LOCAL FUND EXPENDITURES

• 1.0 Purpose
• 2.0 Policy
• 3.0 Definitions
• 4.0 References
• 5.0 Approvals and Revisions

1.0 Purpose

This policy describes the general guidelines for spending and documenting expenditure for local fund accounts so that they may be reimbursed with state funds.

2.0 Policy [Top]

Departments may possess local (non-State: ledgers 4,6, or 8) funds in addition to their State appropriated accounts. Local funds are sometimes used to expedite payments when vendor relations are in jeopardy or to avoid late payment fees (on an exception basis.)

Reimbursements of local fund expenditures from State funds are allowed only under limited circumstances. The IDT process (see also Procedure 6-18), should be used only if the following requirements are met:

• The original local fund payment must comply with applicable state policies and procedures.
• The original local fund payment must have been processed in a timely manner. Late payments may be reimbursed from State funds, if the local payment related to potential problems with vendor relations. Use of local funds for this reason must be fully documented. Prompt pay statistics may be adjusted when this occurs.
• Payroll payments for full time exempt or nonexempt employees paid fully or partially from State funds must NOT be processed with local funds.
• Payroll payments for hourly workers initially paid from local funds can be reimbursed from State funds, if applicable personnel requirements are met.
• Departments must process local fund reimbursements from State funds during the same year the local expenditure was made. Exceptions include processing for summer school and continuing education programs.
• Local fund expenditures for goods and services to be reimbursed from State funds must have complied with the Virginia Public Procurement Act policies.

Payment Processing

Departments must document local fund expenditures in the following way to show it was paid according to policy:

• Attach a copy of the original receipt/invoice,
• Attach any discrepancies or correspondence with the vendor and the date of the resolution,
• Attach a copy of the AM091 report where it originally was processed.

3.0 Definitions [Top]

4.0 References [Top]

5.0 Approvals and Revisions [Top]