Division of Finance TANAB Exception Policy Section AAM 25…

             Division of Finance TANAB Exception Policy
Section AAM 25.090 of the Administrative Manual discusses Expenditure and Revenue
Controls and AAM 25.100 goes into a detailed explanation of how TANAB is set up in
AKSAS.

The tolerance factor is set up in AKSAS to allow spending up to a predetermined
percentage of estimated budgeted revenues in advance of collections. This is in
recognition that in almost all cases, the source of the budgeted revenues will require the
state to incur expenses prior to allowing the billing and collection of revenues to cover
those costs.

The general policy is to set TANAB tolerances for all total control appropriations at
10%, and adjust them as required. Specific exceptions to the 10% default:

   1. DOT capital appropriations have been approved for 20%.
   2. Unbudgeted RSA appropriations that are set up in within separately controlled
      RSA structures can be set up for any amount.
   3. Summary controlled appropriations underneath a total control can have any
      TANAB amount.

With this general policy in place, there can be a need for TANAB exceptions either on a
temporary basis or on a permanent basis. The support is similar for each; the difference
is that temporary increases require two transactions (to raise and subsequently lower the
tolerance) and permanent increases are for the life of the appropriation. TANAB
increases for one year's operating appropriation will not automatically carry over to the
next year's appropriation.

TANAB Increases

First, make sure that the error involves "Insufficient TANAB," rather than "Insufficient
Unobligated Object Balance" or "Insufficient Unobligated Account Balance." The latter
errors require other steps to resolve other than a TANAB increase.

Next, send your Finance accountant a request in writing (e-mail is fine) that includes:

   ·   Total control appropriation requiring an TANAB increase
   ·   amount of increase requested
   ·   duration of the increase (permanent or temporary until when)
   ·   Input RD, batch and sequence number for the transaction to increase the TANAB,
       and for the transaction to reduce the TANAB back to its original percentage if
       applicable. Note: these transactions must be in two different batches because of
       the different effective dates.
   ·   a brief description of the situation, which may include:
           o amount of payments necessary before pending revenue collection.
           o funding source -- who will be billed for the revenue?
           o when collection is expected

Permanent increases are granted in situations where the revenue cycle lags the
expenditures. Examples of such situations: extremely slow revenue reimbursement time
for an active appropriation (e.g., AHFC-funded appropriations) or an appropriation with
just a few, high dollar amount transactions. This can happen with some capital
appropriations that have large payments to contractors, operating appropriations for grant
payments, or payments for large annual interagency billed services that are not part of an
RSA. A simple analysis of the appropriation activity can serve as support.


The Finance accountant reviews the given information for reasonableness, including the
percentage and requested duration. Any questions will be communicated back to the
agency; otherwise both transactions will be approved at the same time, with the
assumption that the date of the transaction reducing the TANAB back to its original
amount will not be changed without further communication from the agency to the
Finance accountant. Finance keeps documented copies of all TANAB changes in
Departmental files for Legislative Audit's review.