NO: 95-08-OMB

ORIGINATING AGENCY: OFFICE OF MANAGEMENT AND BUDGET (OMB)

EFF DATE: IMMEDIATE

EXP DATE: INDEFINITE

SUPERSEDES: NONE

SUBJECT: INTRA-GOVERNMENTAL PAYMENT VOUCHERS

ATTENTION: FISCAL OFFICERS AND BUSINESS MANAGERS

FOR INFORMATION CONTACT: HARRY FISHER PHONE: 984-5220

The purpose of this circular letter is to clarify the Office of Management
and Budget policies regarding the use and processing of Intra-Governmental
Payment Vouchers.

I. General Use of Intra-Governmental Payment Vouchers

Intra-Governmental Payment Vouchers are used to make payments between
governmental units within New Jersey State Government. These payments
contain both a debit and a credit account code distribution, and therefore,
update the appropriate accounts of both a buyer and a seller governmental
unit. No disbursement (check) is generated by these payments.

Intra-Governmental Payment Vouchers are entered into the New Jersey
Comprehensive Financial System (NJCFS) as Accounting Bureau
Intra-Governmental Payment Vouchers (AV transactions), or as Using Agency
Intra-Governmental Payment Vouchers (UA transactions). The AV references
pre-encumbered or encumbered funds previously established in the NJCFS
while the UA directly references the uncommitted balance of an account.

II. Intra-Governmental Payment Voucher Types

There are three different types of Intra-Governmental Payment Vouchers.
These different types are indicated by the payment voucher type field coded
on the Intra-Governmental Payment Voucher Document. The payment voucher
types below are valid for both AV and UA transactions:

Type 2 - Inter-Fund Purchase

An Inter-Fund Purchase involves a purchase/sale between governmental units
referencing accounts with different funds. They are normally used when one
governmental unit is billed by another for expenditures, such as data
processing, telecommunications, office supplies, or other goods and
services that would otherwise be provided by an external vendor.

Inter-Fund Purchases are generally used to record a credit to revenue (the
seller account) and a debit to expenditures (the buyer account). An
example would be a payment to General Services Administration (GSA)
Distribution Center from a governmental unit with an account within the
Casino Revenue Fund. The seller account in this case would include Fund
Code "100" (the General State Fund), while the buyer account would include
Fund Code "490" (the Casino Revenue Fund).

The proper accounting entries are posted to the NJCFS ledger for the seller
and buyer accounts. Since the seller account is in a different fund from
that of the buyer, the NJCFS generates additional ledger entries. An
accounts receivable "DUE FROM" entry is created for the seller's fund, and
an accounts payable "DUE TO" entry is created for the buyer's fund.

These "DUE TO" and "DUE FROM" accounts must be cleared by OMB via Journal
Voucher transaction (JV) before the close of the fiscal year.

The use of Inter-Fund Purchase Intra-Governmental Payment Vouchers
involving two different bank accounts is not permitted. Note the
restrictions listed in section III below.

Type 3 - Intra-Fund Purchase

An Intra-Fund Purchase involves a purchase/sale between governmental units
referencing accounts within the same fund. Like Inter-Fund Purchases, they
are normally used when one governmental unit is billed by another for
expenditures, such as data processing, telecommunications, office supplies,
or other goods and services that would otherwise be provided by an external
vendor.

Intra-Fund Purchases generally record a credit to revenue (the seller
account) and a debit to expenditures (the buyer account). An example is
when both the seller account and the buyer account reference Fund Code
"100" (the General State Fund).

Intra-Fund Purchases post the appropriate revenue and expenditure entries
to the NJCFS general ledger. Off-setting balance sheet entries are not
generated since the fund's assets and liabilities are not affected as with
Inter-Fund Purchases. No other transactions are needed to clear Intra-Fund
vouchers.

Type 4 - Agency Reimbursement

An Agency Reimbursement involves the reimbursement of expenditures between
governmental units. These payments can be Inter-Fund or Intra-Fund. They
are normally used when one governmental unit reimburses another for an
expenditure from which they received benefit.

Agency Reimbursements generally record a credit to expenditures (the seller
account) and a debit to expenditures (the buyer account). Unlike
Inter-Fund and Intra-Fund Purchases, an object code rather than a revenue
source is used in the seller accounting distribution. Reimbursement
object codes can be viewed on the OBJT screen of NJCFS. These object codes
are indicated by the object group code "RE."

Examples of Agency Reimbursements use are when the central
Inter-Departmental accounts are reimbursed by the agencies for the cost of
postage and telephone usage.

The proper expenditure accounting entries are posted to the ledger for the
seller and buyer for both Intra-Fund and Inter-Fund reimbursements. Since
Intra-Fund reimbursements are within the same fund, they do not create
additional ledger entries. When a reimbursement is Inter-Fund, the NJCFS
generates an accounts receivable "DUE FROM" entry for the seller's fund,
and an accounts payable "DUE TO" entry for the buyer's fund.

These "DUE TO" and "DUE FROM" accounts must be cleared by OMB via Journal
Voucher transaction (JV) before the close of the fiscal year.

The use of Inter-Fund Reimbursements involving two different bank accounts
is not permitted. Note the restrictions listed in section III below:

III. Restrictions on Inter-Fund Purchases and Reimbursements

Due to the impact of Inter-Fund Purchases and Inter-Fund Reimbursements on
the bank accounts maintained by the State of New Jersey, the State agencies
are prohibited from making payments between funds that do not share the
same bank account.

If a fund's bank account is unknown when an Inter-Fund Purchase or
Inter-Fund Reimbursement is being considered, the agency should view the
NJCFS APPR table. If no bank account code is indicated on APPR, then the
NJCFS FUND table should be checked for the bank account code. Once the
bank account code for a fund has been determined, it should be compared to
the bank account code of the other fund involved. If the two bank account
codes are different, an Intra-Governmental Payment Voucher should not be
used. The following steps should then be followed:

1. The buyer agency must process a Using Agency Payment Voucher (U1
transaction).

2. After the check is generated, the buyer agency must provide the check
to the seller agency.

3. The seller agency must then use a Cash Receipt (CR) to deposit the
check into their fund's bank account.

Note that all successfully posted Inter-Fund Purchases and Inter-Fund
Reimbursements will be reviewed to verify that none are processed between
funds with different bank accounts. The agencies found to be processing
these type of transactions will be contacted.

Inter-Fund Purchases and Reimbursements can be safely processed for those
funds that share the same bank account. The following funds all share the
same bank account:

100 General Fund
480 Special Transportation Trust Fund
490 Casino Control Fund
491 Casino Revenue Fund
495 Property Tax Relief Fund
496 Gubernatorial Elections Fund

IV. Intra-Governmental Payment Voucher Processing Flow

The following steps should be used in processing Intra-Governmental Payment
Vouchers:

1. If no billing invoice is generated by the seller governmental unit, an
Intra-Governmental Payment Voucher document should be used. All pertinent
information regarding the sale or reimbursement known to the seller
governmental unit must be used to complete the Intra-Governmental Payment
Voucher. The buyer governmental unit account code distribution can be left
blank. The Intra-Governmental Payment Voucher should then be forwarded to
the buyer governmental unit.

2. When the Intra-Governmental Payment Voucher is received by the buyer
governmental unit, it must be completed with any information not provided
by the seller governmental unit. If a billing invoice is used in place of
an Intra-Governmental Payment Voucher, the buyer governmental unit is
responsible for completing an Intra-Governmental Payment Voucher document.

3. The buyer governmental unit must enter the Intra-Governmental Payment
Voucher into the NJCFS, apply approvals, and post the transaction.

V. Intra-Governmental Payment Voucher Approvals

All Intra-Governmental Payment Voucher approvals are applied by the buyer
governmental unit. These approvals must be applied by at least two
different agency users. OMB approval is not required on these
transactions.

OMB will review successfully posted Inter-Fund Purchases and Inter-Fund
Reimbursements to verify that no payments are processed between funds with
different bank accounts.

VI. Intra-Governmental Payment Voucher Document Retention

The buyer governmental unit should keep sufficient back-up documentation of
successfully processed Intra-Governmental payment vouchers. The paper
document, proof of posting, and additional documentation indicating billing
date, amount, and description must be retained for audit purposes.

A seven year retention period is recommended for all Intra-Governmental
Payment Vouchers.