SECTION OVERVIEW AND POLICIES

The Statewide Financial System (SFS) has added functionality to allow for the management of Real Estate assets and leases. This section provides New York State Business Units with information on scheduling the creation of vouchers in the Accounts Payable module for leases utilizing the SFS Real Estate module. Scheduling the creation of lease vouchers via the Real Estate Module results in faster and more accurate payment processing by the Business Units.

The use of the Real Estate module is being implemented in a phased approach, beginning with The Office of General Services (OGS) and OGS-managed leases. For more information on the Real Estate module and its impact on individual agencies and leases. For additional instruction on this topic, visit job aid Real Estate module and its impact on individual agencies and leases published to SFS Coach. SFS Coach is accessible from the SFS home page after logging in with your SFS user ID and password.

Process and Transaction Preparation

To utilize lease management in the Real Estate Module, a Procurement Contract must be created in the Procurement Contracts module. Procurement Contracts that are lease agreements should contain a default payment term representing when the lease payment is due. Contracts must be created and/or updated to include 1N as the default payment term for leases whose payments are due on the first day of the month. Leases due on other days of the month should be processed in accordance with the Business Units’ normal Business Process. Additionally, all lease Procurement Contracts should be updated or created to include the applicable Project ID and Activity ID for the lease. For additional instruction on this topic, visit the job aids published to SFS Coach. SFS Coach is accessible from the SFS home page after logging in with your SFS user ID and password.

Once a lease is established as a Procurement Contract, leaseholders must set up lease contracts in the Real Estate module. For OGS-managed leases, OGS will set up the lease in the Real Estate Module. Each lease created by the leaseholder in the Real Estate module should contain the applicable attributes, including length of lease, frequency of payments, dollar amount of payments, and payment terms.

After the lease is created in the Real Estate module, the Business Unit must create a Purchase Order (PO) either in the in the Purchasing module or by scheduling a PO release from the Procurement Contract. The PO will include all information entered on the Procurement Contract, including the lease contract number, unique Project ID and Activity ID, and payment terms.

Once the Business Unit approves the PO and it is in a valid budget status, the Business Unit must associate the approved PO to the lease in the Real Estate Module. The Business Unit should monitor its PO balance and activity to ensure there is available encumbrance to process the lease payment each month. Business Units may need to create new POs for each new fiscal year or at other times throughout the fiscal year, as necessary. Each new PO must be re-associated with the lease in the Real Estate module.

All POs associated to the lease in the Real Estate Module should be for fixed costs that can be paid on a regular schedule (e.g., base rent, parking). Business Units should process all variable costs (e.g., HVAC, escalation fees) on a separate PO that will not be associated to the lease in the Real Estate module. However, all purchase orders and vouchers for the variable costs described above should contain the appropriate Project ID and Activity ID to allow for the capture of total cost of occupancy. In the event a Business Unit must pay a vendor for a normal, fixed cost (e.g., base rent) and a variable cost (e.g., escalation costs), the Business Unit should request the vendor provide a separate invoice for the variable cost.

The SFS will build Accounts Payable lease vouchers at the frequency specified by the Business Unit on the lease in the Real Estate module. All vouchers built via the Real Estate module must be associated to the PO associate to the lease contract to ensure contract spending is appropriately calculated.

Lease vouchers built from the Real Estate module have a voucher source of “FRE.” The invoice ID for each lease voucher will be the PO ID followed by the month and year (i.e., MMYY) of the voucher. Business Units must enter the “Invoice Received Date” and “Obligation Date” on each voucher and must verify the Payment Term and Invoice Date fields. The following chart outlines the dates that should be used for a lease payment that must be made on the first of the month:

Business Units should refer to the following sections of this Guide for additional guidance:

• Chapter XIV, Section 2 - Obligation, Accounting and Budget Dates for guidance on entering the obligation date.
• Chapter XII, Section 5.F - Selecting the Appropriate Payment Term and Scheduled Date for guidance on selecting the correct payment term and scheduled due date.

Business Units should process a lease voucher using its normal business practices, paying special attention to ensure each lease voucher appropriately references a PO, Project ID, and Activity ID. If a lease voucher is created without these fields, the Business Unit must manually enter the information on the voucher. Additionally, the Business Unit must make corrections to the PO and associated lease to ensure that the next scheduled payment is created with the correct information.

All lease vouchers will be subject to matching and budget checking. After the lease voucher is approved, matched, and budget checked, the voucher will proceed to OSC for audit and will be paid at the interval specified in the payment terms on the voucher. For leases where payment is due on the first day of the month, the lease should be set up with payment terms of “1N.” This will ensure the payment is either 1) deposited in to the vendor’s bank account on the first of the following month, or 2) the vendor’s check will be dated the first of the following month, as long as the Business Unit has approved the voucher in time to enable the completion of the whole payment process by that date. To enable this timely payment, Business Units should approve vouchers for OSC audit no later than the third to last business day of the month.

Business Units should encourage vendors who receive their payments via check to switch to receiving their payments electronically (ACH). This will facilitate faster, more secure payments. Business Units should direct vendors to OSC’s website for additional information on how to sign up for electronic payments (http://www.osc.state.ny.us/vendors/ePayments.htm).

For additional instruction on this topic, visit job aid on processing lease vouchers published to SFS Coach. SFS Coach is accessible from the SFS home page after logging in with your SFS user ID and password.

Guide to Financial Operations

REV. 06/02/2016