FMX Home
Susan Combs•Texas Comptroller of Public Accounts

Fiscal Matters
Appropriation Year Determination

General discussion

A state agency must designate the appropriation year to be charged for a purchase on the voucher to request a payment. This is necessary as three appropriation years are always available to be charged for any purchase.

Construction, repair or remodeling contracts, however, always have five appropriation years available.

A state agency must adhere to certain legal principles that may eliminate or drastically reduce the discretion to designate an appropriation year.

Determining an appropriation year

Appropriation year determination rule

  1. Consumables

    A state agency must charge a purchase of consumables to the appropriation year in which the delivery of the consumables occurred. A state agency may prorate the purchase of consumables over appropriation years only if it is unreasonable to expect to entirely consume the consumables during the appropriation year in which the delivery occurred.

    A state agency may charge the immediately preceding appropriation year for a purchase of consumables even though the consumables were delivered during the current appropriation year if:

    • the contract for the consumables was entered into during the immediately preceding appropriation year and the delivery of the consumables was reasonably expected to occur during that year,
    • the delivery of the consumables was delayed until the current appropriation year for reasons beyond the control of the agency, and
    • the order quantity was no more than the agency could have consumed before the end of the of the immediately preceding appropriation year had the delivery occurred as originally expected.
  2. Services

    A state agency must charge a purchase of services to the appropriation year in which the services were rendered. A state agency may not charge an appropriation year for the purchase of services if the services were rendered during a different appropriation year.

    If services are provided during two or more appropriation years, a state agency must prorate the payment for the services so each appropriation year is charged only to the extent of the services provided during the year.

  3. Capital assets

    A capital asset is a good other than a consumable that benefits both current and future appropriation years. When a state agency purchases a capital asset, the agency may charge the purchase to any appropriation year or combination of appropriation years in existence on the date the agency enters into the purchase contract.

    Example:

    Assume a state agency enters into a purchase contract for a capital asset on July 1, 2009. Assume also the governor signed the General Appropriations Act (GAA) for appropriation years 2010 and 2011 on June 1, 2009. Given these facts, the agency may charge the purchase to appropriation year (AY) 2009, 2010 or 2011, or a combination thereof.

    If the agency had entered into the purchase contract on May 1, 2009, instead of July 1, 2009, the agency would have been able to charge the purchase only to AY 2009, as appropriations for AY 2010 and 2011 were not in existence on the date the contract was entered into.

    The delivery date of a capital asset is not a relevant factor used in determining the appropriation year to be charged.

  4. Mixed purchases

    A purchase contract may involve the purchase of a combination of:

    • consumables,
    • services, and
    • capital assets.

    The dominant purpose of a mixed contract determines the appropriation year to be used for the payment of the mixed contract.

    Example:

    If the dominant purpose of a mixed contract is to purchase consumables, the appropriation year determination principles about consumables would govern the entire purchase.

Exceptions to the appropriation year determination procedures

  1. Seminars and conferences

    Generally, a state agency may use money appropriated for a particular appropriation year to pay expenses for conducting or attending a seminar or conference during that year. To the extent that it is cost-effective, a state agency may use money appropriated for a particular appropriation year to pay expenses related to conducting or attending a seminar or conference that will occur partly or entirely during a different appropriation year.

  2. Internet connection, periodical subscriptions, maintenance contracts, post office box rentals, insurance, and surety or honesty bonds

    Regardless if it covers more than one appropriation year, a state agency may use money appropriated for a particular appropriation year to pay the entire cost or amount of:

    • an internet connection,
    • a periodical subscription,
    • a maintenance contract,
    • a post office box rental,
    • insurance, and
    • surety or honesty bonds.
  3. Utility services

    A state agency may use money appropriated for a particular appropriation year to pay for a utility service provided during that appropriation year and September of the next appropriation year.

    The applicable statute specifically defines utility service to mean:

    • the furnishing of electricity, water or natural gas;
    • a telecommunications service, wastewater treatment service or waste disposal service; or
    • any similar commodity or service the Comptroller's office considers to be a utility service, such as propane or well water service.

    The Comptroller's office believes the furnishing of electricity, water, natural gas, propane, a waste disposal service, a wastewater treatment service or a well water service is a utility service only when provided by a utility.

    The Comptroller's office considers telecommunications service to include:

    • a corded telephone service,
    • a cellular telephone service,
    • a pager service,
    • an Internet connection service,
    • a cable television service, and
    • a monthly satellite television service.

    The Comptroller's office considers telecommunications service not to include:

    • a long distance telephone charge,
    • a prepaid telephone calling card, or
    • a cellular telephone roaming charge.
  4. Non-appropriated funds

    Non-appropriated funds are not subject to the appropriation year determination procedures.

  5. Grant payments

    A state agency’s payment of a grant to an individual or entity must be charged to the appropriation year in which the agency contracts, awards or otherwise legally commits to pay the grant, if an appropriation for that year and purpose is available.

    Otherwise, the payment must be charged to the first appropriation year for which an appropriation is available. This applies regardless of how the grantee will use the grant funds and also applies even if the payments under a grant contract will be made over more than one appropriation year.

  6. Moving and tenant finish-out costs

    As necessary to facilitate the move, the required moving and tenant finish-out costs incurred by an agency moving from leased space to state-owned space during appropriation year (AY) 2009 and after the passage of the General Appropriations Act (GAA) may be paid from AY 2010 appropriations, and the costs incurred in AY 2010 may be paid from AY 2011 appropriations.

    The required moving and tenant finish-out costs incurred by an agency moving from higher cost leased space to lower cost leased space during AY 2010 and after the passage of the GAA may be paid from AY 2011 appropriations as necessary to facilitate the move.

See also: Advance Payments, Appropriations, Encumbrances of Appropriations.

Definitions

Institution of higher education
Has the meaning assigned by Texas Education Code Section 61.003
State agency
  • A department, commission, board, office or other entity in the executive branch of state government, including an institution of higher education.
  • The Supreme Court, the Court of Criminal Appeals, another entity in the judicial branch of state government with statewide authority or a court of appeals.
  • The Legislature or another entity in the legislative branch of state government with statewide authority. (Texas Government Code Sections 2113.001(2)),

Sources for this section [+]

Texas Government Code Section 2113.205; Article IX, Section 11.03 of the General Appropriations Act; Op. Texas Attorney General Nos. H-1008 (1977), M-13 (1967), C-625 (1966), V-1535A (1952), V-1397 (1952), V-1363 (1951), V-1139 (1950), O-6883 (1945), O-6011 (1944), O-2815 (1940), O-2704 (1940), O-2703 (1940), O-2631 (1940), O-2380 (1940), O-2239 (1940); 34 Texas Administrative Code Section 5.56 (2004).

Documentation Requirements [+]

  1. When a state agency wants to charge a purchase of consumables to the appropriation year immediately preceding the appropriation year during which the consumables were delivered, the agency must retain the following explanation in the agency’s files:
    • The consumables were contracted for in the immediately preceding appropriation year and, at the time of contracting, the delivery of the consumables was reasonably expected to occur during that year.
    • The delivery of the consumables was delayed until the current appropriation year for reasons beyond the reasonable control of the agency.
    • The order quantity was no more than the agency could have consumed before the end of the immediately preceding appropriation year, had the delivery occurred as originally expected.
  2. When a state agency makes a payment under a maintenance contract that was purchased in connection with the purchase of a capital asset, the agency must retain documentation in its files to support the agency’s determination of the dominant purpose of the purchases.

Printer Friendly

Susan Combs
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.state.tx.us
Window on State Government | FMX
FMX Sitemap | Contact FM
Accessibility Policy | Privacy and Security Policy