Skip to main content

An Audit Report on State Entity Compliance with Benefits Proportional by Fund Requirements in Fiscal Years 2002 and 2003

June 2004

Report Number 04-039

Overall Conclusion

Inconsistencies and conflicts related to proportionality requirements make it unclear whether state entities should repay General Revenue in order to achieve proportionality under the General Appropriations Act. To comply with these requirements, entities need to pay benefits proportionately to funding sources. Specifically, in fiscal years 2002 and 2003, entities indicated they owed a balance of $7.5 million to General Revenue. However, whether entities should actually pay this amount to General Revenue is unclear.

The requirement that benefits (as well as salaries and wages) be paid proportionately to funding sources is intended to ensure that General Revenue is used appropriately. To meet this requirement, entities prepare reports calculating the amount of benefits that should be paid from their appropriated funding sources. However, these reports are not always useful. The reports may not fully incorporate other restrictions on the use of funding sources, which can lead them to incorrectly indicate that entities owe funds to (or should receive funds from) General Revenue. This occurs because the proportionality requirements (1) are internally inconsistent and (2) can conflict with other laws, rules, and federal grant restrictions.

Contact the SAO about this report.

Download the Acrobat version of this report. (.pdf) (Generate HTML Equivalent)*

*HTML equivalents for PDF documents are generated utilizing Adobe's PDF Conversion by Simple Form.