An appropriation is a statutory authorization against which expenditures may be made during a specific State fiscal year, and from which disbursements may be made, for the purposes designated, up to the stated amount of the appropriation. Appropriations generally are authorizations, rather than mandates, to spend and disbursements from an appropriation need not, and generally do not, equal the amount of the appropriation. An appropriation represents maximum spending authority. Appropriations may be adopted any time during the fiscal year, although generally an appropriation becomes available at the beginning of the State's fiscal year (April 1) and becomes unavailable, except for liabilities already incurred at the close of the State's fiscal year (March 31).

Appropriations which have liabilities incurred continue to be available until the lapse date for that budget pursuant to State Finance Law §40. The Office of the State Comptroller (OSC) is responsible for monitoring expenditures, pre-encumbrances and encumbrances during the year to ensure that appropriation amounts are not exceeded.

There are four types of appropriations. Each has a different purpose and restrictions on types of payments which can be made from them. The four types are:

• Aid to Localities appropriations support grant payments with disbursements coded to the grant account codes.
• State Operations appropriations support the operation of the State agency with payments coded to the personal service and non-personal service account codes.
• Capital Project appropriations support capital construction project disbursements.
• Debt Service appropriations support tax-financed State debt service on long-term debt; contractual obligation and lease-purchase arrangements with several public authorities and municipalities; and lease-purchase payments for State Universities, Health and Mental Hygiene facilities and various highway projects.

A segregation is the authorization issued by the Division of the Budget (DOB) to expend part or all of an appropriation. It is used as one control device to limit the amount of funds that may be disbursed against an appropriation. Effective October 1, 2015, within SFS, there are two kinds of segregations – available and reserve. Any amount budgeted as available can be used for expenditures or the encumbering of purchase requisitions and/or purchase orders. Any amount in the reserve is not available for any type of financial transaction. The sum of the available and any reserve segregations will total the appropriation amount.

Beginning April 1, 2016, once the State’s annual budget is enacted, DOB will authorize OSC to segregate the appropriations included and identify any amounts that should be set aside in the reserve segregation. This new business process means that State Agencies will no longer submit to DOB budget journals to segregate their budget authority. State Agencies will only submit Budget Transfers and/or InterUnit Budget Transfer Journals within SFS to move budget authority between appropriations or between the reserve and available segregations. These journals generally originate at the individual agency and are workflowed to DOB for approval. For more detailed information on these types of movement, refer to Section 3.A – Budget Transfers Overview of this Chapter.

It is essential that State Agencies ensure that disbursements do not exceed the statutory appropriation amounts. It is the agency’s responsibility to correct any negative balances in a timely manner.

Agencies should use NYKK0264 – Negative Segregation Balance report to identify these negative balances.

To run the report, navigate to SFS Financials > Commitment Control > Budget Reports > Negative Segregation Balance. The report can be viewed in Report Manager or through the Process Monitor > Details > View Log/Trace.

Guide to Financial Operations

REV. 09/15/2015