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New York State Accounting System User Procedures Manual

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Special Payments - Fringe Benefit & Indirect Cost Billing

     The purpose of this section is to define the method by which fringe benefits and indirect costs will be assessed and paid from special and administrative funds of the State.

Fringe benefit costs refer to those expenditures incurred by the State for the benefit of its employees and includes the costs to the State, as an employer, for Retirement plans, Social Security, Health Insurance, Dental Insurance, Worker's Compensation, Survivor's Benefits, Unemployment Insurance and the State's contribution to the Employee Benefit Funds as negotiated in labor-union contracts. 

Indirect costs are agency or central service agency costs that cannot be directly associated with the administration of a particular program and therefore cannot be charged as a direct program expense. Indirect costs include, but are not limited to, physical overhead, space occupancy, utilities, information technology and central service agency (e.g. OGS, Civil Service, Budget, General Services, etc. ) costs. 


     Statutory authority for assessing, collecting and payments from funds of the State are included in various statutes of the State.  Generally these provide that whenever the compensation of an employee is paid from a special or administrative fund provided for by law, fringe benefits and a proportionate share of administrative costs associated with the administration of benefits which would otherwise be chargeable to the State's General Fund, shall, with approval of the Budget Director, be paid from such special or administrative fund.  Employee fringe benefit and indirect costs of the General Fund (001 and 003) and State Capital Projects Fund (002) are paid from general state charge appropriations provided annually and are not  subject to the special assessment procedures described herein.

Assess and Collect
Section 8-b State Finance Law
Retirement Section 16(c) Retirement and Social Security Law
Social Security Section 138-a Retirement and Social Security Law
Health Insurance  Section 168-1
and 2
Civil Service Law
Worker's Compensation Section 88-a Workmen's Compensation Law
Survivor's Benefits Section 154-8 Civil Service Law
Unemployment Insurance Section 580 Labor Law
Employee Benefit Funds Section 6 (f) State Finance Law


At the beginning of each fiscal year, fringe benefit and indirect cost rates are provided to the Comptroller by the Director of the Budget.  The federal government may also request the negotiation of a separate rate for distinctive programs. For example, a special rate can be developed for a state-administered program paid for with federal funds or for an organizational unit which is entirely supported with Federal Funds.  Thus, state agencies may have separate rates for federally sponsored activities as well as for any special program for which a unique rate is requested by the federal government.  For federal fund assessments, the rate provided is determined by agreement with federal award agencies and, as noted above, may be agency, fund or program specific.  The State Comptrollers office will apply the rates provided by the Budget Director to personal service payments made from special or administrative funds to determine the fringe benefit and indirect cost assessment.          


Fringe Benefit and Indirect Cost assessments are based upon personal service expenditures paid from appropriated funds, except the General Fund (001, 003), State Capital Projects Fund (002) and any other fund specifically exempted by the Division of the Budget.  The assessment is derived by multiplying the annual percentage rates by the total personal service payments made during the quarter.

Approximately fourteen days after the close of each quarter OSC will produce and distribute a quarterly  Personal Service Analysis Report (CTL610).  For each billable fund, this report depicts the total personal service payments made during the quarter by agency, fund, account, program , appropriation internal number, expenditure cost center and personal service object of expense.  A second report of prior and current quarter Fringe Benefit/Indirect Cost Assessment Ledger (LED080) is also produced and distributed to state agencies.  The LED080 presents, in ledger format, the amounts billed, paid and unpaid balance of all assessments made during the current fiscal year. It also provides users with a cumulative fiscal year to date report that lists the beginning fiscal year balance, transaction activity (transaction date, batch information and transaction code) and ending balance for each subledger account.  The quarterly invoice amounts from the CTL610 will automatically be carried forward to the LED080.  The subledger code, listed on both the CTL610 and LED080, has three components: a five digit agency code, a three digit fund code and a fixed three digit numeric code of either '001' for fringe benefits or '002' for indirect costs.  Any unpaid balance attributable to prior years assessments (e.g. March 31) is carried forward as the beginning receivable balance. 


All state departments and agencies are required to:

Ensure that appropriations are sufficiently segregated for payment of fringe benefit and indirect cost assessments.   OSC will closely monitor the segregation of appropriations for personal service payments to ensure that sufficient amounts are segregated for fringe benefit (segregation object '58') and indirect cost (segregation object '594') payments. 

Remit payment for the full amount of the quarterly assessments.  Payments at less than the full rate require specific legislation, regulation or an approved waiver from the Division of the Budget.  OSC has no authority to cancel or reduce the quarterly assessments levied. 


Payment of the fringe benefit and indirect cost assessments is required within 45 days of the end of each quarter.  Immediately upon receipt of the quarterly fringe benefit and indirect cost assessment (CTL610) and the subledger report of unpaid assessments (LED080), state agencies must review these reports and prepare a Journal Voucher Continuation with Tail (AC2414) as outlined below: 

  • Batch Type - Enter 'FBP'.
  • Liability Date - Last day of the quarter to which the payment applies.  This date also appears in the upper left corner of the CTL610. Under no circumstances is it permissible to combine two quarterly payments on one AC2414, payments must be quarter specific.
    • Expenditure Cost Centers (debits) - Enter the department and expenditure cost center codes to identify the fund/account/program appropriation(s) to which the payment(s) will be charged.

      NOTE: Unique objects are to be used for payment of fringe benefit and indirect cost assessments.  Therefore, it is necessary that two expenditure coding lines be entered for each of the assessment types.

    • Expenditure Object Code - Enter object code 58800 for payment of the fringe benefit assessment and 59400 for indirect cost assessment payments.
    • Revenue Cost Centers (credits) - As noted above, annually the State Comptroller's Office will issue an Accounting Bulletin which provides the rates to be applied for the fiscal year.  This same bulletin will also provide the revenue cost centers to be used to complete this portion of the AC2414.  Accounting Bulletins are published on the Comptroller's website at:
      Information for State Agencies -> Accounting Bulletins
    • Revenue Cost Center Continuation Line - In the Transaction Code (TC) block enter '15' and in the Subledger Code block enter the subledger code provided in the CTL610 and LED080 reports.
    • The Reason for Adjustment box must contain the following:
      • Type of payment - fringe or indirect
      • Agency Code charged (if other than the originating agency
      • Identification of Funds(s) and Accounts from which the payment is being made.

All Journal Voucher prepared pursuant to these procedures, must be mailed to:

                Office of the State Comptroller
               Bureau of Accounting Operations
                  Revenue Processing Section
                  110 State Street - 9th Floor
                        Albany, New York 12236

Journal Vouchers may be entered and released at agency terminals provided they are mailed, with an error-free copy of the batch control list (BCL), to OSC within 48 hours after they are entered.


Refunds of personal service expenses from a non-State entity (e.g. employees on union leave whose salary is reimbursed by the employee organization) must include employee fringe benefit and indirect costs.  The recovery is to be processed as follows:

    • Refund of Appropriation Expense - Refunds related to actual personal service expense should be credited to the appropriation from which such expense was incurred. In the event that the appropriation has lapsed then the refund should be credited to the fund/account which incurred the expense using a Report of Monies Received (AC909) form.
    • Fringe Benefit and/or indirect cost recoveries attributable to 3rd party recoveries are credited to the Fringe Benefit Escrow Fund (166-01) on a Report of Monies Received (AC909) using Object Code 35320.