Appropriated Loan Receivables (ALRs) result when State money is appropriated and subsequently loaned or advanced to non-State agencies pursuant to State Finance Law Section 40-a. ALRs anticipate future repayment from the recipient or future reimbursement from third-party sources.

Loans are made to recipients (generally Public Benefit Corporations, Public Authorities or various localities) in accordance with appropriations enacted by the State Legislature, most frequently for capital purposes. Section 40-a further provides that no part of any appropriation made as an advance shall be made available for expenditure until a written repayment agreement is entered into by the agency, authority, fund or corporation to which the appropriation is made and the Director of the Budget. This repayment agreement must also be approved by OSC Bureau of Contracts (OSC BOC).

Note: Per Section 93 of the State Finance Law, Repayment Agreements are not needed for Capital Appropriations or bond fund reimbursable Loans or Advances from the Local Aid fund.

Establishing an ALR

Appropriations containing advance authorization pursuant to SFL Section 40-a are assigned a designated ALR budgetary program value which is included in the KK_REV budget definition and used by OSC Bureau of State Accounting Operations (BSAO) Budgets and Spending Unit to establish the spending and revenue budgets. With all of these factors in place the spending and revenue can be tracked via the NYAR0473 –Appropriated Loan Receivables report.

To run the NYAR0473, navigate to Accounts Receivable > Report > Appropriated Loan Receivables.

Agencies should review their enacted budget bills each fiscal year and notify OSC BSAO of any new ALR programs. Once an ALR is identified, OSC BSAO will submit a request to SFS to add the new budgetary program value for that appropriation to the KK_REV budget definition. Agencies should also contact DOB to begin the formal contracting process. Once the contract is approved by the agency, DOB, and the Attorney General, it is submitted to OSC BOC for approval. OSC BOC will assign a contract number with a prefix of “F” indicating that repayment to the State is expected. See Chapter XI, Section 2.B - Contract Prefixes. Agencies must then file a copy of the approved repayment agreement with OSC BSAO Budgets and Spending Unit in order for the segregation to be made available for payment.

The ALR may be assigned one of three “Loan Statuses” depending on the appropriation language and the recipient. OSC BSAO reviews the budget language to determine the appropriate status. The loan status also dictates the account code to use when recording repayments. The loan status can be found on the NYAR0473 and is described in the chart below:

Repayments

When a repayment is received for an ALR, a Direct Deposit in the AR module should be submitted by the agency. In order to properly credit the ALR, it is critical that all chartfield values are accurate including the designated ALR program value. If any invalid/incorrect chartfield values are used on a repayment transaction, the receivable record will not be properly updated, resulting in the misstatement of receivable balances reported on the NYAR0473. Agencies should review the NYAR0473 after every payment and repayment is posted to ensure the receivable record has been properly updated.

Annual Confirmations

Every year letters are sent to the cognizant state agencies and/or authorities requesting that they confirm the accuracy of the receivable balances shown on the NYAR0473. A response is required for each confirmation request. Responses are reviewed by OSC BSAO – Budgets and Spending Accounting and any corrective actions necessary are made to bring the accounts in balance. Balances on the NYAR0473 that are overstated due to the use of incorrect chartfields on a repayment transaction, must be corrected by debiting the incorrect chartfields and account and crediting the correct chartfields and account on a General Ledger Journal Entry.

Reporting

A summary of ALR annual activity is reported in Schedules 10-13 of the State’s Cash Basis Annual Report on State Funds.

Guide to Financial Operations

REV. 07/19/2019