• The procedure for intra-agency administrative offset;
• Expansion of the current Contract Voucher Offset process to include non-tax debt; and
• The procedure for refunding an amount previously offset.

1. To offset part of a payment, prepare a Voucher, Payee Continuation and Batch Transmittal as usual, noting the following special requirements.

• Voucher
  

  Payee ID and Payee Name - Enter the ID and name of the debtor.

  Payee Amount - Enter an amount equal to the original Payee Amount minus the offset. The offset amount includes interest, penalties and collection fees.

  Description - Enter an explanation of the nature and amount of the offset (or include in an attachment).

  Charge/Liquidation - Enter the cost center, object code and contract liquidation data that would have been charged if no offset had been withheld from this payment

• Payee Continuation (AC 2395)
• Payee ID - Enter the Payee ID of the debtor.
• Route - Enter 'A' for the offset check to be returned to the agency.
• Payee Name, Line 1 - Enter the name of the account into which the offset check must be deposited. If the account is maintained in the State treasury, enter "Commissioner of Taxation and Finance."
• Payee Name, Line 2 - Enter "Offset" and the debtor's name, so they will appear on the face of the check.
• Address, Line 1 - Enter the Payee ID of the debtor so it will appear on the face of the check.
• Payee Amount - Enter the total amount of the offset, including interest, penalties and collection fees.
• IRS Code - Enter the IRS Code, if any, that appears on the voucher.
• Reference/Invoice No. and Date - Enter information you want to appear on the check stub to facilitate posting your accounts receivable.
• To offset the entire payment, a Payee Continuation form is not needed. Instead, prepare a voucher by entering the information which would be required on the Payee Continuation for partial payment offsets, and enter the cost center, object code and liquidation data that would have been charged if no offset had been withheld from this payment. As with a partial offset, agencies must include an explanation of the nature and amount of the offset with the voucher.

2. After receiving the offset check, deposit it in the appropriate account. If that account is maintained in the State treasury, prepare a Report of Moneys Received (Form AC909). Use object code 35338 for interest, penalties and collection fees. Use the appropriate revenue object for the balance of the offset.
3. Forward the check and AC909 copy to Division of the Treasury and the AC909 original to OSC.

This section replaces Bulletin A-226 issued 12/16/89. OSC and the Department of Taxation and Finance have implemented a Contract Voucher Offset Process for diverting all or part of a contract payment to DTF to credit a contractor's delinquent tax account. That process has been expanded to include offset of non-tax debt against agency contract payments.
As explained in Item K-052 and Appendix E of DOB's Guidelines, agencies can certify past-due, legally enforceable, non-tax debt to DTF for offset against State payments, DTF will review tax refunds and active contracts for those debts certified to DTF. If there are insufficient tax refunds currently payable to satisy those debts, DTF will advise OSC to flag the contracts of such debtors and will also continue to offset any additional tax refunds as they become available.

As vouchers charging flagged contracts are released for payment by OSC auditors, the Central Accounting System (CAS) will reject the vouchers for offset processing by OSC. DTF will post its files, advise OSC of the disposition of the moneys offset and advise creditor agencies of offsets monthly so agencies can adjust accounts receivable balances. Agencies originating vouchers against which offsets are applied will see on the Daily Payee List (VOU065) that all or part of a payment has been made to the Commissioner of Taxation and Finance.

NOTE: In order for the offset process to function properly, it is essential that agencies enter correct Payee ID's when processing both Contract Encumbrance Requests and Vouchers.

Agencies should process contract payments as usual, even after becoming aware of offsets applied against a contractor.

Information relating to tax and non-tax offsets is confidential and must be treated as such by OSC, DTF and agency personnel.

 

• Voucher Number - Enter 'RA' in the first two positions of voucher number.
• Payee ID, Name and Address - Enter the ID, name and address of the payee due the refund.
• Payee Amount - Enter the total amount of the refund.
• Description or Reason - Enter the reason for the refund, the date the erroneous offset occurred and the revenue cost center, object and fund/sub-fund to which the offset was credited.
• Cost Center Code - Enter "02 816508 RA 44".
• NOTE: This cost center will charge the Comptroller's Refund Account. OSC will subsequently prepare a journal transfer reimbursing the Comptroller's Refund Account and charging the Revenue Arrearage Account.
• Object - Enter '59610' which represents refunds.

Prepare a Batch Transmittal using Batch Type 'CRA' and forward with the voucher to OSC.

NOTE: To reduce the possibility of erroneous offsets, creditor agencies must provide timely updates of Debtor balances to DTF as explained in Appendix E to DOB's Guidelines.