The General Appropriation Act reads as follows:

"It is the intent of the General Assembly to appropriate all State funds and to authorize and/or appropriate the use of all Federal and other funds for the operations of State agencies and institutions for the current fiscal year."

Section 2-65-20 of the Code of Laws of South Carolina 1976 reads as follows: "With the exception of appropriations from the general fund and those provided for in Sections 2-5-50 through 2-65-80 of this act, no agency or institution of state government shall receive and expend any funds without prior approval of the Governor and the concurrence in such approval by the Joint Appropriations Review Committee. In determining their position with respect to any proposed receipt or expenditure, the Governor and the committee shall consider, among other things, the public benefit to be derived from the program or service and the impact of the proposal on the future finances of state government'."

Attention is called to the requirement that no agency or institution of state government shall receive and expend any funds without prior approval of the Governor and concurrence in such approval by the Joint Appropriations Review Committee.

Section 2-65-60 of the Code of Laws of South Carolina 1976 states: "Funds other than federal funds or those appropriated from the general funds, which are included in the state general appropriation act and acts supplemental thereto and authorized for expenditure, shall not require subsequent approval by the Governor or the committee if the expenditures are in accord with the line item appropriation of the act."

Code of Laws of South Carolina 1976, Section 2-65-20 states: "Proposals for the expenditure of federal funds shall originate with the agency or institution designated by the Governor. All requests for federal fund allocations shall be furnished to the committee by the Governor with his recommendations. Within a reasonable time, a statement of concurrence or non-concurrence will be furnished by the committee.

The Governor shall also submit his recommendations to the Budget and Control for its review.

The provisions of this section shall not be construed to apply to funds generated at the local level from local appropriations whether or not such funds are used with state funds in the implementation of programs or the delivery of services in cooperation with or under the supervision of agencies of state government."

"2-65-30: "During the fiscal year for which the funds are authorized, the Governor shall submit to the committee his recommendations for:

1. Any changes or proposed changes in federal program structure which would affect state agency programs and budgets;

2. Any changes or proposed changes in the funding of such programs including, but not limited to, changes in funding levels, consolidations, distribution and allocation;

3. State agency requirements for continuation of programs terminated by federal action.

The committee shall furnish to the Governor, within a reasonable time, a statement of concurrence or nonconcurrence with the recommendations.

After review, the committee shall notify appropriate legislative committees as to reconciliation of federal program funding changes in the state appropriation process.

Any allocation, distribution, or consolidation of federal funds between or among any approved recipients or state agencies shall only be authorized by appropriations act passed by the General Assembly. Provided, however, the Governor shall, after review and approval by the committee authorize receipt, reallocation, consolidation, redistribution or transfer of federal funds among or between state agencies.

The Governor shall, upon prior approval of the committee, recommend revisions of the budget format to accommodate changes in federal program structure or funding mechanisms."

Code of Laws of South Carolina 1976, Section 2-65-40 states: "When reviewing federal grant applications, the Governor shall determine the requirement or desirability for a single state agency designation. If the designation is found to be desirable or required, the Governor, with the concurrence of the committee, shall make the designation."

If the authorization for expenditures for approved Federal grants were not included in the State General Appropriation or a supplemental Appropriation Act, by line item within program, it will be necessary to complete and submit a Request for Revision of Authorizations to the Grants Services Unit, Finance and Grants Management Division, Governor's Office for approval by that office and the Joint Appropriation Review Committee. The approved requests for revision will be recorded by the Comptroller General.

Code of Laws of South Carolina 1976, Section 2-65-60 reads as follows: "Funds other than federal funds or those appropriated from the general funds, which are included in the state general appropriation act and acts supplemental thereto and authorized for expenditure, shall not require subsequent approval by the Governor or the committee if the expenditures are in accord with the line item appropriation of the act."

If the authorization for expenditures for other funds are not included in the General Appropriation Act or supplemental Appropriation Act by line item within program, it will be necessary to complete and submit a Request for Revision of Authorizations with adequate explanation and justification to the Grants Services Unit, Governor's Office for approval and concurrence by Joint Legislative Appropriation Review Committee.

Chapter 65 of Title 2 of the Code of Laws of South Carolina 1976 includes: "Notwithstanding the provisions of Sections 2-65-20 and 2-65-30, any state agency or institution may apply for and receive research grants and student loan funds from federal and private sources if the acceptance of the funds will not create a continuing obligation to commit state funds or state resources beyond the term of the grants. The grants may be applied for and received without prior review and approval by the Governor or committee but the receipt of the grants shall be reported to the Governor and the committee within fourteen days of notification of the award. Agencies and institutions receiving research grants shall not be required to remit indirect cost recoveries to the general fund."

Provision in the General Appropriation Act reads as follows:

"All Federal Funds received shall be deposited in the State Treasury, if not in conflict with Federal regulations, and withdrawn therefrom as needed, in the same manner as that provided for the disbursement of state funds. If it shall be determined that federal funds are not available for, or cannot be appropriately used in connection with, all or any part of any activity or program for which state funds are specifically appropriated in this Act to match Federal funds, the appropriated funds may not be expended and shall be returned to the General Fund, except upon specific written approval of the Budget and Control Board. Donations or contributions from sources other than the Federal Government, for use by any state agency, shall be deposited in the State Treasury, but in special accounts, and shall be withdrawn from the treasury as needed to fulfill the purposes and conditions of the said donations, or contributions, if specified, and, if not specified, as may be directed by the proper authorities of the department. The expenditure of funds by agencies of the State Government from sources other than General Fund appropriations shall be subject to the same limitations and provisions of law applicable to the expenditure of appropriated funds with respect to salaries, wages or other compensation, travel expense, and other allowances or benefits for employees."

The sections of the Appropriations Act cited above have been interpreted to mean that all monies deposited in the State Treasurer's Office are "State" monies regardless of their source of origination. This means that all State Rules, Regulations and laws applying to the disbursement of appropriated funds apply to all other funds deposited in the State Treasurer's Office.

Provision in the General Appropriation Act reads as follows:

"To the extent practicable, all agencies and institutions having Federal or other funds available for the financing of their operation shall expend such funds in accordance with the intent of this Act. The authorization to spend Federal and other funds shall be decreased to the extent that receipts from these sources do not meet the estimates as reflected in each Section of this Act; and any increase shall be authorized through the review process as set forth in Act 651 of 1978 as amended."

1. Indirect Cost Recoveries - Research Grants

   Section 2-65-50 of the Code of Laws of South Carolina 1976:

   "Agencies and institutions receiving research grants shall not be required to remit indirect cost recoveries to the general fund."

2. Indirect Cost Recoveries - Waiver

   Section 2-65-80 of the Code of Laws of South Carolina 1976:

   "Section 9. The Governor, with prior approval of the Committee, in accordance with the procedure set forth in Sections 2-65-20 and 2-65-30, may waive the requirement that indirect cost recoveries or overhead cost reimbursements shall be returned to the general funds revenue if it determines it is in the best interests of the State and the agency or institution seeking the grants.

   In making its determination, the Governor and the Committee shall make sure that the action shall not create within an agency or institution a fund of surplus money which can be used to expand programs without legislative approval."

Section 2-65-70 of the Code of Laws of South Carolina 1976 reads as follows:

"An annual statewide indirect cost allocation plan shall be prepared by the Governor's office. Each state agency's, department's or institution's indirect cost rate proposal shall be prepared by the agency, department or institution and shall be submitted to the Governor and the Joint Review Committee prior to the submission to any federal agency for the agency's approval. After being approved by the Governor and the Committee, the proposal shall be forwarded to the federal agency by the Governor's office and a rate shall be issued to the state agency from the Governor's office. The Governor's office shall provide an annual estimate of indirect funds collected from federal and other programs for inclusion in the annual state general appropriation act and the Governor's office shall continually monitor these funds."

The General Appropriations Act provides for transfer of appropriations as follows:

"Transfers of funds may be approved by the Budget and Control Board under its authority or by the agency as set forth herein in Section 72.14. Any agency which requests or transfers personal service funds must indicate on the transfer document whether or not a reduction in force is involved."

"Agencies and institutions shall be authorized to transfer appropriations within programs and within the agency with notification to the Division of Budget and Analyses and Comptroller General. No such transfer may exceed twenty percent of the program budget. Upon request, details of such transfers may be provided to members of the General Assembly on an agency by agency basis. Transfers of appropriations from personal service accounts to other operating accounts or from other operating accounts to personal service accounts may be restricted to any established standard level set by the Budget and Control Board upon formal approval by a majority of the members of the Budget and Control Board."

The requirements and authorization for quarterly allocations are included in the General Appropriation Act as follows:

"As far as practicable all departments, institutions, and agencies of the State are hereby directed to budget and allocate the appropriations herein made to them as quarterly allocations so as to provide for operation on uniform standards throughout the fiscal year and in order to avoid an operating deficit for the fiscal year. It should be recognized that academic year calendars of state institutions will affect the uniformity of the receipt and distribution of funds during the year. The Comptroller General or the Office of State Budget shall make such reports to the Budget and Control Board as they deem advisable on any agency which is expending authorized appropriations at a rate which predicts or projects a general fund deficit for the agency. The Budget and Control Board is authorized and directed to require any such agency, institution or department to file a quarterly allocations plan and is further authorized to restrict the rate of expenditures of the agency, institution or department if the Board determines that a deficit may occur. If the Budget and Control Board finds that the likelihood and cause of a deficit is the result of agency management, then the bond of State officials responsible for management of the agency involved shall be held liable therefor and the Board shall notify the Agency Head Salary Commission of such finding."

The General Appropriation Act authorizes the Budget and Control Board to take action to prevent a deficit as follows:

"Any appropriations made herein or by special act now or hereafter, are hereby declared to be maximum, conditional and proportionate, the purpose being to make them payable in full in the amount named herein, if necessary, but only in the event the aggregate revenues available during the period for which the appropriation is made are sufficient to pay them in full. The State Budget and Control Board is directed to survey the progress of the collection of revenue and the expenditure of funds by all agencies, departments and institutions. If the Budget and Control Board determines that a year-end aggregate deficit may occur by virtue of a projected shortfall in anticipated revenues, it shall utilize such funds as may be available and required to be used to avoid a year-end deficit and thereafter take such action as necessary to restrict the rate of expenditure of all agencies consistent with the provisions of this section. No institution, activity, program, item, special appropriation or allocation for which the General Assembly has provided funding in any part of this Act shall be discontinued, deleted or deferred by the Budget and Control Board. Any reduction of rate of expenditure by the Board, under authority of this Act, shall be applied as uniformly as may be practicable except that no reduction shall be applied to funds encumbered by a written contract with an agency not connected with the State Government. No such reduction shall be ordered by the State Budget and Control Board while the General Assembly is in session without first reporting such necessity to the General Assembly and the General Assembly has taken no action to prevent the reduction within five statewide session days of formal written notification."