Overview of Finance and Administration Cabinet Responsibilities

The Finance and Administration Cabinet, with approximately 1,400 employees, manages the financial resources of the Commonwealth and provides central administrative services to state and local government agencies. Its key responsibilities include finance and accounting operations, state purchasing and procurement, tax administration, managing IT infrastructure, construction and management of state buildings, motor vehicle fleet management, debt issuance, appropriation units, and more.

• Finance
• Administration
• Cabinet
• Responsibilities
• Government

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1. Finance and Administration Cabinet Overview JEREMY SIMPSON LRC OFFICE OF BUDGET REVIEW JUNE 2024

2. Finance and Administration Cabinet (Approximately 1,400 Employees exclusive of Property Valuation Administrators) Manages the financial resources of the Commonwealth and provides central administrative services to agencies of state and local government. Key Responsibilities: Finance and Accounting Operations State purchasing and procurement Tax administration and collection Managing IT infrastructure Construction and management of state buildings Motor Vehicle Fleet Management Debt Issuance 2 LRC OFFICE OF BUDGET REVIEW

3. Appropriation Units General Administration Controller Debt Service Facilities and Support Services County Costs Commonwealth Office of Technology Revenue Property Valuation Administrators 3 LRC OFFICE OF BUDGET REVIEW

4. Administratively Attached Appropriation Units Appropriations Not Otherwise Classified ( ANOC ) Judgments 4 LRC OFFICE OF BUDGET REVIEW

5. FAC Appropriations FY25 Source of Funds Federal Funds $1,851,500 0% General Fund (Tobacco) $23,716,900 3% Restricted Funds $268,091,200 29% $ 928.6 Million General Fund $634,987,900 68% Source: 2024 Budget of the Commonwealth 5 LRC OFFICE OF BUDGET REVIEW

6. FAC Appropriations FY25 Appropriation Unit General Administration $54,825,400 6% Property Valuation Administrators $72,458,300 8% Controller $23,208,400 3% Revenue $129,995,000 14% COT $139,449,700 15% Debt Service $403,364,200 43% County Costs $30,946,000 3% Facilities and Support Services $74,400,500 8% $ 928.6 Million Source: 2024 Budget of the Commonwealth 6 LRC OFFICE OF BUDGET REVIEW

7. FAC Appropriations FY26 Source of Funds Federal Funds 1,851,500 0% General Fund (Tobacco) $17,033,700 2% Restricted Funds $269,773,400 25% $ 1.055 Billion General Fund $766,601,700 73% Source: 2024 Budget of the Commonwealth 7 LRC OFFICE OF BUDGET REVIEW

8. FAC Appropriations FY26 Appropriation Unit General Administration $54,294,500 5% Property Valuation Administrators $74,413,600 7% Controller $23,844,500 2% Revenue $132,431,900 13% COT $141,036,700 13% County Costs $30,946,000 3% Debt Service $515,626,500 49% Facilities and Support Services $82,666,600 8% $ 1.055 Billion Source: 2024 Budget of the Commonwealth 8 LRC OFFICE OF BUDGET REVIEW

9. Total of seven budgetary programs/units: Secretary Legal & Legislative Services Administrative Services Fleet Management Postal Services Policy and Audit Gubernatorial Transition General Administration (~120 Employees) Appropriation FY 25 15,527,500 39,178,000 FY 26 15,027,800 39,146,800 GNRL RSTD 119,900 54,825,400 119,900 54,294,500 FDRL Total 9 LRC OFFICE OF BUDGET REVIEW

10. Controller Appropriation/Budget Unit is responsible for all aspects of accounting principals and procedures, financial accounting systems and internal accounting control policies and procedures. Total of six budgetary programs/units: Controller Local Government Services Financial Management Procurement Services Customer Resource Center State Risk and Insurance Services Controller (~80 Employees) Appropriation FY 25 7,567,800 15,640,600 FY 26 7,852,400 15,992,100 GNRL RSTD 23,208,400 23,844,500 Total 10 LRC OFFICE OF BUDGET REVIEW

11. Includes most previously authorized General Fund debt service. Debt Service OFM pays debt service for financings issued by the State Property and Buildings Commission (SPBC), Kentucky Asset/Liability Commission (ALCo), and the Turnpike Authority of Kentucky (TAK), regardless of fund source or appropriation unit. Appropriation FY 25 23,466,900 379,897,300 403,364,200 FY 26 16,783,700 498,842,800 515,626,500 TBCO GNRL Total SPBC usually issues bonds for combined projects authorized with General Fund supported debt, including Bond Funds for universities. 11 LRC OFFICE OF BUDGET REVIEW

12. Total of seven budgetary programs/units: Commissioner s Office Facility Development and Efficiency Real Property Historic Properties Building and Mechanical Services State Surplus Property Federal Surplus Property Facilities and Support Services (~250 Employees) Appropriation FY 25 17,097,200 57,303,300 74,400,500 FY 26 23,331,500 57,335,100 82,666,600 GNRL RSTD Total 12 LRC OFFICE OF BUDGET REVIEW

13. Total of ten budgetary programs: Public Defender Program Witnesses DUI Service Fees Sheriffs Fees County Clerks (Make Tax Bills) Board of Assessment Appeals Fugitive from Justice Jury Fund Sheriffs Expense Allowance Premium on Sheriffs Bond County Costs Appropriation FY 25 29,243,500 1,702,500 30,946,000 FY 26 29,243,500 1,702,500 30,946,000 GNRL RSTD Total Budget Detail: Statutory payments to local officials from primarily the General Fund. If appropriations are insufficient to meet expenses, then those costs represent potential obligations from the General Fund Surplus or Budget Reserve Trust Fund accounts. 13 LRC OFFICE OF BUDGET REVIEW

14. Total of five budgetary programs: Commonwealth Office of Technology Chief Information Security Officer Infrastructure Services Architecture and Governance Client Support Services Commonwealth Office of Technology (~220 Employees) Advisory Councils: Geographic Information Advisory Council (GIAC) KY Wireless Interoperability Executive Committee (KWIEW) Appropriation FY 25 318,500 137,414,600 1,716,600 139,449,700 FY 26 955,500 138,364,600 1,716,600 141,036,700 GNRL RSTD FDRL Total 14 LRC OFFICE OF BUDGET REVIEW

15. Total of eight budgetary programs: Commissioner s Office Property Valuation Field Operations Income Taxation Sales and Excise Taxes Registration and Operations Office of Tax Policy & Regulation Enforcement Revenue (~725 Employees) Appropriation FY 25 250,000 117,664,600 119,721,400 12,065,400 15,000 129,995,000 132,431,900 FY 26 250,000 TBCO GNRL RSTD FDRL Total 12,445,500 15,000 15 LRC OFFICE OF BUDGET REVIEW

16. PVAs are the state officers responsible for performing fair and equitable assessments of over 2.2M properties statewide. Property Valuation Administrators The appropriation funds personnel only, with a small exception (less than 1%) for annual expense allowance payments and enterprise IT charges. Appropriation PVA Salaries are statutory (KRS 132.590) and based on county population, with annual inflationary adjustments incentive payments. FY 25 67,671,500 4,786,800 72,458,300 FY 26 69,626,800 4,786,800 74,413,600 GNRL RSTD Total and education 16 LRC OFFICE OF BUDGET REVIEW

17. Administratively Attached Budgetary Programs 17 LRC OFFICE OF BUDGET REVIEW

18. Budget Appropriation Bill for appropriations not related to a particular program or agency from the General Fund. Unit under General Government of If appropriations are insufficient to meet expenses, then these expenses represent potential obligations from the General Fund Surplus or Budget Reserve Trust Fund accounts. Appropriations Not Otherwise Classified (ANOC) Eligible Expenses: Attorney General Expense Board of Claims Award Guardian Ad Litem (GAL) Prior Year Claims Unredeemed Checks Refunded Involuntary Commitments ICF/MR Frankfort in Lieu of Taxes Frankfort Cemetery Police Officer, Firefighter and National Guard and Reserve Survivor Benefits Medical Malpractice Reimbursement Blanket Employee Bonds Appropriation FY 25 16,750,300 16,750,300 FY 26 16,750,300 16,750,300 GNRL Total Liability Insurance 18 LRC OFFICE OF BUDGET REVIEW

19. Similar to ANOC, Judgments is a budget Unit under GeneralGovernment of Appropriation Bill. Historically, there had been no appropriations for Judgments since the 05 Session and judgments rendered against the Commonwealth represented potential obligations from the General Fund Surplus or Budget Reserve Trust Fund accounts as NGEs. Judgments Governor Beshear included appropriations in the 20-22 budget for known liabilities against the Commonwealth. Appropriation FY 25 FY 26 -0- -0- -0- -0- GNRL Total Recent Changes: Budget language was modified to both remove NGE spending authority for judgments and to allow for payments to be paid pursuant to KRS Chapter 45 (from funds available to the agency or by future appropriation). Carry forward language is included in the budget bill to allow appropriation to continue to the next biennium and not lapse to the General Fund. 19 LRC OFFICE OF BUDGET REVIEW

20. Questions? Jeremy.Simpson@lrc.ky.gov (502) 564-8100 Ext. 59153 20 LRC OFFICE OF BUDGET REVIEW