The Consolidated Local Street and Highway Improvement (CHIPS) Program was legislated in 1981 to provide State aid for the construction, operation, and/or maintenance of highways, bridges, and highway-railroad crossings that are not on the State highway system. Between 1982 and 1991, all CHIPS funds were distributed to localities in a lump sum on a quarterly allocation basis. In 1991, as a result of statutory changes, the CHIPS Program was divided into two components: a quarterly operation and maintenance (O&M) component, funded from the State's general fund, and a quarterly capital component, funded from New York State Thruway Authority bond proceeds. Effective April 1, 2014, CHIPS is being funded in the first instance by a budget appropriation and all CHIPS capital reimbursements are now issued by the Office of the State Comptroller. CHIPS O&M funding has not been included since the SFY 01-02 State budget. The Legislature converted these funds into additional CHIPS capital funds that have been appropriated since SFY 02-03. Section 10-c of the Highway Law and Thruway Authority bond documents require that municipalities provide several certifications to the Department of Transportation (NYSDOT), that are described in section 34.2 of this Part.

The Office of the State Comptroller (OSC) audits municipal records and accounts. Such audits may include examination of the data generated and used in CHIPS calculations.