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Advisory Number: 4
Date Issued: 06/14/2012 Date Last Updated: 06/14/2012
Advisory Name:

Business Unit and Department ID Combinations Used to Create Contracts in the Statewide Financial System


Subject:

Corrective Action for Contract Transactions Created in the Statewide Financial System with Invalid Business Unit and Department IDs

Guidance:

Agencies may have multiple Business Unit/ Department ID combinations, but only certain of those combinations are valid for use in creating contracts. New contracts (Amendment Sequence “0”) created in the SFS must use a Business Unit/Department ID combination which is valid for contracts. A list of valid Business Unit/Department ID combinations can be found in the Guide to Financial Operations, Chapter XI, Section 2 - Comptroller Approval of Contracts and General Contracts Processing.

Contracts Subject to OSC Approval

OSC will not approve any new contract where the SFS Audit ID includes a Business Unit/Department ID combination other than those valid for contract transactions. If an invalid Business Unit/Department ID is used, BOC will send the agency a notice that the contract has been non-approved, requesting that the contract be re-entered in the SFS with an Audit ID that uses a valid Business Unit/Department ID.

Note: Although the Audit ID in the SFS will change (because the Business Unit and/or Department ID will change) this will NOT require a change to the contract number, provided the contract does not already exist in the corrected Business Unit/Department ID combination.

BOC will retain the contract documentation, and the agency, after re-entering the contract in SFS, must submit to OSC a new Single Transaction Summary (STS) or AC340-S, accompanied by the non-approval notice.

To avoid non-approvals associated with invalid Business Unit/Department ID combinations, and any associated delays, agencies should immediately take the following actions:

  • Ensure that any new contract (Sequence 0) created in the SFS uses a valid Business Unit/Department ID combination;
  • Review new contracts entered into the SFS and saved in the “Open, Requires Approval” status. Ensure that a valid Business Unit/Department ID has been used. If not, the transaction should be cancelled and re-entered with a valid Business Unit/Department ID before changing the status to “Pending OSC Approval”;
  • Review new contracts recently entered into the SFS where the status has been changed to “Pending OSC Approval.” Identify any contract where the Audit ID includes a Business Unit/Department ID that is not valid for contracts. If the contract has not yet been received by BOC (i.e. the paperwork has not yet been received), it may be possible for BOC to reject the transaction, allowing the agency to immediately re-enter the contract correctly, thereby saving time. Contact BOC at (518) 474-7787 to request that a transaction be rejected.

A very limited number of contracts with invalid Business Unit/Department IDs were inadvertently approved by OSC. Impacted agencies are being contacted by BOC regarding corrective action for these transactions.


Contracts Not Subject to OSC Approval

In order to ensure the validity of information included on statutory reporting, agencies must ensure that contracts not subject to OSC approval are created with BU/Dept IDs valid for contracts.

Agencies should review all new contracts (Sequence 0) created in the SFS to ensure that a valid Business Unit/Department ID combination has been used. If not, agencies should take the following action:

  • If the status of the contract is “Open, Requires Approval”, the agency should cancel the transaction and re-enter it with a valid BU/Dept ID;
  • If the status of the contract (sequence 0) is “Approved”, but no payments have been made against the contract, any Purchase Orders associated to the contract should be cancelled and a contract amendment transaction reducing the contract maximum amount to $0 should be processed. The contract should be recreated in SFS with a valid Business Unit/Department ID. OSC will monitor these contracts to ensure that payments are not made.
  • If the status of the contract (sequence 0) is “Approved” and payments have been made no action is required. These agreements should not be amended to increase their value and as needed, new contracts should be established utilizing a valid Business Unit/Department ID.
References: Guide to Financial Operations, Chapter XI, Section 2 – Comptroller Approval of Contracts and General Contracts Processing