Financial
Contents
§300 Three sources
§301 Indiana Code
§302 State Board of Accounts (SBOA) Manuals
§303 State Budget Agency Circulars
§351 Cash book rule (criminal offense)
§352 Depository rule (criminal offense)
§353 Itemization of invoices (criminal offense)
§354 Fiscal spending plan
§355 Payment in arrears
§356 Timely payment of claims
§357 Duplicate and over-payment collection
§358 Claim vouchers less than $25,000
§359 Credit card use
§360 SDO funds
§361 Procurement cards (P cards)
§362 Personal Use
§363 Inventories
§364 Inactive funds
§365 Attendance reports
§381 Food
§382 Alcohol
§383 Travel, in general
§384 Lodging
§385 Subsistence
§386 Mileage
§387 Bonuses and benefits
Sources
The financial rules for the Executive Branch of Indiana Government are in three basic sources:
- the Indiana Code,
- Accounting and Uniform Compliance Guidelines Manuals (“Manuals”) by the Indiana State Board of Accounts, and
- the Financial Management Circulars (“Circulars”) by the Indiana State Budget Agency, an agency within the Office of Management and Budget.
The following sections will address each of the three sources, and then highlight common financial rules.
Financial rules in the Indiana Code by the Indiana Legislature are in Titles 4 and 5.
The State Board of Accounts also maintains an index to legislative financial rules in the Appendix to its Manuals.
§302 State Board of Accounts (SBOA) Manuals
The Accounting and Uniform Compliance Guidelines Manuals (“Manuals”) are authored and maintained by the Indiana State Board of Accounts (SBOA).
The SBOA is required by the Indiana Legislature to maintain these Manuals to provide financial guidance to Indiana government.
The SBOA Manuals provide financial rules for various Indiana government groups, including state government agencies, universities and cities and towns. We will address only state government rules which are found in the State and Quasi Agency Manual.
Source:
IC 5-11-1-24 (Manuals required)
§303 State Budget Agency Circulars
State Budget Agency Circulars are issued by the State Budget Agency periodically and additionally address particular financial issues.
The Budget Agency is expressly authorized by the Legislature to adopt policies and procedures consistent with law to facilitate and carry out the powers and duties of the Budget Agency. These policies are not subject to promulgation requirements.
Source:
IC 4-12-1-13(h) (authority of Budget Agency to issue Circulars)
IC 4-22-2 (promulgation requirements)
General Rules
§351 Cash book rule (criminal offense)
A public officer who receives or distributes public funds and fails to:
- keep a cashbook;
- enter into the cashbook daily, by item, all receipts of public funds; and
- balance the cashbook daily to show funds on hand at the close of each day;
commits a violation of the cash book rule, a class B misdemeanor.
Source:
IC 5-13-5-1 (rule)
IC 5-13-14-4 (penalty)
IC 5-13-4-20 (public officer defined);
IC 5-13-4-21 (public funds defined);
SBOA State and Quasi Agency Manual, Chapter 3
The cashbook is also a public record and is open to public inspection in accordance with the Access to Public Records Act (APRA or Open Records Act). Penalties for the violation of the APRA may include a civil action to compel disclosure and the payment of attorney fees and costs.
Source:
IC 5-13-5-1 (rule);
IC 5-13-14-4 (penalty);
IC 5-14-3 (APRA or Open Records Law);
IC 5-14-3-9 (penalties for APRA violation);
SBOA State and Quasi Agency Manual, Chapter 15
§352 Depository rule (criminal offense)
A (1) public officer or state officer who (2) receives and has control of public funds paid into the treasury of the state or the treasuries of the respective political subdivisions and who (3) later than the business day following the receipt of the public funds fails to deposit the public funds in one or more depositories in the name of the state or political subdivision, commits a violation of the depository rule, a class B felony, and is liable upon the officer’s official bond for any loss or damage that may accrue.
Defense: State officers from the Department of Natural Resources and Department of Revenue are exempted from this rule.
Source:
IC 5-13-6-1 (rule);
IC 4-13-2-21 (rule restated);
IC 5-13-14-3 (penalty);
IC 5-13-4-19 (political subdivision defined);
IC 5-13-4-20 (public officer defined);
IC 5-13-4-21 (public funds defined);
IC 5-13-8-1 and IC 5-13-9.5 (designation of depositories)
Taylor v. State, 663 N.E.2d 213 (Ind.Ct.Apps. 1996)(criminal conviction affirmed where community center director appointed by mayor qualified as “public official”); SBOA State and Quasi Manual, Chapter 3
§353 Itemization of invoices (criminal offense)
Invoices submitted with vouchers for payment by the state must be itemized.
Source:
IC 5-11-10-1
IC 5-11-10-1.6(c)
IC 4-10-11-1
IC 4-10-11-4
IC 4-10-12-1
SBOA State and Quasi Agency Manual, Chapter 5
A criminal offense may also be implicated with a violation of this rule:
- A disbursing officer for the state or one its political subdivisions (not exempted below) who knowingly draws a warrant or check in payment of any warrant or claim which is not
- fully itemized;
- certified for correctness by the claimant or some authorized person in the claimant’s behalf, and
- filed and allowed as provided by law,
commits failure to properly certify an itemized claim, a class D felony.
- The certificate provided for in subsection (2) must be in the following form: I hereby certify that the foregoing account is just and correct, that the amount claimed is legally due, after allowing all just credits, and that no part of the same has been paid.
- Defense: Certain entities are exempted from these itemization and certification requirements. Certain entities are also exempted only from the certification requirements.
Source:
IC 5-11-10-1 (rule)
IC 5-11-10-3 (penalty of class D felony)
IC 5-11-10-1(a) (itemization and certification exemptions)
IC 5-11-10-1(c) (certification exemptions)
State agencies shall complete and submit for approval to Budget Agency a Spending Plan for each required fund center to aid in the fiscal management of the agency.
Source:
Budget Agency Circular 2007-4
Unless specifically exempted, payment by the State for any services, supplies, materials, or equipment shall not be paid from any fund or state money in advance of receipt of such services, supplies, materials, or equipment.
Source:
IC 4-13-2-20 (rule and exemptions)
SBOA Manuals, Chapter 5
Public officials and employees have a duty to pay claims timely, and are personally responsible for any penalty, interest or other charge paid by a governmental unit incurred due to untimely payment.
Source:
IC 5-17-5 (1% penalty for late payments)
SBOA Manuals, Chapter 5 (penalty of 1% and officials liable)
§357 Duplicate and over-payment collection
Governmental units are responsible for the immediate collection of any overpayment or duplicate payments made.
Source:
SBOA Manuals, Chapter 5
§358 Claim vouchers less than $25,000
Claim vouchers where payment is for less than $25,000 may be made by the state agencies rather than the Budget Agency.
Source:
Budget Agency Circular 2003-2
IC 4-12-1-13(c) and (h)
An agency head or designee may authorize a state employee to be considered for a corporate credit card issued in the employee’s name for travel expenses while in travel status. Excluded from this use are expenses for meals, mileage and gasoline.
Source:
Budget Agency Circular 2002-2 (corporate credit card authority)
IC 4-12-1-13(e) and (h)
IC 4-13-1-4(7)
A Special Disbursing Officer (SDO) who does any of the following:
- advances SDO funds for restricted purposes;
- advances SDO funds in excess of:
- the maximum amount authorized, or
- the single purchase limit;
- fails to monthly reconcile the SDO fund by the
- bank statement for the checking account to the check register; and
- the check register balance to the SDO advance;
- fails to secure supervisory or management approval of the advance;
- fails to maintain a record of all cash advances by:
- date the advance was made;
- to whom the advance was made;
- the dollar amount of the advance; and
- when the advance was reimbursed; or
- fails to timely collect reimbursement of SDO fund cash advancements;
commits a violation of the requirements of SDO funds and may be held personally responsible for the amount needed to balance the fund or for amounts improperly expended.
Source:
IC 4-13-2-20(d) through (h)
SBOA State and Quasi Agency Manual, Chapter 7
Budget Agency Circular 96-3
§361 Procurement cards (P cards)
The P-Card system is a credit account established by a commercial financial institution on behalf of the State of Indiana. Goods and services may be purchased with the P-card, but an approved application by the agency is required and various controls must be implemented.
Source:
Financial Management Circular 2008-1
Indiana Department of Administration website
Public funds may not be used for personal items or items unrelated to the government unit.
The public official or employee who makes an unauthorized purchase is personally liable to the state for reimbursement.
Source:
SBOA Manuals, Chapter 5
42 IAC 1-5-12 (ethics rule against personal use of state property)
Inventories must be maintained for state property items which have an individual value in excess of $25,000.
Source:
SBOA State and Quasi Agency Manual, Chapter 10
Funds which remain inactive for two years must be reported to the Office of Budget and Management.
Source:
Employees are required to submit a completed attendance report (A-4) at the end of each pay period.
Supervisors are required to review and approve these forms.
Source:
SBOA Manuals, Chapter 9
Specific Rules
Unlike the corporate or private industry world, business lunches may not be paid for with state money.
However, the State Budget Agency authorizes simple refreshments or light meals at state-sponsored events such as board and commission meetings, conferences, hearings, retreats, seminars, training sessions and workshops. Caution is urged, as approval is “situation and fact sensitive.” Examples of prohibited expenses are included within Budget Agency Circular 2007-2.
Source:
SBOA State and Quasi Manual, Chapter 5
Budget Agency Circular 2007-2
Alcohol may not be purchased with state money.
Source: SBOA State and Quasi Agency Manual, Chapter 5
Budget Agency Circular 2007-2
Travel expenses including reimbursements for lodging, subsistence and mileage, are governed by Budget Agency Financial Management Circulars and the SBOA Manuals.
Travel outside the State must be approved by the DOA Travel Office.
Source:
Budget Agency Circular 2003-1 (travel)
SBOA State and Quasi Agency Manual, Chapter 11
In-state lodging reimbursement may not exceed the maximum in-state lodging rate of $79 set by the State Budget Agency. DOA Travel Office approval is not required unless reimbursement above the maximum rate will be requested.
Out-of-state lodging reimbursement must be approved in advance by the DOA Travel Office.
Lodging reimbursement is not permitted when the state worker travels less than 50 miles from the worker’s home or work station.
Source:
Budget Agency Circular 2003-1, Section 6-1 (lodging)
Budget Agency Circular 2003-1, Section 10-5 (lodging rates of reimbursement)
Budget Agency Circular 2003-1, Section 7-7 (50-mile restriction)
SBOA State and Quasi Agency Manual, Chapter 11
Subsistence expenses may be reimbursed within specified rates.
Subsistence reimbursement is not permitted when the state worker travels less than 50 miles from the worker’s home or work station.
Source:
SBA Circular 2003-1, Section 7-1 (subsistence allowances)
Budget Agency Circular 2003-1, Section 7-7 (50-mile restriction)
SBOA State and Quasi Agency Manual, Chapter 11
Mileage reimbursement is also permitted at a specified rate. Currently the rate is $0.44 per mile.
Source:
Budget Agency Circular 2003-1, Section 5-3
SBOA State and Quasi Agency Manual, Chapter 11
IDOA Travel Update
Any compensation, premium, bonus or product earned as a result of the purchase of goods or services by the government unit becomes the property of the government unit.
Source:
SBOA Manuals, Chapter 5
42 IAC 1-5-1 (ethics rule against accepting gifts)
