Texas Administrative Code Title 34 - PUBLIC FINANCE
Title 34 of the Texas Administrative Code, focused on Public Finance, establishes regulations related to the management, oversight, and operations of state and local government financial systems. This includes the rules for the state’s budgeting, accounting, auditing, debt management, and fiscal operations. It ensures that public funds are managed efficiently, transparently, and in compliance with state laws and policies.
Key Areas Covered by Title 34 - Public Finance
Here’s a breakdown of the main components of Title 34:
1. General Provisions and Definitions
Scope and Purpose: Title 34 outlines the general framework for financial management in the state of Texas. It includes the purpose and objectives of the rules—namely, to ensure sound financial practices and transparency in managing taxpayer dollars.
Definitions: The code includes precise definitions of terms used throughout the regulations, such as “agency,” “appropriation,” “fund balance,” “general revenue,” and other key financial terms that shape how state and local governments interact with public funds.
2. Budgeting and Financial Planning
State Budgeting Process: Title 34 covers how the state’s budget is prepared, approved, and implemented. This includes rules for the Office of the Governor, the Legislative Budget Board, and state agencies. The budget process ensures that funds are allocated according to state priorities and legal mandates.
Biennial Budgeting: Texas operates on a biennial budget cycle (every two years), and Title 34 lays out the regulations for preparing, submitting, and adjusting these budgets.
Revenues and Appropriations: The rules specify how revenues (such as taxes, fees, or federal funds) are appropriated across state agencies and programs. It ensures that spending aligns with the legislature's approved funding limits.
Budget Execution: The code details how agencies and departments should execute the approved budget, monitor expenses, and make necessary adjustments throughout the fiscal year.
3. Accounting and Financial Reporting
Accounting Systems: Title 34 regulates the accounting procedures that state agencies must follow to track revenues and expenditures. This includes the Uniform Statewide Accounting System (USAS), which standardizes accounting practices across state agencies.
Financial Statements: Agencies are required to produce financial reports that comply with Generally Accepted Accounting Principles (GAAP). These reports must include balance sheets, income statements, and other fiscal documents that provide a clear picture of the state's financial health.
Audit and Internal Controls: The code outlines the procedures for auditing state and local governments to ensure that public funds are used efficiently and as intended. It includes rules for both internal audits (performed by state agencies themselves) and external audits (conducted by independent auditors).
4. Debt Management
Issuance of Debt: Title 34 sets rules for how the state can issue bonds and other forms of debt to finance major capital projects (such as infrastructure development) or to cover budget deficits. The regulations specify the types of debt that can be issued, approval processes, and limitations on the amount of debt that can be issued.
Debt Issuance Procedures: The Texas Bond Review Board oversees and reviews the issuance of bonds. Title 34 provides specific procedures for approval, documentation, and public notice related to the issuance of state debt.
Debt Service: The code also regulates how the state manages its debt payments, including setting aside funds in a debt service fund to meet interest and principal payments on bonds.
Debt Limitations: There are clear limits on how much debt the state or local governments can incur. The code lays out requirements for ensuring that any borrowing remains within the legal debt limits established by the Texas Constitution or the legislature.
5. Revenue Management
Revenue Collection and Disbursement: Title 34 outlines the processes by which the state collects revenue (primarily through taxes and fees) and how those funds are distributed across various governmental entities. It establishes procedures for collecting state taxes, licensing fees, and federal grants.
Special Funds and Accounts: Texas has several dedicated funds that are earmarked for specific purposes (e.g., transportation, education, health care). Title 34 governs how these funds are managed, ensuring that they are used exclusively for their designated purposes.
Taxpayer Funds: Title 34 ensures that public funds are spent according to the law, with an emphasis on accountability and efficiency in the disbursement of funds.
6. Financial Oversight and Transparency
Transparency Requirements: Title 34 emphasizes the need for transparency in state and local government financial operations. This includes the publication of regular financial reports and audits, which are accessible to the public and provide insight into how taxpayer money is being spent.
Legislative Oversight: The legislature plays an active role in financial oversight, and Title 34 provides the framework for how the legislature monitors the implementation of the budget and the spending of public funds.
Public Access to Financial Information: Agencies are required to ensure that their financial information is available to the public. This promotes accountability and helps to build trust between the public and state officials.
7. Procurement and Contracting
Procurement Rules: Title 34 outlines how state agencies should procure goods and services, ensuring that contracts are awarded fairly and in compliance with state laws. It requires transparency in the bidding process and ensures that taxpayers get the best value for state expenditures.
Contract Administration: The regulations also govern how contracts should be managed once awarded. This includes guidelines for monitoring contract performance, ensuring that contractors meet their obligations, and handling any disputes or adjustments during the life of the contract.
8. State and Local Government Cooperation
Intergovernmental Agreements: Title 34 allows for cooperation between state agencies and local governments (cities, counties, school districts) for financial operations. These agreements help ensure that funds are used effectively and that there is alignment in fiscal policy across different levels of government.
Grants and Funding: Local governments and entities often receive state funds through grants. Title 34 sets the rules for distributing these funds and ensuring that grant recipients comply with the appropriate use of funds.
9. Public Funds Investment
Investment of State Funds: Title 34 governs the management and investment of state funds. The Texas Treasury Safekeeping Trust Company manages the investment of state funds, ensuring that investments are made responsibly and in accordance with state law.
Investment Guidelines: The code outlines how investments should be made, the types of investments allowed (e.g., bonds, stocks, real estate), and the processes for monitoring and reporting on the performance of state investments.
10. Other Fiscal Rules
Revenues for Specific Purposes: The regulations cover the allocation of specific revenue streams for dedicated purposes (such as funding for education, health programs, or transportation). This ensures that special revenues are spent according to the intended policy objectives.
Expenditure Limits: The code also places limits on state spending, requiring state agencies to adhere to budgetary constraints set by the legislature. This includes guidelines for how surplus revenues should be handled, whether through savings, debt reduction, or reinvestment in state programs.
Conclusion
Title 34 of the Texas Administrative Code sets forth comprehensive regulations governing how public funds are managed in Texas. It addresses the entire lifecycle of public finance— from budgeting, accounting, and financial reporting to debt management, revenue collection, and procurement. By ensuring transparency, accountability, and sound fiscal practices, these regulations help maintain the integrity of Texas' public financial systems and ensure that taxpayer dollars are used efficiently and effectively for the public good.
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