TRANSFER OF FUNDS TO THE ARCHITECTURE REVOLVING FUND (ARF) - 6811

(New: 03/2025)

 

Section 14957 of the Government Code establishes the Architectural Revolving Fund (ARF) which receives, through transfer, funds for the following related to the betterment and new construction of state-owned buildings: Studies, New construction, Major construction and equipment, Minor construction, Maintenance, Improvements, Equipment, and other building and improvement projects.

 

Transfers to the ARF require approval from Finance. Money in the ARF is available without regard to fiscal year for the purposes for which it was transferred; however, funds in the ARF will revert to the originating fund source if they are not encumbered within three years of being transferred or three months of project completion (Section 6832) in accordance with Government Code section 14959. DGS tracks expenditures from the ARF and generates a Return of Funds Transfer report for any unencumbered balance that remains beyond the earlier of these time frames. Extended availability for funds transferred to the ARF may be requested from Finance.

 

Transfer of non-bond funds: the Public Works Project Authorization and Transfer Request form (Form 22), is used to request the transfer of non-bond funds into the ARF. This form is initiated by DGS when it serves as project manager. This form is available from DGS.

A separate Form 22 is used to request the transfer of funds to ARF for each budgeted phase of a capital outlay project. This type of transaction is approved by the Finance capital outlay analyst for the department.

The Form 22 is also used to transfer support funding for facility special repairs expenses (such as painting or carpet replacement) which are classified as state operations. This type of transfer is approved by the Finance support analyst for the department.

Except as allowed in Section 6.00 of the Budget Act, transfer of support funds to ARF for capital outlay purposes is not allowed (Sections 6803 and 6804). Transfers of support funds to the ARF using Section 6.00 must be approved by both the Finance support analyst and capital outlay analyst.

Due to the volume of proposed Form 22s at the end of the fiscal year, and the potential for incorrect classification of the request, departments must allow extra time for verification by Finance of the nature of—and need for—the transaction. Proposed transfers to the ARF which cannot be verified in the time available will not be approved.

Transfer of Bond Funds: a bond proceeds Public Works Project Authorization and Transfer Request form (Form 220) is used for the same purpose as a Form 22 when projects are bond funded. The form is used to request SCO reserve a portion of the department’s project appropriation authority in a separate account within the appropriate bond fund. This reserve is used to reimburse ARF for actual expenditures. This form is initiated by DGS when it serves as project manager. This form is available from DGS.

All transfer requests from lease-revenue bond funds must be submitted first to Finance’s Capital Outlay unit to determine whether the purpose of the expenditure is lawful under the bond indenture and state/federal tax law. This applies whether or not the transfer is for a support purpose. The Capital Outlay unit will then coordinate the request with the appropriate support unit within Finance.

For budgetary purposes (as distinguished from cash flow purposes), Form 220 is treated as an encumbrance recorded in the fiscal year in which approved by Finance. Departments which manage their own projects do not use Form 220.

STD. 22 and STD. 220 Transfer Request Instructions: Requests to transfer funds to the ARF are initiated by DGS and sent to departments for review prior to submission to Finance for approval. Departments should review forms for completeness and accuracy before signing the request. The description of project section should include information on the scope and phase for capital outlay projects. A clear description of the intended use of funds should be included for support requests. References to items should include schedule and subschedule details where applicable.