INTER-DEPARTMENTAL DISBURSEMENTS - 8471-NOV-2020
An agency/department may provide services, materials, or equipment to, or perform work for other agencies/departments subject to the approval of the Department of General Services (DGS), see Government Code section 11256. The DGS State Contracting Manual (SCM) and SAM Chapter 1200-Contracts also provides the provision and exemption information for contracts and interagency agreements between two or more agencies/departments.
With specific statutory authority, an agency/department may request the State Controller’s Office (SCO) to make the electronic funds transfer payments between the agencies/departments appropriations, see Government Code section 11255.
Inter-Departmental Services Provided by the DGS
The DGS may provide services, materials, or equipment to state agencies/departments based on interagency agreements. To engage services from the DGS, a state agency/department must establish a Customer Account Number (CAN) in advance. The DGS will use the six-digit numeric CAN code for billing purposes. Information on how to obtain a CAN is available on the DGS-Office of Fiscal Services website.
Advances to the DGS for Services Provided
Agencies/departments using the DGS’s services will make advances from any fund and appropriation available to assist in financing these services. Per Government Code section 11257, these advances are at the DGS’s discretion to transfer. The DGS will calculate the advance amount equal to the estimated charges or in an amount determined by the Director of General Services, and the State Controller shall transfer any amounts authorized or determined. See Government Code sections 11256 - 11263, 11290, and 11370.4 for more statutory authority regarding advances.
The DGS Advance and Return Process
No advances or portions thereof will be returned until the following fiscal year budget has been passed, and all prior year’s invoices have been paid. Agencies/departments will keep a subsidiary file by fund, agency, and appropriation to record the original advance amount and the subsequent return of the advance. Agencies/departments may submit a request to the DGS to reduce or return the advance to resolve insufficient cash flow situations.
The DGS will submit to the SCO fund transfer requests to return unused prior-year advances and to setup current fiscal year advances. The SCO will issue the following Journal Entries (JEs) for the DGS and agencies/departments to reflect the appropriate transactions in their books.
Prior Fiscal Year Advance Return JEs:
- The DGS and agencies/departments will record the returned advance.
Current Fiscal Year Advance JEs:
- The DGS will record the advance as Prepayment from Other Funds or Appropriations in account 2012000 (Legacy account 3120)
- Agencies/Departments record the advance as Prepayments to Other Funds or Appropriations in account 1309200 (Legacy account 1730).
The Electronic Fund Transfer Process for DGS Invoices
DGS may bill state agencies/departments using one of two methods:
- Non-Direct Transfer – DGS will issue an invoice for goods/services provided. Agencies/departments will process the invoice payment as normal.
- Direct Transfer – DGS will submit a direct transfer request to SCO for monthly invoices or annual advances against the agency’s/department’s appropriation using the Electronic Fund Transfer (EFT) process.
The DGS uses the EFT system to submit monthly direct transfer requests to the SCO. The EFT system streamlines the invoice payment process and eliminates the need for agencies/departments to prepare and submit claims to the SCO. The EFT process transfers money from the agency’s/department’s appropriation to the DGS.
Per Government Code sections 11258-11260, the use of Direct Transfer and the Electronic Fund Transfer process is at the DGS’s discretion. Requests for exceptions may be submitted to the DGS and at the DGS’s discretion for approval.
Below is a summary description of the EFT process:
- The DGS prepares invoices for the prior month’s goods and services provided to agencies/departments. These invoices are available on the DGS-Office of Fiscal Services website after the first week of the following month. Agencies/departments can e-mail the DGS at SRFFiscalServices@dgs.ca.gov and set up an account to view these invoices or inquire about the EFT system.
- The DGS compiles the Notice of EFT into one electronic file and submits it to the SCO by the 3rd working day of the following month.
- The SCO audits the EFT file and issues the Notice of Transfer JEs for the fund transfer by the middle of the month.
- The DGS and agencies/departments reconcile the JEs against the invoices and record the JEs.
Refer to the DGS’s EFT Adjustment Procedure for information on adjustment requests.
Delinquent DGS Invoices
An invoice is delinquent if it is not paid within 60 days from the date of the invoice unless the total amount due is less than $10 or if the agency/department contests the invoice (See Government Code section 926.10). If the agency/ department refuses to pay the invoice, the DGS will collect payments for the delinquent invoice per Government Code section 11291. The DGS may submit an EFT request to the SCO, and the SCO will transfer the payment from the agency’s/department’s appropriation.
Contested DGS Invoices
If the DGS billed an agency/department for goods and services that were not performed or services that are not in accordance with an interagency agreement, the agency/department should notify the DGS within 60 days of the invoice date. The agency/department shall submit an STD. 209, Invoice Dispute Notification form, directly to the contact information indicated on the invoice. The absence of an interagency agreement does not preclude the payment of valid invoices for goods and services received.
Inter-Departmental Services Provided by the Prison Industry Authority
California Prison Industry Authority ( CALPIA) produces and sells various goods to state agencies/departments. State agencies/departments planning to purchase from CALPIA must complete and submit Purchase Order (STD 65) to CALPIA.
The CALPIA collects payments through the electronic fund transfer requests submitted to the SCO. The SCO audits the request and issues the Notice of Transfer journal entries for the CALPIA and agencies/departments to reflect the transactions in their books.