Cash Management and Banking
Contact: Gary Harper (gharper@osc.state.ny.us)
GUIDELINES FOR ESTABLISHING STATE AGENCY BANK ACCOUNTS
State Finance Law Section 106 specifies that the Comptroller designate banks for deposit of State funds. The designation of banks and establishment of agency bank accounts are based on requests from the agencies that want to deposit funds in a specific banking institution. The State Comptroller evaluates a request received from an agency and makes a determination to approve the account based on predefined criteria. The primary considerations given to the request are the financial condition of the bank, the convenience of the branch to the agency, and if the account is necessary or if an existing account can be used. The State Comptroller is also responsible for insuring that all State money on deposit in financial institutions is fully collateralized as outlined in Section 105 and 106 of the State Finance Law. Securities used as collateral must be approved by the Comptroller’s Office and must be held at the State’s Fiscal Agent. In order to insure your agency’s deposits are fully collateralized, it is imperative that each agency provide the Comptroller’s Office with new bank account information.
Establishing a New State Bank Account (Non
Contract)
An agency that requires a new bank account must complete the Request
for a New State Bank Account form and submit the form directly to the Office
of the State Comptroller. The Division of Pension Investment and Cash Management
will review the request and provide an approval notice to both the requesting
agency and the bank authorizing the establishment of a new bank account. Once
the agency receives the approval, the agency will be responsible for contacting
the respective bank to open the account. Each agency will also be responsible
for signing and maintaining signature cards for the account. Once the account
is opened, the Agency must prepare and submit the New York State Bank Account Inventory Update
form with the new account information. Failure to provide the new account
information to the Office of the State Comptroller may result in banking fees
being directly deducted from the bank account.
Competitively Bid Bank Accounts (Contract)
If the cost of the account exceeds the statutory requirements for
bidding banking services which are found in Procurement and Disbursement
Guidelines Bulletin G-182 Banking Services Contracts and Payments,
the account must be bid through the competitive bidding process.
If the account is opened in accordance with the competitive bidding
process, the agency must still complete the New
York State Bank Account Inventory Update form so the State
Bank Inventory can be updated with the new account information.
Closing Bank Accounts
Each agency is responsible for closing their bank accounts. Once
closed, they must notify the Office of the State Comptroller
by completing and submitting the New York State Bank Account Inventory Update
form.
Request for Additional Banking Services
If an agency requires additional services other than those outlined above,
they must complete the Request for Additional
Banking Services form and submit it to the Division of Pension Investment
and Public Finance, Cash Management Unit. The request should provide a justification
for the service and the anticipated cost of the service. The request will be
evaluated based on cost benefit and/or added efficiency. An approval notice
will be sent to the requesting agency and the cost of the services will be
paid for through compensating balance. Failure to obtain prior approval for
additional banking services may result in your account be charged directly
for these services.
Payment of Banking Services
For accounts that are not established through the competitive
bidding process, payment for banking services are paid for by the
use of compensating balances and the bank may not charge the account
directly. The Office of the State Comptroller monitors the compensating
balance levels left at the banks to pay for these services and
adjusts balances in accounts accordingly. Generally, the following
services are paid via compensating balances for State bank accounts:
1) Standard bank checks
2) Deposit Slips
3) Monthly statements
The New York State
Accounting System User Procedures Manual Volume XI Section 4.000 provides
further detail as to what each agency must do to establish and maintain an
agency bank account.