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Frequently Asked Questions

Administrative Adjustment

A vendor's claim for goods or services which has been incurred but not paid prior to the end of the fiscal year, and does not affect the validity or the contractual liability of the State, is subject to the Administrative Adjustment payment process. To be eligible for payment under the Administrative Adjustment process, the goods or services must have been received prior to July 1 of the current fiscal year. Any exceptions to this policy will be handled on a case-by-case basis by ADOA. There must also be a sufficient balance remaining in the reverted appropriation line to pay the claim. Any vendor's claim subject to Administrative Adjustment which is $300.00 or less per vendor may be paid out of the current year's appropriation rather than through the Administrative Adjustment process. Payment must be determined to be within the best interest of the State and approved by the Director of the Department of Administration. These payments can only be made out of the same appropriated line item. Proper planning to schedule the procurement and receipt of good or services previous to June 30 every fiscal year will help minimize Administrative Adjustment requests from your budget unit and will therefore minimize the extra time needed to justify Administrative Adjustment requests. Please see A.R.S. § 35-191 for more detail.

Administrative Adjustments and Relief Bills

There is statutory authority to submit vendor's claims that are more than one fiscal year, but less than four years old to the Legislature. Only appropriated funds are eligible for payment under the Relief Bill. There must be sufficient authority remaining in the lapsed appropriation for the fiscal year of the claim to be included in the Relief Bill which is approved by the Legislature for payment. (A.R.S. § 35-191, C.) As with administrative adjustments, line item integrity is not lost. Every December, the ADOA-GAO sends letters to all agencies requesting invoices that meet the General Relief Bill criteria. Agencies submitting items for inclusion in this bill should be ready to testify before the legislature regarding their request, if necessary.

A vendor's claim for goods or services which has been incurred but not paid prior to the end of the fiscal year, and does not affect the validity or the contractual liability of the State, is subject to the Administrative Adjustment payment process. To be eligible for payment under the Administrative Adjustment process, the goods or services must have been received prior to July 1 of the current fiscal year. Any exceptions to this policy will be handled on a case-by-case basis by ADOA. There must also be a sufficient balance remaining in the reverted appropriation line to pay the claim. Any vendor's claim subject to Administrative Adjustment which is $300.00 or less per vendor may be paid out of the current year's appropriation rather than through the Administrative Adjustment process. Payment must be determined to be within the best interest of the State and approved by the Director of the Department of Administration. These payments can only be made out of the same appropriated line item. Proper planning to schedule the procurement and receipt of good or services previous to June 30 every fiscal year will help minimize Administrative Adjustment requests from your budget unit and will therefore minimize the extra time needed to justify Administrative Adjustment requests. Please see A.R.S. § 35-191 for more detail.

AFIS

The Arizona Financial Information System (AFIS) is the official accounting system and record of the State for fiscal information. All State Agencies must process its accounting data in AFIS. Some very large agencies utilize a tape-interface from their systems to record accounting activity in AFIS.

First and foremost, the accounting structure of an agency must be set up on AFIS. How the structures are established depend upon the applicable reporting requirements and controls. For example, the program structure is generally established according to how agencies submit their budgets. An agency may also set up an organization structure that may be based on the organization chart of the agency. Both types of structures are used to store and report financial information on state agencies. Your GAO liaison may assist you with any questions you may have relating to setting up or changing your agency's structures. A current listing of GAO liaisons can be found on our website. Second, the agency must obtain AFIS application security to process accounting data up to and including obtaining Warrant Authorization Cards (WAC) to pick up vendor warrants. Please see the APPLICATIONS SECURITY section for more information. Processing accounting transactions on AFIS requires appropriate knowledge and understanding of the State's accounting policies and procedures. The ADOA-GAO establishes these accounting policies and procedures and can be found in the State of Arizona Accounting Manual. Because AFIS is a complex accounting system, the ADOA-GAO also publishes an AFIS Reference Guide. Both of these manuals can be found on our website. It is highly recommended that persons involved in the processing of accounting transactions attend the AFIS training classes offered by ADOA through the Arizona Government University (AzGU). You may register for AFIS training classes on-line at https://azlibrary.gov/content/arizona-government-university-azgu or call the registrar at (602) 771-AzGU (2948).

There are many AFIS reports available. There are control, standard and requestable reports. Some are available on a daily, monthly or yearly basis. Amongst these reports are the monthly reports showing agency expenditures compared to appropriations that the ADOA is statutorily responsible for furnishing to each budget unit (A.R.S. § 35-131, C.). The report names are: Appropriation Activity Detail (DAFR7470, and Appropriation Activity Summary ( DAFR7480). These reports are both offered on microfiche. Most agencies obtain their financial reports via Control D, a software that allows agencies to view their reports on-line and to print at their location. Hard copy reports are sent to off-line agencies who do not have access to AFIS and Control D. You may contact your GAO liaison to discuss your agency's reporting needs.

Allotment Transfers

If a budget unit director deems it necessary, he/she may request that a portion of an allotment amount be transferred from one quarter to another. Once reviewed and approval or disapproval is recommended by the OSPB, the Director of the Department of Administration may independently decide to approve or disapprove the request. See A.R.S. § 35-173 for more detail and the State of Arizona Accounting Manual for specific instructions for Allotment Adjustments.

Allotments

The Governor has the authority to administratively move and, to a limited extent, control the allotment process. This authority may be used to reserve monies in the case of revenue shortfalls and to regulate spending by the State agencies.

An allotment is an appropriation made available for expenditures within a given time frame. In Arizona, this time frame is quarterly. No State agency, board or commission's expenditures may exceed its quarterly allotment.

If a budget unit director deems it necessary, he/she may request that a portion of an allotment amount be transferred from one quarter to another. Once reviewed and approval or disapproval is recommended by the OSPB, the Director of the Department of Administration may independently decide to approve or disapprove the request. See A.R.S. § 35-173 for more detail and the State of Arizona Accounting Manual for specific instructions for Allotment Adjustments.

Appropriations

1. The General Appropriations Act or Feed Bill, which finances the normal operations of a budget unit; 2. The Capital Outlay Appropriations Acts, which finance the construction or other acquisition of capital assets such as buildings, machinery or equipment; and, 3. Other Appropriation Acts, which finance expenditures otherwise not provided for. Other Appropriations are used to finance new projects or programs or to add funding to existing programs that are not covered by the General Appropriations Act or the Capital Outlay Appropriation Acts. Other Appropriation Acts are also used to increased a particular line item, project or program originally financed in the General Appropriation Act or a Capital Outlay Appropriation Act. Annually or biennially the General Appropriations Act is introduced and passed by the State Legislature and signed by the Governor. This "Feed Bill" is the authority granted to the various budget units to expend public monies for normal operations. The Appropriations may occur as one of three types: 1) Lump Sum; 2) Modified Lump Sum; and 3) line item Operating.

The Legislature has a legal responsibility to control budget unit spending. Control is exercised through the appropriations. Appropriations are both authorizations to spend and limitations upon spending. Under certain circumstances, a budget unit might be reimbursed for certain expenditures. If not accounted for properly, this might have the effect of making it seem that a budget unit spent less than it did. This, in turn, might make it seem that the budget unit could spend more than the Legislature had intended. In most circumstances, this is prohibited. In some cases, the reimbursement is not foreseen by the Legislature and so is not noted in the appropriation act. If this is true, the budget unit may be free to credit the reimbursement to the fund from which it operates. Under these circumstances, the budget unit must meet legal requirements and communicate certain information, in writing, about the reimbursement to the JLBC, the OSPB and the State Comptroller. This information may be found in A.R.S. § 35-142.01 and is outlined in GAO Technical Bulletin No. 00-8.

An appropriation is the expenditure authority granted to a State agency, board or commission or institution of higher education by the Legislature.

Auditing

The main difference between internal and independent audits is that internal audits are conducted by employees of the entity being audited; and, independent audits are conducted by individuals that are not in the employ of the entity being audited. Most of the larger agencies, such as Department of Transportation, Department of Economic Security, Department of Corrections, etc. have an internal audit section. Those agencies that desire internal audit services and do not have an internal audit section, may request those services from the ADOA-GAO. Additionally, ADOA-GAO services include performing internal audits on a rotational basis to help mitigate internal control risks of public monies. (A.R.S. § 35-181.02) The independent auditor for the State of Arizona is the Auditor General. Since this agency is part of the legislative branch, the Auditor General is appointed to a five year term by the Audit Oversight Sub-Committee of the Joint Legislative Budget Committee. The Auditor General is required to conduct his/her audits in accordance with Generally Accepted Auditing Standards as promulgated by the American Institute of Certified Public Accountants. The Auditor General may "contract out*" audits.

The State of Arizona is subject to Single Audit and A-133 requirements. Please see the "Financials" section of this website for additional information.

Auditing is defined as conducting an examination of a series of events or activities to verify that those events or activities are being maintained and recorded in accordance with established guidelines, policies and procedures. The examination should be conducted by an internal auditor on a periodic basis and by an independent auditor on an annual basis.

Budgets

Once the appropriations acts have been enacted by the Legislature and signed by the Governor, the Department of Administration has the authority and responsibility to control the appropriations. However, this does not absolve or take away the responsibility of each Director of budget units to monitor and control their individual appropriations. The Governor's Office of Strategic Planning and Budget requires that budget units load their appropriation by line item. This is accomplished by providing the line item breakdown to the ADOA-GAO. Directors may "budget*" the budget unit's appropriation. This will provide additional and more restrictive controls over the legislatively approved appropriations for the budget unit. Additionally, budgets are required to be loaded (at a minimum) at the same level the appropriations are loaded. For budget loading instructions, please refer to the joint OSPB and ADOA-GAO budget loading memorandum sent to all State Agencies on an annual basis. Contact the ADOA-GAO or OSPB for further information with regards to budgeting appropriations.

Capital Assets

Not necessarily. The State of Arizona Accounting Manual (SAAM) contains specific guidance for different types of assets. Moreover, certain types of assets?computer equipment as an example?are also subject to special stewardship and reporting requirements.

Yes. A great deal. The appropriate treatment of capital and non-capital assets is fully set forth in section II-G of SAAM. However, the following points are particularly important: * The acquisition of capital and non-capital assets is subject to the State Procurement Code. * The Surplus Property Management Office of the ADOA must be contacted before one can dispose of capital or non-capital assets. * Special rules apply when one wants to use periodic partial payments to acquire capital and non-capital assets. * Agencies are required to reconcile all of their expenditures for capital and non-capital assets each fiscal year. These reconciliations are filed with the GAO each year. * The GAO Liaisons are available to answer questions concerning capital and non-capital assets.

Discounts

Discounts, if available, should be pursued to the fullest extent possible. Taking advantage of discounts saves tax dollars.