The requirement for prior approval by the Office of the State Comptroller (OSC) of a contract involving consideration other than the payment of money, oftentimes referred to as a “revenue contract”, is found in State Finance Law §112(3) which reads: “A contract or other instrument wherein the state or any of its officers, agencies, boards or commissions agrees to give a consideration other than the payment of money, when the value or reasonably estimated value of such consideration exceeds twenty five thousand dollars, shall not become a valid enforceable contract unless such contract or other instrument shall first be approved by the comptroller and filed in his office.”

This requirement extends to repayment agreements and other agreements (e.g., barter agreements) where the consideration given by the State does not involve the transfer of money, but the reasonable value of such consideration over the entire term of the agreement exceeds $25,000. In circumstances where consideration flowing from the State cannot be readily determined in terms of current market value, it shall be valued in terms of intrinsic value. Intrinsic value measures an asset based on qualities in addition to its useful purpose, including both tangible and intangible factors. This value may or may not be the same as the current market value.

State agencies use the Statewide Financial System (SFS) Customer Contracts Module to record these types of State contracts (including repayment agreements) and amendments thereto and to submit such transactions to OSC for approval. (See Sections 7A through 7C of this Chapter, for more information.)

The contracting party must be registered in the Statewide Vendor File and have a valid Vendor ID. In addition, they must be registered in the New York State Customer File and assigned a Customer ID. It is the responsibility of the State agency to initiate the registration process for all Vendors/Customers they do business with, who are not already registered in the New York State Vendor and/or the New York State Customer file. (See Chapter X - Guide to Vendor/Customer Management of this Guide for more information about New York State Vendors/Customers.)

State agencies must establish internal control and accounting procedures to ensure revenue receipts are properly accounted for and reported in the SFS. (See Chapter VII, Section 2 - Miscellaneous Receipts / Accounts Receivable Receipts of this Guide for information about the recording of revenue receipts.)

Guide to Financial Operations

REV. 06/14/2016