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This
section of the manual sets forth the procedures to be followed
by all State agencies in carrying out OSC's banking policy,
especially as it relates to:
- The establishment of agency bank accounts;
- The designation of a bank as a depository for accounts
which require normal banking services;
- Designation of depository banks for accounts requiring
special banking services;
- Agency reporting requirements;
- The closing of agency bank accounts;
- Establishment of savings accounts.
STATUTORY AUTHORITY
Section 106 of the State Finance Law requires that ALL monies
received by any state officer or persons receiving moneys
shall be deposited in a bank or trust company - as approved
by the State Comptroller. This approval is mandatory
since the State Comptroller will arrange for payment of banking
services and collateralization of accounts.
ESTABLISHING AGENCY BANK ACCOUNTS
Agency Responsibility
1. Request to establish a bank account
Each agency must obtain authorization from OSC, Division of
Pension Investment and Cash Management to establish a new
bank account. An agency must request the establishment of
such accounts in writing. To ensure that each new account
is established consistent with the overall financial operation
of the requesting agency, each request must be approved by
the chief fiscal officer of the requesting agency or by a
designee.
The request letter must include the following:
- Name and purpose of the account;
- Statutory reference where applicable;
- Justification for establishing the new account;
- Estimated initial balance;
- Estimated maximum balance anticipated on both a short-term
and a long-term basis;
- A description of the flow of cash, e.g., "the cash
will be held by the agency until disbursed", or "the
cash will be transferred to the State Treasury";
- Address of the office making deposits and withdrawals;
- Name and title of official(s) in charge of the account;
- Name and location of a commercial bank where the agency
wishes to open the account;
- The services anticipated to be provided by the bank.
- Affirmation that the account custodian understands
the need for and has implemented internal controls necessary
to protect State assets - including monthly bank to book
reconciliation's.
All correspondence concerning agency bank accounts should
be sent to:
NYS Office of the State Comptroller
Division of Pension Investment and Cash Management
Cash Management Unit
110 State Street
- 14th Floor
Albany, New York 12236
2. Banking Services
Unless
specifically approved by OSC, an agency shall not request
a bank to provide any service in conjunction with a State
bank account, except the following:
- Standard bank checks - prenumbered and imprinted with
appropriate identification;
- Deposit slips;
- Monthly statements;
- Provision for prompt availability of all deposits.
All requests for banking services, other than those outlined
above must be justified by the requesting agency. This requirement
includes services for new accounts and changes to services
for existing accounts.
As discussed further below, depository banks for accounts
for which special banking services have been requested, such
as lock box processing, account reconciliation, messenger
service or other similar services, will generally be selected
by competitive bidding. Therefore, the requesting agency should
allow a period of time commensurate with the complexity of
the services to be provided between the request for the establishment
of the account and the date that the account is planned to
be opened.
Office of the State Comptroller Responsibility
1. Evaluation of request
Upon receipt of the agency's formal request, OSC will evaluate
the request to determine if the establishment of the account
is consistent with all relevant rules, regulations and statutes
and to determine if the account is necessary for its operations.
If an agency has requested approval for special banking services,
such services will be analyzed to determine if they are justified
on a cost benefit basis. All questions with respect to an
agency's request will be promptly communicated by OSC to the
letter of request's signator.
2. Designation
of Depository Banks/Authorization to Establish New Account
Where an account will not require special banking services,
OSC will advise the requesting agency of its findings and,
if the request is approved, will designate a depository for
the account and establish, pursuant to Section 106 of the
State Finance Law, the initial level of collateral to secure
monies deposited into the account. A designation letter
will be sent to the State depository authorizing the establishment
of the bank account. A copy of the designation letter will
also be sent to the requesting agency. The requesting agency
will be responsible for notifying the bank to open the account.
Once the account is opened, the State agency must notify OSC,
Division of Pension Investment and Cash Management, of the
new account number.
Where an account requires
special services or if the cost of the account exceeds the
statutory level for bidding services as outlined in the Procurement
and Disbursement Guidelines G-182, Banking Services Contracts
and Payments, OSC will require that a depository bank for
such account be selected by competitive bidding. If OSC determines
that a depository bank should be selected by competitive bidding,
the requesting department will be required to prepare, in
cooperation with OSC, a request for proposal detailing the
services to be provided by a bank. Bank proposals will
be evaluated on the basis of the total cost to the State and
the ability of the bank to perform such services. OSC will
determine the mandatory requirements that banks must meet
to be eligible to participate in the bidding.
3. Bank Compensation
OSC is responsible for determining the amount of compensation
a bank should receive for services related to State accounts.
State agencies may not enter into any agreement
with any bank for the payment of compensation for bank services
unless such payment is required by law or is expressly approved
by OSC.
4. Banking Support Services
The
Division of Pension Investment and Cash Management will assist
State agencies with banking related problems. Such assistance
includes providing current information about the various types
of services which banks provide.
The Division
also maintains a computer based inventory of all State bank
accounts. A listing of bank accounts for each agency is available
upon request.
Agency Reporting Requirements
1. Monthly Statement of Balances
To comply with Section 107 of the State Finance Law, the
Department of Taxation and Finance requires each agency to
submit a monthly statement reporting the name of the bank
account and the month end book balance, no later than five
calendar days after the close of the month. The preferred
method of reporting data and balances is by e-mail to (case
sensitive):
Treasury-State
Register Reporting@tax.state.ny.us
Questions
concerning this reporting process may be address to:
Mr.
William Bloodgood
Department
of Taxation and Finance
Division
of the Treasury
Phone:
518-474-5472
Fax:
518-486-9829
2. Collateral Procedures
OSC is responsible for the maintenance of collateral held
in escrow with the State's fiscal agent to secure all New
York State deposits. OSC relies on the State official responsible
for their agency accounts to notify OSC when new accounts
are opened, if unusually high balances are in existing accounts
or accounts are closed. The individual agency officials share
the responsibility for ensuring the funds in their custody
remain fully secured.
3. Confirmation of Bank Services
OSC requires State depositories to provide OSC's Division
of Pension Investment and Cash Management with monthly bank
account analyses detailing the services the bank provides
for each State account.
SAVINGS ACCOUNTS
No State agency should establish an interest bearing bank
account without the expressed approval of OSC. The purpose
of this restriction is to ensure that all State money that
is available for investment is invested in a comprehensive
manner by OSC, as required by law. In addition, since State
bank accounts are not charged directly for the cost of the
banking services, the State depository uses the interest earned
on the balances in the accounts to offset banking costs.
UNOFFICIAL ACCOUNTS
Any bank account established by State employees for unofficial
business, e.g., coffee funds, goodwill funds, party funds,
etc., should not include the names of either the State
of New York or a State agency in the title of the account.
CASH ADVANCE CHECKING ACCOUNTS
Agencies must use one consolidated checking account to account
for cash advances. Agencies using more than one checking account
for this purpose should close all existing cash advance checking
accounts and establish one cash advance checking account entitled
"AGENCY ADVANCE ACCOUNT". (Option: Change the title
of one existing checking account to "AGENCY ADVANCE ACCOUNT"
and close all remaining accounts.) Agencies that have facilities
at multiple locations, may with the approval of OSC, have
more that one advance account.
AGENCY RESPONSIBILITY FOR CLOSING BANK ACCOUNTS
Any bank accounts which are no longer needed by a State agency
should be closed expeditiously. The Division of Pension Investment
and Cash Management Unit must be notified within 10 days of
such action.
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