A significant percentage contracts approved by the Office of the State Comptroller (OSC) are submitted to OSC for pre-audit and approval after the contract's start date. A contractor providing goods or services prior to the Comptroller's approval of a contract assumes a risk of non-payment or reduced payment if the approval of the contract is subsequently withheld. It is the agency's responsibility to advise contractors of this risk. More importantly, it is the agency's responsibility to properly plan its procurements, so that needed approvals can be obtained timely. This planning, necessarily, includes allowing sufficient time for OSC review and approval of contracts before the contractor starts providing goods or services.

A State employee who directs a vendor to start providing goods or services without an approved contract may be personally liable for any indebtedness that is ultimately held to be owed to the contractor.

For some agencies, the majority of the late contract submissions involve grant contracts with NFP providers. These late submissions impose additional burdens upon both the NFP and the State. For the NFP, it is the financial strain placed upon their limited resources. For the State, it is the penalties imposed by Article XI-B of the State Finance Law that provides for prompt contracting and interest payments for NFP corporations. Significant interest penalties accrue when these contracts are submitted after the start date and result in late payments to the NFP. Agencies are strongly encouraged to review and comply with these provisions in order to avoid incurring interest penalties.

Agency heads are strongly encouraged to undertake an immediate review of the processes and controls over their agency's internal procurement and contract award procedures, and to implement the actions necessary to improve planning and contract¹ creation timeframes in accordance with this advisory.

OSC routinely offers training seminars in contracting laws and procedures. The subject matter of these seminars may be general in scope or may be tailored to an agency's specific needs. Agency heads determining that such training will be beneficial for their staff should contact Bureau of Contracts, at (518) 408-3868, for more information.