8452.1 PREPARATION OF PLAN OF FINANCIAL ADJUSTMENT
(Revised 5/95)
Government Code Section 11251 is the general statute that authorizes the use of a PFA. Other statutes which authorize the use of a PFA for specific funds are: Government Code Section 16365 for the Federal Trust Fund; Education Code Section 12060 for the Vocational Education Federal Fund; and Health and Safety Code Section 111 for the Public Health Federal Fund.
The format to be used for a general PFA is contained in SAM Section 8452.1 Illustration 1; and for the Federal Trust Fund, SAM Section 8452.1 Illustration 2. Each PFA must follow this format. Of course, the statute references, funds, and appropriations will vary. Also, each PFA requested under Government Code Section 11251 should request approval only from the State Controller.
The following items are to be included in a PFA:
- The first paragraph should include a request for approval of PFA, and a statement of the period of time for which PFA is to be effective. This period of time can be for a limited period (one, two, three years) or it can be continuous from year-to-year as SAM Section 8452.1 Illustration 1 indicates. Departments should review their PFA each year and cancel those PFA which are no longer needed by notifying SCO, in all cases, and DOF only for those requiring their approval.
- Identify the funds and/or appropriations covered by PFA. If PFA is to be continuous and one of the appropriations covered by the plan is appropriated yearly, care should be taken to identify the yearly appropriation and not the specific appropriation of a particular year. For example, the ten digit item code (_____-_____-_____) numbers of a support appropriation should be used to identify a department's yearly support appropriation and not the year and chapter number of the current budget act. If the appropriation covered is made by other than budget act legislation, the year and chapter must be stated.
- Also to be included is a declaration by the department that a cost allocation plan will be used to allocate the costs covered by the PFA. A description of the cost allocation plan and the types of costs covered must be filed with the State Controller. Those departments that have more than one PFA only need to file one cost allocation plan description unless a different plan is utilized for each different PFA. The description should include the type of costs being allocated and the methodology used to allocate the costs. Refer to SAM Section 9205 through 9228 for guidelines on allocating costs. Although these sections refer to allocating line-item costs to programs, the same principles apply to allocating shared costs between funds and/or appropriations.
- The frequency of transfer requests between the funds and/or appropriations covered by PFA must be included. Transfers must be made monthly. The period covered by the transfer must be clearly stated. For example, if an estimated transfer is submitted for July, it must indicate JULY ESTIMATES. When the estimate is cleared, the transfer request must indicate JULY ACTUAL.
8452.1 Illustration 1
State Controller
Division of Accounting
3301 C Street, Suite 506
Sacramento, CA 95816
Attention: _______________, Chief
(Department/Board/Commission)
(address)
PLAN OF FINANCIAL ADJUSTMENT (No. _____)
We request that you approve the following Plan of Financial Adjustment (PFA) under Government Code Section 11251 to begin _________________________ and to continue until _________________________, unless amended or rescinded.
- As used herein, the following terms have the meanings set forth below:
a. "Agency" means the Department of _______________.
b. "Primary Appropriation" means the main Budget Act appropriation for the support of the Department (e.g., Item _____-_____-_____).
c. "Special Appropriation" means any appropriation other than the main support appropriation in the Budget Act or an appropriation from other legislation (if Budget Act Special Appropriation, state item ___-___-___; if other legislation, state Chapter __________, Statutes of __________).
d. "Covered Expenditures" means the expenditure incurred by the department properly chargeable to the Primary Appropriation or Special Appropriations.
- All covered expenditures may be paid, in the first instance, from the Primary Appropriation.
- On the basis of data set forth in the records maintained by the Agency and in accordance with the plan of cost allocation employed by it, the Agency will determine and record the amounts expended from the Primary Appropriation that are properly chargeable to the Primary Appropriation or Special Appropriations.
- Once a month, the department will file a request with the State Controller to transfer from the Primary Appropriation as established under "1," above, an amount which equals expenditures determined under "3," above which are chargeable to the Special Appropriations.
- At any time after the end of a period covered by previous requests for transfer of funds, the Agency may file with the State Controller requests for transfer to make final adjustments after the close of such period.
- Requests for transfer under this plan will be accompanied by such supporting detail as may be normally required by the State Controller.
Requests for transfers under this plan will be addressed to the State Controller, Division of Accounting, 3301 C Street, Suite 506, Sacramento, CA 95816, and will be certified in the following language:
I hereby certify under penalty of perjury that I am duly appointed, qualified and acting officer of the herein named State agency, department, board, commission, office or institution; that the within transfer is in all respects true, correct, and in accordance with all applicable provisions or restrictions in the Budget Act or other statute pertaining to the particular appropriation.
Approved by State Controller
By (Signature)
Title (Title)
Date (Telephone)
Telephone
8452.1 Illustration 2
, Director Honorable
Department of Finance State Controller
(Appropriate Budget Unit) Division of Accounting
915 L Street 3301 C Street, Suite 506
Sacramento, CA 95814 Sacramento, CA 95816
PLAN OF FINANCIAL ADJUSTMENT
We request that the State Controller and the Director of Finance approve this plan under provision of the Government Code Section 16365 for the Department of ____________________ to transfer and account for expenditure of Federal fund held in the Federal Trust Fund. The plan is to become effective July 1, 19___, and to continue until amended or rescinded.
1. As used herein, the following terms have the meanings set forth below:
a. "Agency" means the Department of ________________________.
b. "Appropriation(s)" means the Agency's appropriation which is current during the period covered by a request for transfer hereunder and has in it the spending authority of the Federal funds covered by this plan. The appropriation(s) covered by this plan is (are):
Sample: Primary appropriation, General Fund. Note: If the plan is to cover several appropriations, an attachment may be used.
c. "Federal Trust Fund Accounts" means the specific accounts created in the Federal Trust Fund for holding of Federal funds as approved by the State Controller's Office and Department of Finance on Form AUD 10A.
d. "Covered Expenditures" means all expenditures which are properly chargeable to the Federal Trust Fund under b and c.
2. As authorized by Government Code Section 16365, all covered expenditures may be paid in the first instance from the appropriation(s) under 1.b. of this plan.
3. On the basis of data set forth in the records maintained by the Agency and in accordance with the plan of cost allocation employed by it, the Agency will determine and record the amounts expended from the Primary Appropriation that are properly chargeable to the Special Appropriations.
4. Monthly the Agency will file a request with the State Controller to transfer funds from the Federal Trust Fund or General Plan Account(s), either:
a. As an advance as authorized by Government Code Section 16365(b), an amount the Agency anticipates will be expended for the purpose of the Federal funds.
or
b. To reimburse the Appropriation(s) for expenditures made on behalf of the Federal Trust Fund Account(s).
5. At any time after the end of a period covered by previous requests for transfer of funds, the Agency may file with the State Controller requests for transfer to make final adjustments after the close of such period.
6. Requests for transfers under this plan will be accompanied by such supporting detail as the Director of Finance and the State Controller may require.
Requests for transfers under this plan will be addressed to the State Controller's Office, Division of Accounting, 3301 C Street, Suite 506, Sacramento, CA 95816, and be certified in the following language:
I hereby certify under penalty of perjury that I am duly appointed, qualified, and acting officer of the herein named State agency, department, board, commission, office or institution; that the within transfer is in all respects true, correct, and in accordance with all applicable provisions or restrictions in the Budget Act or other statute pertaining to the particular appropriation.
Department of _______________
By _____________
Title _____________
Telephone _____________
APPROVALS:
Approved by Director of Finance Approved by State Controller
By ___________ By _________
Title _________ Title ___________
Date _________ Date ___________
Telephone _________ Telephone _________
