SECTION OVERVIEW AND POLICIES
This section provides Business Units with guidance on how to process monies owed to the State using the Statewide Financial System (SFS) for a vendor in the New York State Vendor File
When a vendor owes a Business Unit a refund based on goods or services the Business Unit has already processed a check for, the Business Unit has the following four options to recover the funds. This section outlines the process for each of these options.
Business Units should note that in the event that a refund is owed to the State and the State-issued check was combined with another Business Unit’s check, they cannot cancel the check. Instead, the Business Unit must follow the appropriate process below to either process a credit memo voucher, obtain a check from the vendor, or obtain a check from a third party vendor. Business Units should review each process to assist them in choosing the most appropriate option.
Process and Document Preparation:
CANCELLING THE STATE-ISSUED CHECK
When a vendor returns the State-issued check, the Business Unit must cancel the check.
To cancel the State-issued check issued from the Comptroller’s A-warrant (General) checking account, the Business Unit must follow the process outlined in Chapter VII, Section 3 – Refund of Appropriation/AP Adjustment Vouchers of this Guide. The Division of the Treasury will cancel the check and the Office of the State Comptroller (OSC) will cancel the voucher to credit the appropriation. Business Units do not need to process their own voucher to credit their appropriation.
When a payee returns a State check that was issued from the Comptroller’s P-warrant (refund) account, or W-warrant (unclaimed funds) account, the process for cancelling the check and refunding the Business Unit’s appropriation must follow the process for sole custody bank accounts outlined in Chapter VII, Section 6 – Refund Procedures of this Guide.
REFUNDS USING A CREDIT MEMO
When a vendor owes a Business Unit a refund based on goods or services the Business Unit has already paid for, and the vendor chooses to issue a credit memo to a Business Unit, the Business Unit must process a credit memo voucher upon receipt of the credit memo. The SFS then routes the voucher to OSC’s Bureau of State Expenditures. Upon approval, OSC will credit the funds back to the Business Unit’s appropriation. The SFS will offset any future payments made by any Business Unit to the vendor in question.
To process a credit memo, Business Units must select “Adjustments” from the voucher style drop down in the Accounts Payable module. The Business Unit must enter the credit memo number in the invoice number field of the voucher and include the reason for the adjustment voucher in the description field on the invoice line.
For example, the Business Unit should include the term “Credit Memo,” “CM,” or other comparable language in the description field. OSC will reject any vouchers that do not contain such language. OSC will not reject interagency credit memo vouchers issued by bulkload agencies until such time that SFS makes a description field available to these agencies.
In the event that a Business Unit must recover funds paid through a combined check, the Business Unit should use a credit memo only when it determines that the vendor will receive future payments from any Business Unit.
Access SFSSecure to find job aids containing additional guidance on entering an adjustment credit memo voucher.
REFUNDS USING A VENDOR CHECK
When a vendor submits its own check to the Business Unit for funds due to the State, the Business Unit must follow the refund of appropriation process outlined in Section 5 - Agency Payment Preparation and Submittal of this Chapter. In addition, the Business Unit must process an adjustment voucher using the SFS Accounts Payable Module. Using the Accounts Payable Module will appropriately adjust the vendor’s withholding information and restore the Business Unit’s encumbrance. The Business Unit must take the following into consideration when processing an adjustment voucher:
Enter a negative distribution line(s) coded to the same chart of account values used on the original voucher. These distribution lines will net to zero.
OSC’s Bureau of Accounting Operations will notify OSC’s Bureau of State Expenditures to cancel the voucher and credit the Business Unit’s appropriation. Upon approval of the voucher, OSC will credit the funds back to the Business Unit’s appropriation.
In the event that a Business Unit must recover funds paid through a combined check, the Business Unit should utilize this option to obtain a refund when it determines that the vendor will not likely receive future payments from any Business Unit.
For more information on the Bureau of Accounting Operations’ processes, please see Section 5 - Agency Payment Preparation and Submittal of this Chapter.
REFUNDS USING A THIRD PARTY VENDOR’S CHECK
When a third party returns a check to a Business Unit, the Business Unit will need to process the transaction either as a refund of appropriation, or a receipt of miscellaneous revenue. In most cases, the transaction should be processed in the Accounts Payable module. When the Accounts Receivable module is used to record a receipt, Business Units should use revenue coding, and not use expenditure coding to process the transaction.
If a Third Party (such as an Insurance Company) returns a check on behalf of a Vendor or employee, the Business Unit should process an adjustment voucher. This voucher should reference the voucher the original check was written for. (Select “Adjustments” from the voucher style drop down in the Accounts Payable module). The transaction should reference special vendor number 0RAR00000.
Access SFSSecure to find job aids containing additional guidance on refunds owed to the State.
For questions regarding processing refunds owed to the state, please contact the Bureau of State Expenditures’ Customer Service Help Desk at (518) 474-4868 or firstname.lastname@example.org.
Guide to Financial Operations