix are not considered capital assets for financial statement reporting purposes, the executive head of each State institution, department, board, commission or other State agency is not in any way relieved of the duty to account for all State property under his/her control regardless of the dollar value. Items costing in excess of $500 particularly susceptible to pilferage such as tools, computers, electronic equipment, etc., shall continue to be maintained on capital asset records as Low Value in order to prevent losses and to maintain proper accountability.
Items costing less than $500 individually that are part of or used with a group or set such as kitchen utensils, groups of chairs, hospital linens should be capitalized in groups or sets at total cost as Low Value Collective items. A listing of the contents of the aforementioned sets or groups should be maintained by the agency for internal control and audit purposes.
Donated Items
A donation is defined as a voluntary non-exchange transaction entered into willingly by two or more parties. Both parties may be governments, or one party may be a non-governmental entity, including an individual. Equipment donated to State agencies shall become property of the State and shall be accounted for and disposed of according to the procedures set forth for property of the State.
Donors may set restrictions on the use and disposition of property donated. In such instances the donor's guidelines shall be followed. Adequate records must be maintained to demonstrate the guidelines were followed.
All donated equipment shall be valued and placed on the agency's capital asset records at the fair market value of the donated property at the time the donation is received. Donated items determined to have no value for its manufactured purpose shall be treated as consumable material, (i.e. donated items used for parts or training aids).
PLEASE NOTE: A voluntary contribution of resources between State agencies is not a donation. Such transaction should be accounted for as a transfer.
Federal Surplus Property Donees
The Federal Surplus Property (FSP) is administered by the Arkansas Department of Workforce Education. Generally, property received from FSP must be put into use within twelve months from the date acquired and used for eighteen months from the date the property is put into service. After the eighteen months, ownership of the property passes on to the entity. The property must be entered on the entity's inventory and primarily used in Arkansas. At the time the asset is received, if the asset meets the capitalization requirements of the State, the fair market value of the asset should be debited and deferred revenue should be credited in the fund financial statements of an enterprise fund and in the government-wide financial statements for a governmental fund. At the end of the eighteen month period, the revenue should be recognized. Consumable items would be recorded like other consumable donations.
Please note: Items that are to be held in trust for the federal government (ownership will never be transferred to the State) are not handled in the above manner. They should be handled as described in the following subsection, "Loaned Assets".
Confiscated Assets
Although not voluntary, confiscated assets awarded to an agency by judicial decision are accounted for in the same manner as donations.
Loaned Assets
Loaned assets are assets that are possessed but not owned by an agency. The agency may have fiduciary or administrative responsibility for such assets, but the agency only has temporary control of the asset and does not hold the asset's title or other ownership responsibility. These assets include, but are not limited to, art collections owned by families, estates or others, as well as equipment on loan from the federal government. Such assets shall not be included in the agency's capital asset records.
Other adequate supplemental records must be maintained by the agency on assets loaned (not donated) to the agency. The records must include an acquisition date, an adequate description of the property, location, if feasible, serial number, if applicable, the entity that owns the asset. Such information may be required to be reported to the Department of Finance and Administration-Office of Accounting-Comprehensive Annual Financial Report (CAFR) Section-(DFA-OA-CAFR Section) in the Year-End Disclosure Package.
The assets shall be subject to all other property procedures of the agency including, but not limited to, inventory and lost/stolen procedures.
State Owned Motor Vehicles
Motor vehicles shall be recorded and maintained in the capital asset records of the State Financial Management System. Refer to Rl- 19-4-903 and the Department of Finance and Administration-Office of Information Services web site http://www.state,ar.us/dfa/info_svcs/index.html for additional information on motor vehicles.
Capital Asset Additions
All additions are to be promptly added to the agency's detail of assets in the State Financial Management System. In the event that assets, which should have been added, are not included on AASIS prior to the end of the fiscal year, the agency shall remit a complete "Create Asset Master Record" Form located at http://www.arkansas.sov/dfa/aasis/aasis_forms,html to the DFA-OA-CAFR Section for each capital asset to be added to AASIS. The DFA-OA-CAFR Section will complete the necessary transactions to add the asset to the agency's capital asset records.
Depreciation
Generally Accepted Accounting Principles require capital assets to be reported and depreciated over their estimated useful life in the government-wide financial statements. Capital assets that are inexhaustible are not depreciated
The purpose of depreciation is to spread the cost of the asset over the asset's economic life. The straight-line depreciation method will be used to calculate depreciation. Depreciation data will be calculated and stored by AASIS for each eligible asset of user agencies and service bureau agencies. Reporting agencies shall have a GASB 34 compliant fixed asset system to record fixed assets and calculate depreciation data. Accumulated depreciation shall be summarized and posted to the accounting general ledger of the State Financial Management System.
Each State agency, board or commission shall utilize the estimated useful lives outlined in the useful life appendix P 2-19-4 -1503. Additionally, each agency shall annually evaluate the estimated useful lives assigned to their assets to ensure depreciation is spreading the cost of the asset over the asset's economic life. If the current estimated useful life varies more than one year from the estimated useful life assigned to the asset, the agency shall request approval from DFA-OA to change the estimated useful life. Upon approval the estimated useful life of the asset will be changed, and the related accumulated depreciation and depreciation expense will be adjusted on a prospective basis.
Equipment Transfers - Inter-Agency
The transfer of equipment accountability from one agency to another agency shall be approved by the DFA Director prior to the transfer. (ACA 19-4-1503 )
If the transfer involves the transfer of funds, the agency wishing to transfer the asset shall submit a request to sell the asset to the Department of Finance and Administration-Office of State Procurement-Marketing and Redistribution (DFA-OSP-M & R), and the agency wishing to receive the asset shall submit a letter of acceptance to DFA-OSP-M & R. Upon receipt of sale approval (by the selling agency) and invoice (by the receiving agency), the agency receiving the asset may transfer the asset value to their capital asset records.
If the transfer does not include the transfer of funds, a transfer request including an acknowledgement from the receiving agency, board, commission or institution shall be submitted to the Department of Finance and Administration-Office of Accounting-Reconciliation Section as the DFA Director's designee for approval. Upon receipt of an approved transfer request, the agency receiving the asset may transfer the asset value to their capital asset records and, if a reporting agency, the agency transferring the asset may remove the asset from their capital asset records.
Removal of Equipment
Upon determination by the owning agency that property is no longer usable in its original State or no longer needed, Department of Finance and Administration-Office of State Procurement-Marketing and Redistribution Section (DFA-OSP-M & R) should be contacted for proper disposition (disposal, cannibalization or sale). See additional instructions in Rl- 19-11-243 Marketing and Redistribution.
Assets may be impaired but continue to be in service. Any capital asset that has a permanent reduction in service utility should be adjusted accordingly. If an impairment (physical damage, technological developments that reduce the use of an asset, changes in environmental factors that reduce production or abandonment of a project) occurs, the agency should certify in writing to DFA-OA-CAFR Section the date the impairment occurred, the percentage or dollar amount of the impairment and what caused the asset to be impaired. The DFA-OA-CAFR Section will assist the agency in making the journal entries necessary to properly account for the impairment.
Lost/Stolen Personal Property
When an agency is unable to locate personal property contained on its capital asset records, the following possibilities must be considered:
When property on record cannot be located, the executive head of the agency should immediately appoint an individual with supervisory or managerial responsibility to investigate the case and present the facts. A memorandum from the executive head of the agency should be written to the appointed individual notifying the individual of his/her investigative duties. The appointed individual should proceed in the following manner:
If the agency executive head is satisfied that the missing property cannot be located after the investigation report, a "Credit for State Property" Form (P 3-19-4 -1503) along with copies of the investigation report and the police report in the case of stolen property shall be prepared and submitted to the Department of Finance and Administration-Office of Accounting, Administrator as the DFA Director's designee for approval. Upon receipt of an approved "Credit for State Property" Form, P 3-19-4 -1503, the agency may remove the missing property from the capital asset records. This approval becomes part of the documentation to be used on the audit of the agency's property records by the Division of Legislative Audit. The agency executive head shall take any action he/she considers appropriate to prevent recurrence. (ACA 19-4-1501 )
Rl- 19-4-1601 Payroll Responsibility and Authority
The Department of Finance and Administration-Office of Personnel Management (DFA-OPM) has the overall responsibility for management of the State's payroll. (ACA § 21-5-207 ) DFA-OPM-Payroll Section is responsible for executing payrolls, paying human resource vendors, reporting taxes and associated taxable income to federal and State tax authorities and providing technical assistance for agencies that use Arkansas Administrative Statewide Information System (AASIS).
User agencies are responsible for creating and updating financial, human resource and employee benefits master data for AASIS. DFA-OPM-Payroll Section is responsible for creating and updating human resource master data for AASIS service bureau agencies. A tutorial on payroll can be accessed at the following web site: http://www.aasis.state,ar.us.The DFA-OPM Policies and Procedures Manual can be accessed at: http://www.state.ar.us/dfa/personnel_mgmt/opm_policy/policy_index, html.
Bi-Weekly Pay Periods Not Within a Single Fiscal Year
In the event that a pay period for regular salaries and extra help commences in the closing period of one fiscal year and extends into the following year, and the pay period is bi-weekly, then the payment of such obligation may be made in whole from the appropriation for either fiscal year as determined by the Chief Fiscal Officer of the State. However, both appropriation and funds must be available in the fiscal year against which the payroll is to be processed. (ACA § 19-4-702 )
R 2-19-4 -1601Year-end Reporting for the Comprehensive Annual Financial Report
Payroll expense incurred but unrecorded at year-end is termed "accrued payroll expense." Accrued payroll expense is a liability and expense that will need to be recorded at year-end during the closing process by each agency. Salary and retirement information will be provided to each agency by the Department of Finance and Administration-Office of Accounting at year end for verification. This information will provide the proper balance for the accrued payroll expense account. Each agency will be required to enter the journal entries to adjust this account as follows:
* Debit 5010001100 NBR Personal Services (current year accrued salary expense)
* Debit 5010001600 NBR Employee Benefits (current year accrued retirement and payroll tax expense)
* Credit 2115006000 Accrued Salary & Benefits (to record the year-end accrual)
R 3-19-4 -1601 Payments for Personal Services not Considered Payroll Items
Contract Labor
Occasionally, an agency will undertake special programs or be subjected to seasonal fluctuations that temporarily increase the workload beyond the capabilities of the agency's regular staff Situations of this nature may necessitate the hiring of "contract labor" to be paid for out of the Operating Expenses line item of the agency's appropriation. Contract labor is not to be paid for out of regular salaries or extra help line items because the contract labor is employed by and paid by the contract labor service and not the user agency. The user agency will be billed for the services by the contract labor service. Labor of this type must be considered temporary and infrequently needed. Contract labor is paid from commitment item 02-Operating Expenses.
In order to prevent the circumvention or violation of the law or its intent, it has been determined that no agency subject to this act may employ contract labor for a period longer than six consecutive weeks or 240 hours per calendar quarter. If help is needed more often, the agency must request additional positions and employ full-time or extra help personnel to be paid in accordance with §ACA 21-5-101 and §ACA 21-5-209.
History. Acts 1973, No. 876, § 23; 1975, No. 881, § 1; 1981, No. 251, § 1; 1983, No. 164, § 1; A.S.A. 1947, § 13-349; Acts 1987, No. 18, § 1; 1987, No. 646, § 3; 1989, No. 506, § 1; 1995, No. 1122, § 1; 1997, No. 747, § 1; 2001, No. 166, § 1; 2003, No. 1795, § 1.
Rl-19-4-1602State Insurance Contribution Payments
Payments by agencies and institutions participating in benefits offered by DFA-Employee Benefits Division (DFA-EBD) shall be made payable to the DFA-EBD vendor set up for voluntary products for State insurance contribution payments (currently vendor number 9990386 in AASIS). Invoices entered into AASIS with a payment method of "A " will be directly deposited into the State Employee Benefits Trust Fund Account by Automatic Clearing House transaction. Invoices with a payment method of "W" will produce a warrant, which should be delivered by hand or mailed to DFA-EBD. The payment will be processed and manually deposited in the State Employee Benefits Trust Fund Account. Payments not received by DFA-EBD by the due date will be subject to penalties and benefit termination.
Supportive Papers for State Contribution Payments
No supportive documents are normally required to be submitted with the State contribution payments; however, agencies that are paying a different amount for added extra help positions than the amount billed should submit a copy of the billing along with the changes/corrections to DFA-EBD. Any permanent budgeted position changes/corrections should be reported to the DFA-Office of Budget for future billings. It remains the agencies' responsibility to retain all appropriate supporting documentation in their files for audit purposes.
Agencies participating in the DFA-Employee Benefits Division health and life insurance plans are required to enroll and maintain records for eligible employees. Employee benefit master
data shall be maintained as required by Employee Benefits Division for the purposes of eligibility and employer matching contributions.
R 2-19-4 -1602Retirement Contributions
Agencies participating in the Arkansas Public Employees Retirement System (APERS) are required to monitor regular and extra help hours for all positions to comply with employer retirement matching contribution requirements and balance Arkansas Public Employee Retirement monthly reports. Agencies are required to submit employee contributions and employer matching payments within 10 calendar days after each payroll processing date. Agencies shall receive pre-printed remittance forms from APERS and will be provided additional forms as requested Generic remittance forms may be found at http://www.apers.ors/pdf/form_remittance.pdf for emergency use. Complete the agency name, payroll cycle and agency number when using these generic forms. Reporting instructions are available at http://www.apers.org/emploverassistancep1.html.
R 3-19-4 -1602Deferred Compensation Plans
Authority
Arkansas Annotated Code 21-5-504 states:
Purpose
The purpose of the Arkansas Diamond Deferred Compensation Plan ("Plan"), formerly the State of Arkansas Deferred Compensation Plan, is to provide employees and independent contractors of the State of Arkansas and its political subdivisions with a convenient way to save on a regular long-term voluntary basis to provide supplemental income for their retirement. The Plan is intended to satisfy the requirements for an "eligible deferred compensation plan" under Section 457 of the Internal Revenue Code of 1986, as amended, established and maintained by and for the State of Arkansas, its political subdivisions and any agency or instrumentality of the State of Arkansas or its political subdivisions. All amounts of compensation deferred under the Plan and all income attributable thereto shall be held for the exclusive benefit of participants and their beneficiaries and alternate payees.
In order to make deferral contributions to the Plan, an employee or independent contractor must enter into a deferral agreement, which shall become effective as soon as administratively feasible after the deferral agreement is entered into by the employee or independent contractor.
The operation and administration of the Plan shall be the responsibility of the Executive Director, Employee Benefits Division, Department of Finance and Administration of the State of Arkansas, or the person or persons designated by the Executive Director to act on his or her behalf.
The Executive Director shall, in his or her sole and complete discretion, determine both the financial organizations, which provide investment funds to the Plan, and each individual investment fund offered as an investment option under the Plan. Investment funds may include annuity contracts, fixed or variable life insurance contracts, mutual funds, pooled investment funds or such other investment vehicles that comply with Arkansas and federal laws and which permit the deferral of compensation for income tax purposes when held in a custodial account for the Plan.
TERM DEFINITIONS
Employee - Any employee who is employed by an Employer and is characterized as a common law employee under Arkansas law.
Employer - The State and any Participating Employer.
Independent Contractor - An individual who performs services for an Employer as an independent contractor.
Participant - An individual who is or who has previously deferred compensation under the Plan pursuant to a deferral agreement, and who has not received a distribution of all of his or her accounts under the Plan.
Participating Employer - Any political subdivision of the State and any agency or instrumentality of the State or apolitical subdivision of the State, the governing body of which has adopted the Plan by appropriate resolution or other legal action with the consent of the Executive Director, and in any case where a resolution or other legal action of such governing body is required by law to be approved by any other body or officer, with the written approval of such other body or officer.
Plan Administrator - Citistreet (Third Party Administrator)
Plan Sponsor - Employee Benefits Division
Regulations
Regulations have been established as broad guidelines for State employees' eligibility to participate in the Arkansas Diamond Deferred Compensation Plan. The Employee Benefits Division (EBD) of the Department of Finance and Administration (DFA) has sponsorship oversight of this plan. As such, EBD may enter into a contract or contracts with Plan Administrators to conduct the daily work of The Plan and also hire a consultant as an advisor in these matters.
EBD shall require that the Plan Administrator obtain official permission from each employee participating in the "Plan" to authorize salary reduction and contributions into the "Plan" and that the Plan Administrator be responsible for compliance with the Plan Document (on file at EBD) and State and Federal regulations.
Regarding the Employee's Opportunities to Participate in Plans:
All State employees (including physicians who receive State Medicaid funds) are to have equal opportunity to participate in any deferred compensation plan and any options or benefits related to such plan as has been approved Any employee hired after the "Plan" is effective is to be informed of the "Plan" at the onset of their employment.
EBD is responsible for seeing that a proper, unbiased, educational program is made available to eligible employees to inform them of the pertinent information relating to the "Plan" or plans in which they may participate. This educational program may take the form of an instructional seminar for all eligible employees, a direct mailing to all eligible employees or both. The seminar approach is recommended where practicable because it affords the employee the opportunity to ask questions and have direct contact with persons knowledgeable on the subject.
Regarding Control of Funds:
EBD acts as the Plan Sponsor to the Third Party vendor (Plan Administrator) that manages the funds allocable to any deferred compensation plan or plans in which State employees participate.
When a salary reduction agreement exists, the employee's Federal and State Income Tax withholding will be computed on the net salary after the amount of the salary reduction is applied. The salary reduction will be deducted each payroll from the employee's pay and paid to the third party vendor by the DFA-Office of Personnel Management-Payroll Systems.
Records of such deductions are maintained on AASIS in the employee's payroll result table. AASIS also maintains a record of the third party payment to the vendor.
Payment of contributions for investment in the "Plan" investment options on behalf of participating employees will be made promptly, preferably by secure electronic fund transfer (EFT).
Complete records of salary payments, salary reduction amounts and investment elections will be maintained. Federal and State taxable wages are reported annually in boxes one (1) and sixteen (16) of Internal Revenue Service W-2 forms. The amount of salary reduction for a deferred compensation "Plan" is reported in box twelve (12).
The Plan Administrator is responsible for making prompt payment of any benefits to which the employee or former employee is entitled under the terms of the contract. The Plan Administrator shall maintain complete and accurate records of such payments.
Any benefits forfeited by any State, county, city, town or other political subdivision employee under a deferred compensation agreement shall become the property of the unit of government for which the employee worked and shall be considered general revenues. (The likelihood of this is small, as the "Plan" requires participants to name a beneficiary to receive the account balance in the event of the participant's death. If no beneficiary is on file, plan assets will become part of the deceased's estate.)
R 4-19-4 -1602 Workers' Compensation Premium Tax
The Workers' Compensation Premium Tax was established to provide funding for the Workers' Compensation Commission. Such tax is required to be paid by all insurance carriers, self insurers and public employers not obtaining Workers' Compensation Insurance from an insurance carrier. On or before March 1st of each year the Workers' Compensation Commission shall certify the rate of taxation, not to exceed 3%, for the preceding year to the Insurance Commissioner. The Insurance Commissioner shall notify the Insurance Department-Public Employee Claims Division of the rate of the tax. (ACA § 11-9-306 (a-d), ACA § 11-9-306(e) (3) ) Also refer to ACA§ 11-9-303 for limit on tax.
The tax calculation is based upon the following formula:
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The salaries within the formula are all taxable wages and salaries for the employees of the public entity including any non-cash taxable wage such as clothing and housing allowances. The NCCI Average Compensation rate is determined from the published rate in effect on January 1 of the year the tax is based (i.e., calendar year 2003 salaries and January 1, 2003) NCCI Average Compensation rate will be the basis for the 2003 taxes collected (ACA § 11-9-305(a)(2)(B) )
After the "Computation of the Worker's Compensation Premium Tax" Form, at http://www.awcc.state.ar.us/premium_tax/schedule_wc.pdf, is received from the Insurance Department-Public Employees Claims Division, the agency or institution shall prepare a warrant(s), check(s) or fund transfer as specified by the Insurance Department-Public Employees' Claims Division for remittance. Payments must be made in accordance with salary appropriations received
The tax filing must be completed on the form received from the Insurance Department-Public Employees Claims Division according to the instructions provided The form, including certifying signature with all warrants and/or checks, shall be submitted to the Insurance Department-Public Employee Claims Division, 1200 West Third Street, Suite 201, Little Rock, AR 72201-1904. The tax payment is due to the Insurance Department-Public Employees Claims Division annually on or before April 1st. Any questions regarding payment shall be addressed to the Insurance Department-Public Employee Claims Division. (ACA § 11-9-306(f)
PLEASE NOTE: Workers Compensation Premium Tax is based on the gross payroll and is considered an employment cost as a "Matching" payment. It is paid from Commitment Item 03 using AASIS GL account number 5010010000.
An agency or institution's failure to pay the tax may result in decertification of the public employer from participation in the State Workers' Compensation Program which would require that agency or institution obtain workers' compensation coverage for its employees from the private insurance market for one full year. (ACA §ll-9-305(b))
The Insurance Department-Public Employees Claims Division allocates the tax and remits the payments to the Workers' Compensation Commission on or before April 1st of each year. (ACA § 11-9-306(e) (3) )
Year-End Reportins
Because the Workers' Compensation Premium Tax is paid on a calendar year basis and the State has a fiscal year, which differs from a calendar year, an estimate of the amount of premium tax to be paid for the period from January through June shall be recorded while completing fiscal year-end adjusting entries. The estimated tax due is calculated by the Workers' Compensation Commission-Administrative Services. The amount of each agency's estimate shall be communicated to the respective agency by the Workers' Compensation Commission-Administrative Services on or before July 20th.
As with all year-end accrual entries, the accrual entry should be entered with a FBS1 Enter Accrual/Deferral Document Transaction with a reversal date the first day of the following fiscal year (07/01/20XX). Although the previous year's accrual entry to record the estimated premium tax should have been reversed in the current year, the account should be reviewed to determine this occurred. If the previous year's entry has not been reversed, the previous year entry should be reversed in the current period. The current year estimate should be recorded in non-budget relevant accounts in period 13 in funds that correspond to salary appropriations (See additional information and instructions in R 2-19-4 -506). The amounts recorded for each fund shall also be detailed on the Intergovernmental Transactions (Igt's) - Receivables/Payables Form in the Year-End Disclosure Package. The journal entry should use the following accounts:
DR 5010001100 NBR- Personal Service - Payroll
CR 2110004100 Inter-agency Due to Other Agency
To record accrued workers compensation premium tax accrual.
History. Acts 1973, No. 876, § 23; A.S.A. 1947, § 13-349
History. Acts 1973, No. 876, § 23; A.S.A. 1947, § 13-349; Acts 1995, No. 403, § 1; 2001, No. 1370, § 1; 2005, No. 1189, § 1.
In those instances where a State agency has approved line-items for salaries which are payable from more than one (1) fund, the Chief Fiscal Officer of the State shall be authorized to establish a paying account on his books and on the books of the Treasurer of State and Auditor of State from which all such salaries may be paid, with provisions for reimbursing the paying account by directing the transfer of the necessary funds and appropriations on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State.
History. Acts 1973, No. 876, § 23; A.S.A. 1947, § 13-349.
History. Acts 1969, No. 199, § 8; A.S.A. 1947, § 12-3208; Acts 2001, No. 1453, § 43.
History. Acts 1973, No. 876, § 23; 1975, No. 980, § 1; 1980 (1st Ex. Sess.), No. 36, § 1; 1980 (1st Ex. Sess.), No. 62, § 1; 1985, No. 637, § 1; A.S.A. 1947, § 13-349; Acts 2001, No. 1453, §44
In the event an appropriation is made for the payment of personal services, where it has been established by law on the basis of a scholastic year or for some other period less than twelve (12)
months, then any person so employed may be paid from bank funds for the remainder of the year if his services are required by the State agency.
History. Acts 1973, No. 876, § 23; A.S.A. 1947, § 13-349.
History. Acts 1979, No. 578, § 1; A.S.A. 1947, § 13-349.2; Acts 1989, No. 688, § 1; 1997, No. 758, § 1; 2001, No. 1453, § 45.
History. Acts 1973, No. 876, § 23; 1981, No. 741, § 4; A.S.A. 1947, § 13-349; Acts 1989, No. 629, § 10; 2003, No. 656, §8.
In the event the General Assembly shall have established by law the maximum annual salaries for certain positions for any State agency and shall have appropriated for those positions, no greater salary than that established by law shall be paid to any person occupying the position by making supplemental payments from agency bank funds. However, the salaries may be paid partly from State-appropriated funds and partly from agency bank funds, but the aggregate of the payments shall not exceed the maximum annual salary rate, where it is established by law. History. Acts 1973, No. 876, § 23; A.S.A. 1947, § 13-349.
History. Acts 1973, No. 876, § 23; 1976 (Ex. Sess.), No. 1, § 1; 1977, No. 118, § 1; 1985, No. 820, § 1; A.S.A. 1947, § 13-349.
History. Acts 1973, No. 876, § 23; 1975, No. 980, § 2; A.S.A. 1947, § 13-349; Acts 2001, No. 1453, §46; 2005, No. 1188, § 1.
History. Acts 1973, No. 876, § 23; 1977, No. 813, § 4; A.S.A. 1947, § 13-349.
Refer to Rl- 19-10-101 for information regarding Judicial Awards.
History. Acts 1995, No. 176, § 1.
Refer to Rl- 19-10-101 for additional information regarding Judicial Awards.
ACA£ 19-4-1701 -1717. Repealed.
Act 1315 of 2003 repealed ACA § 19-4-1701 et seq., relating to professional and consulting service contracts between the State of Arkansas and all of its agencies, boards, commissions, departments and institutions. The responsibilities for the maintenance of policies and procedures for this area have thus been assigned by State law to the Office of State Procurement. The State Procurement Director is authorized by A CA § 19-11-1008 to adopt regulations regarding the competitive bidding process, requests for proposals, approval of professional and consultant services contracts, etc. The regulations relative to professional and consultant services contracts can be found on the Office of State Procurement's web site at: http://www.state,ar.us/dfa/procurement/pro_index, html.
History. Acts 1973, No. 876, § 24; 1975 (Extended Sess., 1976), No. 1110, § 1; 1977, No. 437, § 2; 1979, No. 833, § 8; A.S.A. 1947, § 13-350; Acts 1987, No. 873, § 1
Rl-19-4-1801 Reimbursement of Expenses between Agencies (Also see Rl- 19-6-701 )
Generally Accepted Accounting Principles (GAAP) defines interfund reimbursements as "repayments from the funds responsible for particular expenditures or expense to the funds
that initially paid for them." Per GAAP, interfundreimbursements should be treated as an increase in expenditures or expenses in the reimbursing fund and a decrease in expenditures in the reimbursed fund Allocation of indirect cost (overhead) should also be classified as reimbursements. There are two methods available that comply with GAAP with one method restoring appropriation if a current year refund and the second method not restoring appropriation but reclassifying the transaction for financial reporting purposes. Refer to the Frequently Asked Questions Section for detailed examples of the two methods. Refunds to expenditures are permitted by law only in certain instances including reimbursements to State agencies for cost-sharing purposes.
GAAP also states that, when governments concentrate one or more risk financing activities in a single fund, premiums received from other funds should be treated as an interfund reimbursement. An exception to this rule is, when the premiums paid are in excess of related expenditures, these excess premiums should be treated as an interfund transfer. The current practice is for agencies to record expense and the risk financing activity to record revenue. Agencies should continue this practice. These payments will be evaluated and adjusted accordingly by the DFA-OA-CAFR Section.
The procedure used when one agency incurs expenses that is pursuant to a cost sharing arrangement entered into prior to the expense occurring between two agencies or an agency incorrectly paid another agency's invoice is a hybrid refund to expenditure transaction which is processed on a journal entry by the DFA-OA-Reconciliation Section. The purpose of the refund to expenditure transaction is to reduce expense and restore the appropriation used on the books of the agency that paid the expense and record the expense and reduce the appropriation on the other agency's books. Only a current year refund to expenditure gives the agency back their funding and appropriation to use again during the current fiscal year. Prior year refunds do not restore appropriation or funding unless the appropriation and funds have carry-forward authorization in the appropriation Act. The journal entry processed for hybrid refund to expenditures is outlined in the Frequently Asked Question Section.
Hybrid refunds to expenditure cannot be used to circumvent the appropriation process.
PLEASE NOTE: See reimbursement between agencies process in appendix Pl- 19-4-1801.
PLEASE NOTE: See refund to expenditure audit procedures P 2-19-4 -1801.
History. Acts 1973, No. 876, § 24; A.S.A. 1947, § 13-350.
PLEASE NOTE: Refer to ACA§ 19-4-806 for policies regarding Petty Cash and Imprest Funds.
All fines, fees, penalties, court costs, taxes, and other collections which, by the laws of this State, are to be remitted directly to the Treasurer of State for credit in the State Treasury to an account of an agency of this State shall be remitted directly to the agency to whose account they are to be credited. Upon receipt, the agency shall transmit them to the Treasurer of State who shall credit them in the State Treasury to the account of the agency.
History. Acts 1961, No. 250, § 1; A.S.A. 1947, § 13-505.1
Charges, income, receipts, or revenue derived from the sale of publications by the Arkansas Geological Commission shall be deposited in the State Treasury as a refund to expenditures. History. Acts 1971, No. 585, § 19; A.S.A. 1947, § 13-549.
All moneys received in the State Treasury for deposit in the State Highway Employees Retirement System Fund that are derived from the sale or redemption of stocks, bonds, or other securities, other than interest, are to be classified and handled on the books of the Treasurer of State, Auditor of State, and the Department of Finance and Administration as a refund to expenditures.
History. Acts 1975, No. 72, § 4.
All State agencies are authorized to accept grants, aids, and donations and to enter into contracts to accept grants, aids, and donations. Following procedures prescribed by the Chief Fiscal Officer of the State, funds received from grants, aids, and donations may be deposited, disbursed, budgeted, and regulated.
History. Acts 1973, No. 876, § 19; A.S.A. 1947, § 13-345.
History. Acts 1973, No. 876, § 24; A.S.A. 1947, § 13-350.
Rl- 19-4-1807 Cash Management Improvement Act
Purpose of the Cash Management Improvement Act
The purpose of the Cash Management Improvement
Act is to ensure efficiency, effectiveness and equity in the exchange of funds
between the States and the federal government for federal assistance programs.
The Cash Management Improvement Act of 1990 (CMIA) was enacted by
Public Law
The Treasury-State Agreement defines the drawdown methods to be used by agencies. The Department of Finance and Administration-Office of Accounting (DFA-OA) with the assistance of all affected State agencies negotiates the TSA with FMS. The TSA outlines by program, the funding techniques and the forecast describing the amount of funds subtracted from a State's bank account on a daily basis after a State makes a disbursement. The forecast used by the State to draw down funds from the federal government is referred as a clearance pattern. Generally, conformance with the TSA assures that the State does not owe the federal government, or is not due from the federal government, interest liability on its draw downs. The State or the federal government may propose amendments to the TSA at any time during the duration of the contract. A copy of the TSA agreement may be obtained from the DFA -Office of Accounting-Reconciliation Section or printed from Pl- 19-4-1807.
Federal Assistance Programs and State Agencies Subject to the CMIA
The programs listed in the Catalog of Federal Domestic Assistance are subject to CMIA regulations. Currently, programs with $25.6 million or more in annual federal expenditures are required to be subject to the TSA (CMIA agreement). The threshold dollar amount that determines if a Federal program is required to be included in the TSA is calculated annually using a formula furnished by FMS. The list of federal assistance programs impacted by CMIA is revised annually as federal expenditures increase or decrease from the threshold. The $25.6 million threshold was established consistent with the Cash Management Improvement Act Guide to CMIA Thresholds under the Final Rule and was utilized in the preparation of the FY2005 TSA. State agencies that administer CMIA programs are subject to CMIA regulations.
Responsibilities of the DFA-Office of Accounting
The responsibilities of DFA-OA are to:
Responsibilities of Agencies Administering CMIA-Covered Programs
The responsibilities of the State agencies that administer CMIA programs are:
Request federal funds in accordance with the approved funding technique described in the TSA and in amounts needed for immediate payments.
Document the amount of federal funds requested and when federal funds are deposited in the State's account If federal funds are not available when required per the TSA, process the request which will document federal funds were properly requested by the State in accordance with the TSA.
For the federal draw systems that reject requests when federal funds are not available in the system, make the request and print the rejection notice as evidence of the State's conformance with the TSA. If necessary, make appropriate phone calls to federal agencies to notify them that federal funds are not available per the TSA. Document efforts made to request federal funds per the TSA.
When federal funds are not available per the TSA, maintain documentation of the amount of State funds expended, the dates of these expenditures, the date federal funds were requested and the date federal funds were received. Maintain this documentation for use in calculating federal interest liability on late federal funds. Note: In most cases, the State cannot calculate a federal interest liability unless the State has made a request through a federal draw system and had it rejected or has notified the applicable federal agency that federal funds are not available per the TSA. 3. Calculate the State and federal interest liabilities by program. Notify DFA-OA of proposed changes to the funding techniques and clearance patterns. A State agency shall not_ make a change until it is reviewed and approved by DFA-OA and FMS. 4. Certify to DFA-OA-Reconciliation Section that CMIA programs conform to the drawdown methods described in the TSA. DFA-OA-Reconciliation Section requests this certification in December of each year.
How to Calculate Interest Due from or Due to the Federal Government
In cases where interest is owed to the federal government or due from the federal government under the TSA, agencies should calculate and document interest owed (interestpayable) or due. The interest rate to be used is the annualized rate equal to the average equivalent yield of 13-week Treasury Bills auctioned during the State's fiscal year. The interest rate is provided to the State by FMS. Agencies may contact DFA-OA to obtain the necessary annualized rates. Agencies should be aware that interest calculations could be audited.
Responsibilities of Agencies Receiving Federal Funds Not Designated as CMIA Programs
State agencies receiving federal funds not designated as CMIA programs are subject to Subpart B of the CMIA. The principal responsibility of these State agencies is that they must minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes. Neither a State agency nor the Federal government will incur an interest liability on the transfer of funds for a Federal assistance program subject to this Subpart B.
PLEASE NOTE: See Federal/State agreement appendix Pl-19-4-1807. Also see ACA§ 19-4-1906.
Reimbursements of federal funds to the Vocational-Technical Schools Fund Account shall be construed to be income of the fiscal year in which the reimbursements were received. History. Acts 1969, No. 620, § 15; A.S.A. 1947, § 13-513.2.
History. Acts 1973, No. 876, § 21; A.S.A. 1947, § 13-347; Acts 1989, No. 37, § 2.
Preliminary or informal proposals which do not commit personnel, space, facilities, or state funds may be submitted directly to the granting source. However, when the grant requested, if approved, would result in the commitment of state personnel, space, facilities, equipment, or funds, or the program to be proposed by the state agency with the resources from the federal grant has not received specific legislative authorization through an appropriation or specific enabling legislation, the requesting agency shall notify, in writing, the Director of the
Department of Finance and Administration that such preliminary or informal proposal is being made and shall briefly describe it.
History. Acts 1973, No. 876, § 21; A.S.A. 1947, § 13-347.
Each request submitted to the Department of Finance and Administration shall be accompanied with an evaluation report prepared by the state agency that includes information as follows, but not necessarily limited thereto:
State forms necessary to fulfill the requirements of 19-4-1901 through 19-4-1904 can be found within the following five (5) links:
http://www.whitehouse.gov/omb/grants/sf424.pdf
http://www.state.ar.us/dfa/igs/clearinghouse/ch-1_supplementary_grant_information_form.doc
http://www.state.ar.us/dfa/igs/clearinghouse/ch-2_nstructions_clearinghouse_supplement_form.doc
http://www.state.ar.us/dfa/igs/clearinghouse/ch-2_state_clearinghouse_app_supplement_form.doc
http://www.state.ar.us/dfa/igs/clearinghouse/grant_award_notification.doc
Rl- 19-4-1904 Federal Grants and Aid
General Policies and Procedures
From time to time State agencies may request or receive federal funds in the form of grants or other aid. By nature, federal grants are subject to a full range of varying, yet specific, post award administrative requirements. To reasonably assure compliance with State and federal law as well as accurately report financial information, State agencies should maintain effective internal control over the financial administration of federal programs consistent with the following requirements:
U.S. Office of Management and Budget (OMB) Circulars A-87 Cost Principles for State, Local, and Indian Tribal Governments A-102 Grants and Cooperative Agreements With State and Local Governments, A-133 Audits of States, Local Governments, and Non-Profit Organizations, the recommendations and requirements contained in the A-133 Compliance Supplement (current edition), the Cash Management Improvement Act of 1990, the regulations promulgated pursuant thereto at 31 CFR Part 205, and other relevant grants management provisions applicable to the federal program in question, as announced in the Catalog of Federal Domestic Assistance and in The Federal Register.
These essential documents can be found within the following five (5) links:
http://www.whitehouse.gov/omb/grants/grants_circulars.html
http://www.fms.treas.gov/cmia/statute.html
http://www.fms.treas.gov/fedreg/31cfr205final.pdf
http://12.46.245.173/cfda/cfda.html
http://www.gpoaccess.gov/fr/index.html
Grant or Aid Preapplication
All preliminary, preapplication or informal proposals which may result in the commitment of personnel, space, facilities, equipment or State funds shall be submitted to the Department of Finance and Administration-Intergovernmental Services (DFA-IGS) with an Evaluation Report at the time it is submitted to the federal granting agency. DFA-IGS shall coordinate the review of any proposed program to prevent overlap, inefficiency or violation of legislative intent. (ACA § 19-4-1902, ACA § 19-4-1903 )
State institutions of higher education should submit preliminary proposals to DFA-IGS at <http://www.state.ar.us/dfa/igs/igs_clearinghouse.html>as informational only. (ACA § 19-7-604(b)(3) )
Grant or Aid Application
All formal proposals or other applications for federal funds in the form of grants, aids and reimbursements, except research grants or requests originating from a State institution of higher education, are to be submitted to DFA-IGS and the Governor's Office prior to submission to the granting source. The submission should include a summary of the application with the indirect cost rate of the applicant agency and a projection of the amount to be received as indirect cost reimbursement, if applicable. DFA-IGS is to file a summary of this submission with the Bureau of Legislative Research of the Legislative Council quarterly for review. (ACA § 19-4-1901, ACA § 19-7-604 )
MFG Requirements for New or Additional Federal Funds
When new federal programs or new Comprehensive Employment and Training Act programs become available which require the benefiting State agency to employ additional personnel or require the benefiting State agency to obtain additional appropriations so that the program meets the requirements of or performs the objectives of the program, the head of the affected agency may request additional appropriations from the Governor and the Chief Fiscal Officer of the State. The agency's request must be on a "Miscellaneous Federal Grant" Form (MFG) and include supporting documentation, if applicable. The completed MFG and supporting documentation should be submitted to the agency's Budget Analyst at the Department of Finance and Administration-Office of Budget. After consulting the Legislative Council or the Joint Budget Committee, the Governor may approve or modify the requests. (ACA § 19-7-502 )
MFG documents can be found within the following two (2) links:
http://www.state.ar.us/dfa/budget/documents/mfg_form_pagel_0206_001.xls
http://www.state.ar.us/dfa/budget/documents/mfg_form_page2_0206_OOO.xls
Quarterly Reporting Requirements
Information on all grants, aids, reimbursements and reimbursement plans, including research grants and those originating from a State institution of higher education, is to be reported to DFA-IGS quarterly. These reports shall be filed with respect to new federal programs or expansions of existing federal programs which were not in existence or which were not implemented by State participation at the time of the adjournment of the regular session of the General Assembly and entered into prior to the convening of the next regular session of the General Assembly. The DFA Director is to report to the Legislative Council on federal funds quarterly. The report is to summarize and itemize all programs which involve the expenditure of federal funds and is to include the following:
* a brief purpose of the agreement,
* the amount of federal funds to be expended,
* the amount of State matching funds, if required,
* the name of the administering agency or department, as well as any additional information that would assist the Legislative Council in determining the nature and purpose of the agreement.
Findings and recommendations by the Legislative Council from review of the quarterly reports are to be reported to each subsequent regular session. (ACA § 19-4-1904; ACA § 19-7-101, ACA § 19-4-1907, ACA § 19-4-1908 )
Funds Receipt
The DFA-IGS is to be notified when a State agency receives notification or obtains any federal funds, grants, aids or reimbursements, including unsolicited federal funds. Such notification shall include reporting federal funds received for indirect cost reimbursements resulting from overhead cost of the entity or overhead cost allocated to the entity through the Consolidated Statewide Cost Allocation Plan. A summary of the notifications will be provided by DFA-IGS to the Bureau of Legislative Research of the Legislative Council for review quarterly. (ACA § 19-7-604, ACA § 19-4-1904 )
All such funds are to be deposited as all other State Treasury funds. Any federal funds received on behalf of public school districts shall be forwarded to the county treasurer or district treasurer as the district chooses. Federal funds received by the agencies set out in ACA § 19-5-205(b) shall be deposited in to the State Central Services Fund. (ACA § 19-3-501, ACA § 19-3-518, ACA § 19-4-408, ACA § 19-5-205 )
CMIA and other Interest Earned on Federal Funds
Interest earned on federal funds received under the State and Local Fiscal Assistance Act of 1972 is to be transferred from the Securities Reserve Fund at the direction of the Chief Fiscal Officer of the State based upon the related portion of the average daily balance of the federal funds on a quarterly basis. (ACA § 19-3-521 )
PLEASE NOTE: Refer to Rl- 19-4-1807.
Funds Disbursement
Disbursement made on specific funds receiving
federal funding require the State Auditor to process warrants and the Treasurer
of State to redeem the warrants presented for payment in accordance with the
Federal Cash Management Improvement Act of 1990,
Pub. L.
In the event of actions that would adversely affect funds received or related estimates, each agency head administering federal funds is required to immediately notify the State's Chief Fiscal Officer. (ACA § 19-4-1306 )
Recommendations of Governor
ACA § 19-7-504 states that the Governor will submit recommendations to the General Assembly at the beginning of each regular session of the Arkansas General Assembly for any federal programs during the following fiscal biennium Such recommendation is to include a recommended appropriation of federal and State funds necessary for each program. In the event the General Assembly fails to appropriate the funds for any program, the State will no longer participate in such program effective June 30* following adjournment of the regular session.
Accounting
The Federal Grants & Reimbursements, general ledger account 4050004000, is the only account used to record federal grant revenue received directly from the federal grantor or sub grantor that is not another State of Arkansas agency. Grants and Aid from Other State Agencies, general ledger account 6060001000, is used to record grants received from other State agencies. The State agency disbursing grant funds to another agency should use Grants and Aid to Other State Agencies, general ledger account 6061001000. Each agency will be required to provide the Department of Finance and Administration-Office of Accounting-CAFR Section a list of all federal funds with CFDA numbers, the general ledger account the revenue was recorded to and the related amount. For additional information on recording and tracking Federal Grants and Aid see Pl- 19-5-101 and Project Accounting at http://www.aasis.state.ar.us/Training/CourseWare/CWarePRJACT.htmTutorials on the AASIS web site.
PLEASE NOTE: Also refer to ACA § 19-4-2201 et seq. to review requirements for discretionary grants. Also refer to ACA § 19-7-101 et seq. for more information on Federal Funds.
The Department of Finance and Administration shall prescribe procedures for reporting information relative to federal research grants and aids for the colleges and universities. History. Acts 1973, No. 876, § 21; A.S.A. 1947, § 13-347.
History. Acts 1973, No. 876, § 21; 1981, No. 572, § 1; A.S.A. 1947, § 13-347.
History. Acts 1973, No. 876, § 21; A.S.A. 1947, § 13-347.
History. Acts 1973, No. 876, § 21; A.S.A. 1947, § 13-347.
It shall be the duty of the Chief Fiscal Officer of the State to give notice and make proof of loss to, and demand payment of, the surety of any bond executed by any State officer or employee in which the audit report by the Legislative Joint Auditing Committee of the records and accounts shows that such officer or employee and his surety may in any way be liable.
History. Acts 1973, No. 876, § 18; A.S.A. 1947, § 13-344.
History. Acts 1973, No. 876, § 18; A.S.A. 1947, § 13-344
In the event any surety shall fail or refuse to pay over the amounts so found to be due, the Chief Fiscal Officer of the State shall give notice of the failure or refusal to the Attorney General. The Attorney General shall immediately take such legal action as shall be necessary to collect the amount so found to be due from the officer or employee and his surety.
History. Acts 1973, No. 876, § 18; A.S.A. 1947, § 13-344.
Rl-19-4-2004 Responsibility for Reporting and Recovery of Losses Discovered Prior to Audit
The bonded disbursing officer for each State agency, board, commission or institution is responsible for, and held accountable for, reporting any losses of State funds to the Chief Fiscal Officer (CFO) of the State of Arkansas and to the Division of Legislative Audit (DLA). Losses include apparent unauthorized disbursements of State funds or the apparent theft or misappropriation of State funds or property.
No State agency, board, commission or institution has the authority to negotiate with any officer or employee for settlement of any losses of State funds without the approval of the CFO of the State.
The CFO of the State and the Director or Chief Officer of the respective agency, in coordination with the advice of the Attorney General (AG), has the duty to determine and initiate the appropriate action that is necessary to collect any amount found to be due the agency.
The recovery of losses under surety bonds must be coordinated with the CFO of the State and the DLA.
Recovery of Moneys Lost through Improper Redemption of Warrants/Checks
If a vendor or individual (the payee) receives a replacement warrant/check and cashes both the replacement and original, the agency shall attempt to obtain repayment from the payee. Evidence of the collection attempt(s) shall be documented in writing. If attempts to collect fail, the agency shall report the incident to the CFO of the State, the DLA and the AG's office.
If an individual, who is not the payee, cashes a warrant/check, the agency shall report the incident to the CFO of the State, the DLA, and the AG's office and to their local law enforcement office.
Recovery of Lost Assets (Not Warrants/Checks)
If theft of assets occurs, the agency shall report the incident to the CFO of the State, DLA, and the AG's office and to their local law enforcement office.
R 2-19-4 -2004Recoveries of Losses Discovered by an Audit
Notice and Proof of Losses - Investigations - Restitution
The DLA, with the approval of the Legislative Joint Auditing Committee, will give notice and proof of loss to the Governmental Bonding Board on fidelity bonds. This is done when the audit report reflects apparent unauthorized disbursements or unaccounted-for funds or property for which the public official, officer or employee may be liable. (ACA 21-2-708 ) The DLA may request the appropriate prosecuting attorney or the AG to assist the State or the appropriate political subdivision in obtaining restitution when the audit report reflects apparent unauthorized disbursements or unaccounted-for funds or property for which the public official, officer or employee may be liable.
The Self-Insured Fidelity Bond Program and the participating governmental entity are considered victims. Restitution may be awarded to the participating governmental entity for the entire amount of its non-reimbursed losses and to the Self-Insured Fidelity Bond Program for the entire amount of its payment to the participating governmental entity in the event that any criminal prosecution against the official or employee causing the loss where such official or employee enters a plea of guilty or nolo contendere or where such official or employee is found guilty following a trial.
Disposition of Bond Proceeds
When the Board receives proof of loss from the DLA, the Governmental Bonding Board will determine whether the loss is covered under the Fidelity Bond Program (ACA 21-2-709 )
When determined that the loss is covered under the Fidelity Bond Program, the Insurance Commissioner will authorize fidelity bond loss payments from the fund to the participating governmental entity on a timely basis.
All disbursing documents for bond claim payments must include as supporting documents:
Any loss payment may be adjusted by any applicable deductibles, restitution payments or coinsurance payments.
When a loss payment is made from the Fidelity Bond Fund, all rights and claims that the recipients of the loss payment may have against the official, officer or employee involved will be assigned to the Fidelity Bond Fund.
The Insurance Commissioner must timely notify the DLA and the agency when the Board determines that the loss is, or is not, covered under the Fidelity Bond Program.
An asset that is no longer in possession of the agency must be removed from the agencies books. The agency must notify the Department of Finance and Administration-Office of Accounting (DFA-OA) using P 3-19-4 -1503, "Credit for State Property" Form that the asset needs to be removed from the asset listing. The agency must give a full description of the lost asset. Once approval to remove the asset has been given, the agency must remove the asset and retain the correspondence for an audit trail. If Fidelity Bond proceeds are received for the reimbursement of a loss of personal property, the proceeds should be deposited into the Treasury using the agency's normal process for recording cash receipts. The proceeds should be recorded as Insurance Settlement/Restitution in GL 6092000000. If the asset is to be replaced, the agency should request an increase in appropriation from DFA-OA-FMfor the purchase of the replacement. If in the current year an agency has been reimbursed for the loss and the property has been replaced, the increase in appropriation is accomplished with a refund to expenditure by the DFA-OA. The agency must provide proof of the deposit and a copy of the invoice that replaced the property in order to have the appropriation restored. If the agency is reimbursed for a prior year loss, the agency should request an increase in appropriation from DFA-OA-FM. The agency must provide proof of the deposit and a copy of the invoice that replaced the property in order to have the appropriation restored.
Refer to Pl- 19-4-2004 for sample journal entries to record restitution and Fidelity Bond Insurance payments.
Fidelity Bond Premiums
The Risk Management Division of the Insurance Department works with each agency to determine the number of employees to be bonded each year. The flat rate is applied to that number, and DFA-Administrative Services receives the information and sends it to DFA-OA-Funds Group.
The DFA-OA-Funds Group compiles the information on a per fund basis for the agencies. The Funds Group Manager sends the proposed funds and transfer amounts to those agencies that want specific cost centers or funds to be charged The Funds Group changes the spreadsheet and transfers the funds to the various funds from which Administrative Services will issue the disbursements for the Bond Premiums. This transfer is usually done in December of each fiscal year. (A.CA 21-2-710 )
R 3-19-4 -2004Returned Checks
Funds Deposited to Treasury:
When a check that was originally deposited into a Treasury fund is returned for insufficient funds, the Treasurer of State shall reverse the receipt of those funds and notify the agency of the returned check by sending the check back to the agency with a letter telling the agency the fund, revenue code and amount that was reduced. The Treasurer of State shall send a copy of the letter to DFA-OAfor the correction to be made into the State Accounting System.
Funds Deposited to Commercial Bank Accounts:
When an agency is notified by the financial institution that a check has been returned, the agency will adjust its cash fund by debiting the revenue account and crediting the cash account in the cash fund where originally deposited.
Agencies shall diligently and actively pursue the collection of returned checks. Written agency procedures shall be developed and filed with DFA-OA within 90 days from the effective date of this regulation. The procedures must be followed to ensure the returned checks are followed up promptly and in a manner that is cost effective.
Employees with access to cash receipts and the recording of cash receipts should not have access to returned checks. In situations where it is impractical to separate duties due to the small number of employees, compensating controls should be implemented. Examples of compensating controls include review of returned checks and collection efforts made or having an individual without access to the system and cash receipts, be the Custodian of the returned checks.
R 4-19-4 -2004Accounts and Notes Receivable
State agencies must promptly record amounts due for delivery of goods and services, licenses, unpaid taxes, student loans, special assessments, accounts receivable, notes receivable and capital leases receivable.
Collection procedures shall be developed and followed to ensure that all receivables are collected promptly in a cost effective manner. Written procedures shall be filed with the Department of Finance and Administration-Office of Accounting (DFA-OA) within 90 days from the effective date of this regulation.
Agencies shall diligently and actively pursue the collection of receivables. Diligently and actively pursuing the collection of these accounts may include but is not limited to:
Agencies are to document all efforts made toward the collection of receivables. Agencies are to prepare aging reports at least monthly. Aging reports are required to be reviewed by management, and such review documented on the report as to the action taken. Accounts receivable records may contain personal information about citizens. Safeguarding and disposition of personal information must be consistent with federal and State laws/regulations applicable to the information.
Allowance for Doubtful Accounts
Generally Accepted Accounting Principles (GAAP) require that a determination be made between receivables deemed to be collectable and those considered not economically collectable, including those not collectable at all. Agencies are to develop and follow written criteria for the determination of those not collectable. These written procedures shall be filed with the DFA-OA within 90 days from the effective date of this regulation. Estimates of total e receivables not collectable are to be made at fiscal year end, and adjusting entries are to be recorded in the agency's accounting records to the allowance for receivables not collected
Abatement Procedures
The procedures that must be followed by State agencies, departments, boards, commissions and institutions to "charge off" moneys owed to them are prescribed in ACA§ 19-2-301 through 19-2-307. The provisions contained in the law must be complied with before any accounts or notes receivable may be abated. If, after the State agency has pursued collection of the debt owed it as set out above and such debt or partial debt is decreed unable to be collected, then the debt shall be referred to the Chief Fiscal Officer of the State for abatement. Before any debt will be considered for abatement, the State agency shall certify in writing that the above procedures have been complied with and submit detailed support of collection attempts. A statement must be included justifying why any of the above methods was not used, and the agency shall provide a copy of the letter from the attorney or collection agency stating they were unable to collect the bad debt, if applicable.
The Chief Fiscal Officer of the State shall verify that all efforts to collect the indebtedness have been fulfilled. He/she may then, by written approval, declare the debt or remaining debt unable to be collected and notify the State agency and Legislative Joint Auditing Committee of abatement of the debt.
Refer to Appendix P 2-19-4 -2004, for transaction instructions.
PLEASE NOTE: Refer and adhere to the provisions of ACA§ 19-2-301 et seq. in applying the above regulation.
For purposes of this subchapter the term "constitutional officers" means the Governor,
Lieutenant Governor, Attorney General, Secretary of State, Treasurer of State, Auditor of State, and the Commissioner of State Lands.
History. Acts 1991, No. 768, § 1.
History. Acts 1991, No. 768, § 2.
History. Acts 1991, No. 768, § 3.
No disbursing officer of State funds shall approve any expenditure from maintenance and operation funds for expenses for a constitutional officer or an employee of a constitutional officer unless the request for the expenditure is accompanied by the documentation required by this subchapter.
History. Acts 1991, No. 768, § 4.
The constitutional officers and their employees shall retain the original documentation required by this subchapter for a period of three (3) years after the date of the request for expenditure. History. Acts 1991, No. 768, § 5.
The Legislative Council between legislative sessions, and the Joint Budget Committee during legislative sessions, shall review all nonexempt discretionary grants by State agencies, and notify the agencies as to the results of the review. The Legislative Council or the Joint Budget committee shall notify agencies of any other grants identified as not requiring review. History. Acts 1999, No. 1032, § 2.
TITLE 19 PUBLIC FINANCE
This chapter shall be known and cited as the "Revenue Stabilization Law."
History. Acts 1973, No. 750, § 1; A.S.A. 1947, § 13-501.
PLEASE NOTE: Go to
http://www.arkleg.state.ar.us/NXT/gateway.dll?f=templates&fn=default.htm&vid=blr:code
(Revenue Stabilization Law) to view the entire language of the code on this subject.
Rl-19-5-101Funds, Revenue Distribution, Transfers, and Loans
FUNDS
Two definitions of fund exist within the State of Arkansas. The first type of fund is one established by Arkansas Law or the Chief Fiscal Officer of the State. The second type of fund is one established by governmental accounting standard for financial reporting.
There are two categories of funds per Arkansas Law: agency cash in bank funds and funds on deposit with the Treasurer of State.
Agency Cash in Bank Funds
These are moneys belonging to the State of Arkansas that are permitted to be kept in financial institutions other than the Treasurer of State. The funds may be either appropriated or nonappropriated The Chief Fiscal Officer of the State must approve the creation of nonappropriated funds. See Section Rl- 19-4-805 for information regarding management of cash funds.
Funds on Deposit with the Treasurer of State
Funds on deposit with the Treasurer of State are established primarily and individually in either the Revenue Stabilization Act ( 19-5-101 et seq.) or the Revenue Classification Acts ( 19-6-101 et seq.). The remaining funds on deposit with the Treasurer of State are established individually by general or appropriation acts or by the Chief Fiscal Officer of the State as a result of authority granted to him to accomplish the intent of legislative enactment. The types of funds on deposit with the Treasurer of State are as follows:
Pursuant to § 19-4-801 and § 19-5-206 cash funds deposited in the State Treasury as cash in treasury funds ("N"funds) are not required to pay the 1 1/2% service charge.
Fund Structure
Fund structure follows a hierarchy that begins with the legally designated fund and includes all sub-funds. Funds are established by law and are set up by the DFA-OA-Funds Group. All funds have a specific coding structure comprised of seven characters and/or numbers. All funds on deposit with the Treasurer of State begin with three alpha characters and end with four numeric or alpha-numeric characters. All Cash in Bank funds begin with three numeric characters and end with four numeric characters.
Creation of Funds
All requests for the creation of a fund or fund account must be sent to DFA-OA-Funds Group Manager after approval from the agency's Budget Analyst in the Department of Finance and Administration - Office of Budget (DFA-OB). The "Create Fund" Form is located at Pl- 19-5-101 or
http://www.state.ar.us/dfa/accounting/documents/request_form_and_instructions for_revenue-receipt-The DFA-OA-Funds Group will review the fund type requested by the agency. The DFA-OA-CAFR Section Manager/Assistant Manager or their designee also must approve the fund type. The DFA-OA-Funds Group will notify the Treasurer of State and the Auditor of State when appropriated funds are established so that both offices may also establish the fundon their books of record
PLEASE NOTE: Also refer to Rl 19-5-104 (Establishment of other funds or accounts).
Financial Reporting Fund Types
The Governmental Accounting Standards Board (GASB), which replaced the National Council on Governmental Accounting (NCGA), prescribes the fund type structure to be used in financial reporting. Funds must be typed as defined in NCGA Statement 1 and GASB Statement 34. The financial reporting fund type should be listed on the "Create Fund" Form, link P-l- 19-5-101. The types of financial reporting funds are as follows:
General - To account for all financial resources, except those required to be accounted for in another fund.
PLEASE NOTE: DFA-OA has the final decision regarding the fund type assigned to each fund. Funds that are material to the Comprehensive Annual Financial Report (CAFR) will be classified using the following fund types:
Special Revenue - To account for the proceeds of specific revenue sources that are legally restricted to expenditure for specified purpose. The most common example would be the federal grant funds that begin with a letter "F."
Capital Projects - To account for financial resources to be used for the acquisition or construction of major capital facilities. The most common example would be major construction that is financed by bonded indebtedness such as road or real estate and its improvements. Routine type capital asset purchases should not be accounted for in the capital projects fund.
Debt Service - To account for the accumulation of resources for and the payment of general long term debt principal and interest. An example would be a fund of the Treasurer of the State that makes principal and interest payments for a bond issue of the Soil and Water Conservation Commission.
Permanent Funds - To account for resources that are legally restricted to the extent that only investment earnings and not principal may be used for purposes that support the reporting government's program, that is for the benefit of the government or its citizenry.
Agency - To account for situations where the government's role is purely custodial, such as the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations or other governments. An example would be child-support payments collected for custodial parents by DFA, or prisoner funds held by the Department of Correction.
Pension Trust - To report resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contributions plans and other post employment benefit plans. An example would be the Arkansas Public Employees Retirement System.
Investment Trust - To account for an investment pool or specific investments that belong to entities outside the government but are held by the government.
Private Purpose Trust - To report any trust arrangement not properly reported in a pension trust fund or an investment trust fund under which principal and income benefit individuals, private organizations or other governments.
Enterprise - To account for any activity for which a fee is charged to external users for goods or services. Also, to account for any activity whose principal revenue sources meet any of the following criteria:
Internal Service - To report any activity that provides goods or services to other funds, departments or agencies of the primary government and its component units or to other governments on a cost-reimbursement basis. An example would be the Department of Information Systems.
A list can be generated in AASIS by using Transaction SKI43 8000039 which will display the Index of Funds. The layout of the report can be changed to display the fund type.
See P 2-19-5 -101b.
REVENUE DISTRIBUTION
Distribution of General and Special Revenues
Moneys collected that are deposited with the Treasurer of State and are defined as general and special revenue in ACA 19-6-201 and 19-6-301 are credited to the State Apportionment Fund and are deemed to be Gross Revenue. The following distributions are made on the last working day of the month in accordance with AC A 19-5-401 through 19-5-406. The Treasurer of State determines the distributions, and the DFA-OA posts the transactions in AASIS.
TRANSFERS
Fund Transfers
The ACA 19-5-101 etseq. (ACA 19-5-106(a) ) provides for transfers to be made under certain circumstances. Transfers may be made for one of the following reasons:
DFA-OA also permits transfers between each agency's legal Treasury fund group for the purpose of moving cash to the fund where obligations will be expended
Fund Transfer Procedures
If it is determined that a proposed transfer qualifies under one or more of the reasons listed above, the following procedure should be followed:
PLEASE NOTE: There are certain fund groups in which the first three letters are the same but more than one agency has a fund account in that group. The agency should not park or post those transfers. Examples of this type of fund groups are the HSC, HUA, MCF andMTA funds. The funding comes from the DFAfund, and DFA must make the transfer after logging it into its tracking spreadsheets.
Please review Pl- 19-5-101 & P 2-19-5 -101 or
http://www.state.ar.us/dfa/accounting/acc_forms.html - funds which outlines the proper
procedures for recording certain items as transfers versus an expenditure.
LOANS
Inter fund Loans
Generally Accepted Accounting Principles (GAAP) defines interfund loans as a flow of assets such as cash or goods for which repayment is expected within a reasonable amount of time.
Loans are properly recorded as increases and decreases in assets and liabilities with no effect on revenue, expense or other financing sources/uses.
Temporary Loans
The AC A 19-5-101 et seq. provides for temporary loans to be made to certain funds from the Budget Stabilization Trust Fund Generally, those funds that are eligible to receive such loans under certain circumstances are:
PLEASE NOTE: State agencies supported solely from special revenues are not eligible to apply for or receive loans from the Budget Stabilization Trust Fund
Temporary Loan Procedures
If it is determined that the loan requests qualify under one or more of the reasons listed above, the procedure should be as follows:
R 2-19-5 -101 Cash Funds Service Charge
ACA § 19-5-206 requires certain State agencies whose cash funds, whether appropriated or not and whose annual revenues as reflected in the previous year's audit exceeds $25,000, shall remit on the first day of each calendar quarter a 1 ¥2% service charge to the Treasurer of State. Such funds shall be deposited into the State Central Services Fund (HSCOOOO) held by the Treasurer of State. Requirements of this service charge, the method of computation and agencies included (excluded) are as follows:
State agencies subject to this statutorily required service charge shall include all boards, commissions, departments, agencies, institutions, offices, or officers and any other office or unit of the State of Arkansas created or established pursuant to law or pursuant to any action of the Governor functioning under appropriation of the General Assembly or functioning as a representative of the State of Arkansas without appropriation of the General Assembly.
Excluded from this service charge are the Office of the Commissioner of State Lands, the Department of Parks and Tourism, the Department of Education and any of its divisions, community colleges and branches thereof, universities and branches thereof, technical colleges, technical institutes, post secondary vocational-technical schools, comprehensive lifelong learning centers, funds received from the federal government, funds held in trust, funds of the various State retirement systems and funds received by the Department of Arkansas Heritage from voluntary donations and non-federal grants. The service charge to be remitted on the first day of each calendar quarter shall equal 1 ¥2% of the total expenditures of the previous calendar quarter from all cash funds as defined in ACA § 19-4-801. These quarterly expenditures are exclusive of any expenditure which paid the previous quarter's service charge.
In case funds are held outside the State Treasury, remittance shall be in the form of a check payable to the Treasurer of State and coded as an operating expense (commitment item 502:00:02) (general ledger account 5080005000). The Treasurer of State shall deposit each check as a non-revenue receipt in the State Central Services Fund to provide financial support for certain required administrative functions of State government.
If cash funds are on deposit within the State Treasury ("N" funds), the amount required under this section shall be transferred from the State agencies Treasury fund to the State Central Services Fund
The Chief Fiscal Officer of the State may only establish such other funds or fund accounts on his books and on the books of the Treasurer of State and Auditor of State for making payments that are composed of funds derived from more than one (1) fund or fund account as established by this chapter. He may also establish paying accounts on the books of the Treasurer of State and Auditor of State for making payments that are composed of funds derived from more than one (1) source. However, he may establish on his books accounts within funds or fund accounts carried on the books of the Treasurer of State and Auditor of State that he deems are necessary for the accounting system of his office. Nothing in this section shall prevent the establishment of new funds composed solely of federal grants, aids, reimbursements, or any other moneys received from the United States Government that are to be used for specific purposes.
History. Acts 1973, No. 750, § 9; 1979, No. 1013, § 8; 1979, No. 1077, § 2; A.S.A. 1947, § 13- 535.
Rl 19-5-104 Funds Group
The Department of Finance and Administration-Office of Accounting-Funds Group (DFA-OA-FG) assists agencies in establishing, managing and maintaining "Treasury Funds." A "Treasury Fund" is moneys on deposit in the State Treasurer's Cash Accounts that is available to be expended in the manner detailed in the related appropriation authorized by the General Assembly. Payments made from the "Treasury Fund" are always by State warrant issued by the Auditor of State at the direction of the agency that owns the "Treasury Fund." The primary processes involved in funds management are detailed below:
To Establish a New Treasury Fund
Treasury Funds are established in two manners:
In both instances the completion of the form must be the first step in the process ("Create Treasury Fund Request" Form) to set up a new fund for receipting and expensing. The original form is submitted to the agency's DFA-Office of Budget Analyst (OB) for review. The Manager of the DFA-OA-Funds Group may initiate the establishment of new legal funds or the Chief Fiscal Officer or Director of the agency requesting a new sub-fund may initiate the process. The Budget Analyst approves the form by placing his/her initials on the fund request form and submitting it to the DFA-OA-Funds Group Manager. The information provided on the form is reviewed Items that are incomplete are researched and corrected by the Funds Group Manager or DFA-OA-Funds Group staff.
The Funds Group Manager assigns an alpha numeric code to the fund as necessary to comply with the general naming convention used for all funds held by State agencies. After DFA-OA-Funds Group enters the new fund information into AASIS, the information contained on the request form is entered into a template and e-mailed to the Treasurer of State for entry into their system. The beginning date for usage is the date following entry into the AASIS system. The end date is always the biennium end date. The information contained on the funds request form is entered into the "Funds Control Log."
A copy of the e-mail is sent to the Auditor of State, Attorney General's Office, DFA Comprehensive Annual Financial Report Section Manager (CAFR) who verifies the fund type assigned and DFA-OA Funds/Appropriations Manager. A copy is filed in the DFA-OA-Funds Group files. The original printed e-mail letter is signed and faxed to the Auditor of State.
When the Treasurer of State has completed entry into their system, a return e-mail is made to the Funds Group Manager, and the DFA-OA-Funds Group "funds" log is updated to reflect the date of the "establishment" or "fund created" date. When the DFA-CAFR Section Manager responds with the correct fund type, the Funds Group Manager updates the fund type as necessary in AASIS, logs and files the response in the 'saved e-mail" inbox.
The original fund request form is returned to DFA-OB after it is signed and dated for filing.
Establishing New General Ledger Codes
Additions to the existing general ledger chart of accounts are a result of either new legislation from the General Assembly (request will be by DFA-OA) or a request from an agency, DFA-OA, DFA-Budget Office or the AASIS Support Center staff. The form to request a new general ledger code is completed and signed by the originating party and transmitted by printed or electronic copy to the DFA-OA-Reconciliation Manager. The appropriate name, legal authority and AASIS coding structure for the new general ledger code is added onto the request form by the DFA-OA-Reconciliation Manager if the request is for an expenditure or balance sheet code. If the request is for a revenue code, the appropriate name, legal authority and AASIS coding structure is added to the request form by the Funds Group Manager. After establishing the code in AASIS, the DFA-OA-Reconciliation Manager notifies the Funds Group Manager by delivery of an initialed copy of the request form. The Funds Group Manager enters the information onto an e-mail letter template that is sent to the Treasurer of State. The Treasurer of State e-mails a verification notice to the Funds Group Manager that the general ledger account code has been added to the Treasurer of State's system.
Deposits to Treasury Detail
The reporting agencies, user agencies or Department of Finance and Administration-Office of Accounting-Service Bureau (in the case of agencies that have their accounting process performed by DFA) enter their receipts of income into cash journals for posting, which in turn creates the deposit slip for the agency to submit to the Treasurer of State with the corresponding checks, cash or warrants for non-Electronic Fund transfer deposits. Entries to record receipts of income or federal fund transfers that are received through the Electronic Fund transfer (EFT) process also create cash journals and the corresponding deposit slips; however, additional identifying information about the draw, such as the transfer document number from the Federal Reserve System, must be on the face of the deposit slip. The deposit slips are to be made on the day of the federal fund transfer request and presented to the Treasurer of State. These deposit slips are then matched to the incoming federal fund transfers and recorded into the Treasurer of State's records.
The agency submits the original deposit slip and three copies to the Treasurer of State. The Treasurer's staff records the Treasury receipt number on the third copy of the deposit slip which is given to the agency for filing in their records. The remaining copies are maintained in the Treasurer of State's records.
The Treasurer of State's posting of deposits and transfers ends at 2:00 p.m. each weekday, except for the last workday of the month which ends at 12 noon. Deposits delivered to the Treasurer's Office after those times will be posted the following business day. Processing of the receipts and disbursements into the proper funds follows. When all processing and daily reconciliation is complete, the Treasurer of State files the original deposit receipt, provides one copy to the Auditor of State and the final copy to the DFA- OA-FG. The DFA- OA-FGfiles the receipt copies in "daily batches."
The DFA-OA-FUNDS GROUP files are used to provide an agency a copy of misplaced receipts. If the DFA-OA-Funds Group Manager issues a revenue receipt correction, the Treasury receipt number will be obtained from these files and entered on the receipt correction sent to the Treasurer of State.
Revenue Receipt Corrections
Revenue receipt corrections are initiated by agency personnel to correct an incorrect characterization of the revenue or transfer of moneys receipted by the agency. This is accomplished by completing the "Revenue Receipt Correction" Form and recording it in both AASIS and the Treasurer of State's records. The electronic template is provided on the DFA web site
http://www.state.ar.us/dfa/accounting/documents/request_form_and_instructions_for_revenue-receipt
The revenue receipt corrections requested by an agency are sent by e-mail to DFA-OA-Funds Group and accompanied by the electronic template with all pertinent information. The detailed instructions appear on the Excel template.
The Funds Group Manager reviews the information provided, and any missing information is requested from the agency person initiating the request. When completed, the deposit record is researched thoroughly to ensure the correcting entry will be accurate. DFA-OA- FG staff will post the correction into AASIS.
Revenue receipt corrections that involve either general or special revenue or those in which cash is taken from one fund and deposited into another fund require correction in the Treasurer of State's records. This is accomplished by the DFA-OA-Funds Group Manager forwarding a copy of the revenue receipt correction to the Treasurer of State's office to be posted.
The Treasurer of State and the Auditor of State choose to process certain documents manually rather than accept interfaces with updated records to process within their systems. The actual documents are printed out and the Funds Group Manager enters those document numbers in a document log. These documents, the list and the log are faxed to the Auditor of State and Treasurer of State for manual entry.
After the Auditor of State and Treasurer of State have entered them into their systems, they fax the log with the entry date on it to the Funds Group Manager. The document log is updated in the DFA- OA-FG computer files maintained by the Funds Group staff The printed lists, logs and fax coversheets are filed in the Funds Group.
PLEASE NOTE: Revenue Receipt Correction forms for transactions are located at http://www.state.ar.us/dfa/accounting/documents/request_form_and_instructions_for_revenue-receipt-correction.xls. PLEASE NOTE: The Treasurer of State investment policy may be viewed as appendix PI- 19-5-104.
PLEASE NOTE: Other forms applicable to the management of funds in the State Treasury are located on the DFA-OA web site at http://www.state.ar.us/dfa/accounting/index.html.
Returned Checks
Refer to R 3-19-4 -2004 "Returned Checks" for discussion of returned checks.
It is the purpose of this subchapter that all programs, regardless of their funding source,
contribute equally to the cost of unemployment compensation benefits charged to the State agencies operating such programs. It is not the intent of this subchapter that the State of
Arkansas relinquish its status as a nontaxable reimbursable employer under the Arkansas
Employment Security Law, § 11-10-101 et seq.
History. Acts 1977, No. 608, § 1; A.S.A. 1947, § 13-554.
PLEASE NOTE: The Unemployment Compensation regulations are a compilation ofACA§
19-5-701 et seq. and may be reviewed in their entirety in the Arkansas Code.
Sections: Purpose, Authority, History and Administration
Applicable Arkansas Code
Contributions Policy
Rate Calculation Procedure
Contribution Accounting Procedure (Attachment Pl-19-5-701)
Fiscal Year-End Accrual Procedure
Purpose
All programs of State government shall contribute their fair share to the cost of unemployment benefits charged to the State agencies operating such programs. To do this, each State agency receiving an appropriation of Regular Salaries, Extra Help, or Authorized Overtime from Treasury or Cash Funds shall contribute from their Personal Services Matching Funds a percentage of their gross payroll.
Authority:
Refer to Unemployment Compensation Revolving Fund Law and Reimbursement of Unemployment Compensation Benefits - ACA § 19-5-939 and 19-5-701 through 19-5-710.
History:
Unemployment Compensation requirements for Arkansas State Government were established under the authority of Acts 608 of 1977 and 697 of 1979, and incorporated into ACA § 19-5-701 through 19-5-710 and 19-5-939.
Administration
The Department of Finance and Administration, Office of Administrative Services (DFA-OAS), administers this program for the Chief Fiscal Officer of the State of Arkansas.
Applicable Arkansas Code
ACA $ 19-5-701 Purpose
"It is the purpose of this subchapter that all programs, regardless of their funding source, contribute equally to the cost of unemployment compensation benefits charged to the State agencies operating such programs. It is not the intent of this subchapter that the State of Arkansas relinquish its status as a nontaxable reimbursable employer under the Arkansas Employment Security Law, ACA § 11-10-101 et seq."
ACA $ 19-5-702 Definitions
ACA § 19-5-704 Administration
"This subchapter shall be administered by the Chief Fiscal Officer of the State. Upon certification to the Chief Fiscal Officer of the State by the Arkansas Employment Security Department of unemployment compensation benefits paid during a benefit period and charged to a State agency, the Chief Fiscal Officer of the State shall direct that reimbursement be made to the Arkansas Employment Security Department from the Unemployment Compensation Revolving Fund for such amounts as are properly certified. The Chief Fiscal Officer of the State shall have the authority to make such rules and regulations as are necessary to enforce the provisions of this subchapter."
ACA § 19-5-705 Benefits Claims Investigation
"The Arkansas Employment Security Department shall investigate all claims for benefits filed by State employees whether or not the employing State agency lodges a protest to the payment of such benefits. Such investigation shall result in a determination of the eligibility of the employee for benefits payments."
ACA § 19-5-707 Contributions Generally
"Each State agency shall make contributions to the Unemployment Compensation Revolving Fund, using the experience rate determined in accordance with ACA § 11-10-704, from personal services matching costs funds within fourteen (14) calendar days following the end of each calendar quarter. The experience rate for each even-numbered fiscal year will be used to fix the rate for the next even-numbered fiscal year. Each odd-numbered fiscal year's experience rate will be used to fix the next odd-numbered fiscal year rate. If during any fiscal year the Chief Fiscal Officer of the State determines that the contributions rate for any agency will result in a significant surplus or deficit for that fiscal year, he shall have the authority to adjust the agency contribution rate to reduce such surplus or recover any such deficit, subject to the provision of ACA § 19-5-708."
ACA § 19-5-708Maximum Contributions
"In no event shall any experience rate result in a State agency making contributions of more than three percent (3%) of its gross payroll expenditures. In the event that an agency builds a deficit which would require a contribution rate greater than three percent (3%), then that agency shall continue to make contributions at the rate of three (3%), even though eligible for an experience rate reduction, until any deficit owed the fund is repaid. Only then shall the actual experience rate be used to compute such agency contributions."
Contributions Policy
Notification of the next fiscal year's contribution rate for each State agency shall be distributed by March 1 of each year. These rate assignments shall be forwarded to the DFA-Office of Budget as well.
A newly established agency shall be assigned a contribution rate equal to the experience rate of State government agencies as a whole (the total claims divided by the total salaries). Contribution rates for second and subsequent years' shall be established through experience rating. The rate calculation method is outlined herein.
To each agency's current balance:
* Add each agency's pro-rata share of accrued interest,
* Add the projected interest through the next fiscal year,
* Add the contributions yet due from current year rates,
* Subtract projected claims through the next fiscal year,
* Subtract the desired fund level (75% of the last 2-year average of claims).
These steps will have established the amount of contributions due for the next fiscal year. Each agency's contribution rate is determined by dividing the contributions due amount by the projected salaries for the fiscal year.
Maximum Contributions
Unemployment contribution rates may not exceed 3% of agency's total gross salaries.
Rate Calculation Procedure
Contribution Accounting Procedure
Quarterly contributions are due within 14 calendar days following the end of each calendar quarter.
At the end of each quarter, agencies with unemployment compensation rates other than zero shall receive an invoice from the DFA-OAS for the amount of the contribution due made payable to:
DFA-UNEMPLOYMENT COMPENSATION
1515 WEST 7th, ROOM 700
PO BOX 2485
LITTLE ROCK, AR 72203
The vendor code is 9996101 for unemployment contributions. The general ledger code is 5010008000 for unemployment contributions. Unemployment and Workers' compensation contributions may not be combined on a single State warrant or check.
The State of Arkansas' Accounting System provides the Gross amount expended for a payroll period for all State agencies. Gross amount expended for a payroll period for Unemployment Compensation purposes is downloaded from State of Arkansas' Accounting System into an invoice. These invoices are generated by the DFA-OAS and are distributed to the agency each quarter through messenger service, e-mail or regular mail. Copies of invoices shall be sent only with checks. The agency number and the quarter ending date shall be provided on the State warrant stub by keying this information in the text box on the basic tab when processing the payment in the State of Arkansas' Accounting System. See Attachment Pl- 19-5-701.
The DFA-OAS deposits these warrants and checks to the Unemployment Compensation Trust Fund (TUC). The TUC Trust Fund shall be used by the DFA-OAS to reimburse the Employment Security Department for Unemployment Claims paid to former State employees, charged to the applicable agency.
Call the DFA-OAS Fiscal Accounting Section at (501) 324-9060 with any questions about unemployment compensation contributions.
Call the ESD Unemployment Insurance Section at (501) 628-3257 with any questions about Employer Accounts
Fiscal Year-End Accrual Procedure
Each State agency shall record a journal entry utilizing the State of Arkansas' Accounting System's transaction "ENTER GL ACCOUNT DOCUMENT", for the amount of the accrued but unpaid quarterly unemployment contribution to be provided by DFA-OAS. Conversely, the Unemployment Compensation Trust Fund will record a reciprocal amount due from all the agencies for the unpaid accrual.
The Department of Finance and Administration-Office of Administrative Services-Fiscal Accounting (DFA-OAS-FA) shall distribute the 4 fiscal quarter invoices to the agencies after the fiscal quarter's close. Agency contributions are due 14 days after the fiscal quarter closes. A memo shall be attached to each agency invoice reminding the agencies to book the fiscal year-end liability in the State of Arkansas' Accounting System and to reverse the prior fiscal year's liability accrual entry. An advance payment memo shall be attached to the invoices applicable to those agencies which prepay the 4 fiscal quarter invoice prior to the quarter's close in order to avoid erroneously booking a year-end accrual entry.
DFA-OAS-FA shall record a receivable for agency unemployment contributions due reduced for amounts received as advance payments.
It is the purpose of this subchapter that all programs, regardless of their funding source,
contribute equally to the cost of workers' compensation benefits charged to the State agencies operating such programs.
History. Acts 1977, No. 924, § 1; A.S.A 1947, § 13-1407.1.
PLEASE NOTE: The Workers' Compensation regulations are a compilation of ACA§ 19-5-801 et seq. and may be reviewed in their entirety within the Arkansas Code.
Sections:
Purpose, Authority, History and Administration
Applicable Arkansas Code
Contributions Policy
Rate Calculation Procedure
Contribution Accounting Procedure (Pl-19-5-801, P 2-19-5 -802, and P 2-19-5 -803)
FISCAL YEAR-END ACCRUAL PROCEDURE
Purpose
All programs of State government shall contribute their fair share to the cost of workers' compensation benefits charged to the State agencies operating such programs. To do this, each State agency receiving an appropriation of Regular Salaries, Extra Help, or Authorized Overtime from Treasury or Cash Funds shall contribute from their Personal Services Matching Funds a percentage of their gross payroll.
Authority:
Refer to Workers' Compensation Revolving Fund Law and Reimbursement of Workers' Compensation Benefits-ACA § 19-5-940 and 19-5-801 through 19-5-809.
History:
Workers' Compensation requirements for Arkansas State Government were established under the authority of Acts 924 of 1977, 807 of 1979 and 25 of 1981 and incorporated into ACA § 19-5-940 and 19-5-801 through 19-5-809.
Administration
The Department of Finance and Administration-Office of Administrative Services (DFA-OAS) administers this program for the Chief Fiscal Officer of the State of Arkansas.
Applicable Arkansas Code:
ACA $ 19-5-801 Purpose
"It is the purpose of this subchapter that all programs, regardless of their funding source, contribute equally to the cost of workers' compensation benefits charged to the State agencies operating such programs."
ACA 819-5-802 Definitions
ACA § 19-5-804 Administration
"This subchapter shall be administered by the Chief Fiscal Officer of the State. The Chief Fiscal Officer of the State shall have the authority to establish procedures and to make such rules and regulations as are necessary to enforce the provisions of this subchapter."
ACA § 19-5-806 Contributions Generally
"Each State agency shall make contributions to the Workers' Compensation Revolving Fund, using the experience rate determined in accordance with this section, from personal services matching costs funds within fourteen (14) calendar days following the end of each calendar quarter. The experience rate for each even-numbered fiscal year will be used to fix the rate for the next even-numbered fiscal year. Each odd-numbered fiscal year's experience rate will be used to fix the next odd-numbered fiscal year rate. If during any fiscal year the Chief Fiscal Officer of the State determines that the contribution rate for any agency will result in a significant surplus or deficit for that fiscal year, he shall have the authority to adjust the agency contribution rate to reduce such surplus or recover any such deficit, subject to the provision of ACA § 19-5-807."
ACA § 19-5-807Maximum Contributions
"In the event a State agency builds a deficit
which would require a contribution rate greater than two percent (2%), the agency shall continue to make contributions at the rate of two percent (2%) until any deficit owed the fund is repaid. In the event that an agency's experience rate exceeds two percent (2%) for one (1) full fiscal year their contribution rate shall be adjusted to equal their experience rate, not to exceed a maximum of five percent (5%). Their contributions shall remain at that level until their experience rate decreases and their accumulated deficit is repaid."
Contributions Policy
Notification of the next fiscal year's contribution rate for each State agency shall be distributed by March 1 of each year. These rate assignments shall be forwarded to the DFA-Office of Budget as well.
A newly established agency shall be assigned a contribution rate equal to the experience rate of State government agencies as a whole (the total claims divided by the total salaries). Contribution rates for second and subsequent years' shall be established through experience rating. The rate calculation method is outlined herein.
To each agency's current balance:
* Add each agency's pro-rata share of accrued interest,
* Add the projected interest through the next fiscal year,
* Add the contributions yet due from current year rates,
* Subtract projected claims through the next fiscal year,
* Subtract the desired fund level (75% of the last 2 years average of claims).
These steps will have established the amount of contributions due for the next fiscal year. Each agency's contribution rate is determined by dividing the contributions due amount by the projected salaries for the fiscal year.
Maximum Contributions
Workers' compensation rates may not exceed 5% of the agency's total gross salaries.
Rate Calculation Procedure
Contribution Accounting Procedure
Quarterly contributions are due within 14 calendar days following the end of each calendar quarter.
At the end of each quarter, agencies with workers' compensation rates other than zero shall receive an invoice from DFA-OAS for the compensation due amount payable to:
DFA-WORKERS' COMPENSATION
1515 WEST 7th, ROOM 700
PO BOX 2485
LITTLE ROCK, AR 72203
The vendor code is 9990613 for workers' compensation contributions. The general ledger code is 5010009000for workers' compensation contributions. Unemployment and Workers' compensation contributions may not be combined on a single State warrant or check.
AASIS provides the gross amount expended for a payroll period for all State agencies except the Drug Task Forces. Gross amount expended for a payroll period for Workers' Compensation purposes is downloaded from the State of Arkansas' Accounting System into an invoice. These invoices are generated by the DFA-OAS and are distributed to the agency each quarter through messenger service, e-mail or regular mail. Copies of invoices shall be sent only with checks. The agency number and the quarter ending date shall be provided on the State warrant stub by keying this information in the text box on the basic tab when processing the payment in AASIS. See Pl- 19-5-801
In the event an agency does not participate in AASIS, the agency must complete pro-forma invoices that will be mailed out to the agency each quarter. These pro-forma invoices must be submitted to the payee along with the remittance. See P 2-19-5 -802
DFA-OAS deposits these warrants and checks to the Workers' Compensation Revolving Fund (TUW). The TUW Trust Fund shall be used by the Public Employee Claims Division of the State Insurance Department to pay for workers' compensation claims of State employees charged to the applicable agency.
Call the DFA-OAS Fiscal Accounting Section at (501) 324-9060 with any questions about workers' compensation contributions.
Call (501) 371-2700 with any questions about workers' compensation claims.
Fiscal Year-End Accrual Procedure
Each State agency shall record a journal entry utilizing the State of Arkansas' Accounting System's transaction ENTER GL ACCOUNT DOCUMENT for the amount of the accrued but unpaid quarterly Workers Compensation contribution to be provided by DFA-OAS.
Conversely, the Workers Compensation Trust Fund will record a reciprocal amount due from all the agencies for the unpaid accrual.
The Department of Finance and Administration-Office of Administrative Services-Fiscal Accounting (DFA-OAS-FA) shall e-mail the 4 fiscal quarter invoices to the agencies after the fiscal quarter's close. Agency contributions are due 14 days after the fiscal quarter closes. A memo shall be attached to each agency invoice reminding the agencies to book the fiscal year-end liability in AASIS and to reverse the prior fiscal year's liability accrual entry. An advance payment memo shall be attached to the invoices applicable to those agencies which prepay the 4 fiscal quarter invoice prior to the quarter's close in order to avoid erroneously booking a year-end accrual entry.
DFA-OAS-FA shall record a receivable for agency workers compensation contributions due reduced for amounts received as advance payments.
Workers Compensation Administrative Cost Reimbursements
Each State agency's share of the administrative costs of processing the Workers Compensation claims attributable to that agency is to be transferred to State Insurance Department-Public Employee Claims Division (PECD). The Insurance Department computes the amounts and the request for the transfer of funds is sent to DFA-OA-Funds Group. The computations also include those amounts due by public school employees, and it is administered by the Department of Education. The Treasurer of State administers the charges for the county and municipal employees.
This fund transfer is usually done in the first month of each quarter for the previous quarter. Since the amount due for the last quarter of each fiscal year is not computed until July of the following fiscal year, the amount due should be accrued in the closing books as soon as DFA-OA-Fund Group sends the amount.
Procedure
The Insurance Department-PECD sends a worksheet with the calculations per agency and fund Since funds and appropriations may change over time, the DFA-OA-Funds Group Manager sends a spreadsheet to the agencies that may have changes to make. Any changes requested are made. The Funds Group transfers the funds to the Insurance Department-PECD fund from the agency's funds within a week after the notification. The information is sent to DFA- Office of Budget. (ACA 11-9-307 )
Rl- 19-5-1002 Motor Vehicle Acquisition
The Director of the Department of Finance and Administration (DFA Director) designated the Department of Finance and Administration-Office of Information Services (DFA-OIS) as his agent authorized to purchase new and used vehicles for all State agencies, boards, commissions, departments and institutions of higher education. Such purchases shall be made from the Motor Vehicle Acquisition Revolving Fund (MMV Fund) which was established for the purpose of acquiring motor vehicles of the State. The amounts deposited into this fund include a portion of State general revenues as authorized by the Revenue Stabilization Law, amounts received upon the disposal of used vehicles and deposits or transfers from benefiting agencies. (ACA § 19-5-1002, ACA § 22-8-206 (a-c), ACA § 22-8-207 )
PLEASE NOTE: See additional information regarding vehicles in Rl- 19-4-1503 Property Management and Rl- 19-11-243 Marketing and Redistribution.
TITLE 19 PUBLIC FINANCE
This chapter shall be referred to and may be cited as the "Revenue Classification Law" of
Arkansas.
History. Acts 1973, No. 808, § 1; A.S.A. 1947, § 13-503.
PLEASE NOTE: Every two years the Revenue Stabilization Law changes. Go to
http://www.arkleg.state.ar.us/NXT/gateway.dll?f=templates&fn=default.htm&vid=blr:code
(Revenue Classification Law) to view the entire language of the code on this subject.
Rl- 19-6-101Revenue Classification
Revenue is classified by general ledger account number. All general ledger accounts are identified by a ten (10) digit account number and an appropriate account description. The ten (10) digit account number is designed to identify the revenue receipt(s) of a State entity. The revenue accounts may be used by any agency to record a receipt and, with only a few exceptions, may be used for any fund The account number is broken down into four main
parts: the financial statement type, the revenue type, the revenue source and a unique identifier.
All revenue accounts begin with "4." The type of revenue is identified by the third digit of the account number. The fourth digit of the account number indicates the revenue source. The remaining six digits are assigned by the Department of Finance and Administration-Office of Accounting (DFA-OA) in a systematic manner to uniquely identify the account.
Revenue Type
The revenue type (the third digit in the account number series) is established in accordance with the Revenue Classification Law to provide a basic breakdown of the revenues. The revenue types are General Revenues, Special Revenues, Non-revenue Receipts and Other Revenue, Grants and Reimbursements. (ACA § 19-6-108 ) A description of each revenue type is listed below.
PLEASE NOTE: The revenue type directs the Treasurer of State's distribution process. The use of an incorrect revenue type will cause incorrect distribution of the related funds. Revenues deposited in revenue account types "1," "2" or "3" remain on deposit with the Treasurer of State until the end of the month. At that time a percentage as specified by law is deducted for the Constitutional Officers Fund and the State Central Services Fund. The remaining balance after deduction of fees is distributed to the designated fund. Revenue receipt deposits with account types "4" or "5" are credited to the designated fund at the time the receipt is processed in AASIS, and these revenues may be utilized as soon as posting is complete.
|
Series |
Revenue Type |
Description |
|
(40)1 |
General Revenues |
Used only when the revenue(s) is to be deposited into the General Revenue Fund Account of the State Apportionment Fund - AGAOOOO. A detailed list of these revenues is located in ACA § 19-6-201. |
|
(40)2 |
Special Revenues -3% |
As required by law, certain special revenues are held in the Special Revenue Fund Account of the State Apportionment Fund - ASAOOOOprior to being credited to the special revenue fund as provided on the receipt document. The revenues recorded in this manner are usually collected by the DFA-Revenue Division or another Constitutional and Fiscal Agency Fund agency or an agency in the State Central Services Fund on behalf of another agency. A detailed list of these revenues is located in ACA § 19-6-301. The fee deducted from these collections to support State Central Services Fund and Constitutional Officers Fund ranges from 3 to 4% by law. |
|
(40)3 |
Special Revenues 11/2% |
Same as type "2 " except a smaller deduction is made at month end. Typically, the agency collecting the revenue(s) is usually an agency other than a Constitutional and Fiscal Agency Fund agency or an agency in the State Central Services Fund The revenues recorded in this manner are usually funds of the collecting agency. A detailed list of these revenues can be found in ACA § 19-6-401 et seq. The fee deducted from these collections to support State Central Services Fund and the Constitutional Officers Fund ranges from 1 Vi% to 2%. |
|
(40)4 |
Non-Revenue Receipts |
Used to account for receipts received that are deemed non-revenue. A list of receipts that are statutorily required to be non-revenue is detailed in ACA § 19-6-701. |
|
(40)5 |
Other Revenue, Grants & Reimbursement |
Other Revenue, Grants & Reimbursement include all other revenues not determined by legislation to be General or Special Revenues or Non-Revenue Receipts. This includes ad valorem taxes collected for the benefit of local governments and federal funds and receipts for federal grants, aid or reimbursements received directly from the federal government. (ACA § 19-6-501 ) |
Revenue Source
The revenue source number (the fourth digit in the account number series) is established to designate the basic source of the revenue. The types of sources with their related description follow:
|
Series |
Description |
|
(40X)0 |
Taxes |
|
(40X)1 |
Fees |
|
(40X)2 |
Fines and Penalties |
|
(40X)3 |
Licenses and Permits |
|
(40X)4 |
Rents, Royalties and Leases |
|
(40X)5 |
Grants and Federal Reimbursements |
|
(4 OX) 6 |
Non-Revenue |
|
(40X)7 |
Miscellaneous |
|
(40X)8 |
Sale of Property (whether purchased or produced) |
|
(40X)9 |
Interest on investments |
An updated listing of revenue account numbers can be obtained any time by running a Chart of Accounts Report in AASIS. To obtain only revenue account numbers enter "4*" in the GL Accounts field. Agencies that do not have direct access to AASIS may request a copy of the listing from the DFA-OA-Service Bureau at any time.
Additional accounts may be requested by completing the "General Ledger Account Request" Form located at http://www.state.ar.us/dfa/accounting/documents/gl_acct_request, doc. After completion, the form should be submitted to the DFA-OA-Reconciliation Section. DFA-OA reserves the right to limit the adding of new accounts.
R 2-19-6 -101Revenue Receipts and Deposits
All cash, checks and legal tender received by a State agency, board, commission or institution must be immediately deposited with the Treasurer of State or one of the agency's bank or investment accounts. Additionally, all cash, checks and legal tender receipts must be immediately recorded in AASIS (through direct access, interface software, or by the Service Bureau).
Trust and agency funds must also be posted to a cash or investment account in AASIS using a fiduciary fund type. In creating journal entries, the offsetting debit or credit for agency funds will be the "Agency Fund Liability" account (general ledger #2114004000). Additions and deductions to trust-type funds must be recorded in the appropriate general ledger accounts.
Procedures for Posting Receipts in the AASIS
Cash Journals are used by AASIS for revenue receipts. The AASIS operation records revenue receipts in a Cash Journal. Each Cash Journal is assigned a specific general ledger account which is updated by cash journal receipts and deposits. Thus, the purpose of the Cash Journal is to keep track of revenue received in various forms and to post the revenue to the appropriate general ledger account.
A revenue code must be designated in AASIS for all cash receipt transactions. It is important to select the correct revenue code based on the type of revenue. Note that General Revenue codes begin with 401, and Special Revenue codes begin with 402 or 403. All General Revenue is deposited to fund AGAOOOO using cost center 383359 and business area number 0610. Special Revenue funds are receipted to the agency 'sfund and subsequently transferred to fund ASAOOOO daily by the Treasurer of State. At the end of each month, Special Revenues are distributed back to the agency's fund less the corresponding Treasury fee (3% for 402 and 1.5% for 403 revenue codes).
General ledger accounts that begin with 404 and 405 identify Other Revenue. Other Revenue must be deposited directly to the agency's fund. General ledger accounts that begin with 601 through 699 will be used for other financing sources (such as Refunds to Expenditure, Intra-Agency Transfers, and Inter-Agency Transfers).
Recording a revenue receipt requires selecting a business transaction in the Cash Journal corresponding to the appropriate revenue code. A cost center is required on the entry of a revenue receipt and will derive the fund assigned in AASIS. Check to be sure the desired fund is derived from the cost center. If the moneys are to be deposited to a different fund, the cost center must be modified. As appropriate, the revenue receipt will debit "Cash in Treasury-Incoming, " "Cash in Bank-Incoming" or a "Non-AASIS House Bank" account and credit the selected revenue account.
Recording the receipt of a customer's payment requires information to be obtained from the customer's account in AASIS. The customer number, assignment number, fund and cost center must be entered The cost center, fund and general ledger revenue account fields shall be the same as those recorded in AASIS for the original invoice which has now been paid Since the initial accounts receivable transaction debited the customer account and credited the appropriate revenue account, the receipt of a customer payment will credit the customer's account and debit the "Cash in Treasury - Incoming" or agency bank account.
Authorized Individuals
Agencies determine role needs and request roles from the AASIS Security Department. Roles available for Cash Receipting are the Agency Cash Receipt Specialist and the Agency Cash Deposit Specialist. Security roles determine the transactions that a user can perform. Features within permissible transactions can be further configured for security purposes. Transactions for Cash Journals have two security roles - one for recording and saving entries and one for posting and preparing deposits.
To maintain internal control, receipts are to be entered and saved by the role of Cash Receipt Specialist and then posted by the role of Cash Deposit Specialist. Smaller agencies with limited personnel, which are unable to provide for an adequate segregation of duties, may be granted an exception to this requirement by obtaining an approval of their applicable mitigating controls from the Department of Finance and Administration-Office of Accounting (DFA-OA).
Procedure for Treasury Deposits
The AASIS transaction ZBCJ is used to print a deposit ticket for Treasury deposits. Printing of deposit tickets in ZBCJ will trigger the posting of Special Revenue to Fund ASAOOOO. PLEASE NOTE: Caution must be taken when reprinting a deposit ticket not to make a duplicate posting of Special Revenue. Deposit tickets must have an AASIS document number in order for the Treasurer of State to accept the deposit.
Refer to the AASIS web site http://www.aasis.state.ar.us/ for transaction training tutorials for and detailed instructions regarding the preparation and printing of a deposit ticket.
PLEASE NOTE: Once a deposit has been processed by the Treasurer of State, that deposit transaction may only be reversed with approval of the Department of Finance and Administration-Office of Accounting (DFA-OA).
Deposit tickets relative to funds on deposit with the Treasurer of State must only contain Treasury fund related transactions. Refer to AASIS web site http://www.aasis.state.ar.us/ and their transaction training tutorials for detailed instructions regarding the proper procedures to omit cash fund related deposits from Treasury fund deposit tickets.
Procedure for Cash Fund Deposits
Procedures for cash fund deposits are identical to those for Treasury deposits except for the fact that the funds are not transferred to the Treasurer of State. Additionally, the agency has the option to print a deposit ticket using AASIS as supplemental supporting documentation to its pre-printed bank deposit tickets.
Refund to Expenditures
Arkansas Code 19-6-701(b) (1) - (8) states that refunds to expenditures 'shall consist of:
Please note that Arkansas Code 19-6-701(b) (8) "reimbursements to State agencies for cost-sharing purposes" is in reference to cost-sharing between agencies and not with public entities. Also, refunds to expenditures generally do not apply to cost-sharing within an agency. This would need to be treated as an expense error correction.
There are two types of refunds to expenditure: current year and prior year. Current year refunds to expenditures are used to reduce expense and restore the appropriation on the books of an agency where covered by Arkansas Code 19-6-701(b) (1) - (8) or special language contained in individual agency current year Acts. Prior year refunds to expenditures do not reduce expenses nor restore appropriation except in specific circumstances.
Current Year
If monies are received by an agency in current fiscal year for payment(s) made in the same fiscal year and the monies are covered as a refund to expenditure under any of the criteria set out in Arkansas Code 19-6-701(b) (1) - (8) or by special language in individual Agency current Acts, then the agency must record the deposit into the agency's fund as a current year refund to expenditure using general ledger code 6080001000.
Record Deposit as Current Year Refund to Expenditure
Debit 1100001002
Credit 6080001000
The agency must then complete and submit a "Request for Refund to Expenditure Form" along with a photocopy of the check/warrant processed as a receipt of funds to support the "refund to expenditure" to the Department of Finance and Administration - Office of Accounting - Reconciliation Manager (DFA-OA-Reconciliation Manager).
The request will be reviewed and, if approved, will be processed reducing the agency expense and restoring appropriation.
Debit 6080001000
Credit 5XXXXXXXXX
A photocopy of the original request will be returned to the agency with the document number for documentation. The original will be maintained by DFA-OA.
Prior Year
If monies are received by an agency in current fiscal year for payment(s) made in the prior fiscal year and the monies are covered as a refund to expenditure under any of the criteria set out in Arkansas Code 19-6-701(b) (1) - (8) or by special language in individual agency current Acts, then the agency must record the deposit into the agency's fund as a prior year refund to expenditure using general ledger code 6990003000.
Record Deposit as Prior Year Refund to Expenditure
Debit 1100001002
Credit 6990003000
If the refund to expenditure is for a prior year transaction, a "Prior Year Non-Reclaimable Certification Form", Pl- 19-6-101, must be completed and submitted to DFA-OA. The appropriation shall not be restored unless it involves a carry-forward appropriation item.
If a warrant from a prior year is cancelled or refund to expenditure from a prior year is deposited into a reclaimable fund, it is reclaimed based upon the appropriate procedures.
The Certification of Non Reclaimable PY Warrant Cancellations and Refunds to Expenditures Form and instructions can be found at http://www.state.ar.us/dfa/accounting/acc_forms.html or Pl- 19-5-1004.
Specific Circumstances for Prior Year Refunds to be handled as Current Year Refunds to Expenditures
If an agency has an appropriation with carry forward depending on the carry forward criteria for that appropriation, a refund of monies for a prior year expense may result in a current year refund to expenditure. To determine if a refund of monies in current year for prior year expenses on an appropriation with carryforward is eligible, please contact Department of Finance and Administration - Office of Accounting - Appropriations Manager.
R 3-19-6 -101Sales and Use Tax
It is the responsibility of the agency to accurately accrue and pay to the Department of Finance and Administration-Office of Accounting (DFA-OA) sales and use tax by the 15' of each month. It is the responsibility of DFA-OA to accurately report and remit sales and use tax for State agencies to the Department of Finance and Administration-Revenue Division (DFA-RD).
Sales Tax, also referred to as Gross Receipts Tax, is a tax levied against the sale of tangible personal property and various services. Sales tax is the responsibility of the seller to collect and remit to the State.
Use Tax, also referred to as Consumer Use Tax, is a tax levied against the purchase of tangible personal property from out-of-state vendors who are not registered with the State to remit sales and use tax. Use tax is the responsibility of the buyer to accrue and remit to the State.
DFA-OA must report and remit sales and use tax by the 2(f of each month to DFA-RD. Therefore, it is imperative that agencies remit the payment of their sales and use tax to DFA-OA no later than the 15' of each month.
Refer to P 2-19-6 -101 for further information.
TITLE 19 PUBLIC FINANCE
The State Board of Finance is authorized to:
History. Acts 1955, No. 338, § 11; 1965 (1st Ex. Sess.), No. 12, § 13;A.S.A. 1947, § 13-411.
Rl- 19-9-201 Long-Term Debt
Article 16 , Section 1 of the Constitution of Arkansas states: "Neither the State nor any city, county, town or other municipality in this State shall ever lend its credit for any purpose whatever; nor shall any county, city or town or municipality ever issue any interest bearing evidences of indebtedness, except such bonds as may be authorized by law to provide for and secure the payment of the indebtedness existing at the time of the adoption of the Constitution of 1874, and the State shall never issue any interest-bearing Treasury warrants or scrip. [As amended by Const. Amends. 13 and 62. J"
Amendment 20 to the Constitution of Arkansas states: "Bonds prohibited except when approved by majority vote of electors. - Except for the purpose of refunding the existing outstanding indebtedness of the State and for assuming and refunding valid outstanding road improvement district bonds, the State of Arkansas shall issue no bonds or other evidence of indebtedness pledging the faith and credit of the State or any of its revenues for any purpose whatsoever, except by and with the consent of the majority of the qualified electors of the State voting on the question at a general election or at a special election called for that purpose. This Amendment to the Constitution of Arkansas shall be self-executing and require no enabling act, but shall take and have full force and effect immediately upon its adoption by the electors of the State."
Bonds shall be the direct general obligations of the State of Arkansas for the payment of the debt service on which the full faith and credit of the State of Arkansas are irrevocably pledged so long as any such bonds are outstanding. The bonds shall be payable from the general revenues of the State as termed in the Revenue Stabilization Law § 19-5-101 et seq., and general revenues that are necessary for the payment of debt service on the bonds shall be and remain pledged for such purposes. (A CA 6- 62- 718, A CA 15-22- 615, A CA 15-22- 714)
Authorization to Borrow
The Arkansas Development Finance Authority (ADFA) has been given the authorization to borrow moneys and issue bonds to provide financing for a specific activity or particular project which is secured by and payable solely from the bonds, lease payments or other obligations issued by or payable to the State agencies and political subdivisions of the State. The specific activities or particular projects may include capital improvement facilities, educational facilities or health care facilities. (ACA 15-5-301, ACA 15-5-207 )
PLEASE NOTE: If the long-term debt is financed through ADFA, contact the Department of Finance Administration-Office of Accounting-CAFR Section (DFA-OA-CAFR Section) for further instructions.
Long-term obligations may be backed by the full faith and credit of the State or specific revenue as defined in authorizing legislation. Generally, long-term debts are not expected to be paid within the next twelve months.
Depending on the nature of the obligation, long-term obligations of the State are accounted for in one of two ways. Long-term obligations related to and expected to be paid from proprietary and fiduciary fund type funds are accounted for in those funds. All other long-term debt will be identified as a general liability and accounted for in Fund 7006101 for inclusion in the government-wide Statement of Net Assets Financial Statements.
Types of Bonds
General Obligation Bonds are statewide bond issues that are secured by an unconditional pledge of the full faith and credit of the State.
Revenue Bonds are bond issues secured by specific sources of revenue and do not involve a pledge of the full faith and credit of the State but require legislation authorizing the specific revenue. They are payable from identified sources of revenue which are generally derived from the assets acquired or constructed with the bond proceeds.
Refunding Bonds are issued to retire bonds already outstanding. Refundings are classified as current or advance refundings.
New Issues
Generally accepted accounting principles (GAAP) direct that the proceeds from long-term debt be treated as an "other financing source" rather than as revenue in governmental fund types. The amount reported as an "other financing source" should be equal to the face amount of the debt. For accounting and financial reporting purposes, a long-term debt issue is considered to have taken place as of the closing date. Consequently, bond or loan proceeds should be reported as an "other financing source" as of the closing date. Due to withheld underwriter's fees and/or the debt issued at a discount the amount of cash received is typically less than the face amount of the debt. A discount arises when the stated rate of interest on the debt is less than the market rate of interest for similar securities when the debt was issued. AASIS uses "6" series general ledger account numbers to record "other financing sources" as well as "other financing uses."
"Other financing uses" is a category used to isolate certain non-routine outflows that might otherwise distort the analysis of expenditure trends. Discount, premiums, issuance costs such as amounts withheld for underwriters 'fees should be recorded as "other financing uses " in governmental fund types.
Modified Accrual
A long-term debt would be recorded at the closing date as:
A debit to a cash account for the amount of the bond or loan proceeds plus or minus the bond premium or discount, respectively, and less the bond issuance costs (actual cash received). A debit or credit to a bond discount or premium account for the amount of the discount or premium, respectively.
A debit to a bond issuance costs account for the amount of the issuance costs which would include underwriters' fees.
A credit to "proceeds from" bonds or loan account for the amount of the bonds or loan.
Full Accrual
At the end of the fiscal year the bonds or loan proceeds, bond discount or premium, bond issuance costs would be reclassified to bonds or loans payable, unamortized bond discount, unamortized bond premium and unamortized bond issuance costs, respectively, in accounting period "15" using Fund 7006101. The entry to reclassify the proceeds would be done by debiting the "proceeds from" bonds or loan account and crediting the payable account. The amortization of the discounts, premiums and issuance costs are also recorded in accounting period "15" using Fund 7006101. Discounts, premiums and issuance costs are amortized over the life of the debt using the 'straight-line method." Amortization amounts due in the next year need to be reclassified as current. The reclassification is recorded in accounting period "15" using Fund 7006101. Interest owed but not yet due (interest payable) will be accrued and recorded in accounting period "15" using Fund 7006101.
Refunding Issues
When advantageous and permitted by Arkansas code or bond covenants, the State will refund outstanding bond issues. Refundings are transactions to take advantage of changes in interest rates, the maturity date or escape onerous debt covenants by issuing new debt to refinance existing (old) debt. Current refundings immediately apply the proceeds of the refunding debt to redeem the old debt. When the proceeds of the refunding debt are placed into an escrow account pending the call date or maturity of the old debt, the refunding is called advance refunding. Most advance refundings result in the defeasance of the old debt. For accounting purposes, the debt is treated as though it had been redeemed. GAAP directs that the proceeds of refunding bonds, whether used for redemption or placed in escrow, be reported as an "other financing use" rather than as an expenditure (payments to escrow agents).
Modified Accrual
A long-term debt would be recorded as:
* A debit to the "payments to refunding escrow agent" account for the amount of the old bond or loan or the amount that was paid to the refunding escrow agent;
* A debit to a cash account for the amount of the bond or loan proceeds plus or minus the bond premium or discount, respectively, and less the bond issuance costs and amount paid to the escrow agent;
* A debit or credit to a bond discount or premium account, respectively for the amount of the discount or premium, respectively;
* A debit to a bond issuance costs account for the amount of the issuance costs;
* A credit to "proceeds from" bonds or loan account for the amount of the bonds or loan.
Full Accrual
At the end of the fiscal year the bond or loan proceeds, bond discount or premium, bond issuance costs would be reclassified to bonds or loans payable, unamortized bond discount, unamortized bond premium and unamortized bond issuance costs, respectively, in accounting period "15" using Fund 7006101. The entry to reclassify the proceeds would be done by debiting the "proceeds from" bonds or loan account, crediting the "payments to refunding escrow agent" account and crediting the bonds or loan payable account for the difference. The amortization of the discounts, premiums and issuance costs are also recorded in accounting period "15" using Fund 7006101. Discounts, premiums and issuance costs are amortized over the life of the debt using the 'straight-line method." Amortization amounts due in the next year need to be reclassified as current. The reclassification is recorded in accounting period "15" using Fund 7006101.
If material, the difference between the cost of refunding the old bonds (the outstanding principal of the old debt plus any associated costs) and the proceeds of the refunding bonds is deferred and amortized over the remaining life of the old debt or the life of the refunding debt whichever is shorter (deferred loss on refunding). The amortization of the "deferred loss on refunding" is recorded in accounting period "15" using Fund 7006101. Amortization amounts due in the next year need to be reclassified as current. The reclassification is recorded in accounting period "15" using Fund 7006101.
Interest owed but not yet due (interest payable) will be accrued and recorded in accounting period "15" using Fund 7006101.
New and Refunding Issues
All bond issue payments include principal and interest. The classification of the principal and interest payment as both being expenses or the interest being an expense and the principal reduction of debt is determined by the financial reporting statements.
Modified Accrual
The payment of a long-term debt should be recorded as principal and interest expense following an amortization schedule.
Full Accrual
At the end of the fiscal year the expense for the principal portion will be reclassified as a reduction of the debt. Principal payments due on all long-term debt in the next year need to be reclassified as current. The reclassification is recorded in accounting period "15" using Fund 7006101.
Responsibility of Agencies to Provide DFA-OA-CAFR Long-Term Debt Information
The various State agencies, departments and entities are each responsible for safeguarding assets in its charge, the execution of only properly authorized transactions and the maintenance of the necessary financial information to document the discharge of its responsibilities. Therefore, the primary responsibility for the collection, maintenance, recording and transmission of information to permit the DFA-OA-CAFR Section to prepare GAAP financial statements lies with each agency.
It is imperative that agencies and institutions also maintain:
* An adequate internal control structure to reduce the risk that errors or irregularities may occur and not be timely corrected in the normal course of agency staff business.
* An audit trail that can readily trace the information transmitted to DFA-OA and amounts recorded in the State Financial Management System to the original source transaction information.
Therefore, each agency and institution should design their process to compile needed GAAP information to its own circumstances and document those processes for future training and audits.
At the close of each fiscal year DFA-OA-CAFR Section will send a debt service packet out to the agencies to gather information needed to compile the State's Comprehensive Annual Financial Report (CAFR). Journal entries to record long-term debt are found in appendix Pl- 19-9-201.
TITLE 19 PUBLIC FINANCE
The Director of the Department of Finance and Administration, as soon as he learns of facts from which he concludes that a claim, other than for personal injury or death of a State employee, may be filed under this chapter against the State or any of its agencies, departments, or institutions,
whether or not the claim has already been filed, is authorized and directed to investigate and take evidence concerning the claim. The director is, for this purpose, authorized to exercise all necessary investigatory powers conferred upon him by this chapter. All information acquired by him shall be made available to the Arkansas State Claims Commission prior to the hearing and determination thereof.
History. Acts 1949, No. 462, § 12; 1951, No. 373, § 7; A.S.A. 1947, § 13-1412.
Rl-19-10-101Claims, Judgments & Other Contingent Liabilities
Claims and judgments are obligations related to the payment of claims declared or court imposed awards. Generally, the events creating these obligations have already occurred and one can reasonably determine their future impact. Contingent liabilities are potential future amounts to be paid based on conditions that existed as of the financial statement date. The circumstances related to contingent liabilities have occurred, but their future impact may not be certain for a variety of reasons including, but not limited to, a claim not being asserted or the amount owed not being determinable. Examples of claims, judgments and other contingent liabilities may include, but are not limited to, claims brought before or awards made by the Arkansas State Claims Commission (ASCC) or other courts where jurisdiction may reside, accrued leave, potential benefits under the State Workers' Compensation Program and disputed costs in connection with federal funding.
Federal Claims & Judgments
Federal awards shall be paid upon receipt of a court order. In the absence of a court order, claims may be paid upon receipt of an out-of-court settlement recommendation made in writing by the Attorney General of the State after an investigation by the Chief Financial Officer determines that payment will be in the best interest of the State and upon receiving favorable review from the Legislative Council or Joint Budget Committee. (ACA § 21-9-203 )
PLEASE NOTE: Also refer to ACA § 19-4-1614 and ACA § 19-4-1615 for claims and judgments related to wages or salaries for personal services rendered.
ASCC Claims & Judgments
When the Director of the Department of Finance and Administration is made aware of a potential claim that may be filed with the ASCC, he/she shall investigate such claims, other than those involving personal injury or death of a State employee. Any information obtained from such investigation will be made available to the ASCCprior to the related hearing. (ACA § 19-10-101 )
Awards, other than those related to wages and salaries, are to be paid upon order by the ASCC. If the award is $10,000 or less, the DFA-OA-Funds Group will reimburse the ASCC fund that paid the award via a fund transfer from the paying agency's fund to be charged for the expenditure of the judgment. Awards involving wages and salaries are processed through the State's payroll system to ensure the appropriate reporting and payments for payroll tax purposes. All awards, including awards for wages and salaries, in excess of $10,000 require an appropriation from the General Assembly prior to payment. (ACA § 19-10-215 )
When a valid claim is to be paid from funds not in the State Treasury, the ASCC Clerk will notify the agency, board, commission or institution of higher education that the claim is charged. Upon receipt of the notification, the agency, board, commission or institution of higher education is required to deliver a check to the ASCC Clerk from the agency, board, commission or institution of higher education's cash funds. The check is to be deposited into the Miscellaneous Revolving Fund as a non-revenue receipt for disbursement to the complainant. (ACA § 19-10-213 )
When an agency admits liability to a claim filed with the ASCC and the claim involves a contract or the claim exceeds $7,500, the State agency, board, commission or institution of higher education responsible for the payment of the settlement or judgment shall file a written report to the Litigation Subcommittee of the Arkansas Legislative Council within 30 days after adjudication by ASCC. The report shall include a statement of facts surrounding the claim and an explanation of the agency, board, commission or institution of higher education's liability. (ACA § 19-10-212 )
Contingent Liabilities
Generally Accepted Accounting Principles (GAAP) require disclosure and, in some cases, recording of claims, judgments and other contingent liabilities that are reasonably possible (i.e. more than remote, less than likely). The liability for claims, judgments and other contingent liabilities should be recognized (or recorded) when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated As such, if not previously recorded, judicial awards shall be recorded as liabilities when judgment is rendered Failure to disclose or record such would cause a misstatement in the financial statements. It is imperative that agencies that believe they may have circumstances that meet the criteria for claims, judgments and other contingent liabilities contact the agency's liaison in the DFA-OA-CAFR Section to discuss the circumstances and obtain assistance in determining if the item can or should be recorded as a liability of the agency.
All judicial awards and contingent liabilities shall be recorded by each State agency, board, commission or institution of higher education utilizing the appropriate accounts, funds and periods as instructed in the Fiscal Year-End Closing Instructions unless instructed otherwise in writing by the CAFR Section. All items that are recorded as liabilities or may be considered claims or contingent liabilities if the liability may exceed $500,000 shall be disclosed to the CAFR Section in the agency's Year-End Disclosure Package returned to the CAFR Section. Additionally, disclosure may be required if the aggregate liability exceeds $500,000. The disclosure should take the form of completing the Claims and Judgments/Contingencies Questionnaire Section of the Year-End Disclosure Package. Regardless of whether the circumstances for the potential claim or liability existed before or after the end of the fiscal year, if an agency determines that a liability should be recorded or the agency becomes aware of a potential claim or contingent liability after completion and submission of the Year-End Disclosure Package to the CAFR Section, the agency should contact their agency's liaison in the CAFR section to disclose the determination made and the additional details identified to arrive at such decision.
Recording Contingent Liabilities
All contingent liabilities that are probable (The future event or events are likely to occur.) and the related loss can be reasonably estimated should be recorded by each agency, board, commission or institution of higher education on or before year-end All contingent liabilities should be recorded in non-budget relevant accounts in period "15" to fund 7006101. All amounts expected to be paid within one year of the fiscal year end should be recorded as current liabilities. Any prior year entries to record the claims, judgments or contingent liabilities should be reversed prior to recording current year items. Examples of general journal entries to record some common contingent liabilities follow:
Accrued Leave
5010091000 Accrued Compensated Absence Expense
2230002000 Non-Current Accrued Compensated Absences
2115007000 Compensated Absences Current
Claims/Judgments
5110015000 Taxes/Claims
2114003000 Claims Incurred but not Reported
Questioned Costs Related to Federal Awards Expected to be Repaid 4050004100 NBR - Grant Revenue 2114003000 Claims Incurred but not Reported
PLEASE NOTE: These examples are for illustrative purposes only. The nature of the claim or contingent liability will determine what accounts should be used for recording the liability. Please contact the CAFR Section for assistance in recording the liability.
TITLE 19 PUBLIC FINANCE
History. Acts 1979, No. 482, § 15; A.S.A. 1947, § 14-243; Acts 1991, No. 1018, § 2; 2001, No. 1237, § 9; 2005, No. 2322, § 1.
Rl-19-11-217Vendor Maintenance
Each vendor that is paid through AASIS is required to have a Vendor Master Record The Vendor Master Record is used to store a variety of information on each of the State's vendors. One of the primary uses of the Vendor Master Record is to track payments for the processing of Internal Revenue Service Form 1099 and its related reporting.
All disbursements should generally utilize previously established vendor master record numbers which is linked to the vendor's master record. However, a "one time" vendor may be utilized when the vendor is expected to only be paid once, or the vendor is expected to be paid on a very infrequent basis.
The Department of Finance and Administration-Office of State Procurement Vendor Maintenance Policy can be accessed at http://www.state.ar.us/dfa/procurement/pro index, html
Instructions for determining if a vendor has established a Vendor Master Record are in the Vendor Database Tutorial which can be accessed at http://www.state.ar.us/dfa/procurement/pro_index.html.
R 2-19-11 -217 Internal Revenue Service Form 1099-Miscellaneous (1099-MISC) Reporting
It is the policy of the State of Arkansas to adhere to the Internal Revenue Code guidelines for 1099-MISC reporting contained in Internal Revenue Service (IRS) Publication 1220 as revised each calendar year. http://www.irs.sov/pub/irs-pdfA1099.pdf
1099-MISC forms are produced to satisfy Sections 6041 through 6050N of the Internal Revenue Code, which requires States and State agencies to file informational returns on reportable payment types of non-wage compensation paid to reportable payees.
IRS Form W-9 is the foundation for meeting the 1099 reporting requirements of the IRS. A Form W-9 must be provided to the Office of State Procurement (OSP) for all statewide vendor numbers requested as outlined in the OSP policies and procedures located at http://www.arkansas.gov/dfa/purchasing/index.html
The vendor master record designates each vendor's tax status based on the information provided on the W-9. The tax code is automatically populated on each payment transaction based on the tax status identified on the vendor master record The tax code can be changed by the agency on any transaction when necessary for proper 1099 reporting. It is the agency's responsibility to ensure the accuracy of the tax code on each payment transaction.
Agencies classified as "user" or 'service bureau" in AASIS which are included within the Statewide Federal Tax Identification Number (TIN) are responsible for providing accurate information for 1099-MISC reportable vendors and vendor payments to the Department of Finance and Administration-Office of Accounting (DFA-OA). Any payments of penalties and interest arising from inaccurate information provided by the agency will be charged back to the individual agency by a fund transfer initiated by the DFA-OA. The DFA-OA' s sole responsibility is the consolidation of all payment information provided by State agencies to the vendor's payee tax identification number and the resulting printing, mailing and reporting of the 1099-MISC forms.
An updated informational 1099 package will be available on the web site when the final rules are made available by the IRS for the upcoming calendar year. http://www.accessarkansas.org/dfa/accounting/index.html
Additional detailed information regarding vendors/vendor payments may be found on the AASIS web site. http://aasis.state.ar.us/default.htm
Agencies classified as "user" or 'service bureau " in AASIS that operate independent programs with their own tax identification number are responsible for all tasks necessary to report the 1099-MISC forms. Payments made by warrant from these programs must use "onetime" vendor numbers to avoid duplication in the statewide reporting of 1099s performed by DFA-OA.
Agencies classified as "reporting" in AASIS cannot use the Statewide Federal TIN and are responsible for creating and reporting IRS Form 1099-MISC under their own assigned Tax Identification Number. Reporting agencies may use statewide vendor numbers, but these payments and vendors will automatically be excluded from the statewide reporting of 1099s.
History. Acts 1979, No. 482, § 43; A.S.A. 1947, § 14-267; Acts 1995, No. 317, § 5; 1995, No. 340, §5; 1995, No. 912, § 1.
Rl- 19-11-238 Leases of Tangible Personal Property (Equipment)
Provisions for leasing of equipment by State agencies are contained in ACA §19-11-238. Agencies should review lease contracts before signing and ensure that they are not committing their agencies to make lease payments beyond the end of a biennial period. The contract should include language to allow termination of the lease in the event sufficient appropriations or funding does not exist to fulfill the obligation. Contractual questions concerning leasing equipment should be directed to the Department of Finance and Administration-Office of State Procurement. Accounting questions should be directed to the Department of Finance and Administration-Office of Accounting.
PLEASE NOTE: ACA § 22-8-102 covers leasing and renting of State vehicles by State agencies. Procedures governing the lease of motor vehicles are located on the DFA-OSP web site at http://www.arkansas.gov/dfa/procurement/proindex.html.
Lease Type Determination
A lease agreement that meets one or more of the following four criteria is a capital lease:
* The lease transfers ownership of the property to the lessee by the end of the lease term.
* The lease contains a bargain purchase option. A bargain purchase option exists when the lessee can either buy the property at a minimal amount or renew the lease at very low rental payments relative to market rates.
* The lease term is equal to 75% or more of the life of the leased asset. (For example, the lease term is six years and the estimated remaining useful life is eight years). The life of a used leased asset will be calculated using 75% of the suggested useful life in the State's capital assets policy.
* The present value of rental and other minimum lease payments equals or exceeds 90% of the fair value amount of the leased asset (for example, the present value of the rental and other minimum lease payments equals $9,000, and the fair value is $10,000). Instructions on how to calculate the present value of minimum lease payments follow the example below. The fair value is the amount at which the asset could have been purchased
The last two criteria are not applicable when the beginning of the lease term falls within the last 25% of the total estimated remaining useful life of the leased property.
The lease is accounted for as an operating lease if it does not meet the State's capitalization threshold or does not meet the criteria of a capital lease.
Accounting for Leases
Accounting for an operating lease consists of recording rental payments as a normal operating expenditure/expense on a monthly basis. Each agency will be required to provide the amount of operating lease payments for the year, as well as future operating lease payments annually for inclusion in the Comprehensive Annual Financial Report (CAFR).
Capital Leases are Accounted for as Follows:
An Outline Agreement is created in the Arkansas Administrative Statewide Information System (AASIS) at the inception of the lease. Office of State Procurement personnel create the Outline Agreement for leases of $25,000 or more, and agency procurement personnel create the Outline Agreement for leases less than $25,000. The material numbers for principal (10119371) and interest (10119370) must be used in the outline agreement.
The agency personnel responsible for asset management creates an asset master record in AASIS using transaction AS01, "Create Asset Master Record," and selects the appropriate NBR (non-budget relevant) asset class. On the allocation tab, select the class code for Capital Lease 000000. This class code allows the State to collect capital lease information on a statewide level.
If the lease agreement transfers ownership of the asset to the lessee (criterion 1) or contains a bargain purchase option (criterion 2), the leased asset is depreciated over the recommended useful life of the class code the asset would have been assigned to if the asset had been purchased If the lease does not transfer ownership or does not contain a bargain purchase option, then the asset is depreciated over the term of the lease.
To record the acquisition value of the asset, perform transaction ABSO, Miscellaneous Transactions. Enter the non-budget relevant asset class. The document date will be the capitalization date of the asset. The transaction type will be 100. Enter the quantity. Credit Other Financing Sources (6990004200). The text field can be used to record information about the lease. Use document type "aa." The leased asset should not be booked at more than its fair-market value; therefore, use the lower of(l) the present value of the minimum lease payments (excluding executory costs) or (2) the fair market value of the leased asset at the inception of the lease. The asset should be booked in the fund code from which the lease payments will be made.
To record the liability, use transaction FB50, G/L Acct Pstg: Single Screen Trans, into Fund 7006101, which has been set up to carry all long-term liabilities for the State with each agency having its own cost center within the fund. Use document type 'sa." Debit Other Financing Sources (6990004200). Credit Non-Current Capital Leases (222005000).
Capital Lease Payments are Budgeted under Capital Outlay (Commitment Item 11)
For financial statement purposes, accounts 5120012100, CI11 Interest Expense Capital Lease, and 5120012200, CI11 Principal Expense Capital Lease, are used to record the capital lease payments. The lease payments are recorded as expenditures of the fund from which the lease payments are made. An amortization schedule must be prepared to distinguish the principal and interest portion of the lease payments.
User agencies must utilize the purchase order system for all lease payments. The purchase order can cover an entire year's worth of payments so as to reserve budget and enter the remaining year's payments faster. The year you enter the purchase order into the system is the year your budget will be encumbered.
A single lease may be for several pieces of equipment with the payments apportioned to more than one cost center. An amortization schedule showing the principal and interest portion applicable to each cost center may be required.
Purchase orders for capital lease payments should reference the outline agreement number, the "our reference" number and the "your reference" number. Use material numbers 10119371 and 10119370 to access the proper principal and interest expense accounts.
Year-End Reporting for the CAFR
As part of the year-end closing process, each agency will be required to provide the asset acquisition values and accumulated depreciation at year end as well as principal and interest amounts due in subsequent years for inclusion in the CAFR.
Year-end Closing Entries
Two closing entries must be made to properly classify capital lease payments for CAFR purposes.
The first entry is made in period "15" of Fund 7006101 in your agency's cost center to reclassify the principal portion of capital lease payments.
|
DR |
CR |
|
2220005000 Non-current Capital Lease Payable |
$ XX |
|
5120001200 Accrued Debt Service Principal |
$ XX |
|
(To reclassify capital lease principal payments to reduce the liability) |
The second entry is made in period "15" of Fund 7006101 inyour agency's cost center to reclassify the current portion of the lease payable.
|
DR |
CR |
|
2220005000 Non-current Capital Lease Payable |
$ XX |
|
2114001000 Capital Lease Payable - Current |
$ XX |
|
(To reclassify the current portion of the capital lease payable) |
See Section R 2-19-4 -506 for further discussion of year-end closing procedures including year-end closing entries.
Definitions:
Executory Costs
Usually insurance, maintenance and taxes paid in connection with the leased property. If the lessor pays these "ownership-type costs," a portion of each lease payment that represents executory costs should be excluded in computing the present value of the minimum lease payments because it does not represent payment on or reduction of the obligation. If the portion of the minimum lease payments that represents executory costs is not determinable from the provisions of the lease, an estimate of such amount must be made. Many lease agreements, however, specify that executory costs be paid to the appropriate third parties directly by the lessee; in these cases, the rental payment can be used without adjustment in the present value computation.
Lessee's Incremental Borrowing Rate
The rate of interest that the lessee would have had to pay at the inception of the lease to borrow the funds, or similar terms, to purchase the leased property. It is the policy of the State of Arkansas to use the prime rate for an agency's incremental borrowing rate.
Summarized Capital Lease Procedures
Capital Lease Determination
Apply the four capital lease criteria.
If any one of the four capital lease criterion is met, it is a capital lease; otherwise, it is an operating lease.
Recording the Capital Lease
Transaction AS01 - Creates asset master record.
Transaction ABSO - Record the asset in the fund from which the lease payments will be made Transaction FB50 ENTER GL ACCOUNT DOCUMENT - Record the liability in Fund 7006101 in your agency's cost center
Recording the Lease Payments
Create an amortization schedule to allocate principal and interest portions of each lease payment.
Create a purchase order.
PLEASE NOTE: The same purchase order can be used for a year's worth of lease payments.
Year-End Reporting
Provide asset acquisition values and accumulated depreciation at year end as well as principal and interest amounts due in subsequent years for inclusion in the CAFR.
Year-End Closing Entries
Reclassify principal expense as a reduction of the liability in Period "15" in Fund 7006101 in your agency's cost center.
Reclassify the current portion of the liability from the non-current portion in Period "15" in Fund 7006101 in your agency's cost center.
The State Procurement Director shall promulgate regulations for the allocation of proceeds from the sale, lease, or disposal of surplus commodities, to the extent practicable, to the using agency which had possession of the commodity.
History. Acts 1979, No. 482, § 56; A.S.A. 1947, § 14-275.2; 2001, No. 1237, § 33
Rl-19-11-243Marketing and Redistribution
PLEASE NOTE: Also see ACA§ 19-4-1503.
Purpose
The Marketing and Redistribution Section (M & R) is a section of the Department of Finance and Administration-Office of State Procurement (DFA-OSP). The Section is responsible for the proper disposal and sale of equipment, property and other tangibles that are determined to be surplus to the needs of the various State agencies. The Department of Finance and Administration-Office of Accounting (DFA-OA) is responsible for transfer of equipment, property and other tangibles where no moneys are involved (such as inter-agency transfers). Equipment is offered for sale by the competitive bid method on site as well as an on-line auction site at www.arstatesurplus.com.
Authority (ACA 19-11-242 )
The State Procurement Director shall promulgate regulations governing: The sale, lease or disposal of surplus equipment by public auction, competitive sealed bidding or other appropriate method designated by regulation, and no employee of DFA, or member of their immediate family shall be entitled to purchase any such equipment and transfer of excess equipment within the State.
Regulations
The State Procurement Director is authorized by ACA 19-11-243 to adopt regulations regarding the allocation of proceeds from the sale, lease, or disposal of property and other tangibles. The regulations may be found on the DFA-OSP web site at http:www.arkansas.gov/dfa/purchasing/mr/m_r_regs.doc.
Proceeds From Sale
Proceeds from the sale, transfer or rental of property by the State Procurement Director (M & R) shall be accounted for as follows:
The purchasers, transferees and lessees of property available shall transmit to the OSP the agreed sale price, service charge or rental fee.
The OSP shall deposit the full amount of proceeds received in the State Treasury in the manner as provided by law.
Proceeds from the sale or transfer of property deposited in the State Treasury shall be classified as non-revenue receipts and be credited to the Property Sale Holding Fund therein created on the books of the Treasurer of State as a trust fund. (ACA§ 25-8-106 )
Funds deposited in the Property Sale Holding Fund may be expended only by the selling or transferring agency under procedures established by the Chief Fiscal Officer of the State and appropriations provided by the General Assembly. (ACA 19-11-255 )
Funds deposited in the Property Sale Holding Fund from the sale of property purchased from agency cash funds may be refunded to the agency cash fund from which the original expenditure was made by the issuance of a warrant under procedures established by the Chief Fiscal Officer of the State and the Auditor of the State to be payable from appropriations provided by the General Assembly for disposition of the proceeds. (ACA 25-8-106 )
INSURANCE PROCEEDS
Personal Property Other Than Vehicles
The proceeds received from an insurance policy for loss of personal property due to fire, storm or other causes (excluding stolen property) owned by an agency must be processed through M & R. This is done through the use of a Certificate of Property Disposal (CPD). The agency must keep a copy of the completed CPD for an audit trail.
Pursuant to ACA 19-11-243 and Rl:19-ll-243 (B), a standard fee of25% will be assessed for administrative, property and record maintenance unless other arrangements are approved by the Marketing and Redistribution Manager.
When insurance proceeds are received for the reimbursement of a loss of personal property, the proceeds should be deposited into the Treasury using the agency's normal process for recording cash receipts. The proceeds should be recorded as Insurance Settlement/Restitution in GL 6092000000. If the asset is to be replaced, the agency should request an increase in appropriation from DFA-OA-FMfor the purchase of the replacement.
If in the current year an agency has been reimbursed for the loss and the property has been replaced, the increase in appropriation is accomplished with a refund to expenditure by the DFA-OA. The agency must provide proof of the deposit and a copy of the invoice that replaced the property in order to have the appropriation restored. If the agency is reimbursed for a prior year loss, the agency should request an increase in appropriation from DFA-OA-FM. The agency must provide proof of the deposit and a copy of the invoice that replaced the property in order to have the appropriation restored.
Refer to Pl- 19-4-2004 for sample journal entries to record insurance proceeds/restitution.
Refer to R 2-19-4 -2004 for guidance related to lost/stolen property.
Vehicles
The insurance claim and moneys must be processed through M & R when damage occurs that results in a total loss of the vehicle. Once an agency loses a vehicle they cannot replace it until they receive the insurance proceeds. The moneys cannot be given to the agency until M & R has deposited the insurance proceeds into the MMVfund. This is done monthly when M & R processes the "Letters of Transmittal." M & R sends a report to DFA-OA, requesting funds and appropriation to be transferred A 'special" letter of transmittal for insurance proceeds on totaled vehicles only can be done by M & R Doing a 'special" letter of transmittal for totaled vehicles helps the agency replace the vehicle quicker.
PLEASE NOTE: In those cases where proceeds are received on the loss of a vehicle purchased with "agency" funds, the funds are first deposited to the MMV Fund, and then a refund to the paying agency (that purchased the vehicle) would be reimbursed by the MMV Fund.
Real Property
When insurance proceeds are received for the reimbursement of a loss of real property (for example, buildings or infrastructure), the proceeds should be deposited into the Treasury using the agency's normal process for recording cash receipts. The proceeds should be recorded as Insurance Settlement/Restitution in GL 6092000000. Prior to retiring the related asset the agency should contact M & R to obtain a Certificate of Property Disposal. When a loss has occurred on any real property, the agency must provide the details about the loss to the agency's assigned CAFR liaison. The liaison will then assist in determining the effect on the State-wide financial statements.
Allocation of Proceeds From Sale or Disposal of Surplus Equipment
Using agency - The allocation of proceeds from the sale, lease or disposal of surplus equipment, less appropriate fees, will be made and deposited monthly to the using agency which had possession of the equipment.
Fee schedule - The OSP will develop a fee schedule to defray the costs of the equipment management program. The fee schedule will set forth various charges for services rendered. Proceeds from the sale of property may be used by the using agency only to purchase items from the Sub-classifications of M&O, Commitment items 02,11 and 12 (Operating Expense, Capital Outlay, and Data Processing). Commitment items 09 Conference Fees and Travel and 10 Professional Fees and Travel may not be paid for with M & R Proceeds.
Disbursement of Revenues
Funds generated from the sale of agency surplus computer and electronic equipment to State employees, public schools or by other sales shall be allocated as follows: If the sale of surplus computer or electronic equipment is made within the agency-Sixty percent (60%) of the proceeds shall be returned to the owning agency; Fifteen percent (15%) of the proceeds shall be deposited with M & R; Twenty-five (25%) of the proceeds shall be deposited in the Computer and Electronic Recycling Fund established by ACA 25-34-108.
If the sale of surplus computer or electronic equipment is outside the agency and conducted by M & R-
Fifty percent (50%) of the proceeds shall be returned to the owning agency;
Twenty-five percent (25%) of the proceeds shall be deposited with M & R;
Twenty-five percent (25%) of the proceeds shall be deposited in the Computer and Electronic
Recycling Fund established by ACA 25-34-108.
Procedure For Revenue Disbursement
Agencies that establish a policy for selling surplus computer and electronic equipment to either their employees or to Arkansas Public Schools will use the following procedure for revenue disbursement:
The agency will create a customer receipt for the sales price and calculate sales tax.
Record the receipt in the cash journal as a customer payment.
Request a fund transfer through DFA-OAfrom the receipting agency's fund to: M & R, cost center 383333, Fund MPHOOOO -15 % of the sales price. Arkansas Department of Environmental Quality, cost center 451346, FundMEROlOO - 25% of the sales price.
The sales tax will be paid when DFA-OA does their (owning agency's) monthly billing for Sales & Use Tax.
Sales Made Through M & R on Behalf of the Agency
M & R will create a customer receipt to record sales price and sales tax.
Record the receipt as a customer payment in the cash journal
Request fund transfer through DFA-OAfrom: M & R, cost center 383333, Fund MPHOOOO to the agency's fund and cost center - 50% of the sales price. Arkansas Department of Environmental Quality, cost center 451346, FundMEROlOO - 25% of the sales price.
The sales tax due will be included in the DFA monthly report of Sales & Use Tax.
To record all revenue from sale of surplus property except for equipment sold through M & R on behalf of the agencies, the agency will debit their cash account and credit account number 4048003000, Sale of Surplus Property, in their proper fund using their cost center.
An Agency Purchases an Item at M & R
M & R records the sale in AASIS and issues an invoice.
The invoice is sent to the accounts payable section and is paid like any other vendor invoice. The general ledger code used will depend on what item is purchased, ex. office supplies, equipment, etc.
An agency turns in items to M & R. M & R will keep records of what items belongs to each agency. When an item is sold, M & R records the sales and notes the original State agency. At the end of the month, M & R totals all sales by each State agency, deducts M & R's fees and arrives at the amount to be returned to the agency.
M & R compiles two lists of funds to be returned to State agencies, one for Treasury fund agencies and the other for cash fund agencies. The Treasury fund list is processed by DFA-OA with funds and appropriation being returned to the agencies. The cash fund list is processed by the DFA-Office of Administrative Services with warrants being returned to the agencies.
M & R finally prepares a memo stating the total amount of their monthly fees, and this amountis transferred from their holding fund to their operating fund.
Surplus Disposal Form (SDF)
M & R requires a 'Surplus Disposal" Form (SDF) to be completed to schedule the pickup and delivery of State surplus items. This is a web-based form that is accessible by all State agencies and institutions of higher education athttp://www.arkansas.gov/eformsAndex.php. After completed on-line by the agency, the SDF is submitted electronically to M & R. The SDF will be reviewed, and the agency will be notified either by e-mail or telephone of the date and time the delivery or pickup will take place.
Two copies of the SDF form must accompany the surplus item. One copy will be signed by a representative of M & R and kept by the agency, and one will be kept by M & R. This signed document verifies that M & R has made property pick up.
Procedure Description
This web-based form allows a State agency to create a list of items to be disposed of per M & R instructions. Using this form, an agency may request one of the following actions: delivery, pickup or request a move. Upon completion this form automatically notifies M & R of the agency's request. Each agency person accessing and completing the SDF must have priorauthorization through M & R.
Upon receipt of the completed SDF the agency asset manager must complete transaction ABA VN (Scrapping) to delete the asset from the agency's fixed asset inventory. Transaction ABA VN must be done in the same month the SDF is received from M & R.
Transaction AS02, "Change Asset Master Record," must be completed to change the status of the asset from on hand to transferred to M & R.
The above-mentioned transactions will only be completed if the status of the asset on the completed SDF is marked "REC" for received. Assets marked with "DNR," did not receive, should not be deleted from the agency's inventory. Assets must be removed within the month the SDF is received.
The agency must keep a copy of the completed SDF for an audit trail.
The State Procurement Director, after soliciting suggestions from State agencies and after seeking and receiving the advice of the Attorney General and review by the Legislative Council or by the Joint Budget Committee, if the General Assembly is in session, shall publish general guidelines for the procurement of professional and consultant services contracts and general regulations governing the use of each type of contract.
History. Acts 2003, No. 1315, § 13.
Rl-19-11-1005Professional and Consultant Services Contracts
Act 1315 of 2003 repealed ACA § 19-4-1701 - 19-4-1717, et seq. relating to professional and consulting service contracts between the State of Arkansas and all of its agencies, boards, commissions, departments and institutions. The responsibilities for the maintenance of policies and procedures for this area have thus been assigned by State statute to the Office of State Procurement. The State Procurement Director is authorized by ACA § 19-11-1008 to adopt regulations regarding the competitive bidding process, requests for proposals, approval of professionals, etc. The regulations relative to professional and consultant services contracts can be found on the Office of State Procurement's web site at: http://www.state.ar.us/dfa/procurement/proindex.html
R 2-19-11 -1005Procurement Codes
Procurement Codes
Procurement codes are used to assist in the tracking of procurement activity. Proper use of the codes enables the Office of State Procurement (OSP) to automatically track purchases by category and provide required reports. Procurement codes must be included in all transactions paying for goods and services purchased by the State. Inquiries regarding further definition of these codes should be directed to the OSP.
Procurement codes can be found on the OSP web site: http://www.state.ar.us/dfa/procurement/pro_agency.html - 6.
Updates to the procurement codes can be found on the OSP web site: http://www.state.ar.us/dfa/purchasing/general.html.
21-5-1202. Compensation of employees of state agencies and state-supported institutions -Emergency activities.
History. Acts 2005, No. 2113, § 1.
Rl- 21-5-1202 Military Differential Pay
Military differential pay is paid from an agency's individual fund and is not reportable as salaries or wages. State agencies shall determine which employees are due military differential pay and contact each employee or their beneficiary. Eligible employees are as follows:
Employees or beneficiaries must provide 1) Leave and Earnings Statements or other supporting documentation showing the employee's military pay from each year for which payment shall be calculated and 2) Form DD-214 Report of Separation, if applicable.
Agencies that use AASIS to process checks and warrants must request a vendor number for each employee receiving military differential pay. A vendor number is obtained by submitting a Vendor Maintenance Request Form. The Form can be found on the DFA-Office of State Procurement (DFA-OSP) website: http://www.arkansas.gov/dfa/procurement/proindex.html. The Second Name Line of the Form must be "Military Differential Pay." A W-4form must be attached to the Vendor Maintenance Request form, as well as a letter from the agency on agency letterhead signed by the agency's authorized payroll official stating the employee's eligibility for military differential pay and employee's personnel number. The Vendor Maintenance Request Form, W-4 form and letter must be submitted to DFA-OSP. Electronic submission will not be accepted.
State agencies shall submit a Military Pay Differential Calculation Worksheet, Pl- 21-5-1202, the Leave and Earnings Statements) or other supporting documentation showing military pay and DD-214 Report of Separation, if applicable, to DFA-Office of Personnel Management (DFA-OPM). Following review, DFA-OPM will return the approved request to the agency for processing as an Accounts Payable Vendor Payment. Military differential pay is not considered by the Internal Revenue Service to be W-2 reportable wages. Budget transfers may be necessary in order to accommodate this extraordinary disbursement for commitment item 501:00:00. A pay plan adjustment request should be communicated to the agency's DFA-Office of State Budget analyst to be submitted to the Legislative Council.
If the employee continues to be on active duty after the lump-sum payment is made, on-going payments shall be processed monthly. The agency shall submit a Military Pay Differential Calculation Worksheet to DFA-OPM for each monthly payment. Following review, DFA-OPM will return the approved request to the agency for processing. Leave and Earnings Statements for those currently on active duty, after the initial submission to payroll, need only be submitted thereafter when a pay change occurs.
The Internal Revenue Section requires military differential pay to be reported on Form 1099 Miscellaneous. The payment is reported in Box 3 - Prizes and Awards, and no withholding is allowed The $600 minimum reporting threshold applies.
Payments authorized by A. C.A § 21-5-1202 will not be retirement eligible earnings at the time of payment and will not be reported to APERS; thus, there will be no contribution paid to APERS. When the employee returns to State service as an active State employee, the retirement service will be purchased for them by the agency, and the retirement contribution will be paid at that time. If the employee is a member of the APERS contributory plan, he/she will pay their contributions to APERS by personal payment. These contributions will not be tax deferred.
Supporting documentation for military differential pay must be maintained for audit purposes by the agency.
TITLE 22 PUBLIC PROPERTY
private offices, conference rooms, reception areas, general equipment, vaults, and the necessary space to ensure adequate and effective circulation within and access to all State agencies, including parking and traffic patterns.
History. Acts 1975, No. 716, § 8; 1979, No. 411, § 1; A.S.A. 1947, § 5-1025; Acts 1999, No. 859, § 1; 2001, No. 238, § 1.
Arkansas Building Authority (ABA) was established under ACA § 22-2-104. Guidance on other areas of responsibility of ABA can be found in Rl- 19-4-524, "Construction and Permanent Improvements," and Rl- 19-4-1415, "Procedures for Approval of Design Professionals."
Rl- 22-2-114 Leases of Office Space, Buildings, Structures, Parking Lots and Grounds
Agencies should review lease contracts before signing and ensure that they are not committing their agencies to make lease payments beyond the end of a biennial period. The contract should include language to allow termination of the lease in the event sufficient appropriations or funding does not exist to fulfill the obligation.
Arkansas Building Authority (ABA) is specifically given the authority to act as the leasing agent for State agencies for leases of space, buildings, structures, parking lots and grounds. Agencies are prohibited from negotiating directly with the Lessor or Lessee. ACA § 22-2-114 'State agency" is defined under the authority of ABA as any board or commission, agency, department, institution of higher education including colleges, universities, and vocational-technical schools or other State institutions. "State agency" shall not include any county, municipality, school district, subdivision, or unit thereof of the State of Arkansas, the Arkansas State Highway and Transportation Department, the State Highway Commission, Arkansas State Game and Fish Commission or asset held as an investment of any retirement system ACA § 22-2-102, § 22-2-103(a), and§ 22-2-114
While Constitutional Offices are not defined as a State agency under Ark. Code Ann. 22-2-114(a) (1) (B), ABA has the authority to enter into agreements with other State entities, such as Constitutional Offices to act as their leasing authority.
Leasing regulations may be found on the ABA web site and are referenced as §5-100 through §5-104 within the ABA Minimum Standards and Criteria. Questions regarding lease issues other than accounting should be directed to the ABA Real Estate Services Administrator. Access to the ABA web site can be found at: www.arkansasbuildingauthoritv.com. ABA will provide a document to the agency with any proposed lease that sets out clearly the terms of the lease that will indicate the following determinations:
If the determination is made that the lease is in fact a capital lease, the Department of Finance and Administration-Office of Accounting will provide an amortization schedule to the agencies and assist with proper accounting.
PLEASE NOTE: For detailed accounting procedures refer to the Leases of Tangible Personal Property (Equipment) Section Rl- 19-11-238.
History. Acts 1977, No. 455, § 3; A.S.A. 1947, § 14-526; Acts 2001, No. 588, § 1.
Rl- 22-8-102. Leasing and renting of vehicles by State agencies
Executive branch agencies will continue to submit State Vehicle Requests to the DFA-Offtce of Information Services (OIS) as outlined in the Arkansas State Vehicle Fleet Management Guide http://www.accessarkansas.org/dfa/ois/oisvehicle.html.
When the request involves a lease, the "lease justification letter" addressed to the State Procurement Director will also be submitted with the vehicle request to OIS. If the vehicle request is tentatively approved by OIS, a copy of the request and the requesting agency's "lease justification letter" will be forwarded to the Office of State Procurement (OSP). The State Procurement Director will evaluate and process the lease request in accordance with the State Procurement Law and ACA 22-8-102. If the lease is approved by the Legislative Council and the State Procurement Director, OSP will notify OIS and the State Vehicle Request will be given final approval and processed A State Vehicle Request involving a lease cannot receive final approval until the lease itself has been reviewed and approved.
Signed this 24th day of May, 2006, in the City of Little Rock, Pulaski County, Arkansas.
Richard A. Weiss, Director
Department of Finance and Administration
Notes
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