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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Fiscal Matters
Appropriation Year Determination

A state agency must designate the appropriation year to be charged for a purchase on the voucher to request a payment.

Determining an appropriation year

Appropriation year determination rule

  1. Consumables

    Consumables are goods that are expected to be used within the year they are purchased. 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 available appropriation year or combination of available appropriation years that existed 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 Aug. 1, 2016. The agency may charge the purchase to appropriation year (AY) 2016, 2017 or 2018, or a combination thereof provided the contract extends into those AYs.

    However, if the agency had entered into the purchase contract on Sept. 1, 2016, the agency could not use AY 2016 because the contract began in AY 2017.

    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 to not 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) 2016 and after the passage of the General Appropriations Act (GAA) may be paid from AY 2017 appropriations, and the costs incurred in AY 2017 may be paid from AY 2018 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 2017 and after the passage of the GAA may be paid from AY 2018 appropriations as necessary to facilitate the move.

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

Definitions

Appropriation Year
Budget period the expenditure/revenue should be counted in.
Fiscal Year
Financial reporting period the transaction should be reported in. The state fiscal year-end is Aug. 31 of each year. State government appropriations conform to this fiscal year.
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.
Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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