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Department of the Treasury
HOLD CHECKS

NO: 94-17-OMB

ORIGINATING AGENCY: OFFICE OF MANAGEMENT & BUDGET

EFFECTIVE DATE: JULY 1, 1993

EXPIRATION DATE: INDEFINITE

SUPERSEDES: 86-23-OMB

SUBJECT: HOLD CHECKS

ATTENTION: DIRECTORS OF ADMINISTRATION AND CHIEF FISCAL OFFICERS

FOR INFORMATION CONTACT: RICHARD ANDERSON
PHONE: 984-5216

The Office of Management and Budget has provided a service to State
fiscal offices by not mailing appropriation accounting checks under
specific circumstances. The checks are commonly referred to as "HOLD
CHECKS." This circular letter establishes general guidelines for the
processing of hold checks to minimize the possibility of the misuse
of this service.

VALID HOLD CHECKS

Checks should not be requested to be held as a normal course of
action. The following are valid reasons for requesting that checks
be held:

1. Reserve for garnishments. Not for agency use.

2. Payroll deductions, salary advances and payrolls which require
special handling.

3. A travel advance for a state employee.

4. Closing paperwork must be signed with the presentation of the
check (e.g. right of way, construction).

5. The payee is a foreign vendor. Extra postage is needed.

6. A letter or order form must accompany the check.

7. Inmate wages and gate money.

8. To save a cash discount.

9. Mailing the check would cause hardship to the vendor.

10. The payee must receive the check at the completion of his
performance in accordance with the contract (e.g. entertainers, athletic
officials.)

11. Other special circumstances.

PROHIBITED PROCEDURE

Under no circumstances should fiscal officers use a State check as a
means of coercing vendors to complete or improve their services.
If a fiscal officer is dissatisfied with the performance of a vendor,
the processing of the state invoice at the agency should be delayed
until the problem is resolved.

DISPOSITION OF HOLD CHECKS

Checks that are valid holds should be held for the fiscal officer or
business manager of the agency requesting the hold check. It is the
fiscal officer's responsibility to make certain that appropriate
internal controls are maintained within an agency concerning the
disposition of hold checks.

EXCESSIVE HOLD CHECKS

Agencies, which in the opinion of OMB request an excessive number of
hold checks, may be subject to a more detailed review.

Fiscal officers are directed to examine their reasons for requesting
hold checks and to eliminate all unnecessary hold check requests.
Appropriate action now will eliminate the need for additional review
by the Office of Management and Budget in the future.

Richard F. Keevey
Director

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