Allotment System

HRS div. 1, tit. 5, ch. 37, pt. II

in effect

HRS §37-31 Intent and policy

37-31. Intent and policy It is declared to be the policy and intent of the legislature that the total appropriations made by it, or the total of any budget approved by it, for any department or establishment, shall be deemed to be the maximum amount authorized to meet the requirements of the department or establishment for the period of the appropriation, excepting as may otherwise be provided by law, and that the governor and the director of finance should be given the powers granted by sections 37-32 to 37-41 in order that savings may be effected by careful supervision throughout each appropriation period with due regard to changing conditions; and by promoting more economic and efficient management of state departments and establishments. [L Sp 1959 1st, c 12, pt of §3; am L Sp 1959 2d, c 1, §14; am L 1963, c 114, §1; Supp, §35-19; HRS §37-31]

HRS §37-32 Quarterly allotment periods

37-32. Quarterly allotment periods Except as provided in section 37-41.5, no officer, department or establishment shall expend or be allowed to expend during any fiscal year any sum for any purpose not specifically authorized by the legislature for expenditure during that particular fiscal year, and not made available pursuant to the allotment system provided for in sections 37-31 to 37-41. For the purposes of the allotment system, each fiscal year shall be divided into four quarterly allotment periods, beginning, respectively, on the first days of July, October, January, and April; provided that in any case where the quarterly allotment period is impracticable, the director of finance may prescribe a different period suited to the circumstances, not exceeding six months nor extending beyond the end of the fiscal year. [L Sp 1959 1st, c 12, pt of §3; Supp, §35-20; HRS §37-32; am L 1993, c 364, §3; am L 1994, c 281, §§2, 12]

HRS §37-33 Funds to which allotment system applies

37-33. Funds to which allotment system applies Sections 37-31 to 37-42 relating to the allotment system shall apply to all appropriations (including standing, continuing, or annual appropriations and special funds) for all departments and establishments, but shall not apply to refund accounts nor to appropriations for the courts or the legislature nor to payment of unemployment compensation benefits. In the cases of capital improvements and in other cases where periodical allotments are impracticable, the director of finance may dispense therewith and prescribe such regulations as will insure proper application and encumbering of funds. Subject to section 37-40, emergency or contingent funds, revolving funds, and trust funds, shall be subject to such regulations as the director may prescribe for controlling the expenditures and encumbering the funds. [L Sp 1959 1st, c 12, pt of §3; Supp, §35-21; HRS §37-33]

HRS §37-34 Appropriations available for allotment; estimate of expenses

37-34. Appropriations available for allotment; estimate of expenses (a) No appropriation to which the allotment system is applicable shall become available to any department or establishment for expenditure during any allotment period until the department or establishment submits an estimate to the director of finance, at whatever time prior to the beginning of the allotment period and in whatever form as the director may prescribe, of the amount required to carry on the work of the department or establishment during that period and until the estimate is approved, increased, or decreased by the director and funds are allotted pursuant to section 37-35. (b) Before appropriations for the University of Hawaii become available to the university, the university shall advise the governor and the director of finance of the amount necessary for payments for financing agreements under chapter 37D, the governor, with the assistance of the director of finance, as may be necessary, shall establish allotment ceilings for each source of funding of all of the appropriations of the University of Hawaii for each allotment period and shall advise the university of these determinations. (c) Any other law to the contrary notwithstanding, general fund appropriations for the operating expenses of public health facilities shall be made available to the public health facilities for expenditure during any allotment period. [L Sp 1959 1st, c 12, pt of §3; Supp, §35-22; HRS §37-34; am L 1986, c 320, §1; am L 1988, c 326, §3; am L 1989, c 327, §1 and c 370, §2; am L 1994, c 281, §§4, 5; am L 1995, c 11, §21; am L 1998, c 41, §2]

HRS §37-34.5 Department of education; allotment and expenditure plan; updates

37-34.5. Department of education; allotment and expenditure plan; updates The department of education shall submit an annual allotment and expenditure plan, including a separate description of all existing financing agreements of the department of education that require funding, together with a statement of the amount of funding required, and all proposed financing agreements of the department of education for the ensuing fiscal year, to the governor for each fiscal year. The governor may require the department of education to submit an update of the expenditure plan based on changing economic conditions. [L 1993, c 364, pt of §2; am L 1998, c 41, §3]

HRS §37-35 Estimated expenditures; approval

37-35. Estimated expenditures; approval The director of finance shall review all estimates submitted under section 37-34 and, having due regard for: (1) The probable further needs of the department or establishment for the remainder of the term for which the appropriation was made; (2) The terms and purposes of the appropriation, the progress of collection of revenues, and condition of the treasury; and (3) The probable receipts and total cash requirements for the ensuing quarter, shall approve, increase, or reduce the amount of the estimate; provided that the director of finance shall approve the estimates submitted by the University of Hawaii when: (1) The sum of the estimates for each funding source does not exceed the applicable allotment ceilings established by the governor under section 37-34; (2) The progress of collection of revenues, the condition of the treasury, and the probable receipts and total cash requirements for the ensuing quarter permit; and (3) All other legal requirements are satisfied. The director shall act promptly upon all estimates and notify each department or establishment of its allotment, and shall notify the comptroller. [L Sp 1959 1st, c 12, pt of §3; Supp, §35-23; HRS §37-35; gen ch 1985; am L 1986, c 320, §2; am L 1989, c 370, §2; am L 1994, c 281, §§4, 6; am L 1995, c 11, §21]

HRS §37-36 Modification

37-36. Modification (a) The director of finance may modify or amend any previous allotment upon notice to the department or establishment concerned; provided that: (1) For the University of Hawaii, the director of finance may modify or amend any previous allotment only upon application of or notice to the university, and upon public declaration, which shall be made ten days prior to the modification or amendment taking effect; (2) The modification or amendment shall be made only to avoid an illegal result or in anticipation of a revenue shortfall; (3) No deficit or undue reduction of funds to meet future needs of the department or establishment will result from the modification or amendment; and (4) No modification or amendment shall reduce an allotment below the amount required to meet valid obligations or commitments previously incurred against the allotted funds. (b) Prior to the implementation of any modification in allotment proposed by the director of finance pursuant to subsection (a), in which the sum of the modifications exceed 2.5 per cent of the total general fund appropriation made by the legislature in any fiscal year, the director shall notify the president of the senate, the speaker of the house of representatives, and the chairpersons of the senate committee on ways and means and the house of representatives committee on finance, respectively, of the director's intent. [L Sp 1959 1st, c 12, pt of §3; Supp, §35-24; HRS §37-36; gen ch 1985; am L 1986, c 320, §3; am L 1989, c 370, §2; am L 1992, c 294, §8; am L 1994, c 281, §§4, 7; am L 1995, c 11, §21; am L 1996, c 285, §1]

HRS §37-37 Reduction

37-37. Reduction (a) Except as provided in subsection (b), when the director of finance determines at any time that the probable receipts from taxes or any other sources for any appropriation will be less than was anticipated, and that consequently the amount available for the remainder of the term of the appropriation or for any allotment period will be less than the amount estimated or allotted therefor, the director shall, with the approval of the governor and after notice to the department or establishment concerned, reduce the amount allotted or to be allotted; provided that no reduction reduces any allotted amount below the amount required to meet valid obligations or commitments previously incurred against the allotted funds. (b) For the University of Hawaii, when the director of finance determines at any time that the probable receipts from taxes or any other sources for any appropriation will be less than was anticipated, and that consequently the amount available for the remainder of the term of the appropriation or for any allotment period will be less than the amount estimated or allotted therefor, the director shall advise the governor of the situation, and the governor shall redetermine the allotment ceiling for the affected source or sources of funding pursuant to section 37-34, and shall advise the university and make a public declaration ten days prior to the effective date of the redetermination. The university, not more than twenty days after the governor's notification, shall submit revised estimates consistent with the governor's redetermination to the director of finance. Otherwise, the director of finance shall modify, amend, or reduce any allotment of the university to comply with the governor's redetermination; provided that no reduction shall reduce any allotted amount below the amount required to meet valid obligations or commitments previously incurred against the allotted funds. (c) Prior to the implementation of any reduction in allotment proposed by the director of finance or the governor pursuant to subsection (a) or (b), in which the sum of the reductions exceed 2.5 per cent of the total general fund appropriation made by the legislature in any fiscal year, the director of finance shall notify the president of the senate, the speaker of the house of representatives, and the chairpersons of the senate committee on ways and means and the house of representatives committee on finance, respectively, of the director's intent. [L Sp 1959 1st, c 12, pt of §3; Supp, §35-25; HRS §37-37; am L 1986, c 320, §4; am L 1989, c 370, §2; am L 1992, c 294, §9; am L 1994, c 281, §§4, 8; am L 1995, c 11, §21; am L 1996, c 285, §2]

HRS §37-38 Allotment according to classification prescribed in appropriation

37-38. Allotment according to classification prescribed in appropriation Allotments shall be made according to the classifications of expenditures prescribed in the appropriation measure as enacted by the legislature, and the funds allotted for each classification of expenditure shall be used for no other classification of expenditure. [L Sp 1959 1st, c 12, pt of §3; Supp, §35-26; HRS §37-38]

HRS §37-39 Reduction of allotted amounts for objects and items

37-39. Reduction of allotted amounts for objects and items The head of a department or establishment may, at any time during any allotment period, reduce the expenditure of money appropriated and allotted for that period for specific items and objects within the classification of expenditures prescribed in the appropriation measure and allotted to the department or establishment. [L Sp 1959 1st, c 12, pt of §3; Supp, §35-27; HRS §37-39]

HRS §37-40 Exceptions; trust funds

37-40. Exceptions; trust funds Except as to administrative expenditures, and except as otherwise provided by law, expenditures from trust funds may be made by any department or establishment without appropriation or allotment; provided that no expenditure shall be made from and no obligation shall be incurred against any trust fund in excess of the amount standing to the credit of the fund or for any purpose for which the fund may not lawfully be expended. Nothing in sections 37-31 to 37-41 shall require any trust fund established pursuant to law be reappropriated annually. [L Sp 1959 1st, c 12, pt of §3; Supp, §35-28; HRS §37-40; am L Sp 1995, c 11, §8; am L 2010, c 187, §§2, 12; am L 2012, c 175, §1]

HRS §37-41 Appropriations to revert to state treasury; exceptions

37-41. Appropriations to revert to state treasury; exceptions Unless otherwise provided by section 37-41.5 or any other law, every appropriation or part thereof of any kind made subject to sections 37-31 to 37-40, remaining unexpended and unencumbered at the close of any fiscal year shall lapse and be returned to the general fund in the manner prescribed in section 40-66. [L Sp 1959 1st, c 12, pt of §3; Supp, §35-29; HRS §37-41; am L 1993, c 364, §4; am L 1994, c 281, §§3, 12]

HRS §37-41.5 Department of education; carryover of funds

37-41.5. Department of education; carryover of funds (a) The department of education may retain up to five per cent of any appropriation, except for appropriations to fund financing agreements entered into in accordance with chapter 37D, at the close of a fiscal year and the funds retained shall not lapse until June 30 of the first fiscal year of the next fiscal biennium. The department of education shall submit: (1) A report to the director of finance ninety days after the close of each fiscal year, which shall be prepared in the form prescribed by the director of finance and shall identify the total amount of funds that will carry over to the next fiscal year; and (2) A copy of this report to the legislature, as well as a report identifying the carryover of funds on a school-by-school basis, at least twenty days prior to the convening of the next regular session of the legislature. (b) Appropriations allocated to the schools shall remain within the budget of the school to which they were originally allocated; provided that the retention of an appropriation shall not be used by the department as a basis for reducing a school's future budget requirements. (c) [Repeal and reenactment on July 1, 2026. L 2024, c 10, §17.] In addition to the five per cent retainage under subsection (a), the department of education may retain any appropriation received pursuant to section 127A-16(a) or as reimbursement for disaster relief pursuant to section 127A-16(e) at the close of the fiscal year in which the appropriation or reimbursement was received, and the funds retained shall not lapse until June 30 of the first fiscal year of the next fiscal biennium. The funds shall be considered as separate and distinct from the funds the department of education is authorized to retain pursuant to subsection (a). [L 1993, c 364, pt of §2; am L 1994, c 272, §22; am L Sp 1995, c 9, §6; am L 1998, c 41, §4; am L 2000, c 202, §1; am L 2004, c 51, §52; am L 2017, c 139, §1; am L 2024, c 10, §14]

HRS §37-42 Allotment as limit of expenditures; liability for excessive expenditure

37-42. Allotment as limit of expenditures; liability for excessive expenditure No department or establishment shall expend or be allowed to expend any sum, or incur or be allowed to incur any obligation in excess of an allotment. No obligation incurred in excess of the balance of an allotment shall be binding against the State, but where the obligation is violative only for having been made in excess of an allotment, the director of finance may authorize payment thereof from unallotted funds. Any officer, employee, or member of any department or establishment, who makes or causes to be made any excessive expenditure or incurs or causes to be incurred any excessive obligation shall be deemed guilty of neglect of official duty and shall be subject to removal from office and shall be liable to the State for such sum as may have been expended or paid, and such sum, together with interest and costs, shall be recoverable in an action instituted by the attorney general. Provided that any state department, with the prior consent of the governor and of the director, and subject to terms and conditions insuring protection of the State as shall be imposed by the department, may cosponsor with another state department or with the county or any agency thereof, for the purpose of applying for federal funds or assistance for any project, after certification by the state comptroller that proper and sufficient allotment has been made by the governor to the other department or after receipt of resolution adopted by the county council that proper and sufficient sums for the project have been appropriated and encumbered. [L Sp 1959 1st, c 12, pt of §3; am L 1963, c 194, §1; Supp, §35-30; HRS §37-42]

HRS §37-43 Capital improvement project allotment process

37-43. Capital improvement project allotment process The department of budget and finance shall carry out the capital improvement project allotment process, which shall consist of reviewing, prioritizing, and evaluating capital improvement project appropriation proposals submitted by state and county agencies to ensure conformity with statewide planning goals and objectives and executive priorities, and report its findings and recommendations and an estimate of the operational costs for each proposed capital improvement project to the governor in order that the proposals may be considered for possible inclusion in the executive capital improvement project budget that is to be presented to the legislature. The department shall also review, analyze, and report on state and county capital improvement project appropriation proposals that extend over wide geographical areas of the State and that have significant impacts upon economic development, land use, environmental quality, construction employment, and executive policy directions. [L 1988, c 352, §1; am L 2014, c 135, §2]

HRS §37-46 Transfers of non-general funds to the general funds

37-46. Transfers of non-general funds to the general funds (a) The director of finance shall submit written notification to the legislature within ten days of any transfer of non-general funds to the general fund. (b) The director of finance shall prepare an annual report to be submitted to the legislature no later than twenty days prior to the convening of each regular session on such transfers for the preceding fiscal year. [L Sp 1995, c 15, pt of §2]

HRS §37-47 Reporting of non-general fund information

37-47. Reporting of non-general fund information No later than October 1 annually, each department shall submit to the legislature a report for each non-general fund account under its control that shall include but not be limited to the following: (1) The name of the fund and a cite to the law authorizing the fund; (2) The intended purpose of the fund; (3) The current program activities that the fund supports; (4) The balance of the fund at the beginning of the current fiscal year; (5) The total amount of expenditures and other outlays from the fund account for the previous fiscal year; (6) The total amount of revenue deposited to the account for the previous fiscal year; (7) A detailed listing of all transfers from the fund; (8) The amount of moneys encumbered in the account as of the beginning of the fiscal year; (9) The amount of funds in the account that are required for the purposes of bond conveyance or other related bond obligations; (10) The amount of moneys in the account derived from bond proceeds; and (11) The amount of moneys of the fund held in certificates of deposit, escrow accounts or other investments. [L Sp 1995, c 15, pt of §2; am L 2021, c 87, §4]

HRS §37-48 Non-general fund program measures reports

37-48. Non-general fund program measures reports No later than October 1 annually, each department shall submit to the legislature a report for each non-general fund account under its control that shall include but not be limited to the following: (1) A statement of its objectives; (2) Measures quantifying the target population to be served for each of the ensuing six fiscal years; (3) Measures by which the effectiveness in attaining the objectives is to be assessed; (4) The level of effectiveness planned for each of the ensuing six fiscal years; (5) A brief description of the activities encompassed; (6) The program size indicators; and (7) The program size planned for each of the next six fiscal years. [L 2021, c 87, pt of §3]

HRS §37-49 Non-general fund cost element reports

37-49. Non-general fund cost element reports No later than October 1 annually, each department shall submit to the legislature a report for each non-general fund under its control that shall include but not be limited to the following: (1) Budget details by cost element; and (2) Non-general fund names and account codes for each item or object code. [L 2021, c 87, pt of §3]

Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: http://www.capitol.hawaii.gov/hrscurrent/Vol01_Ch0001-0042F/HRS0037/HRS_0037-.htmFetched: 11/10/2026