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Sources of Revenue Required to Pay Benefit Cost (APS 001)

FPP A.021


Note: This document deals with the requirement that wage and salary funding sources also pay for related employee benefit cost, which does not preclude agencies from compliance with Benefits Proportional by Method of Finance (APS 011) (FPP A.010) requirements for proportionality of benefit cost relative to the method of finance.


To maintain employee benefit funding equity, the Legislature requires certain collected revenue funding sources for wages and salaries to also fund related employee benefit costs. Three collected revenue sources of salary funding required to pay employee benefit cost are:

  • Federal receipts.
  • Interagency receipts paid from a different fund.
  • Other collected receipts, including those deposited to Appropriated Fund 0001.

Employee benefit costs include:

  • Retirement.
  • Insurance.
  • Social Security.
  • Benefit Replacement Pay (BRP).

GAA, Article IX, Section 13.05

According to the GAA, Article IX, Section 13.05, agencies receiving federal employee benefit reimbursements for benefit expenditures made in relation to salaries paid from federal receipts, including federal pass-through funds, must deposit the benefit reimbursements to the appropriated fund that paid the employee benefits.

This section also states:

Reimbursements received from employee benefits paid from General Revenue Fund appropriations of other administering agencies shall be deposited to the unappropriated General Revenue Fund.

GAA, Article IX, Section 6.08 (a)

Section 6.08 (a) states:

Unless otherwise provided, in order to maximize balances in the General Revenue Fund, payment for benefits paid from appropriated funds, including “local funds” and “education and general funds” as defined in Education Code, Section 51.009 (a) and (c), shall be proportional to the method of finance, except for public and community junior colleges.