 M.S.
162.08, Subd 5, 6 & 7 provides for
counties to make advances from future
year’s allocations to expedite construction
 Threshold
is determined by looking at
 Current
construction cash balance
 Expenditure trends
 Repayments
 Threshold
may be administratively adjusted
by MnDOT’s Chief Financial Officer

RED – SEVERE
 Construction
cash balance too low. NO MORE ADVANCES –
NO EXCEPTIONS

YELLOW - GUARDED
 Construction cash balance low; balances reviewed
monthly. Advancing money may not meet the anticipated
needs. Resolution required. Reserve option is available
only prior to bid advertisement.

GREEN - LOW
 Construction
cash balance at acceptable level. Advances
approved on 1st come, 1st serve basis while funds are
available. Resolution required. High priority projects are
reserved.
 Submit
an Advance Resolution
 Earmarks
the funding, but will NOT hold the funds
 Advances paid out on a 1st come 1st serve basis
 Requests are good for only the year requested
(cannot summit for multiple years) – void 12/31
 Not limited to the projects listed on the resolution
 Payments are processed in the order received by
SAF until the maximum advance amount is reached
 Advances are repaid with next year’s allocation(s)
until fully repaid.
 Advance funding is not guaranteed
 Use
if County needs a guarantee that the
funds will be held for them
 Once
approved, a signed copy will be
returned to the County

Requests are good for only the year requested
(cannot summit for multiple years) – void 12/31
 Advance
Resolution
 Advance Resolution – Federal Project
 Advance Resolution – Townbridge
 Advance Resolution – Turnback
 Advance Resolution – Request to Reserve
Funds
http://www.dot.state.mn.us/safinance/forms
andresolutions.html
 Required
if the construction cash balance drops
below an acceptable level – Code Yellow
 Process starts in early October
 Each county is required to submit projects to
their DSAE for prioritization within the district
 DSAE submits the prioritized list to SALT for final
prioritization
 Requests should include a negative impact
statement if project had to be delayed or
advance funding not available plus the
significance of the project
 Projects
where agreements have mandated
the county’s participation
 Projects
 Small
with advanced federal aid
over-runs and funding shortfalls may
be funded, but require State Aid approval.
 Counties
last “construction” allotment
 Advance
amount is reduced by any similar
outstanding obligations &/or bond principal
due
 Limit
can be administratively adjusted by
MnDOT’s Chief Financial Officer
 For
federal aid advance construction projects
programmed by the ATP in the STIP where
State Aid funds are used in lieu of federal
funds.
 Repayment
is made when federal funds are
converted
 Should federal funds fail to be programmed, or
the project (or a portion of it) be declared
federally ineligible, the county is required to pay
back the advance.
Accounting Entry – for 95% of State Aid
obligation only (up to approved advance
amount)
Debit: Cash
Credit: State Aid Receivable
NOTE: The “Encumbrance Balance” on the Status
Report will not include any projects that have
been paid to the county with a State Aid Advance.
The entries for recognizing expenses and
earned revenues are the same as for a regular
project.
NOTE: Excess revenue from State Aid Advances
will be backed out at year end.
 Transfers
from Maintenance to Construction when
final maintenance underruns.
Debit: State Aid Construction - Allotment
Credit: State Aid Construction – Deferred Revenue
 Construction
project underruns – unused
encumbrance is put back into the Allotment
Debit: State Aid Construction – Allotment
Credit: State Aid Construction - Receivable
The negative “Available Balance” from your
report is the net amount of all State Aid
Advances that have occurred for that funding
type.
Accounting Entry – Recognize State Aid Advance
Debit: State Aid – Advance (revenue)
Credit: State Aid – Advance Payable (liability)
The current year revenues must be reduced by the
amount of the Deferred Revenue debit balance.
Accounting Entry – Reduce revenue for the amount
of the State Aid Advances
Debit: State Aid Construction – Revenue
Credit: State Aid Constr – Deferred Revenue
NOTE: If the debit amount of the Deferred Revenue is more
than the Advance amount another entry needs to be made to
Reduce Revenue based on Deferred Revenue Balance.
Reverse prior year State Aid Advances (repaid)
Accounting Entry –
Debit: State Aid – Advance Payable
Credit: State Aid – Advance
Revenue not recognized in previous year due to
State Aid Advance.
Accounting Entry –
Debit: State Aid Constr – Deferred Revenue
Credit: State Aid Constr – Revenue
NOTE: An entry should be made for both of the
reversing revenue entries that were made at year end.