PREPARATION OF PLAN OF FINANCIAL ADJUSTMENT - 8452.1-AUG-2018

(Revised: 08/2018)

Government Code (GC) section 11251 is the statute that authorizes the use of a general Plan of Financial Adjustment (PFA). Statutes which authorize the use of a PFA for federal funds are: GC section 16365 for the Federal Trust Fund; Education Code section 12060 for the Vocational Education Federal Fund; and Health and Safety Code section 100390 for the Public Health Federal Fund.

The format for a general PFA is shown in Illustration 1 below, and for federal funds in Illustration 2 shown below, and a combined PFA (general and federal) in Illustration 3 shown below. Each PFA must follow one of the illustrations; however, statute references, funds, and appropriations will vary.

The following items must be included in a PFA:

1. 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. Departments should review their PFA each year and update as necessary. If the PFA is no longer needed, notify the State Controller’s Office (SCO) and Department of Finance budget analyst.

   Departments can seek approval to establish a new clearing program by adding language to the PFA.

2. Identify the funds and 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 11-digit item code (ex. 8860-001-0001) 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.
3. 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 SCO. 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 Chapter 9200 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.
4. The frequency of transfer requests between the funds and/or appropriations covered by the PFA must be included. Transfers should be on a monthly basis, but can be more frequent if needed. Transfers should be for a one-month period, specify if it is actual or estimated, and months should not be combined.
5. The PFA must be certified by an authorized department officer.

Note: If the proposed PFA contains any incorrect or missing information, it will be returned to the department for correction.

Refer to SAM section 8452.2 for Approval of Plan of Financial Adjustment.

 

8452.1 Illustration 1

Department of Finance	State Controller
(Appropriate Budget Unit)	State Accounting and Reporting Division
915 L Street	3301 C Street, Suite 760
Sacramento, CA 95814	Sacramento, CA 95816

 

PLAN OF FINANCIAL ADJUSTMENT (No. _____)

We request that the Department of Finance and the State Controller approve the following Plan of Financial Adjustment (PFA) under Government Code Section 11251 to begin July 1, 20__ and to continue until __________, unless amended or rescinded.

We are also requesting to establish a clearing program in Budget Act of ______ (Year) Item ____-____- ____, effective on _________ (MM/DD/YY) (Remove if not needed)

1. As used herein, the following terms have the meanings set forth below:
   1. "Agency" means the Department of _______.
   2. "Primary Appropriation" means the main Budget Act appropriation for the support of the Department (e.g., Item ____-____- ____).
   3. "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 _______).
   4. "Covered Expenditures" means the expenditure incurred by the Agency properly chargeable to the Primary Appropriation or Special Appropriations.
2. All covered expenditures may be paid, in the first instance, from the Primary Appropriation.
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.
4. Once a month, the Agency shall 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. Such a transfer may be made on an estimated basis, if needed, and then must be followed by an actual expenditure transfer for the month.
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 transfer under this plan will be accompanied by such supporting detail as may be normally required by the State Controller and the Department of Finance.

Requests for transfers under this plan will be addressed to the State Controller’s Office, State Accounting and Reporting Division, 3301 C Street, Suite 760, 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 ___________
	Print Name ___________
	Signature ___________
	Title ___________
	Date ___________
	Telephone ___________
APPROVALS:
Approved by Department of Finance	Approved by State Controller
Print Name ___________	Print Name ___________
Signature ___________	Signature ___________
Title ___________	Title ___________
Date ___________	Date ___________
Telephone ___________	Telephone ___________

 

8452.1 Illustration 2

Department of Finance	State Controller
(Appropriate Budget Unit)	State Accounting and Reporting Division
915 L Street	3301 C Street, Suite 760
Sacramento, CA 95814	Sacramento, CA 95816

 

PLAN OF FINANCIAL ADJUSTMENT (No. ______)

We request that the State Controller and the Department of Finance approve the following Plan of Financial Adjustment (PFA) under Government Code Section 16365 for the Department of __________ to transfer and account for expenditure of Federal funds held in the Federal Trust Fund. The plan is to become effective July 1, 20__, and to continue until _______, unless amended or rescinded.

We are also requesting to establish a clearing program in Budget Act of ______ (Year) Item ____-____-____, effective on __________ (MM/DD/YY) (Remove if not needed)

1. As used herein, the following terms have the meanings set forth below:
   1. "Agency" means the Department of _______.
   2. "Primary Appropriation" means the main Budget Act appropriation for the support of the Department (e.g., Item ____-____-____).

      Note: If the plan is to cover several appropriations, an attachment may be used.

   3. "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 on Form AUD 10A.
   4. "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 primary 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.
4. Once a month, the Agency shall file a request with the State Controller to transfer from the Primary Appropriation as established under “1.b.,” above, an amount which equals expenditures determined under “3,” above which are chargeable to the Special Appropriations. Such a transfer may be made on an estimated basis, if needed, and then must be followed by an actual expenditure transfer for the month.
   1. 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

   2. 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 may be normally required by the State Controller and the Department of Finance.

Requests for transfers under this plan will be addressed to the State Controller’s Office, State Accounting and Reporting Division, 3301 C Street, Suite 760, 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 ___________
	Print Name ___________
	Signature ___________
	Title ___________
	Date ___________
	Telephone ___________
APPROVALS:
Approved by Department of Finance	Approved by State Controller
Print Name ___________	Print Name ___________
Signature ___________	Signature ___________
Title ___________	Title ___________
Date ___________	Date ___________
Telephone ___________	Telephone ___________

 

 

8452.1 Illustration 3

Department of Finance	State Controller
(Appropriate Budget Unit)	State Accounting and Reporting Division
915 L Street	3301 C Street, Suite 760
Sacramento, CA 95814	Sacramento, CA 95816

 

PLAN OF FINANCIAL ADJUSTMENT (No. _______)

We request that the Department of Finance and the State Controller approve the following Plan of Financial Adjustment (PFA) under Government Code Sections 11251 and 16365 to begin July 1, 20__ and to continue until ______, unless amended or rescinded.

We are also requesting to establish a clearing program in Budget Act of _______ (Year) Item ____-____-____, effective on _______ (MM/DD/YYYY) (Remove if not needed)

1. As used herein, the following terms have the meanings set forth below:
   1. “Agency” means the Department of ________
   2. “Primary Appropriation” means the main Budget Act appropriation for the support of the Department (e.g., Item ____-____-____).
   3. “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 ______, Statues of _______).

      Note: If the plan is to cover several appropriations, an attachment may be used.

   4. “Covered Expenditures” means the expenditure incurred by the Agency properly chargeable to the Primary Appropriation or Special Appropriations.
   5. “Federal Trust Fund Accounts” are specific accounts created in the Federal Trust Fund to hold Federal funds as approved by the State Controller’s Office on Form AUD 10A.
2. All covered expenditures may be paid, in the first instance, from the Primary Appropriation.
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.
4. Once a month, the Agency shall file a request with the State Controller to transfer from the Primary Appropriation as established under “1. b.,” above, an amount which equals expenditures determine under “3,” above, which are chargeable to the Special Appropriations. Such a transfer may be made on an estimated basis, if needed, and then must be followed by an actual expenditure transfer for the month.
   1. As an advance as authorized by Government Code Section 16365(b), an amount the Department anticipates will be expended for the purpose of the Federal funds.

      or

   2. 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 transfer under this plan will be accompanied by such supporting detail as may be normally required by the Department of Finance and the State Controller.

Requests for transfers under this plan will be addressed to the State Controller’s Office, State Accounting and Reporting Division, 3301 C Street, Suite 760, 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 ___________
	Print Name ___________
	Signature ___________
	Title ___________
	Date ___________
	Telephone ___________
APPROVALS:
Approved by Department of Finance	Approved by State Controller
Print Name ___________	Print Name ___________
Signature ___________	Signature ___________
Title ___________	Title ___________
Date ___________	Date ___________
Telephone ___________	Telephone ___________