Revised: 08/30/2023
Article II, of Section 22, of the Ohio Constitution limits the length of appropriations to a period of no more than two years. Because many capital projects require more than two years to complete, the biennial capital budget process normally includes a process to review existing agency capital appropriations to determine any amounts which need to remain effective beyond the current fiscal biennium. Guidance regarding the reappropriation process is published by OBM at the commencement of the capital budget process.
As a part of the capital reappropriation process, OBM works with agencies to review capital appropriation line items (ALIs), identify ongoing capital projects that require reappropriation, and compile a list of those capital project ALIs along with a projection of their unexpended/unencumbered balances for inclusion in the bill which will make capital reappropriations. In addition to reappropriating available balances, the reappropriations process provides an opportunity to review long standing encumbrances and to consider repurposing or cancelling unused capital appropriations. Agencies should work closely with their OBM Budget Analyst during the capital reappropriations process.
Agencies must complete an Agency Capital Reappropriation Justification for each request for reappropriation and submit to OBM a BI/Cognos BPM-0023, Reappropriation Request Detail report after uploading or manually entering reappropriation requests into the Budget Enterprise Application. With respect to ongoing, not yet completed capital improvement projects, agencies should request reappropriation for every line item expected to have available balances as of the end of that capital biennium. If an ALI is not included in the reappropriations bill, then any unencumbered appropriation amounts will lapse on upon the close of that biennium. If an agency anticipates the full amount will be disbursed or encumbered by the close of the biennium, then the agency does not need to request reappropriation.
Agencies should be aware that the reappropriation amounts contained in the reappropriations bill are not the actual amounts that will be reappropriated. Rather, the dollar values contained in the bill function as placeholders that are reasonable estimates based on agency requests and OBM’s subsequent analysis. Using estimates in the bill is necessary due to the time lag between the bill’s development, introduction, and passage. Language in the bill stipulates that the actual amount to be reappropriated for each line item is the unexpended/unencumbered and unallotted balance at the end of the fiscal year plus any adjustments that may be made by the General Assembly.
It is important to note that purchase orders encumbering capital appropriations function differently than operating appropriations. Where most operating purchase orders must be closed shortly after the close of the fiscal year in which they were established, capital purchase orders do not because they are typically reappropriated for a longer period of time by the General Assembly. Because many capital projects will span multiple years, recurring reappropriation authority allows capital purchase orders to remain open for the length of the project. The life of a capital purchase order may even span different capital biennia.
Agencies may encounter situations from time to time where a project where funds were previously released by the Controlling Board does not come to fruition or the scope shifts to such a degree that it no longer resembles what was originally approved. In this case, the agency may submit a Controlling Board request to repurpose the funds. Agencies should continually monitor the project scope to ensure the project does not materially deviate from the previously approved purpose. Agencies do not have the ability to adjust purchase orders created in a prior biennium. Requests to repurpose prior Controlling Board approvals should take this into consideration.
Please note: A purchase order which was created in a past biennia may not be changed or adjusted. Should some adjustment need to be made, a new purchase order will need to be created using current appropriation authority. Additionally, any prior-biennium purchase order which is closed or cancelled generally forfeits any appropriation that existed as part of that encumbrance.