You asked how money is paid out when the state settles a lawsuit against an agency or employee. You also asked whether there is a separate fund or whether the payment comes from that agency's budget.

According to Carl DiNello, an accountant for the comptroller, money to settle lawsuits against the state comes from the general fund. Although there is an adjudicated claims account, DiNello told us that no money is appropriated to that account ahead of time because it is not clear how much money will be needed.

DiNello indicated that when the attorney general settles a lawsuit, he sends a copy of the judgment and a memo requesting money to be paid. The memo and judgment indicate the amount of money and the method of payment. The comptroller draws the amount of money specified in the judgment and the memo from the state's general fund.

DiNello said he is aware of one exception to this rule. If the lawsuit concerned back wages owed to a state employee, the money comes from the budget of the agency involved.

GC: ro