Minnesota Department of Transportation

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MnDOT Policies

Special Revenue Funds

MnDOT Policy #FM025
Effective: March 12, 2021
Reviewed: April 8, 2024

View/print signed policy (PDF)

Special Revenue Funds Procedures

Please go to the MnDOT Org Chart to find specific contact information: Org Chart.

Responsible Senior Officer: Deputy Commissioner/Chief Administrative Officer
Policy Owner: Director, Office of Financial Management
Policy Contact: Assistant Office Director, Office of Financial Management

Policy statement

The Minnesota Department of Transportation (MnDOT) must create a Special Revenue Fund appropriation for all non-federal funds it receives under Minnesota Statutes §174.02, subdivision 6, or other legislative designation. Employees must follow the Special Revenue Fund Procedures to establish funding strings in accordance with the MnDOT Chart of Accounts, collect and spend funds, and disperse remaining funds at the time the appropriation is closed per contract terms. Expenditures must be for the work specified in the contract and must be moved from the related fund to the Special Revenue Fund in the year the expenditures occurred.

Reason for policy

Minnesota Statutes §174.02, Subd 6, allows MnDOT to enter into agreements with other governmental or nongovernmental entities for:

  • Research and experimentation;
  • Sharing facilities, equipment, staff, data, or other means of providing transportation-related services; or
  • Cooperative programs that promote efficiencies in providing governmental services or that further development of innovation in transportation for the benefit of the citizens of Minnesota.

Minnesota Statutes §174.02, Subd 6, allows MnDOT to accept and spend funds received under such agreement for the purposes set forth in the agreement. The funds must be deposited in a special revenue appropriation for the agreement to which they are associated.

Outside the above statutory authority, the legislature may designate a Special Revenue Fund appropriation for a specific activity, and a contract is not necessary to receive those funds as the statute creates the legal authority for the spending.  Funds are collected through fees and spent as statutorily mandated. Expenditures are either directly applied or moved from operating budgets to the corresponding Special Revenue Fund appropriation, as applicable, per the legislatively mandated activity.  Examples of this type of Special Revenue Fund are Forest Hauler Fees, Training appropriations and Damage Restitution.

The policy establishes the foundation and assigns responsibilities for creating special revenue funding strings, receiving payments, and spending the funds received.


All MnDOT employees must comply with this policy.

Key stakeholders with responsibilities under this policy include:

  • Employees who are responsible for negotiating, preparing, or managing special revenue funded contracts and/or activities.
  • All employees who code labor time or other expenses related to special revenue funded contracts and/or activities.



Authorization by the legislature to spend money from the state treasury for purposes established in law. Appropriations typically limit expenditures to a specific amount and purpose within a fiscal year or biennial period.

Funding String

The elements of a funding string include the Fiscal Budget Year, Fund, Fin DeptID, Appropriation ID, Account Codes, Project ID, and Source Type. The funding string is used to designate the revenue and/or expense budget for either spending or collecting monies.

Lump Sum

A contract payment method which provides a fixed payment for performing work required by a contract, regardless of the actual costs required to perform the work.  A lump sum may be paid at one time upon completion or it may be broken into multiple payments, such as per-deliverable or "progress" payments.


An internal MnDOT document that describes the basic terms of a proposed contract which is approved by Office of Financial Management.

Restricted Fund

A fund which is authorized by legislation that allows a government entity to collect money from an external entity and restricts those monies for a specific purpose.

Special Revenue Fund

A non-federal restricted fund (2000 and 2001 funds) in which to deposit receipts for a specific purpose.


Offices and Districts

  • Collaborate with Contract Management on drafting proposals and contracts to determine if special revenue funds will be utilized.
  • Implement contracts as written or, if needed, request exceptions to standard process from the Director of Office of Financial Management.
  • Encumber funds for products and services related to the contract prior to starting work.
  • Track transactions related to Special Revenue Fund appropriations.
  • Move, or notify the Office of Financial Management to move, expenditures from the related fund to the Special Revenue Fund in the year the expenditures occur.

Contract Management Section (Office of Chief Counsel)

  • Collaborate with Offices and Districts on drafting proposals and contracts.
  • Route proposals and contracts for review and signature.
  • Request Office of Financial Management to set up Special Revenue Fund funding strings.
  • Provide funding string, obtained from the Office of Financial Management, to contract administrators and all parties involved.
  • Run a report each month to identify special revenue funded contracts that are expiring. Work with the Project Manager to determine if the contract needs to be amended or closed.

 Office of Financial Management

  • Review and/or approve proposals and work orders for special revenue funded contracts.
  • Review and approve special revenue funded contract amendments.
  • Create and provide funding string to Contract Management.
  • Invoice the customer during contract term and after audit certificate completion.
  • Conduct reviews and process transactions.
  • Review reports to track Special Revenue Fund contract activity.

Consultant Services

  • Encumber contracts funded by special revenue funds.

Policy Owner (Director, Office of Financial Management)

  • Review and approve exceptions to standard process for special revenue funded contracts.
  • Review and approve amendments to the financial terms of lump sum special revenue funded contracts.
  • Review the policy every year, or sooner as necessary, to ensure policy remains up to date.
  • Ensure procedures, forms, and other documents associated with the policy remain current.
  • Monitor state, federal, enterprise, agency, or other requirements that apply to the policy or procedures.
  • Consult with the Office of Chief Counsel to ensure the policy and procedures remain compliant with all state, federal, enterprise, agency, or other requirements.
  • Ensure that necessary approvals by state or federal agencies are obtained before changes to the policy or procedures are implemented.
  • Work with the Policy Coordinator to revise policy and/or confirm its accuracy.
  • Communicate policy revisions, reviews, and retirements to stakeholders.

Resources and related information


Processes, Procedures, and Instructions


History and updates


March 12, 2021

Policy Review

  • February 23, 2023 - Updated the definition of “Funding String” to include source type; added three responsibilities for policy owner to match revised policy template.
  • April 8, 2024 - No changes

This policy's next scheduled review is due March 2025.