Change in Recording Administrative and Civil Penalties

Overview

Applicable to

State agencies that assess administrative and/or civil penalties.

Policy

Agencies are required to implement the changes detailed in this Fiscal Policy and Procedure (FPP) beginning Sept. 1, 2014.

The Texas Comptroller of Public Accounts requires state agencies to record the deposit of:

• Administrative penalties under Revenue Object 3770
• Civil penalties under Revenue Object 3717

The current practice of depositing these penalties under the object code for which the penalty was assessed overstates the fee revenue. This new policy will ensure proper tracking of administrative and civil penalties and provide transparency regarding revenue collections.

The Texas Comptroller Manual of Accounts has been updated to reflect the current policy, which applies to all fee-type revenue codes.

Legal citation

Texas Government Code, Section 403.011.

Summary

Currently, not all administrative or civil penalties are recorded using the 3770 and 3717 object codes. Previously, it was permissible to record some of these penalties using the object code for which the penalty was assessed, such as 3175 – Professional Fees. This has led to inconsistencies in the accounting and reporting of both professional fees and penalties.

Beginning Sept. 1, 2014, agencies must deposit administrative or civil penalties using the appropriate comptroller object code.

Recording Administrative and Civil Penalties

Administrative penalties: use Revenue Object 3770

Administrative penalty amounts are determined by statute or set by the controlling agency, board or commission and may or may not be assessed through the State Office of Administrative Hearing. The agency has specific statutory authority to levy administrative penalties in the law.

Do not include fines, late fees, civil penalties or other types of penalties under the administrative penalties object code. Please consult the Texas Comptroller Manual of Accounts for revenue object 3717 and other revenue objects specific to these types of revenue.

Civil penalties: use Revenue Object 3717

Civil penalties are usually assessed through action and processes by the Attorney General’s Office in most but not all cases. The agency must have specific statutory authority to levy civil penalties in the law. As with administrative penalties, these may be determined by statute or set by the controlling agency, board or commission.

Do not include any misdemeanor or felony fines, court costs, late fees or other similar penalties. Please consult the Texas Comptroller Manual of Accounts for revenue object 3704 and other revenue objects specific to these types of revenue.

General information

Agencies that issue multiple licenses must be able to break out and identify associated penalties by license type.

Please contact your Legislative Budget Board analyst regarding any possible effect this policy may have on agency riders or appropriations.

Generally, agencies do not have appropriation authority for administrative and civil penalties. Therefore these amounts should be deposited to unappropriated 99906 with transaction code (T-code) 188.

2014–15 Biennium

For contingent revenue riders appropriating sum-certain amounts in the General Appropriation Act, the Comptroller’s office will include penalty revenue in determining those sum-certain amounts collected above, if penalty amounts were included in the Biennial Revenue Estimate of those particular revenues. In these cases the revenue must meet the sum-certain amount for the agency to receive any excess revenue.

For riders appropriating fees in excess of the Biennial Revenue Estimate or target amount, but not specified as a sum-certain amount, the Comptroller’s office will not include penalty revenue in determining the excess amounts to be appropriated. In these cases, the agency does not have to meet a sum-certain amount to receive excess revenue but is appropriated any amounts over the Biennial Revenue Estimate or target amount.

If your agency has the authority to collect these penalties through Texas.gov, please update those coding blocks to reflect this new policy. If these coding blocks cannot be updated by the implementation date, please make manual entries separating the revenue until the coding blocks are changed.

For questions on classifying these penalties in USAS or relating to your agency’s coding block, please contact your assigned appropriation control officer (ACO).