Chapter 12: State
Financial Management
Subchapter I: General Provisions
Subchapter II: General Fund & Special
Funds
Subchapter III: Deposits, Allotments,Obligations & Disbursements
Subchapter IV: Prohibitions &
Penalties
Subchapter V: Miscellaneous
Provisions
Subchapter I: General
Provisions
§1201. Title.
§1202.
Purpose.
§1203.
Definitions.
This chapter shall be known and may be cited as the "State Financial Management Act of 1983".
Source: YSL 1-167 §1, modified.
The purpose of this chapter is to ensure that all public funds raised or received by the State of Yap, from whatever source derived, or appropriated by the Legislature are subject to the provisions of this chapter and are only used or obligated in a manner provided by law, and to achieve this purpose criminal penalties are imposed, civil suits are authorized, and job protections are provided for public employees who refuse to cooperate with or who disclose official mismanagement of funds.
Source: YSL 1-167 §2, as amended by YSL 1-177 §1.
Cross-reference: Section 6 of Article IX of the Yap Constitution states: "No money shall be withdrawn from the State treasury nor obligated except in accordance with law".
For the purpose of this chapter, unless it is otherwise required or the context requires a different construction, application, or meaning:
(a) "Allotment" means the delegation of authority to a person to create legally enforceable financial obligations in accordance with applicable law within specified limits set forth in an appropriation act of the State Legislature or as may be required by the terms of funding available from other sources.
(b) "Appropriation" means the designation of funds by law for a specific governmental expenditure.
(c) "Disbursement" means payment for goods or services.
(d) "Funds" means a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial sources, together with all related liabilities and residual equities balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.
(e) "funds" means cash, cash plus near-liquid investments, money or other resources the principal or interest of which is set apart for a special objective.
(f) "Lapse" means the end of a right or privilege because of neglect to exercise it within a time limit.
(g) "Obligation" means legal liability for salaries and wages; contractual services; contracts entered into for the purchase of supplies and equipment, construction, and land, usually evidenced by a purchase order or contract; and loans or other commitments requiring the payment of money.
(h) "State of Yap" means all agencies, departments and offices of all branches of the State Government.
(i) "Treasury" means all places and facilities, including banks, bank accounts and other bank-issued instruments of deposit, for receiving, storing, and disbursing State funds which are under the control of the Director of Administrative Services.
Source: YSL 1-167 §3, as amended by YSL 1-177 §2, modified.
Subchapter II: General Fund & Special
Funds
§1211. General Fund of the State of Yap; created.
§1212. Special funds of the State of Yap; created.
There is hereby created a General Fund of the State of Yap to be known as the General Fund. This General Fund shall be the successor fund to and replaces the General Fund of the Legislature. The General Fund of the State of Yap shall be an account or accounts within the Treasury maintained and controlled under the authority of the Director of Administrative Services or his designee. The General Fund shall account for all financial resources except those required to be accounted for in another fund.
Source: YSL 1-167 §4, as amended by YSL 1-177
§3.
Cross-reference:
The statutory provision designating the composition and the
responsibilities of the Office of Administrative Services is found in
section 127 of Title 3 (The Executive) of this
Code.
There are hereby created the following Special Funds of the State of Yap:
(a) Capital Improvement Programs and Development Fund. The Capital Improvement Programs and Development Fund shall be an account or accounts within the Treasury which shall account for financial resources to be used for the acquisition or construction of major capital facilities and economic development projects. The account or accounts shall be maintained and controlled under the authority of the Director of Administrative Services or his designee.
(b) Special Revenue Fund. The Special Revenue Fund shall be an account or accounts within the Treasury into which United States or other special grant funds, except current account and capital account funds under the Compact of Free Association, designated for the State of Yap shall be deposited and, except as otherwise provided by the granting authority, such funds may be withdrawn pursuant to appropriation laws enacted by the Legislature of the State of Yap. The account or accounts shall be maintained and controlled under the authority of the Director of Administrative Services or his designee. All funds accounted for in the Special Revenue Fund shall be allotted, managed, and administered in accordance with applicable law, including, but not limited to, this chapter.
(c) Enterprise Fund. The Enterprise Fund shall be an account or accounts within the Treasury which shall account for operations:
(1) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or
(2) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The account or accounts shall be maintained and controlled under the authority of the Director of Administrative Services or his designee.
(d) Internal Service Fund. The Internal Service Fund shall be an account or accounts within the Treasury which shall account for the financing of goods or services provided by one department or agency to other departments or agencies of the government unit, or to other government units, on a cost-reimbursement basis. The account or accounts shall be maintained and controlled under the authority of the Director of Administrative Services or his designee.
Source: YSL 1-167 §5, as amended by YSL 1-177 §4
and YSL 2-20 §1, modified.
Cross-reference:
The statutory provision designating the composition and the
responsibilities of the Office of Administrative Services is found in
section 127 of Title 3 (The Executive) of this
Code.
Subchapter III: Deposits,
Allotments,
Obligations & Disbursements
§1231. Deposits to the Treasury.
§1232. Allotment of funds; authority.
§1233. Obligation.
§1234. Documentary evidence required to record an obligation.
§1235. Disbursement procedures.
§1236. Reversion of unexpended funds; closing out accounts and transfer of
unexpended balance; cancellation of obligation.
§1237. Allottees' reports required.
Public money raised or received by the State of Yap, from whatever source derived, including but not limited to, all grants and assistance from foreign aid, the United States of America, all State tax and revenue laws, receipts from revenue sharing with the National Government, fines, fees, interest loans to the State, gifts or rents, unless otherwise provided by law, shall be deposited in the Treasury. The Director of Administrative Services or his designee shall generate forms for the transmission of revenue from State agencies to ensure that internal revenue is deposited in a timely manner, and shall provide checks on agencies which may be delinquent in transmittal.
Source: YSL 1-167 §6, as amended by YSL 1-177 §5,
modified.
Cross-reference:
The statutory provisions on the Treasury are found in chapter 5 of
this title. The statutory provision on the deposit of revenues is
found in section 501 of this title.
The authority to make allotments shall be vested in the Governor or his designee. The Governor or his designee shall make an allotment not later than ten days before the beginning of the fiscal year for which the appropriation is available, or not more than 30 days after the act under which an appropriation is made available takes effect, whichever is later, unless otherwise provided by rules and regulations issued pursuant to the authority of section 1281 of this chapter. An allottee shall be notified immediately after the making of an allotment. If sound financial management practices and techniques so require, allotments may be made monthly, quarterly, or at other intervals, provided that the allottee of such funds is made aware of the periodic nature of his allotment(s).
Source: YSL 1-167 §7, as added by YSL 1-177 §6,
modified.
Cross-reference:
Section 1281 of this chapter is on the issuance and promulgation of
rules and regulations. The statutory provisions on the Treasury are
found in chapter 5 of this title.
(a) An obligation for the expenditure of State funds exists when there is a duty to withdraw money at some time in the future, from any account of the General Fund or of a Special Fund of the State. Except expenditures to support a United States Government agency, every right of expenditure from any account of the State shall be by obligation of appropriated sums.
(b) The Director of Administrative Services or his designee, shall record all State obligations for payment of money.
Source: YSL 1-167 §7, as renumbered as section 8
by YSL 1-177 §16.
Cross-reference:
Section 6 of Article IX of the Yap Constitution states: "No
money shall be withdrawn from the State treasury nor obligated except in
accordance with law". The statutory provisions on the Treasury are
found in chapter 5 of this title.
(a) The Director of Administrative Services or his designee, shall not record or assent to any claim that an obligation exists unless funds have been obligated by an allottee and the obligation is supported by documentary evidence, and is for the purpose specified by an appropriation. Only an allottee or his designee may offer evidence of an obligation.
(b) Evidence of an obligation is:
(1) An agreement in writing, between the allottee of the appropriation, and another party, for a purpose authorized by the law which appropriated the funds to be obligated. The agreement must have been executed during the period of availability of the fund. It may be for the purchase and delivery of specific goods or the lease of real property, or work or services to be performed, or to lend money, in which case the agreement shall show the amount of the loan and the terms of repayment;
(2) A grant or subsidy payable from an appropriation which requires direct payment to a recipient upon submission of a plan or according to a formula prescribed by law; or
(3) Any other legal liability of the State against an appropriation or funds legally available therefor.
Source: YSL 1-167 §8, as amended by YSL 1-177 §7
and renumbered as section 9 by YSL 1-177 §16.
Cross-reference:
Section 6 of Article IX of the Yap Constitution states: . No
money shall be withdrawn from the State treasury nor obligated except in
accordance with law.. The statutory provisions on the Treasury are
found in chapter 5 of this title.
Unless otherwise specifically provided by law, the following procedures shall control the administration and management of all funds appropriated from the General Fund or Special Funds of the State of Yap or made available to the State from other sources:
(a) All such funds shall remain in the custody and control of the Director of Administrative Services or his designee until they are obligated by the person or entity to whom the funds are allotted and disbursed by the Director of Administrative Services or his designee in accordance with law.
(b) Such funds shall be deemed to be obligated as of the date the person or entity to whom the funds are allotted enters documentary evidence required by section 1234 of this chapter or regulations issued pursuant to authority vested by section 1281 of this chapter.
(c) The Director of Administrative Services or his designee shall disburse such funds as may be required to liquidate valid obligations within 30 days of their becoming payable, as indicated by valid documentary evidence of such obligation and a valid claim for payment, if required by the terms of the document evidencing the obligation.
Source: YSL 1-167 §9, as amended by YSL 1-177 §8
and renumbered as section 10 by YSL 1-177 §16,
modified.
Cross-reference:
Section 1234 of this chapter is on documentary evidence required to
record an obligation. Section 1281 of this chapter is on the
issuance and promulgation of rules and regulations.
§1236. Reversion of unexpended funds; closing out accounts and transfer of unexpended balance; cancellation of obligation.
(a) Unless otherwise provided by law, all sums of money which are appropriated for any fiscal period, and which are not obligated during the period, shall lapse and shall not be issued or applied in any future fiscal period to the particular purpose for which the appropriation has been made, unless a valid obligation has been made before the expiration of the fiscal period, and a certified copy of such valid obligation has been deposited with the Director of Administrative Services or his designee.
(b) In all cases where an appropriation of public money is made and an unexpended balance remains to the credit of the appropriation on the books of the Director of Administrative Services or his designee after the purposes of the appropriation have been accomplished, or after the time has expired within which those purposes may be accomplished, or after a time when the reasons for the appropriation have ceased to exist, the Director of Administrative Services or his designee, upon the receipt of a certificate from the head of the department or other public officer who is charged with the duty of expending the appropriation that all obligations have been fully paid and satisfied, may close out the appropriation account and transfer the unexpended balance to the credit of the General Fund or the appropriate Special Funds of the State of Yap.
(c) The Director of Administrative Services or his designee is authorized to cancel an obligation not liquidated within one year of the time it became payable, as indicated by valid documentary evidence of such obligation, if the reason for not liquidating the obligation was the failure of a party to submit a valid claim for payment as required by the terms of the document evidencing the obligation.
Source: YSL 1-167 §10, as amended by YSL 1-177 §9
and renumbered as section 11 by YSL 1-177 §16,
modified.
(a) Unless otherwise provided by law, not later than July 9 of each year, each allottee shall submit a report to the Legislature which shall provide for full accounting of each line item, or subsection apportioning funds, as of the end of the third quarter of the fiscal year, detailing obligations incurred against all sums appropriated by the Legislature or made available to an allottee from other sources including reimbursements, reprogramming and reallocation, to include a detailed explanation and full justification for each major deviation from a line item, or subsection apportioning funds.
(b) Unless otherwise provided by law, not later than the second Tuesday in January of each year, each allottee shall submit a report to the Legislature which shall provide for the full accounting of each line item, or subsection apportioning funds as of the end of the fiscal year, detailing obligations and expenditures incurred against all sums appropriated by the Legislature or made available to an allottee from other sources including reimbursements, reprogramming and reallocation, to include a detailed explanation and full justification for each major deviation from a line item, or subsection apportioning funds.
Source: YSL 1-167 §11, as renumbered as section
12 by YSL 1-177 §16, modified.
Subchapter IV: Prohibitions & Penalties
§1261. Criminal penalties for wrongful obligation of funds.
§1262. Criminal penalties for wrongful disbursement of funds.
§1263. Violation to be reported.
§1264. State may sue for recovery of preservation of funds.
§1265. Job protection for public servants who disclose violations of this chapter.
(a) No officer or employee of the State or allottee of a State appropriation shall incur an obligation, or authorize or order any one to incur an obligation of funds from the General Fund or from a Special Fund:
(1) Unless at the same time there are funds appropriated and allotted;
(2) Unless the obligation is for the purpose specified by the appropriation, except as provided in section 1007 of this title; and
(3) Unless the amount obligated is not in excess of the obligational authority.
(b) Violation of this section shall be a crime punishable by imprisonment of not more than two years or a fine of not more than $2,500.00, or both.
Source: YSL 1-167 §12, as amended by YSL 1-177
§10, YSL 3-50 §2 and renumbered as section 13 by YSL 1-177 §16,
modified.
Cross-reference:
Section 6 of Article IX of the Yap Constitution states: "No
money shall be withdrawn from the State treasury nor obligated except in
accordance with law". Section 5 of Article IX states: "The
Legislature shall not appropriate funds in excess of estimated available
revenues".
(a) No officer or employee of the State shall make or authorize any disbursement of money from the General Fund or from a Special Fund:
(1) In advance of the appropriation and availability of funds; or
(2) In excess of the amount appropriated; or
(3) For another purpose other than that specified in an appropriation, except as provided in section 1007 of this title.
(b) Violation of this section shall be a crime, punishable upon conviction by imprisonment for less than three years or a fine of not more than $3,000.00, or both.
Source: YSL 1-167 §13, as amended by YSL 1-177
§11 and YSL 3-50 §2, renumbered as section 14 by YSL 1-177 §16,
modified.
Cross-reference:
Section 6 of Article IX of the Yap Constitution states: "No
money shall be withdrawn from the State treasury nor obligated except in
accordance with law". Section 5 of Article IX states: "The
Legislature shall not appropriate funds in excess of estimated available
revenues".
In the case of a violation of section 1261 or section 1262 of this chapter, the Director of Administrative Services, or his designee, shall immediately submit to the Attorney General a written report, with copies to the Governor and to the Speaker of the Legislature, of all pertinent facts together with a statement of the action taken or proposed to be taken with respect thereto.
Source: YSL 1-167 §14, as amended by YSL 1-177
§12 and renumbered as section 15 by YSL 1-177 §16,
modified.
Cross-reference:
Section 1261 of this chapter is on criminal penalties for wrongful
obligation of funds. Section 1262 of this chapter is on criminal
penalties for wrongful disbursement of funds.
A cause of action shall exist in favor of the State for the recovery or preservation of funds expended or in danger of being expended in violation of this chapter. The State Attorney General may proceed in State Court for recovery of sums lost or in danger of loss to their lawfully dedicated purpose, or for a court order commanding compliance with this chapter, or both. Any citizen of the Federated States of Micronesia may maintain the same cause of action for the same relief, provided the Attorney General has neglected to proceed due to illegal or improper motives. The Court shall consider the purposes and possible motives of a person claiming to act on behalf of the State and may dismiss the complaint without prejudice upon a finding of a lack of adversariness. The Court may give judgment to a prevailing private party for costs and reasonable attorney. s fees.
Source: YSL 1-167 §15, as amended by YSL 1-177
§13 and renumbered as section 16 by YSL 1-177 §16,
modified.
Cross-reference:
The statutory provisions on the Judiciary are found in Title 4 of
this Code. The statutory provision on the Office of the Attorney
General is found in section 128 of Title 3 (Executive) of this
Code.
Any disciplinary, negative, or punitive job action against an employee of the State who:
(a) Has in good faith disclosed to the Prosecutor or Attorney General an actual or attempted violation of this chapter; or
(b) Had refused to participate in an actual or attempted violation but was unable to report prior to the imposition of disciplinary, negative, or punitive job action, shall be presumptively in retaliation against such employee. In any appeal for relief from retaliation the burden shall be upon the government to show that the job action was in response to a genuine failure of performance of lawful duties; such showing must be made by a preponderance of the evidence. Any employee who prevails in an appeal for relief from a retaliatory job action shall be granted all back pay and benefits lost, if there were any, and all costs and reasonable attorney fees. The protection of the presumption of retaliation shall be afforded the employee for four years after the disclosure or refusal.
Source: YSL 1-167 §16, as amended by YSL 1-177
§14 and renumbered as section 17 by YSL 1-177 §16,
modified.
Subchapter V: Miscellaneous
Provisions
§1281. Rules and regulations.
§1282. Severability.
§1281. Rules and regulations.
In accordance with the State Administrative
Procedure Act, the Director of Administrative Services shall issue and
promulgate rules and regulations necessary to implement provisions of this
chapter. Upon approval by the Governor, the rules and regulations shall
have the force and effect of law.
Source:
YSL 1-167 §17, as amended by YSL 1-177 §15 and renumbered as section 18 by
YSL 1-177 §16, modified.
Cross-reference: The statutory provisions of the State Administrative Procedure
Act, Yap State Law No. 1-90, are found in chapter 1 of Title 10
(Administrative Law) of this Code.
§1282. Severability.
If any provision of this chapter, or the
application thereof to any person or circumstance is held invalid, the
invalidity does not affect other provisions or applications of this
chapter which can be given effect without the invalid provision or
application, and to this end the provisions of this chapter are
severable.
Source:
YSL 1-167 §19, as renumbered as section 20 by YSL 1-177
§16.