General Rules for Paying Another State Agency

SECTION OVERVIEW AND POLICIES

This section informs New York State Business Units how to process vouchers to another Business Unit in the Statewide Financial System (SFS).

Payments from one Business Unit to another require the use of the Special Use Vendor IDs called Interagency Vendor IDs. The Office of the State Comptroller’s (OSC) Vendor Management Unit (VMU) has populated the New York State Vendor File with Special Use Vendor IDs as well as the Centralized Customer ID for Business Units to use when processing transactions between Business Units. Transactions that require this process include, but are not limited to, fringe benefit payments from one Business Unit to OSC.

Interagency Vendor ID’s are a ten-digit number starting with “042” or “043.” Using the Interagency Vendor ID starting with “042” allows Business Units to pay each other without the need for a paper check. Using the Interagency Vendor IDs starting with “043” allows Business Units to pay each other in situations where the Business Unit requires a check to deposit into a bank account other than the General Checking account. See Chapter X, Section 7.A - Interagency and Federal Grant Centralized Corporate Customers for assigned Interagency Vendor IDs.

Before processing an Interagency payment, Business Units must identify if the billing is from an SFS Online or a Legacy System Business Unit.

The following processes are billing scenarios with explanations as to how Business Units will use the SFS to create transactions between one another. The Billing Business Unit is the agency supplying the good or service and the Customer Business Unit is the agency paying for the good or service. If the Customer Business Unit disputes the amount billed, it must negotiate with the Billing Business Unit for an adjusted bill.

Process and Document Preparation:

BOTH BUSINESS UNITS ARE SFS ONLINE

When two SFS Online Business Units intend on doing business with one another, the Business Units must utilize the Accounts Receivable and Billing Modules in the SFS. The transaction is processed without the production of a check.

The Billing Business Unit creates a bill to the Customer Business Unit in the SFS Billing Module either online or via the bulkload process. This action automatically creates a receivable in the SFS Accounts Receivable Module of the Billing Business Unit and a regular voucher to the Customer Business Unit’s Interagency Vendor ID in the Accounts Payable Module.

The voucher that is created includes ChartField values to ensure the voucher fails the budget checking process. The Customer Business Unit then updates the ChartFields appropriately to reflect the goods or services and to ensure the Customer Business Unit recognizes the expense.

The voucher continues to process through the SFS, satisfies the receivable and no paper check is transferred between the two Business Units.

SFS ONLINE BUSINESS UNIT TO LEGACY SYSTEM BUSINESS UNIT

The SFS Online Billing Business Unit sends a paper invoice to the Customer Business Unit. The Customer Business Unit processes the invoice like any other invoice using a regular voucher and the Billing Business Unit’s Interagency Vendor ID. Once the voucher is processed through the SFS, the billing module will identify that the invoice is from the SFS Online Billing Business Unit and allow SFS to link the payment to the SFS Online Business Unit’s receivable.

The expenditure detail on the voucher satisfies the receivable, and no paper check is transferred between the two Business Units.

LEGACY SYSTEM BUSINESS UNIT TO SFS ONLINE BUSINESS UNIT

The Legacy System Billing Business Unit creates an invoice using its own internal billing procedures and sends a paper invoice to the SFS Online Customer Business Unit. The SFS Online Customer Business Unit pays the invoice by processing a General Ledger Journal Entry in the General Ledger Module of the SFS to account for the revenue and expense. For more information on Interagency billing, refer to Chapter VIII, Section 3 - Interagency Billing of this Guide.

LEGACY SYSTEM BUSINESS UNIT TO LEGACY SYSTEM BUSINESS UNIT

Legacy System Business Units create an invoice using their own internal billing procedures. For a Legacy System Customer Business Unit to make payment on the invoice created by the Legacy System Billing Business Unit, a General Ledger Journal Entry must be made in the General Ledger Module to account for the revenue and expense. For more information on Interagency billing, refer to Chapter VIII, Section 3 - Interagency Billing of this Guide.

SHARED COSTS

Occasionally, Business Units may share costs of services or need to transfer costs between Business Units. An example may be the use of rented space. For example, Business Unit A leases office space and allows Business Unit B to use some of the space as its own. Business Unit A will continue to pay the lessee for the space, and Business Unit B will reimburse Business Unit A for its share of the space rental by processing a General Ledger Journal Entry. For more information on Interagency billing, refer to Chapter VIII, Section 3 - Interagency Billing of this Guide.

MASS BILLINGS

There are instances where Business Units process bills for a specific business purpose to other Business Units and the public. These situations require the Business Unit to produce a check for deposit into a bank account other than the General Checking account. Examples of this situation include licensing fees and tuition payments. The bills for these types of services are not created as Interagency Billings on the SFS. In these cases, the Billing Business Unit does not treat the Customer Business Unit as a State agency. Instead, the Billing Business Unit issues an invoice using the same process as a non-State agency.

In these instances, for both Business Units to properly account for the expense and revenue, a paper check must be created. The VMU has created Special Use Vendor IDs starting with “043” for Business Units to use when making payments to the billing Business Unit.

Refer to Chapter X, Section 6.A - Requesting a Special Use Vendor ID for instructions on how to request a Special Use Vendor ID.

Refer to Section 5 - Agency Payment Preparation and Submittal of this Chapter for instructions on how to prepare and submit a regular voucher.

Paying Another State Agency for Tax Assessments, Fines or Fees

SECTION OVERVIEW AND POLICIES

Generally, Business Units pay other Business Units using an Interagency Vendor ID number starting with “042” or “043.” However, when Business Units pay tax assessments, fine or fees to another Business Unit, documentation, such as tax returns or applications, must accompany the payment.

This section informs New York State Business Units how to process vouchers to pay State tax assessments, fines or fees to another Business Unit.

Process and Document Preparation:

1. Send an email to [email protected] with a request for approval to use the One Time OSC Approved Payment Vendor ID 0400000003. Business Units may not use this Vendor ID without OSC prior approval. Business Units also may not use interagency Vendor IDs that start with “042” or “043” to pay tax assessments, fines or fees.
2. Once OSC approval is received, the Business Unit must create a single payment voucher using the One Time OSC Approved Payment Vendor ID 0400000003. The Business Unit must:
   1. Ensure the voucher is made payable to the name and address on the tax assessment, fine or fee.
   2. Ensure the voucher will be paid by check.
   3. Select the appropriate handling code on the voucher to ensure the Business Unit can obtain the check to mail with the required documentation.

Guide to Financial Operations

REV. 03/06/2013