XII.4.B.1
Supporting Information

 

SECTION OVERVIEW

 

The purpose of this section is to provide guidance to assist agencies in determining whether claims for payment from vendors and state employees are appropriate to pay prior to certifying the claims to the Comptroller.

 

Title 2, Chapter I, Part 6.5 of the New York Codes, Rules and Regulations (NYCRR) requires agencies to certify to the Comptroller that claims for payment are just, true and correct and therefore appropriate to pay. In addition, Title 2, Chapter I, Part 6.7 of the NYCRR requires agencies to support any claim for payment entered in to the Statewide Financial System (SFS) with sufficient original source documentation including, but not limited to, a vendor invoice or a vendor claim and a receiving report.

 

As part of these requirements, the agency certifier should be satisfied that acceptable information or documentation is on file to (i) show goods and/or services provided by the vendor are in accordance with the terms and conditions of the agreement, or (ii) verify employee expenses are in accordance with New York State’s travel rules and regulations, union contracts, and/or agency policies. Agencies are required to retain all original source documentation and other agency records in support of financial transactions to ensure it is readily available to agency management, the Office of the State Comptroller and other interested parties. For information on record retention and storing documents in support of transactions in the SFS, please refer to Section 3 – Record Retention – Accounts Payable Vouchers and Land Claims of this Chapter and Chapter XIV, Section 9 – Statewide Financial System Imaging and Attachment Guidance of this Guide.

 

Agencies certify millions of dollars in claims for payment daily. It is critical for accounts payable staff to practice good stewardship over State money when making the final approval on claims for payment submitted to the Comptroller. This includes cases where accounts payable staff seek initial approval of (1) claims or invoices from agency program staff or (2) expense reports from employees’ supervisors.

All staff responsible for providing an initial or final approval of claims, invoices or expense reports, whether they are in the finance office or in a program area, should have a clear understanding of their responsibilities and have tools necessary to aid in their validation. To ensure all affected staff are aware of their responsibilities to validate claims, invoices or expense reports, agency management should incorporate these responsibilities in staffs’ performance expectations. Agency management should also provide affected staff with tools, such as those in this section, to aid in validating claims, invoices or expense reports.

 

These actions, if carried out effectively, can provide a reasonable basis for agency staff to certify claims to the Comptroller. It can also help provide a reasonable basis for the head of an agency to certify internal controls over the payment process, as required by Title 2, Chapter I, Part 6.6 of the NYCRRand described in Section 4.D - Certification of Internal Controls over the Payment Process of this Chapter.

Effective review of claims can reduce the risk of agencies overpaying vendors for the incorrect type, quantity, and/or price of goods and services billed. In addition, effective review of expense reports can ensure employees are only reimbursed for expenses to which they are entitled. When reviewing claims for payment, agencies may use a risk-based approach, with greater focus on claims that pose a higher risk of being incorrect.

To determine if a claim for payment is appropriate to pay prior to being certified and submitted to the Comptroller, agency staff need to know: the type of claim for which the vendor or employee is seeking payment; the types of information that can support the claim; where the reviewer can obtain supporting information; and how to evaluate the supporting information.

 

Policy

 

Types of Claims and Supporting Information

 

Vendors and employees can submit claims for payment as a part of contracts, grants, travel events, etc. Agencies should obtain evidence to support claims for payment are appropriate. The information in the links below provide guidance on the types of support the agency could obtain based on the nature of the claims, the sources for that support, and how to evaluate supporting information.

 

 

Where the agency has confirmed the claim for payment, officials should certify to the Comptroller that claim is just, true and correct and therefore, appropriate to pay.

 

Agencies should resolve situations where the supporting information does not substantiate the claims for payment. This may include rejecting them back to the vendor or employee to correct or adjusting the claims. In cases where the agency suspects the vendor or State employee has committed fraud, the agency should refer the evidence to their Inspector General and to the Office of the State Comptroller, consistent with Section XII.10.F - Reporting the Theft, Loss or Misuse of State Assets of this Chapter.

 

Where to Obtain Supporting Information

 

The vendor will most likely provide the agency with an invoice or a completed claim for payment form for the goods and/or services provided. The agency should obtain enough information to provide assurance that the vendor delivered the goods and/or services as expected. Generally, the accounts payable staff should obtain a requisition and/or purchase order, an invoice or claim for payment, and confirmation that the agency received the goods and/or services.

 

Accounts payable staff should analyze this information or documentation to determine whether the vendor provided the correct good or service at the right price. If accounts payable staff rely on end users to confirm an invoice is appropriate to pay, accounts payable staff should ensure the end users obtain and verify supporting information before asserting that the invoice or claim for payment is appropriate. For example, on a risk basis, accounts payable staff can contact end users prior to making a payment to understand how they confirmed the invoice was appropriate to pay.

 

Agency staff should consider routinely obtaining supporting information from vendors as part of the normal course of billing. Requesting additional back up information from the vendor to accompany the invoice can often deter inappropriate claims. Agency staff can then use a risk-based approach to determine which of these claims to review further. For help in establishing a risk-based approach and a payment monitoring process, please refer to Chapter XI, Section 11.F – Contract Monitoring of this Guide.

 

Travelers must provide the agency with supporting information along with their expense reports. For employees of online agencies, these supporting documents should be attached to the travel and expense report in the SFS. The documentation should provide support that the travel expenses were actual, reasonable, and necessary. At a minimum, accounts payable staff should obtain receipts supporting all travel card charges and reimbursable expenses, as well as other information to support charges for which there would be no receipts, such as per diem allowances and mileage. For additional information on travel expenses, please refer to the State Travel Manual.

 

Evaluating Supporting Information

 

Agency staff should ensure information obtained in support of a claim for payment or expense report pertains directly to that claim or report. A large amount of supporting information does not make up for a lack of reliable, high-quality support. For example, if the vendor provides a large amount of information or documentation to support a claim for payment, agency staff should ensure they can discern from the documents how the information supports the vendor’s assertion on the invoice or claim. In certain cases, agencies may require an explanation from the vendor in addition to the detailed documentation. For additional guidance on the quality of evidence, please refer to Exhibit B from Chapter XI, Section 11.F – Contract Monitoring.

 

Agencies are required to retain supporting information and documentation in accordance with Section 3 – Record Retention – Accounts Payable Vouchers and Land Claims of this Chapter. The supporting information should be accessible to agency staff in multiple departments, such as program, purchasing, accounts payable and receiving.

 

Other Considerations

 

Agency staff should communicate to vendors those factors that can facilitate timely payments. This includes advising the vendor to retain sufficient support for charges on invoices and include only allowable costs on invoices. Agencies should communicate to vendors the requirements outlined in Appendix A – Standard Clauses for All New York State Contracts and in Section 4.F – Proper Invoice of this Chapter.

 

Other Resources

 

If agencies need help to determine how to identify high-risk claims, they should consider reaching out to their Internal Audit department and/or their Internal Control Officer.

Agencies should report suspected fraud, waste, and abuse of public funds to their Inspector General, the Office of the Inspector General and to the Office of the State Comptroller.

 

 

 

Guide to Financial Operations
REV. 10/18/2018