CHAPTER 3: OTHER ADMINISTRATIVE REGULATIONS

Return to CHAPTER 3: OTHER ADMINISTRATIVE REGULATIONS

SUBSECTION 4.3.6.3
DISBURSEMENTS

4.3.6.3.1

Purpose

Effective Date:

August 1, 1996

This section contains the policies, regulations, and procedures regarding the timing and mechanisms for disbursing moneys owed by the state.

4.3.6.3.2

Disbursements Policy

Effective Date:

August 1, 1996

4.3.6.3.2.a

Each agency should administer its disbursement process to:

4.3.6.3.2.a(1)

Minimize the cost of making disbursements by using the most cost effective means available [i.e., Journal Voucher (JV), Electronic Fund Transfers (EFT), Electronic Benefit Transfer (EBT), warrant, or check].

4.3.6.3.2.a(2)

Make timely payments of all obligations owed by the state. A payment has been made timely (refer to RCW 39.76.011) if:

The agency records show that 95 percent, or more, of its obligations are paid by the due dates as defined in (b) below;

Due dates are established by the terms of the contracts. If the contract is silent or does not specify a term, it is thirty days. The payment is to be made within thirty days of receipt of a properly completed invoice or receipt of goods or services, whichever is later;

4.3.6.3.2.a(3)

Minimize early payments unless early payments result in vendor discounts.

4.3.6.3.2.b

For general accounting policies and procedures on disbursements, refer to Subsection 2.2.3.4.

4.3.6.3.2.c

For internal control procedures on disbursements, refer to Subsection 6.2.2.1.3.

4.3.6.3.2.d

Payroll disbursements for employees’ net pay and voluntary withholdings.

There are two ways to pay employees’ earnings: by warrant (check), or by direct deposit into an employee’s account. Direct deposit requires written authorization by the employee. Refer to Subsection 4.3.2.7.2 for methods of depositing employees’ net pay into a financial institution.

Payment of employees’ deductions and deferrals shall be made by warrant or check except when the recipient requests payment by EFT. If the recipient requests an EFT, sufficient time shall be made available to establish the process. Refer to RCW 41.04.232(4).

For general accounting payroll procedures, refer to Subsections 2.2.3.3 and 4.3.2.

For internal control procedures on payroll, refer to Subsection 6.2.2.1.10.

4.3.6.3.2.e

Deposit of federal employer taxes and withholdings requirements.

4.3.6.3.2.e(1)

In general, deposit of income tax withheld and both the employer and employee portions of social security and Medicare taxes is done by mailing or delivering a check, warrant, money order, or cash to an authorized financial institution or Federal Reserve bank. However, some agencies are required to deposit by EFT if they meet the IRS dollar threshold [Refer to IRS Publication 15 (Circular E) and Revenue Procedure 94-48].

4.3.6.3.2.e(2)

Agencies using the Department of Personnel’s Human Resources Information System Division (HRISD) payroll system must deposit payroll federal taxes and withholdings through TaxLink.

New agencies on the HRISD payroll system must complete the TaxLink enrollment process through OST and HRISD.

Dissolving agencies or an agency being combined with another agency that is part of the HRISD payroll system must notify OST and HRISD of their change in status.

4.3.6.3.2.e(3)

Some agencies using payroll systems other than HRISD will be required by regulations to make deposits using TaxLink or a successor system, or may voluntarily participate in TaxLink. Agencies that participate in TaxLink and agencies that are required by regulations to make deposits using an EFT system are treated differently (Refer to IRS Revenue Procedure 94-48).

4.3.6.3.2.f

Travel.

4.3.6.3.2.f(1)

The preferred method for purchasing lodging accommodations while on official state business is through the use of the Department of General Administration (GA) authorized corporate charge card. Refer to Subsection 4.2.2.2.2 for details. The preferred method of purchasing advance bookings of transportation on common carriers is through the agency’s Business Travel Account as established through GA. Refer to Subsection 4.2.3.2.3 for details.

4.3.6.3.2.f(2)

For internal control procedures on travel, refer to Subsection 6.2.2.1.4.

4.3.6.3.2.g

Federal Disbursements.

4.3.6.3.2.g(1)

Federal disbursements follow normal disbursement procedures unless the Cash Management Improvement Act (CMIA) contract requires specific timing for disbursements.

4.3.6.3.2.g(2)

For accounting procedures related to federal disbursements, refer to Subsection 4.3.8.1.3.

4.3.6.3.2.h

Interagency and Interfund Transactions.

Interagency and interfund transactions follow the disbursement procedures in Subsection 2.2.6.3.

4.3.6.3.2.i

Intergovernmental Payments.

4.3.6.3.2.i(1)

Intergovernmental payments follow the normal disbursement procedures.

4.3.6.3.2.i(2)

These payments can be made by warrant, by local check, or by EFT.

4.3.6.3.3

Disbursement Mechanisms

Effective Date:

August 1, 1996

Agencies can use various disbursement mechanisms to pay moneys owed by the state. OFM approval is required for use of credit, debit cards or other electronic and technological means of disbursement following requirements in Subsection 4.3.6.4. Acceptable disbursement mechanisms are as follows:

4.3.6.3.3.a

Treasury Warrants or Local Checks.

For general accounting procedures on disbursements by warrant or local check, refer to Subsection 2.2.3.4.

For internal control procedures on disbursements by warrant or local check, refer to Subsection 6.2.2.1.3.

4.3.6.3.3.b

JV Payments of Interagency and Interfund Transactions.

These are the same as other vendor payments.

JVs are to be used for all payments between accounts in the treasury.

The paying agency should list the receiving agency’s accounting codes on the JV.

Refer to Subsection 2.2.6 for accounting requirements related to interagency and interfund transactions.

4.3.6.3.3.c

Credit Card Disbursements.

RCW 43.19.185 authorizes agencies to use credit cards for making purchases under rules established by GA. GA codified these rules in WAC 236-48-250 through WAC 236-48-300. When an agency determines that the use of credit cards will be to its advantage, the agency is not required to prepare an Economic Feasibility Plan, as long as the source will be the existing state contract.

4.3.6.3.3.d

EFT Payments.

EFT payments are electronic transfers from OST or an agency’s local bank account to the payee’s account at their designated financial institution. EFT uses various electronic services such as Automated Clearing House (ACH), ACH Manager, or Wire Transfers.

For treasury and treasury trust accounts, agencies must inform OST as early as practical, which should be on or before 12:00 noon the day before the transmission of an EFT JV authorizing the transfer. The effective date of the transfer should be noted on the EFT JV. The effective date is the day funds will be transferred between bank accounts.

In cases where an agency prepares an ACH tape (a file transfer tape) for OST, the tape must be available to the treasurer no later than two working days before the effective date of the transfer. This includes receipt of the EFT JV authorizing the transfer.

For internal control procedures on payments by EFT, refer to Subsection 6.2.2.1.11.

4.3.6.3.3.e

EBT Payments.

EBT is an alternative method for making disbursements to benefit recipients. EBT is similar in nature to a debit card. The recipient’s benefits are encoded on a magnetic stripe card.

4.3.6.3.3.f

Debt Offset.

Debt offset can be used as a mechanism for disbursing moneys owed by the state. This is a process where moneys owed by the state are offset against moneys owed to the state.

This payment mechanism requires a written agreement between the state and the payee. Both the state and the payee must agree in writing that a continuing process of netting of the amounts owed and the amount due is acceptable to both parties. This written agreement is necessary to avoid liabilities that could be incurred by the state in disputed billings. The written agreement is not required when agencies are exercising collection powers granted by statute.

4.3.6.3.3.g

Electronic Data Interchange (EDI).

EDI is an electronic exchange of information rather than a disbursing process. This mechanism can be used to feed optional accounting information electronically between an agency and a financial institution or the payee. This process can be used in conjunction with credit or debit card payments, or any other electronic form of disbursement to eliminate rekeying information or to streamline processes.

Return to CHAPTER 3: OTHER ADMINISTRATIVE REGULATIONS

4.3.6.3.2.a	Each agency should administer its disbursement process to:
4.3.6.3.2.a(1)	Minimize the cost of making disbursements by using the most cost effective means available [i.e., Journal Voucher (JV), Electronic Fund Transfers (EFT), Electronic Benefit Transfer (EBT), warrant, or check].
4.3.6.3.2.a(2)	Make timely payments of all obligations owed by the state. A payment has been made timely (refer to RCW 39.76.011) if:
	The agency records show that 95 percent, or more, of its obligations are paid by the due dates as defined in (b) below;
	Due dates are established by the terms of the contracts. If the contract is silent or does not specify a term, it is thirty days. The payment is to be made within thirty days of receipt of a properly completed invoice or receipt of goods or services, whichever is later;
4.3.6.3.2.a(3)	Minimize early payments unless early payments result in vendor discounts.
4.3.6.3.2.b	For general accounting policies and procedures on disbursements, refer to Subsection 2.2.3.4.
4.3.6.3.2.c	For internal control procedures on disbursements, refer to Subsection 6.2.2.1.3.
4.3.6.3.2.d	Payroll disbursements for employees’ net pay and voluntary withholdings.
	There are two ways to pay employees’ earnings: by warrant (check), or by direct deposit into an employee’s account. Direct deposit requires written authorization by the employee. Refer to Subsection 4.3.2.7.2 for methods of depositing employees’ net pay into a financial institution.
	Payment of employees’ deductions and deferrals shall be made by warrant or check except when the recipient requests payment by EFT. If the recipient requests an EFT, sufficient time shall be made available to establish the process. Refer to RCW 41.04.232(4).
	For general accounting payroll procedures, refer to Subsections 2.2.3.3 and 4.3.2.
	For internal control procedures on payroll, refer to Subsection 6.2.2.1.10.
4.3.6.3.2.e	Deposit of federal employer taxes and withholdings requirements.
4.3.6.3.2.e(1)	In general, deposit of income tax withheld and both the employer and employee portions of social security and Medicare taxes is done by mailing or delivering a check, warrant, money order, or cash to an authorized financial institution or Federal Reserve bank. However, some agencies are required to deposit by EFT if they meet the IRS dollar threshold [Refer to IRS Publication 15 (Circular E) and Revenue Procedure 94-48].
4.3.6.3.2.e(2)	Agencies using the Department of Personnel’s Human Resources Information System Division (HRISD) payroll system must deposit payroll federal taxes and withholdings through TaxLink.
	New agencies on the HRISD payroll system must complete the TaxLink enrollment process through OST and HRISD.
	Dissolving agencies or an agency being combined with another agency that is part of the HRISD payroll system must notify OST and HRISD of their change in status.
4.3.6.3.2.e(3)	Some agencies using payroll systems other than HRISD will be required by regulations to make deposits using TaxLink or a successor system, or may voluntarily participate in TaxLink. Agencies that participate in TaxLink and agencies that are required by regulations to make deposits using an EFT system are treated differently (Refer to IRS Revenue Procedure 94-48).
4.3.6.3.2.f	Travel.
4.3.6.3.2.f(1)	The preferred method for purchasing lodging accommodations while on official state business is through the use of the Department of General Administration (GA) authorized corporate charge card. Refer to Subsection 4.2.2.2.2 for details. The preferred method of purchasing advance bookings of transportation on common carriers is through the agency’s Business Travel Account as established through GA. Refer to Subsection 4.2.3.2.3 for details.
4.3.6.3.2.f(2)	For internal control procedures on travel, refer to Subsection 6.2.2.1.4.
4.3.6.3.2.g	Federal Disbursements.
4.3.6.3.2.g(1)	Federal disbursements follow normal disbursement procedures unless the Cash Management Improvement Act (CMIA) contract requires specific timing for disbursements.
4.3.6.3.2.g(2)	For accounting procedures related to federal disbursements, refer to Subsection 4.3.8.1.3.
4.3.6.3.2.h	Interagency and Interfund Transactions.
	Interagency and interfund transactions follow the disbursement procedures in Subsection 2.2.6.3.
4.3.6.3.2.i	Intergovernmental Payments.
4.3.6.3.2.i(1)	Intergovernmental payments follow the normal disbursement procedures.
4.3.6.3.2.i(2)	These payments can be made by warrant, by local check, or by EFT.

	Agencies can use various disbursement mechanisms to pay moneys owed by the state. OFM approval is required for use of credit, debit cards or other electronic and technological means of disbursement following requirements in Subsection 4.3.6.4. Acceptable disbursement mechanisms are as follows:
4.3.6.3.3.a	Treasury Warrants or Local Checks.
	For general accounting procedures on disbursements by warrant or local check, refer to Subsection 2.2.3.4.
	For internal control procedures on disbursements by warrant or local check, refer to Subsection 6.2.2.1.3.
4.3.6.3.3.b	JV Payments of Interagency and Interfund Transactions.
	These are the same as other vendor payments.
	JVs are to be used for all payments between accounts in the treasury.
	The paying agency should list the receiving agency’s accounting codes on the JV.
	Refer to Subsection 2.2.6 for accounting requirements related to interagency and interfund transactions.
4.3.6.3.3.c	Credit Card Disbursements.
	RCW 43.19.185 authorizes agencies to use credit cards for making purchases under rules established by GA. GA codified these rules in WAC 236-48-250 through WAC 236-48-300. When an agency determines that the use of credit cards will be to its advantage, the agency is not required to prepare an Economic Feasibility Plan, as long as the source will be the existing state contract.
4.3.6.3.3.d	EFT Payments.
	EFT payments are electronic transfers from OST or an agency’s local bank account to the payee’s account at their designated financial institution. EFT uses various electronic services such as Automated Clearing House (ACH), ACH Manager, or Wire Transfers.
	For treasury and treasury trust accounts, agencies must inform OST as early as practical, which should be on or before 12:00 noon the day before the transmission of an EFT JV authorizing the transfer. The effective date of the transfer should be noted on the EFT JV. The effective date is the day funds will be transferred between bank accounts.
	In cases where an agency prepares an ACH tape (a file transfer tape) for OST, the tape must be available to the treasurer no later than two working days before the effective date of the transfer. This includes receipt of the EFT JV authorizing the transfer.
	For internal control procedures on payments by EFT, refer to Subsection 6.2.2.1.11.
4.3.6.3.3.e	EBT Payments.
	EBT is an alternative method for making disbursements to benefit recipients. EBT is similar in nature to a debit card. The recipient’s benefits are encoded on a magnetic stripe card.
4.3.6.3.3.f	Debt Offset.
	Debt offset can be used as a mechanism for disbursing moneys owed by the state. This is a process where moneys owed by the state are offset against moneys owed to the state.
	This payment mechanism requires a written agreement between the state and the payee. Both the state and the payee must agree in writing that a continuing process of netting of the amounts owed and the amount due is acceptable to both parties. This written agreement is necessary to avoid liabilities that could be incurred by the state in disputed billings. The written agreement is not required when agencies are exercising collection powers granted by statute.
4.3.6.3.3.g	Electronic Data Interchange (EDI).
	EDI is an electronic exchange of information rather than a disbursing process. This mechanism can be used to feed optional accounting information electronically between an agency and a financial institution or the payee. This process can be used in conjunction with credit or debit card payments, or any other electronic form of disbursement to eliminate rekeying information or to streamline processes.