Amounts received by state agencies that represent a return of monies paid from state appropriated funds are to be immediately documented and transmitted to the State's Treasury pursuant to §121 of the State Finance Law. Such amounts are to be credited to the fund from which the original payment was made.

Since all federal fund payments are charged to appropriation/segregation records, any refunds of such expenditures, including audit disallowances, should be credited back to the appropriation/segregation (provided the appropriation has not lapsed) that was charged when the initial payment was made. Applying the refund reduces the expenditure balance on the appropriation/segregation and federal grant award, as well as increasing the undrawn grant award amount.

Under no circumstances should a state agency return such refunds directly to the U.S. Treasury or the federal cognizant agency without first recording the refund in the SFS as described in these procedures.

Guide to Financial Operations

REV. 07/31/2015