Office of the New York State Comptroller  
     Home || Press Releases || Audits || Retirement || State Finances || Local Government || Reports || NYC Oversight || Pension Fund

New York State Accounting System User Procedures Manual

Volume Name
CONTROLS AND SPECIAL PROCEDURES
Volume
XI
Date
10/25/04
Section Name
Petty Cash Advance - Personal Services Use
Section
4.0310

     This section provides the procedures for, and limitations to, making personal service payments to an employee from a cash advance account. The payment to an employee for personal services is not intended to supersede normal State payroll procedures but is to provide a means to pay an employee for actual time worked where an undue hardship would result,

ALLOWABLE PERSONAL SERVICES PAYMENTS TO EMPLOYEES AND LIMITATION ON USE

Personal service payments are allowed for employees only. They must be (a) for an initial payment to a new employee or (b) to employees already on the payroll.

  • The advance cannot be in an amount greater than the estimated 'net' salary.
  • Under no circumstances should salary advances be made to individuals on a recurring basis to expedite the payroll process or for minor changes in the individual’s biweekly earnings.
  • Employees who are on an agency’s payroll, but because of absences in excess of available leave credits or for other reasons are not entitled to a full biweekly salary check, may be paid on the normal pay day for the time actually worked.

SALARY CHECK EXCHANGE OR REPLACEMENT

It is not always necessary to exchange an employee's check for unauthorized absences. The adjustment may be made in the following pay period. Refer to the Agency Payroll Manual, Chapter E, Report of Check Returned for Refund or Exchange for instructions on check refunds.

The procedure to replace a salary check for a lesser amount is as follows:

1) The agency's payroll office initiates the Report of Check Returned for Refund or Exchange (AC230), and forwards it to the fiscal officer.

2) The agency fiscal officer or authorized custodian of the advance account draws a check payable to the employee for the amount due the employee, as shown on the AC 230. The payment to the employee from the cash advance account must be documented by a copy of the AC 230 and signed by the employee receiving the check. This can be done in the "Remarks" section with a notation "Petty Cash Check Received". The disbursing officer must note on the AC 230 the date and check number to further cross reference and document the disbursement.

3) Enter on the AC230, as the Name of Payee for the exchange check, "(Name of Agency), Advance Account". This will enable the advance account to be reimbursed by a check to be issued by OSC. This check will be issued by OSC upon receipt of the AC 230 as described in the Payroll Manual.

4) The custodian of the advance account should retain a copy of the AC 230 to document the disbursement from the account. The advance account will then be reimbursed by a check issued to the agency by OSC through its payroll exchange account. Upon receipt of the check from OSC, the custodian of the account should promptly deposit the check to the advance account, noting receipt of the check on the copy of the AC230 that was retained. This should then be filed for historical and audit purposes.

Exclusion

This procedure cannot be used in cases of termination, or to exchange checks because of death.

ESTABLISHING A CASH ADVANCE ACCOUNT

          In order to make personal service payments, a advance account must either be in existence or one must be established by the agency. Procedures for establishing a advance account are in Section 4.0210 of this manual.

VERIFICATION BY AUDIT

          The operation of the advance account, including partial payment and exchange procedures, should be reviewed periodically by an independent office of the agency. The results of the review should be made available to the head of the department, agency or institution, and any exceptions should be resolved.

          Violations of these guidelines may result in the agency losing the privilege of the entire petty cash account.