TO: Controllers and Chief Fiscal Officers of State Departments and Institutions of Higher Education
FROM: Robert Jaros, State Controller
DATE: December 19, 2024
SUBJECT:
- New Revenue Source Codes
- New Revenue Source Class Codes
- December SLFRF Reallocations Authorized in House Bill 24-1466
- Accrual of Unencumbered Unpaid SLFRF Expenditures Incurred in December
- Accounting Clarifications for ARPA Refinance Funds
- Budget Clarifications for SFLRF Funds
- Budget Clarifications for Refinance Funds
- SLFRF FY24 Year-End Clarifications
- Capital Asset Threshold Change for Equipment from $5,000 to $10,000 Effective October 1, 2024
- OSC Staffing Changes
New Revenue Source Codes (RSRC)
- RSRC 1403 – Cigarette Tax and License – TABOR Exempt for use by DOR to record exempt revenue pursuant to HB24-1469.
- RSRC 4113 - Gaming Taxes, Distributed to Cities & Counties - TABOR Exempt for use by DOR to record exempt revenue pursuant to HB24-1469.
- RSRC 4114 - Gaming Taxes, 20% Distributed to History Colorado - TABOR Exempt for use by DOR to record exempt revenue pursuant to HB24-1469.
- RSRC 4231 – Natural Medicine License Fees for use by DOR to record fees pursuant to C.R.S. 44-50-601(3)(a).
- RSRC 4232 – Firearm Dealer Permit Fees for use by DOR to record fees pursuant to C.R.S. 18-12-401.5(2)(c)(I).
- RSRC 3803 – Support Surcharge Rate Revenue for use by CDLE to record support surcharge rate revenue pursuant to C.R.S. 8-76-102.5(3)(a)(IV).
- RSRC 4234 – Child Welfare Licensing Fees for use by CDHS to record revenue pursuant to C.R.S. 26-6-907(4)(b).
New Revenue Source Class codes (RSCLS)
- LGTE – Limited Gaming TABOR Exempt
- CTEX – Cigarette Tax TABOR Exempt
December SLFRF Reallocations Authorized in House Bill 24-1466
House Bill 24-1466 authorized the Governor’s Office to reallocate any unobligated SLFRF dollars as of December 1, 2024 to ensure that all SLFRF funds are fully obligated by December 31, 2024. Departments will use the SLFRF LZ6 funding source code reversion process (FPM, Chapter 3, Section 8.6.7) to return any reallocated funds. Departments and IHEs must also complete a reversion budget document for the amount reallocated as described in the SLFRF Budget clarification paragraph below. As a result of the federal obligation deadline, SLFRF budgets are effectively final as of December 31, 2024.
Accrual of Unencumbered Unpaid SLFRF Expenditures Incurred in December
For costs incurred in December, but for which an encumbrance document does not exist, a manual accrual should be recorded in CORE by December 31. The type of costs that typically fall in this category include salaries, PCard and small dollar purchases, and indirect costs. Do not use an ACC/ACL document as these documents are designed to cross fiscal years. Record any such accruals using a JV type document. Make any needed adjustment to actual in January. In Gravity reporting for the quarter ending December cycle, include the accrued costs with an equal amount as obligated for these unencumbered costs.
Because IHEs that do not operate directly in CORE, the recording of an accrual in IHE systems are optional. However, IHEs are responsible to report December unencumbered incurred expenditures in Gravity along with the matching obligation in the same manner as state agencies.
Because there is not a similar obligation date requirement with Refinance “R” funds, accruals are not needed for the refinanced portions of projects.
Accounting Clarifications for ARPA Refinance Funds
Cash transfers were completed to reduce the SLFRF projects and fund the Refinance projects for appropriated SLFRF projects based on House Bill 24-1466.
Any transfers needed based on subsequent Interagency Agreements (IA) need to be completed by state agencies and institutions of higher education.
- For reimbursement basis IAs, the coding for Refinance “R” fund reimbursement shall revert to regular state coding, whether that be related to state pass-thru grants, purchased services, or operating transfers. Any portion remaining in SLFRF funds will need to continue to be reimbursed using SLFRF transfers.
- For advance-funded IAs, the funding agency will need to clear the SLFRF advanced balance and the recipient agency or IHE will need to move the cash between the SLFRF and Refinance “R” fund based on the Funding Source Change Letter.
Budget Clarifications for SFLRF Funds
Reversions of legislative SLFRF budgets shall be completed with an SAI 6 spending authority indicator code, which includes budget reductions for funds reallocated by the Governor’s Office. Budget reductions for any unutilized spending authority for related SLFRF Interagency Agreements can be processed using an SAI of 45 or 6, although 6 is preferable. For Interagency Agreements that are amended down to actual spending in the close-out process, the amended document drives the change in spending authority and shall be recorded in the same manner as the original IA. For example, the Governor’s IAs close-out amendment reductions shall be recorded using an SAI 44 since that is how originally recorded.
Budget Clarifications for Refinance Funds
Common budget scenarios for Refinance “R” funds include:
- Carryforwards: Initial FY25 Carryforwards were processed using SAI 10, based on the ARPA Refinance Bill that authorized the swap of funding sources under the existing statutory SLFRF timelines. Future carryforwards will be processed in the same manner for both legislated and Interagency Agreement unobligated balances in Refinance “R” funds.
- Refinance Interagency Agreements: Refinance Interagency Agreements need to be recorded using with a statutory spending authority indicator (SAI 10) referencing House Bill 24-1466 as the citation authorizing the budget.
- Reversions: Upon completion of a Refinance project or related Interagency Agreement, process an SAI 6 or SAI 10 budget document, although an SAI 6 is generally preferable. If cash needs to be transferred back to the Governor’s Office, establish a *CLZ6* appropriation unit with SAI 10, similar to the coding structure for SFLRF budgets that are segregated to return cash. Note that the return of funds shall be completed as a regular 7A0*/9A0* series operating transfer.
SLFRF FY24 Year-End Clarifications
The following clarifications were distributed from the SLFRF mailbox on August 1, 2024. They are included in this Alert to ensure the completeness of SLFRF guidance.
- Funding Source Code 980 ARPA Refinance Cash Transfer Appropriations
Appropriations were created in the 980 funding source codes to support the HB24-1466 ARPA refinance cash transfers; federal for the federal project reduction transfers back to the main ARPA Cash Fund in FY2024 and cash for transfers to the projects as backfill from state funds in FY2025. No departmental action is required for the 980 funding source code appropriation units. Revenue is not required to support the FY2024 federal transfers, and fund balance from prior year transfers to the project is the funding source for these transfers. - ARPA Refinance Cash Budgets
The OSC will carryforward cash budgets from FY2024 to FY2025 as part the process to carryforward SLFRF federal funds. Rollforward requests or manual budget documents are not required. You may establish a $0 FY2025 budget line item if you need to utilize the refinance appropriation prior to the carryforward that will occur in early September. - SLFRF Overexpenditure Form Signature Requirement Reduced
To facilitate the overexpenditure reporting process, the Controller may sign the overexpenditure forms instead of the Executive Director or IHE President. This exception only applies for SLFRF federal overexpenditures resulting from the ARPA Refinance. - Revenue Recording for SLFRF Overexpenditures
Federal Revenue should be recorded to cover all FY2024 federal expenditures, even if the federal appropriation is overspent. This will result in an abnormal unearned revenue balance in the amount of the overexpenditure. This abnormal balance should remain with an explanation on the diagnostic reports that the abnormal balance is due to the overexpenditure. If stand-alone financial statements are impacted as a result of this direction, please reach out to the OSC for further guidance. Related to SLFRF overexpenditures, this could result in deficit cash depending on the nature of the expenditures. If this is the case, this will also need to be noted on the diagnostic reports and an advance will be required through the year-end workbook process.
Capital Asset Threshold Change for Equipment from $5,000 to $10,000 Effective October 1, 2024 (will be updated in CORE on Friday 12/20/2024)
Please be advised that Uniform Guidance for the capitalization threshold for equipment has changed. Absent specific program guidance or an agency/institutional election to postpone implementation, as of 10/1/2024 equipment should only be capitalized when the value of that asset equals or exceeds $10,000 (per unit). Additional information in regards to CORE configuration will be send out separately from the FAR mailbox. CORE thresholds will be updated as of Friday 12/20/2024.
OSC Staffing Changes
There are a number of OSC staffing changes since the last Alert. Michelle Whistler has been named manager of the Central Accounting and Vendor Operations Team, with Komal Tank backfilling her former position on the team. Kaila Terrell and Jeramy Martin have joined Central Payroll, and Louis Pantalacci and Jessra Snyder the ARPA Compliance Team. Finally, Deanna Fisher is the newest member of the Risk Management team as its deputy.