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Financial Terminology

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A

Account
An account is a subdivision of a fund and refers to a classification by which information on particular financial transactions and financial resources is recorded and arranged.
Advance
An advance is a payment by the State on behalf of an agency, an authority, a fund, a public benefit corporation, or the Federal government that must be reimbursed by such entity. Certain advances are made from the Capital Projects Fund for pre-financing the cost of capital projects undertaken by public authorities, State agencies or localities.
All Governmental Fund
All Governmental Funds is a term referring to all State government funds within the following fund types: General, Special Revenue, Capital Projects and Debt Service. In a discussion of appropriations rather than cash figures, All Funds includes All Governmental Funds appropriations plus appropriations made from the non-governmental (Proprietary and Fiduciary) fund types.
Allocation (see also Segregation)
Authorizes expenditures from appropriated funds for specified purposes, activities or objects. It is used as a control device for appropriated funds (e.g., quarterly allocations) and to distribute lump-sum appropriations within State agencies.
Amendments to the Budget
The State Constitution permits the Governor to amend or supplement the Executive Budget within 30 calendar days after its submission or, with the consent of the Legislature, at any time before the close of the legislative session. Such revisions, additions or deletions, conveyed to the heads of the fiscal committees in a memorandum, reflect necessary corrections or responses to new situations or conditions arising after the preparation of the Executive Budget.
Annual Internal Control Review Report
The Annual Internal Control Review Report is a report by each covered organization describing certain aspects of its internal control system. It may include procedures, schedules and follow-up on vulnerability assessments, internal control reviews and education and training efforts. The report is a companion to and supports the latest Internal Control Act certification from the agency.
Annualization
Annualization refers to the expected full-year financial implications of a revenue item or an expenditure item initially budgeted for only part of a fiscal year.
Apportionment
Transfers part of an appropriation from certain lump-sum “all State departments and agencies” appropriations to specific agencies.
Appropriation
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. Under the Constitution, an appropriation may be made for no longer than a two-year period.
Appropriation-Backed Bonds
Appropriation-backed bonds refers to long-term obligations sold by the State’s public authorities under a variety of financial arrangements — primarily lease-purchase and contractual service agreements. Debt service on such obligations is appropriated annually by the State, although the State has no legal obligation to continue to make such appropriations. This form of debt represents an important source of financing for capital projects in the State’s transportation, criminal justice, mental hygiene, education, health, and housing programs.
Attrition
Attrition refers to a method of achieving a reduction in personnel by not refilling positions that are vacated through resignation, reassignment, transfer, retirement, or means other than layoffs.

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B

Bond Anticipation Notes
Bond anticipation notes (BANs) are short-term notes which occasionally may be sold by the Comptroller to finance capital expenditures until long–term bonds are sold. Since these obligations are outstanding for no more than two years (with certain exceptions), the interest rates paid on such obligations are typically lower than that for long-term bonds.
Bondable Capital Spending
Bondable capital spending refers to disbursements for capital purposes which, by statute, may be financed by the proceeds of bonds or other debt obligations.
Budget Request Manual
The Budget Request Manual provides instructions and forms for use by agency fiscal officers in the submission of their budget request each fall. The Manual is developed and issued by the Division of the Budget’s Budget Services Unit.

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C

Cap
Cap refers to an absolute dollar limit placed on spending and/or borrowing for a designated activity or program. The term is sometimes used to refer to the limitation of a disbursement for the current and/or forthcoming fiscal year(s) to the level of the preceding fiscal year or to some other predetermined level.
Capital Projects Funds
These funds finance such capital construction costs as: planning, land acquisition, design, construction, construction management and supervision, and equipment costs attributable to: highway, parkway and rail preservation projects; outdoor recreation and environmental conservation projects; buildings and other capital facilities required by various State departments and agencies.

Capital Projects funds also finance aid payments to local governmental units and public authorities to help finance the following types of capital programs: highway, parkway, bridge, mass transportation, aviation, economic development, port development, community colleges, community and State mental health, outdoor recreation, State-assisted housing and environmental quality; and advances for capital construction costs reimbursable by public authorities, instrumentalities of the State, the Federal government or local governments.

Sources of revenue for this fund type include transfers from the General Fund, dedicated taxes and other revenues, reimbursement of advances, other State funds including bond proceeds, and Federal capital grants.
Carryover
A carryover is the balance of an appropriation that remains at the end of the fiscal year for which it was appropriated (and where it has not been repealed or reappropriated), against which liabilities were incurred (i.e., an obligation exists) but for which cash payments were not disbursed before the end of the fiscal year. Disbursements may be made against a carryover balance through June 30 of the following fiscal year to liquidate any such liabilities for State operations, or through September 15 for aid to localities, capital projects and debt service.
Certificates
Certificates of several types are issued by the Budget Director to authorize various fiscal actions. Copies of all certificates must be sent to the State Comptroller and to the chairpersons of the two legislative fiscal committees.
Certificate of Allocation
A certificate of approval for allocation of appropriated funds.
Certificate of Approval
For State Operations, and in some cases Aid to Localities, a certificate of approval issued by the Budget Director formally authorizes certain financial transactions. These transactions include allocations or segregations, apportionments and interchanges.
Certificate of Approval of Availability
For Capital Projects, a certificate of approval of availability issued by the Budget Director in accordance with an appropriation authorizes the State Comptroller to encumber, expend and disburse funds to the extent required for specific projects or phases of projects.
Certificate of Transfer
A certificate of transfer authorizes the transfer of appropriation authority and/or positions between agencies and/or funds. All such transfers must be specifically authorized in statute. Transfers of appropriation authority must be distinguished from operating transfers which move moneys (cash) between funds or accounts.
Certificates of Participation
Certificates of Participation represent shares of lease-purchase payments for personal or real property made by State agencies. These tax-exempt certificates are sold publicly or privately to investors by the Comptroller, pursuant to Article 5-A of the State Finance Law. These payments are not State debt under Article VII of the State Constitution and are subject to annual appropriation.
Certification
Certification is the annual affirmation by each agency that it is in conformance with the requirements of the Internal Control Act of 1987, which prescribed the establishment and maintenance of a system of internal controls and a program of internal control review by State agencies and certain public authorities. Agencies may submit a plan to achieve compliance with the Act in lieu of a certification.
Chargeback
Chargeback refers to an assessment levied by the State on another government or other entity (e.g., a public authority, a private-sector enterprise, a trade association, or a nonprofit organization) for payment of costs incurred by the State in administering an activity or program on behalf of such government or entity. It may also refer to an assessment by one State agency against another.
Commercial Paper
Commercial paper refers to a form of short-term obligation sold by the State and issued by the Comptroller. These are general obligations of the State and are outstanding for only short periods — sometimes only days — and, therefore, have much lower interest rates than do long-term bonds. Obligations can be sold up to a statutory maximum of $500 million, but must be replaced within two years with long-term bonds. As a result, a portion of a general obligation bond sale may be used to “take-out” commercial paper which has been outstanding the maximum two years, rather than to directly reimburse a capital expenditure.
Community Projects Fund
This fund was created in legislation accompanying the 1996-97 Budget to provide a fund to track various community projects.
Comprehensive Construction Programs
Capital Projects appropriations are structured as follows: one or more comprehensive construction programs (CCPs), which may or may not relate to agency programs or other organizational arrangements; a grouping of appropriations into one or more purposes within CCPs, which may or may not relate to other agency organizational structures; and one or more appropriations or projects in each purpose.

Some appropriations have “project schedules” that list institutions or projects for which construction work will be done.
Constitutional property tax limits
The New York State Constitution (Article VIII, Section 10) limits the amount of real property taxes that cities, villages, and counties may raise each year for operating purposes. Cities outside of New York City and villages may each levy an amount equal to no more than 2 percent of the five-year average full valuation of taxable property in the city or village. The limit for New York City is set at 2.5 percent of its five-year average full valuation of taxable property. Counties may each levy an amount equal to no more than 1.5 percent of the five-year average full valuation of taxable property in the county, a limit that may be increased to as much as 2 percent subject to the approval of two-thirds of the county legislature or of a majority of the county legislature and a majority of voters in a referendum.
Contingency Reserve Fund
This fund was created in legislation accompanying the 1993-94 budget to provide a reserve to fund extraordinary needs arising from litigation actions against the State. Use of this fund is restricted to litigation cases of $25 million or more, and requires an appropriation to access.
Corrective Action Plan
Corrective Action Plan is a step-by-step plan of action and schedule for resolving the internal control weaknesses identified by a vulnerability assessment or internal control review.
Credit Rating
A credit rating is assigned by a non-governmental agency serving the financial market (such as Standard & Poors, Moody’s Investor Service, and Fitch), and represents the relative security behind a given debt. The ratings indicate the relative likelihood of repayment of debt service liabilities by a specific issuer.

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D

Debt Service Funds
All tax-financed State debt service on long-term debt and payments on certain lease-purchase or other contractual obligations are paid from debt service funds. These account for the accumulation of money for, and the payment of principal and interest on, general long-term debt and certificates of participation.

Lease-purchase payments for State University, Health and Mental Hygiene facilities, and for highway construction, reconstruction, reconditioning and preservation under contractual agreements with public authorities are also paid from funds classified as debt service funds. Debt service on highway bonds supported by dedicated highway revenues is also reflected in this fund type.

Sources of revenue for this fund type include transfers from the General Fund, dedicated taxes and other revenues.
Deficiency Appropriation
A deficiency appropriation is used to meet actual or anticipated obligations not foreseen when the annual budget and any supplemental budgets were enacted and for which the costs would exceed available spending authorizations. It might add to a previously authorized appropriation anticipated to be inadequate, or provide a new appropriation to finance an existing or anticipated liability for which no appropriation exists. A deficiency appropriation usually applies to the fiscal year during which it is made.
Deficit
A deficit, for purposes of the cash-basis Financial Plan, is an excess of disbursements over receipts at the end of a fiscal year. On a GAAP basis, a deficit is an excess of expenditures or expenses over revenues at the end of a fiscal year.
Disbursement
A cash payment against a specific appropriation.

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E

Encumbrance
This provides a mechanism for reserving all or a portion of an appropriation for future expenditure. Entering into a contract usually requires an encumbrance, although the funds will be expended or disbursed over a period of several months. Encumbrance accounting enables management to avoid spending in excess of authorized appropriations.
Executive Budget
This term refers to the structure and process of the constitutional system of budgeting in New York State which gives the Governor primary authority and responsibility for budget formulation, presentation and execution. More specifically, it refers to the Governor’s constitutionally mandated annual submission to the Legislature containing his plan of recommended appropriations, expenditures and cash disbursements necessary to carry out programs, along with estimates of revenues and cash receipts expected to be available to support these expenditures and disbursements for the forthcoming fiscal year. The State Constitution requires explicit recommendations for making changes to the current revenue structure and legislation to implement such recommendations.

Pursuant to the Constitution, the Governor’s Executive Budget must incorporate the appropriation requests of the Judiciary and the Legislature as they are received from these bodies, although they are not part of the executive branch of State government. While the Governor may not alter their requests, the Governor may comment on them and recommend changes.

The Constitution requires submission of the Budget on or before the third Tuesday after the first Monday in January, except in years following gubernatorial elections when it must be submitted by February 1.

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F

Fiduciary Funds
Agency Funds
These funds are used to account for funds held by the State in a purely custodial capacity. Cash is held temporarily until disbursements are made to individuals, private organizations or other governments.

Pension Trust Fund
This fund is used to account for the cash basis results of operations for the administration portion of the State’s Common Retirement Fund. It does not reflect investment activity, balances, or other assets available to this fund. In addition, pension contributions and payments to retirees are excluded since these payments are not required to be appropriated.

Private-Purpose Trust Funds
These funds are used to report all other trust arrangements under which principal and income benefit individuals, private organizations, or other governments.
Financial Plan
A financial plan is a comprehensive outline of a government’s financial resources and spending requirements.
Fiscal Year
A fiscal year is the accounting period on which a budget is based. The State fiscal year runs from April 1 through March 31. The Federal fiscal year runs from October 1 through September 30. The fiscal year for all New York counties and towns and for most cities is the calendar year. New York City and the City University of New York, and independent school districts in the State operate on July 1 through June 30 fiscal years. For most villages, the fiscal year runs from June 1 through May 31. Other cities and villages in New York State have varying fiscal years.
Fixed Assets
Fixed assets are assets of a long-term character, such as land, buildings, machinery, equipment and improvements other than buildings, which are intended to continue to be held or used. General fixed assets include all fixed assets not accounted for in proprietary funds or in trust and agency funds. Under GAAP, general fixed assets are recorded in an account group (which does not involve the measurement of results of operations), rather than in a fund, and the recording of “infrastructure” assets and depreciation is not required.
Full Time Equivalent (FTE)
Full Time Equivalent (FTE) is a unit of measure which is equal to one filled, full time, annual-salaried position.
Full valuation of taxable real property
The full valuation of all the taxable real property in a municipality is the estimated current market value of all the property in the municipality that is not tax exempt.

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G

Generally Accepted Accounting Principles (GAAP)
Generally Accepted Accounting Principles (GAAP) for governments are uniform minimum standards and guidelines for financial accounting and reporting as promulgated by authoritative national standard-setting bodies, primarily the National Council on Governmental Accounting (NCGA); its successor, the Governmental Accounting Standards Board (GASB); and the American Institute of Certified Public Accountants (AICPA).

New York presents its State financial plan and Executive Budget on both a cash basis and in accordance with GAAP. Projected operating results in the General Fund as measured on the cash basis of accounting differ from projections measured in accordance with GAAP. Generally, these differences are caused by the inclusion of certain funds in the GAAP General Fund which are outside the cash basis General Fund plus the recognition of differences between cash and GAAP.
General Fund
This is the major operating fund of the State. It receives all State income not earmarked for a particular program or activity and not specified by law to be deposited in another fund. State income for financial plan purposes consists of moneys deposited to the credit of the General Fund during the fiscal year from current revenues (taxes, fees, and miscellaneous receipts including certain repayments of State advances) and transfers. General Fund income finances disbursements from its two operating accounts — the Local Assistance Account and the State Purposes Account — and transfers to other funds.
General Obligation Bonds
General obligation bonds refer to long-term obligations of the State, used to finance capital projects. These obligations must be authorized by the voters in a general election, are issued by the Comptroller, and are backed by the full faith and credit of the State. Under current provisions of the Constitution, only one bond issue may be put before the voters at each general election, and it must be for a single work or purpose. The amount of general obligation bond or note proceeds which the State expects to issue in a given fiscal year is shown in the Capital Projects fund-type of the Governmental Funds Financial Plan in the Other Financing Sources category. Debt service must be paid from the first available taxes whether or not the Legislature has enacted the required appropriations for such payments.

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I

Impoundment
Impoundment is the term used to describe the setting aside, in a separate account, of income necessary to pay principal and interest on obligations. The specific method of impoundment — including the timing and amounts — is generally specified by State law for each obligation, and is an integral element of the security behind any obligation.
Interchange
This is the movement of funds by certificate to increase or decrease the funds for any item within the same program or purpose appropriation schedule. Currently, in accordance with the State Finance Law, within a given Fund, the amounts appropriated to a department or agency may also be interchanged among such schedules, subject to the following formula (with the exclusion of the State University of New York, the City University of New York, and other specific appropriations as may be noted in the various appropriation bills): the total amount appropriated for any given program or purpose may not, in aggregate, be increased or decreased via interchanges by more than 5 percent of the first $5 million, 4 percent of the second $5 million and 3 percent of amounts in excess of $10 million.
Internal Accounting Controls
Internal accounting controls are the measures which safeguard assets and ensure the reliability of financial records. They include authorization procedures for financial transactions, use of generally accepted accounting principles to record financial transactions, limited access to assets and periodic inventories of assets.
Internal Administrative Controls
Internal administrative controls are the measures (e.g. organization plan, policies, procedures and records) which ensure that transactions are authorized consistent with managerial intent. They include mission and policy statements, organization charts, procedure manuals, duties descriptions, training programs, information systems, filing systems, and other tools used to control program operations.
Internal Audit
Internal audit is an independent appraisal of operations, conducted under the direction of agency management, to assess the effectiveness of internal administrative and accounting controls and help ensure conformance with managerial policies.
Internal Control Review
Internal Control Review (ICR) is a detailed evaluation of the degree to which the organization has designed, established, documented and followed the policies and procedures necessary to achieve specific functional goals and objectives and avoid unwanted outcomes. The ICR focuses upon how well procedures operate for a given function rather than the broader, common controls assessed through a vulnerability assessment.
Internal Controls
Internal controls are the measures an organization adopts to: encourage adherence to agency policies and procedures; promote operational efficiency and effectiveness; safeguard assets; and ensure the reliability of accounting data. Internal controls encompass both internal administrative controls and internal accounting controls.

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J

Joint-Custody Fund
A Joint-Custody Fund is held within the State Treasury by both the State Comptroller and the Commissioner of Taxation and Finance.

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L

Lapsed Appropriation
A lapsed appropriation is an appropriation which has expired and against which obligations can no longer be incurred, nor payment made. An appropriation lapses, and is no longer available to authorize any encumbrance or cash payments, on June 30 for State operations and on September 15 for aid to localities, capital projects, and debt service.
Legislative Action on the Executive Budget
The Legislature and its fiscal committees — Senate Finance and Assembly Ways and Means — analyze the budget, by holding public hearings on major programs and seeking further information from the staffs of the Division of the Budget and other State agencies. Except for the budgets of the Legislature and the Judiciary, the Legislature may not alter an appropriation bill except to eliminate or reduce the amount of an item recommended therein. It may, however, add items separate and distinct from those included in the original bill submitted by the Governor.

The appropriation bills, except for those which added items or provided funds for the Legislature and Judiciary, become law without further action by the Governor. The Governor must approve or disapprove all or parts of the appropriation bills covering the Legislature and Judiciary and may disapprove, by line item veto, items added to his original bills. As provided in the Constitution, the Legislature may override the Governor’s veto by a vote of two-thirds of those elected to each house.
Line Item Veto
The line item veto in the State Constitution authorizes the Governor to veto individual appropriations for the Legislature and Judiciary, and appropriations added by the Legislature, contained within any multiple appropriation bill passed by the Legislature.
Local Assistance Account
This account finances State grants to, or State expenditures on behalf of, counties, cities, towns, villages, school districts and other local entities; certain contractual payments to localities; certain advances for reimbursable costs; and certain financial assistance to, or on behalf of, individuals and not-for-profit organizations.
Lump-Sum Appropriation
A lump-sum appropriation is one made for personal service, non-personal service or maintenance undistributed; or for local assistance or capital projects for all State agencies, or to an agency alone or on behalf of itself and one or more other agencies. A lump sum is appropriated for a stated purpose without specifying maximum amounts that may be spent for specific activities or individual objects of expenditure. Such an appropriation cannot be obligated and expended without an allocation.

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M

Maintenance Undistributed
Maintenance undistributed is an appropriation which does not define the amounts to be available for personal and non-personal service. Such an appropriation allows flexibility in the management of a program. The terms “lump sum” and “maintenance undistributed” are often used synonymously, although they are not equivalent.
Margin
A margin, or positive margin, is a temporary excess of receipts over disbursements. When disbursements temporarily exceed receipts, a negative margin exists. A positive margin is not a surplus, nor is a negative margin a deficit, until the fiscal year ends.
Matching Formula
A matching formula is a formula applied under an intergovernmental grant program which requires a recipient to match from its own funds a specified percentage of each dollar granted by one or more higher level(s) of government.
Moral Obligation Debt
Moral obligation debt refers to long-term bonds issued by certain State public authorities, also known as public benefit corporations, which are essentially supported by their own revenues. Moral obligation debt is not incurred pursuant to a referendum, is not considered State debt, and is not backed by the full faith and credit of the State. However, the authorities selling such obligations have been allowed to establish procedures where, under certain conditions, the State may be called upon to meet deficiencies in debt service reserve funds supporting such bonds. An appropriation must be enacted by the Legislature to meet any such obligation.

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N

Non-personal Service
Non-personal service represents an appropriation for such items as contractual services, equipment and supplies.
Nonrecurring Receipts
Nonrecurring receipts are receipts in a given fiscal year that are not normally expected to recur in subsequent fiscal years. Recurring receipts are normally derived from an income stream that is expected to continue from one fiscal year to the next.

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O

Obligation
An obligation is a commitment (such as a contract or purchase order) to spend against a given appropriation.
Official Statement
An official statement is a disclosure document prepared to accompany each issuance of bonds, notes and publicly sold certificates of participation offered for sale by the State or its public authorities. This statement is prepared by the issuer and describes the issuer, the project or program being financed and the security behind the bond issue.

In addition, where payment of debt service is made primarily with State moneys, this statement discloses information regarding the State, including recent and projected fiscal and economic trends and developments that bear reasonably on the credit strength of the issue. It discusses potential legal, fiscal or economic problems facing the issuer, State government and other relevant major governmental jurisdictions.

Its primary purpose is to provide prospective bond or note purchasers sufficient information to make informed decisions on the creditworthiness of the issue.
Offset Fund
An offset fund is an appropriated fund, usually of the Special Revenue Fund type, which is used to reimburse expenditures charged in the first instance to the General Fund.

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P

Pay-As-You-Go
Pay-as-you-go financing refers to the use of current State resources (as opposed to bonds) to finance capital projects.
Personal Service
Personal service represents an appropriation for salaries and non-wage compensation for State employees and certain payments to non-State employees.
Proprietary Funds
The Internal Service Funds and the Enterprise Funds are treated as Proprietary Funds for cash-basis budgeting and reporting purposes, and are combined with the General Fund for purposes of budgeting and reporting on a GAAP-basis.

Enterprise Funds
These funds are used to account for operations similar to private business enterprises.

Internal Service Funds
These funds are used to account for the financing of goods or services supplied by one State agency to other State agencies or governmental units on a cost reimbursement basis.

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R

Rainy Day Reserve
Created by the 2007 budget reform legislation, this fund may be used to respond to an economic downturn or catastrophic event, as defined in the law. The reserve may have a maximum balance of 5 percent of expected General Fund disbursements in the immediately following fiscal year.
Reappropriation
A reappropriation is a legislative enactment that continues all or part of the undisbursed balance of an appropriation that would otherwise lapse (see lapsed appropriation). Reappropriations are commonly used in the case of federally funded programs and capital projects, where the funding amount is intended to support activities that may span several fiscal years.

For example, funds for capital projects are customarily recommended and appropriated in amounts sufficient to cover the total estimated cost of each phase of a specific project (such as land acquisition, design, construction and equipping). As contracts within each phase are established, portions of the capital construction appropriation are allocated. However, disbursements are made only to meet the actual costs incurred as each phase of the project progresses. In ensuing years, the balances not disbursed are reappropriated to cover the costs of subsequent construction phases in the project.

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S

Save Harmless
Save harmless refers to a provision of law under which the State protects another entity against any decrease from a previous level of funding under a given State program.
Segregation
Authorizes expenditures from appropriated funds for specified purposes, activities or objects. It is used as a control device for appropriated funds (e.g., quarterly allocations) and to distribute lump-sum appropriations within State agencies.
Shortfall
Shortfall refers to a situation where actual revenues collected are less than those that had been projected.
Sole-Custody Fund
A sole-custody fund is administered by an individual State agency official and is not under the joint custody of the State Comptroller and the Commissioner of Taxation and Finance. Sole-custody funds are usually fiduciary in nature. Examples include assets held for wards of the State.
Special Emergency Appropriation
Section 53 of the State Finance Law authorizes the enactment of a special emergency appropriation which may be allocated by the Governor to various funds. As set forth in the statute, allocations to the General Fund, the Capital Projects Fund and funds receiving Federal moneys are subject to the prior approval of the chairpersons of the Senate Finance and Assembly Ways and Means committees.
Special Revenue Funds
These funds account for State receipts from specific revenue sources and are legally restricted to disbursement for specified purposes. This governmental fund type is divided into two classifications in New York State:

Special Revenue Funds – Federal
For example, the Health and Human Services Fund where Federal Medicaid reimbursements are received and disbursed.

Special Revenue Funds – Other
For example, the Conservation Fund, which finances a number of State environmental programs.
State-Guaranteed Debt
State-guaranteed debt refers to debt authorized by the voters to be sold by three public authorities: the Job Development Authority, the New York State Thruway Authority, and the Port Authority of New York and New Jersey. Such debt is backed by the full faith and credit of the State.
State Operating Funds
The total amount of state spending, excluding long-term capital projects and disbursements financed through revenue from the federal government.
State Purposes Account
This account finances: salaries and non-wage compensation for most State employees; other operating costs of State departments and agencies, the Legislature and the Judiciary; General State Charges, which are costs mandated by statute or court decree, or by agreements negotiated with employee unions for which the State is liable, including: pensions; health, dental and optical benefits; Social Security payments on behalf of State employees; unemployment insurance benefits; employee benefit programs; court judgments and settlements; assessments for local improvements; and taxes on public lands; certain contractual payments, including some contractual payments to localities and State lease-purchase payments for certificates of participation; certain financial assistance to individuals and not-for-profit organizations; certain advances for reimbursable costs; and interest payments on tax and revenue anticipation notes (TRANs), bond anticipation notes (BANs) and BANs issued in the form of commercial paper.
State-Related Debt
State-related debt includes all State-supported debt, as well as State-guaranteed, and moral obligation debt. This broad category combines all forms of debt for which the State is directly or contingently liable.
State-Supported Debt
State-supported debt includes general obligation and appropriation-backed debt, and certificates of participation. This category includes all obligations for which the State appropriates and pays debt service. While tax supported debt (obligations supported by State taxes) represents the majority of obligations in this category, obligations supported by other State revenues (such as dormitory fees or patient revenues) are also included.
Surplus
A surplus, for purposes of the cash-basis Financial Plan, is an excess of receipts over disbursements at the end of a fiscal year. On a GAAP basis, a surplus is an excess of revenues over expenditures or expenses at the end of a fiscal year.

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T

Tax and Revenue Anticipation Notes
Tax and revenue anticipation notes (TRANs) refer to short-term obligations of the State. The notes must be redeemed within one-year of issuance. Notes are generally sold to address short-term cash flow imbalances, such as the spring borrowing, but may also be issued to address a year-end deficit.
Tax Stabilization Reserve Fund (TSRF)
This fund receives any General Fund cash surpluses existing at year-end up to a maximum contribution of two-tenths of one percent of total General Fund disbursements. The reserve fund cannot exceed 2 percent of General Fund disbursements for the fiscal year. Any General Fund surplus after the reserve contribution may be used for State tax reduction or may be carried over into the succeeding fiscal year. In the event of a deficit in the General Fund at the close of the fiscal year, a loan may be made from the TSRF to the extent of the deficit or the funds available in the TSRF whichever is lower, provided such loans will be repaid in three equal annual installments within a period of six years from the date the loan was made. Cash assets of the TSRF can be loaned to the Local Assistance Account or the State Purposes Account during the fiscal year, but must be repaid, in cash, by March 31 of any fiscal year.
Testing
Testing (sometimes called compliance testing) is that part of an internal control review which assesses whether actual practice follows, or complies with, prescribed policies and procedures. The assessment is made by interviewing or observing staff, following a transaction through the process, or sampling documentation of transactions to determine if required steps are executed.

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V

Vulnerability Assessment
Vulnerability Assessment (VA) is an assessment by an agency of its potential susceptibility to unintentional and intentional operational breakdowns which could lead to inadequate or inappropriate program outcomes, including waste of resources. The VA analyzes the overall organizational and administrative environment, the potential for failures and the seriousness of such occurrences. Identifying each function’s level of risk helps the agency schedule the timing and frequency of more extensive reviews of operations. The VA may also identify internal control weaknesses which can be immediately corrected.

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