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State Accounting and Budgetary Procedures 

Title 19 | Chapter 4 | Subchapter 4

SUBCHAPTER 4 - AUDITOR OF STATE AND TREASURER OF STATE

19-4-401. Duties generally.

Except as otherwise provided for in this chapter, the offices of the Auditor of State and the Treasurer of State shall continue to perform the duties imposed by law upon these offices.
History. Acts 1973, No. 876, § 27; A.S.A. 1947, § 13-353.

19-4-402. Auditor of State as disbursing officer.

The Auditor of State shall act as disbursing officer for the appropriations made for:
(1) Circuit judges;
(2) Prosecuting attorneys;
(3) Retired circuit and chancery judges; and
(4) The Lieutenant Governor.
History. Acts 1973, No. 876, § 27; A.S.A. 1947, § 13-353 ; Acts 2005, No. 1962, 78.

19-4-403. Issuance of warrants.

The Auditor of State shall issue his or her warrants in payment of the vouchers presented to him or her by the Chief Fiscal Officer of the State only after he or she shall have satisfied himself or herself that the provisions of this chapter have been complied with. For this purpose, the Auditor of State shall have the authority to conduct any further examination and pre-audit of the vouchers which he or she may deem necessary. A single warrant may contain payments from multiple appropriations, classifications of appropriation, and funds.
History. Acts 1973, No. 876, § 27; A.S.A. 1947, § 13-353; Acts 2001, No. 1453, § 5.

Warrants are instruments utilized by the State to pay for obligations incurred in the purchasing of goods or services from outside sources. Warrants are initiated in AASIS by utilizing either the purchase order or the direct invoice method.

R1-19-4-403 Warrant Cancellations
A warrant must be cancelled when either the warrant contains incorrect information (i.e. vendor name, address, payment amount, etc.) or the vendor loses or does not receive the warrant issued to them for payment. The following procedures supply the necessary information to complete a warrant cancellation whether the warrant is for an outside vendor or for payroll to a State employee. PLEASE NOTE: For a chart reflecting forms that must be submitted in all instances of warrant cancellation actions, please see P1-19-4-403.

Non-Payroll Warrant Cancellation
Department of Finance and Administration-Office of Accounting (DFA-OA) is responsible for the cancellation of all Non-Payroll Warrants. All forms must be sent to DFA-OA where they will be processed and forwarded to the Auditor of State-Warrant Division.
There are two general categories for Non-Payroll Warrant Cancellations, those to be re-issued and not to be re-issued. These categories may include warrants that the agency have in hand or those that are lost or forged.
See: P4-19-4-403b

PLEASE NOTE: Generally, Automatic Clearing House (ACH) warrants cannot be cancelled. ACH Warrants are payments that are made by direct deposit into a vendor’s commercial bank account. If an agency requests the cancellation of an ACH warrant and that request cannot be processed, the agency must then contact the vendor for a refund of the ACH warrant. Once the agency receives the refund, a refund to expenditure must be completed and a deposit prepared and sent to the Treasurer of State-Warrant Division to record the receipt of funds for both the prior year and the current fiscal year warrants. Appropriation will be restored for current fiscal year warrants only.

An "Affidavit of Forged Warrant" Form, P2-19-4-403, must be completed by the vendor and submitted to the issuing agency for Non-Payroll Warrant Cancellations when the vendor purports the warrant has been lost or forged. The original "Affidavit of Forged Warrant" must then be sent either by mail, inter-office mail, or personal delivery to DFA-OA- Reconciliation Manager. The "Affidavit of Forged Warrant" will not be accepted by DFA-OA-Reconciliation Manager until the 15th day after the issuance of the warrant. The agency personnel must contact the Treasurer of State-Warrant Division either by phone or by e-mail to verify that the warrant has not been redeemed just prior to the submission of the form.

Upon receipt of the "Affidavit of Forged Warrant" Form, the DFA-OA-Reconciliation Manager will review and enter any action necessary in AASIS (i.e. voiding of warrant, reversal of payment). The "Affidavit of Forged Warrant" will then be delivered to the Treasurer of State-Warrant Division to be held in the event that the corresponding warrant is redeemed. If the Treasurer of State-Warrant Division has the original "Affidavit of Forged Warrant" and the original warrant is redeemed, the Treasurer of State-Warrant Division can then return the warrant and the "Affidavit of Forged Warrant" to the bank to attempt to receive a refund of the moneys. If the commercial bank does not refund the moneys to Treasurer of State-Warrant Division, Treasurer of State-Warrant Division will notify the agency that the warrant was not collectable. It is the agency’s responsibility to collect the amount of the warrant from the vendor. If after six months the agency is unable to collect, a claim will be filed with the Claims Commission to reimburse the Treasurer of State from the agency’s funds and appropriation.

If the original warrant is redeemed prior to an "Affidavit of Forged Warrant" being filed with the Treasurer of State-Warrant Division and the reissued warrant is also redeemed, the Treasurer of State-Warrant Division will attempt to receive a refund of moneys for the original warrant from the commercial bank. If the commercial bank denies the "Affidavit of Forged Warrant," the agency will be charged for both the original and the reissued warrant. The agency must then contact the vendor to collect the overpayment. Once the overpayment has been collected, the originating agency will deposit the refund in the originating fund and complete a refund to expenditure. If the original expenditure was for the current year, the general ledger account to use is 6080001000 Refund to Expenditure - Current Year. The agency then must submit a "Refund to Expenditure" Form, P3-19-4-403, to DFA-OA-Reconciliation Manager. The "Refund to Expenditure" Form is then used to adjust the appropriation for the current year. If the original expenditure was for prior year, the general ledger account to use is 6990003000 Prior Year Refunds to Expenditures. There is no adjustment of appropriation for prior year.

Non-Payroll Warrant Cancellation with Reissue

Prior Year
All prior year warrant cancellations with reissue require the Auditor of State-Warrant Division to issue a duplicate warrant. These warrants will reflect the same warrant number and date as the original but will have "Duplicate" stamped on the actual warrant.
To cancel a prior year warrant that is being reissued, the agency must submit a "Non-Payroll Warrant Cancellation" Form, P4-19-4-403, P4-19-4-403b, (Instructions) an original "Affidavit of Forged Warrant" Form, P2-19-4-403, and an original "Bond for Reissuing Warrant" Form, P5-19-4-403, to DFA-OA. When a prior year warrant cancellation is submitted with a request for reissue and the Auditor of State-Warrant Division issues a duplicate warrant, no journal entries are made.

Current Year
Current year warrant cancellations can either have a duplicate warrant processed by the Auditor of State-Warrant Division or a new warrant can be issued. Duplicate warrants for current year warrant cancellations will only be processed if an "Affidavit of Forged Warrant" and "Bond for Reissuing Warrant" has been submitted with the "Non-Payroll Warrant Cancellation" Form. Also the agency must note on the "Affidavit of Forged Warrant" that the warrant is, if in fact, a forgery. When a current year warrant cancellation is submitted with a request for reissue and the Auditor of State-Warrant Division issues a duplicate warrant, no journal entries are made.

If a current year warrant is cancelled, a new warrant can be issued by the agency DFA-OA- Reconciliation Manager will notify the agency when the warrant has been cancelled.
If a current year warrant is damaged or unacceptable at a commercial bank, the agency must send the original warrant and the "Non-Payroll Warrant Cancellation" Form to DFA-OA-Reconciliation Manager, and a new warrant will be issued to the vendor by DFA-OA-Reconciliation Manager.

Non-Payroll Warrant Cancellation with Reissue (Continued)
Note: All forms must be submitted to DFA-OA-Reconciliation Manager.
Prior Year Warrant Cancellations with Reissue Forms Needed:  

P4-19-4-403– Non-Payroll Warrant Cancellations Form
P2-19-4-403– Affidavit of Forged Warrant (Original)
P5-19-4-403– Bond for Reissuing Warrant (Original)

Non-Payroll Warrant Cancellation without Reissue
Prior Year
For a prior year warrant cancellation (void), the agency must submit a "Non-Payroll Warrant Cancellation" Form, P4-19-4-403, either the original warrant or an "Affidavit of Forged Warrant," P2-19-4-403, and a "Prior Year Non Payroll Warrant Cancellation Journal Entry" Form,P6-19-4-403, to DFA-OA-Reconciliation Manager. If the moneys were expensed from a fund that is supported by General Revenue and a portion of the moneys should not be reclaimed, a "Prior Year Non-Reclaimable Certification" Form, P7-19-4-403, or http://www.dfa.arkansas.gov/offices/accounting/Pages/default.aspx, must also be submitted to DFA-OA. Instructions for the "Prior Year Non-Reclaimable Certification" Form can be found at P7-19-4-403b. If the "Prior Year Non-Reclaimable Certification" Form is not submitted, all moneys will be reclaimed at month end. Prior year warrant cancellations require journal entries to be created and the warrant to be voided by DFA-OA-Reconciliation Manager. Document type "ZW," will be used in creating the journal entry. The following entry is made as of current date to the originating fund:

DR 1100001000 Cash in State Treasury
CR 6990002000 Prior Year Warrants Cancelled

The Prior Year Warrant Cancelled general ledger account posting is a non-budget relevant posting that does not reestablish appropriation.

The Business Area is used in the reference field for the posting of the prior year warrant cancellation; the short text will reflect "PY Warrant Cancel" and the text field will contain the warrant number.

If the original payment was from a fund that is supported by General Revenue, an additional entry will be made by DF-OA Funds Group Manager at month end reclaiming the moneys.
The agency will need to provide a contact person, phone number (with area code) and e-mail address in the space provided on the "Non Payroll Warrant Cancellation" Form that is submitted to DFA-OA-Reconciliation Manager.

Current Year
For a current year warrant cancellation the agency must submit a "Non-Payroll Warrant Cancellation" Form, P4-19-4-403, and either the original warrant or an "Affidavit of Forged Warrant" P2-19-4-403 to DFA-OA-Reconciliation Manager.

The warrant will be cancelled in AASIS and the original invoice(s) will be reversed by DFA-OA-Reconciliation Manager, if a new warrant is to be issued. A duplicate warrant can be issued for a current year warrant only if the original is reported as a forgery.  

Payroll Warrant Cancellation
Department of Finance and Administration – Office of Personnel Management (DFA-OPM) is responsible for the cancellation of all payroll warrants. All forms must be sent to DFA-OPM where they will be processed.

PLEASE NOTE: Generally, ACH warrants cannot be cancelled. ACH Warrants are payments that are made by direct deposit into a vendor’s commercial bank account. If an agency requests the cancellation of an ACH warrant and that request cannot be processed, the agency must then contact the employee for a refund of the ACH warrant. Once the agency receives the refund, a deposit is to be made to the originating fund by the agency and a refund to expenditure must be completed to the originating fund to record the receipt of funds for both the prior year and the current fiscal year warrants. Appropriation will be restored for current fiscal year warrants only.

An "Affidavit of Forged Warrant" Form, P2-19-4-403, must be completed by the employee and submitted to the issuing agency for Payroll Warrant Cancellations where the employee is claiming that the warrant is lost or that the warrant has been forged. The original "Affidavit of Forged Warrant" must then be sent either by mail, inter-office mail, or personal delivery to DFA-Office of Personnel Management-Payroll Section (DFA-OPM-PS). The "Affidavit of Forged Warrant" will not be accepted by DFA-OPM-PS until the 6th day after the issuance of the warrant and after the agency contacts the Treasurer of State-Warrant Division either by phone or by e-mail to verify that the warrant has not been redeemed.

Upon receipt of the Affidavit of Forged Warrant" Form, DFA-OPM-PS will review and enter any action necessary in AASIS (i.e. voiding of warrant, reversal of payment). The "Affidavit of Forged Warrant" will then be delivered to the Treasurer of State-Warrant Division to be held in the event that the corresponding warrant is redeemed. If the Treasurer of State-Warrant Division has the original "Affidavit of Forged Warrant" and the original warrant is redeemed, the Treasurer of State-Warrant Division can then return the warrant and the "Affidavit of Forged Warrant" to the bank to attempt to receive a refund of the moneys. If the commercial bank does not refund the moneys to the Treasurer of State-Warrant Division, Treasurer of State-Warrant Division will notify the agency that the warrant was not collectable. It is the agency’s responsibility to collect the amount of the warrant from the vendor. If after six months the agency is unable to collect, a claim will be filed with the Claims Commission to reimburse the Treasurer of State from the agency’s funds and appropriation.

If the original warrant is redeemed prior to an "Affidavit of Forged Warrant" being filed with the Treasurer of State-Warrant Division and the reissued warrant is also redeemed, the Treasurer of State-Warrant Division will attempt to receive a refund of moneys for the original warrant from the commercial bank. If the commercial bank denies the "Affidavit of Forged Warrant," the agency will be charged for both the original and the reissued warrant. The agency must then contact the employee to collect the overpayment. Once the overpayment has been collected, the originating agency will deposit the refund in the originating fund and complete a refund to expenditure. If the original expenditure was for the current year, the general ledger account to use is 6080001000 Refund to Expenditure - Current Year. The agency then must submit a "Refund to Expenditure" Form, P3-19-4-403, to DFA-OA-Reconciliation Manager. The "Refund to Expenditure" Form is then used to reinstate the appropriation for the current year. If the original expenditure was for prior year, the general ledger account to use is 6990003000 Prior Year Refunds to Expenditures. There is no adjustment of appropriation for prior year.

Payroll Warrant Cancellation with Reissue

Prior Year
For prior year payroll warrant cancellation, the agency must submit to DFA-OPM-PS a "Request for Reverse Payment Void," P8-19-4-403, a copy of the "Remuneration (REM) Statement," "Affidavit of Forged Warrant" and an additional two copies of each form. If the warrant cancellation is considered a forgery, the agency must also submit a "Bond for Reissuing Warrant," P5-19-4-403. DFA-OPM-PS will forward the "Affidavit of Forged Warrant" to DFA-OA-Reconciliation Manager for the determination of whether a duplicate warrant can be reissued.

If a duplicate warrant is issued by the Auditor of State-Warrant Division, no cancellation is required.

PLEASE NOTE: Should the employee cash the original warrant for which the "Affidavit of Forgery" papers have been signed, criminal charges can be filed against the employee by the individual or business entity that cashed the warrant or accepted it for deposit.

Current Year
For current year payroll warrant cancellation, the agency must submit to DFA-OPM-PS an "Affidavit of Forged Warrant" and attach one copy. If the warrant cancellation is for a forgery, the agency must also submit a "Bond for Reissuing Warrant." DFA-OPM-PS will forward the "Affidavit of Forged Warrant" to DFA-OA-Reconciliation Manager to make the determination of whether a duplicate warrant can be reissued.

If a duplicate warrant is issued by the Auditor of State-Warrant Division, no cancellation is required.

Outlawed Warrants
Refer to R1-19-4-703 "Outlawed Warrant Process" in this Guide. Questions concerning the outlawed warrant process should be directed to DFA–OA Reconciliation Manager. A list can be provided detailing all warrants that were outlawed by DFA-OA upon request.

19-4-404. Books, forms, and receipts.

(a) In order to provide for uniformity in fiscal procedure, the Auditor of State and the Treasurer of State are directed to establish and set up in their respective books such income, appropriation, disbursement, and fund accounts as shall be prescribed by the Chief Fiscal Officer of the State or as otherwise provided by law.
(b) The forms of all vouchers and other prescribed forms used in connection with the disbursement of funds in the State Treasury shall be prescribed by the Chief Fiscal Officer of the State, with the approval of the Auditor of State, or as otherwise provided by law. (c) All forms of receipts and other prescribed forms used in connection with the recording of the receipts of the Treasurer of State shall be prescribed by the Chief Fiscal Officer of the State, with the approval of the Treasurer of State, or as otherwise provided by law.
History. Acts 1973, No. 876, § 27; A.S.A. 1947, 13-353.

19-4-405. Examination of records.

(a) It is the duty of the Auditor of State to examine and verify the disbursement and redemption records of the Treasurer of State daily and compare them with the records in his own office and with the Auditor of State’s redeemed warrants. (b) As each redeemed warrant is examined and found to compare with the disbursement records, it shall be stamped over the signature of the Auditor of State. The stamp shall contain the words "VOID, STATE AUDITOR," and shall be at least one-half inch by one and one-half inches (1/2" x 1 1/2") in size.
History. Acts 1973, No. 876, § 27; A.S.A. 1947, § 13-353.

19-4-406. Storage of warrants.

(a)(1) The Auditor of State shall place all redeemed warrants in a secure place or vault in the Auditor of State’s office, subject to the inspection by any interested citizen.
(2)(A) Except as provided in subdivision (a)(2)(B) of this section, the Auditor of State shall keep a warrant intact and without further alteration for a period of one (1) year from the close of the fiscal year in which they were issued.
(B)(i) If the Auditor of State makes an electronic copy of the warrant, the original warrant shall be kept for three (3) months.
(ii) The electronic copy of the warrant shall be maintained for a period of ten (10) years from the close of the fiscal year in which the warrant was issued.(b) If the Legislative Auditor and State Historian request retention of an original warrant or the electronic copy of a warrant in excess of the time periods provided under subsection (a) of this section, the warrants and vouchers shall be retained by the Auditor of State for such period of time as required by the Legislative Auditor and State Historian.
(c) If federal law or regulations require the retention of certain warrants for a period longer than the period prescribed in this section, warrants shall be retained for the period prescribed by the federal law or regulations.
History. Acts 1973, No. 876, § 27; 1983, No. 305, 1; A.S.A. 1947, 13-353; Acts 2007, No. 269, 1.

19-4-407. Electronic warrants transfer system.

(a) The Chief Fiscal Officer of the State, the Treasurer of State, and the Auditor of State may establish an electronic warrants transfer system directly into payee's accounts in financial institutions in payment of any account allowed against the state.
(b) The Chief Fiscal Officer of the State, the Treasurer of State, and the Auditor of State, by joint rules, shall establish the standards and procedures for administering the system, to include that the electronic warrants transfer shall be in such form that a single instrument shall serve as electronic warrants transfer. 
(c) A single electronic warrants transfer may contain payments to multiple payees, appropriations, characters, and funds.
History. Acts 1991, No. 421, §§ 1-3.

R1-19-4-407 Electronic Warrants

Overview

Electronic warrants must be formatted to comply with Automated Clearing House (ACH) requirements. Circumstances occasionally arise that require deletions or reversals from the ACH transmittal file after it is created by the Statewide accounting system. The difference between a reversal or deletion of an ACH item is determined based upon the timing of the request. If an ACH item has not been distributed to the Federal Reserve by the bank, the ACH item will be deleted. If an ACH item has been distributed to the Federal Reserve, it will be reversed if possible. ACH items are distributed to the Federal Reserve two (2) business days prior to the effective date if the bank has the item at that point. For example, if an ACH item is transmitted and the Request for Reversal/Deletion of an ACH Item form is faxed to the bank on Monday and the ACH item has an effective date of Thursday or later, the ACH item will be deleted. If an ACH item is transmitted and the Request for Reversal/Deletion of an ACH Item form is faxed to the bank on Monday and the ACH item has an effective date of Wednesday or earlier (but no earlier than five (5) business days prior), the ACH item will be reversed.

Deletions/reversals from an ACH file can only be processed by the Department of Finance and Administration – Office of Accounting (DFA-OA). In order to request a deletion/reversal of an ACH, the agency must properly complete the "Request for Reversal/Deletion of an ACH Item" form and submit the form via fax to DFA-OA. The "Request for Reversal/Deletion of an ACH item" form must be signed by two authorized agency personnel who are on file with DFA-OA as authorized personnel. Requests for deletion/reversal of an ACH item must be processed immediately following knowledge of an error.

Please Note: To comply with National Automated Clearing House Association (NACHA) Rules, the Reversal/Deletion Request must be received by the bank in time to be processed within five (5) business days of the original entry settlement date. (The cutoff time is 5:00 PM CST on the 5th business day after settlement.)

After two DFA-OA authorized personnel review and sign their approval to the "Request for Reversal/Deletion of an ACH item" form, DFA-OA will contact the bank and submit a formal request for a reversal/deletion of an ACH item. Pending bank approval, the monies will be returned to the Vendor ACH Return Account, the Payroll ACH Return Account or the Income Tax ACH Return Account.

If the monies are returned to the Vendor ACH Return Account, the requesting agency will be notified by DFA-OA and issued a check from the Vendor ACH Return Account to be processed as a refund to expenditure to the fund, fund center, commitment item, wbs element and/or internal order of original issuance.  

If the monies are returned to the Payroll ACH Return Account, a check will be issued to the Payroll paying fund and deposited into the Treasurer of State’s office.

If the monies are returned to the Income Tax ACH Return Account, a check will be issued to DFA-Revenue-Individual Income Tax and deposited into the Treasurer of State’s office as a refund to expenditure.

Reversal/Deletion of an ACH item

The purpose of this process is to delete or reverse an ACH item once the file has reached the bank. This must be done within five (5) working days of the settlement or pay date of the deposit.

The requesting agency must complete the "Request for Reversal/Deletion of an ACH item" form and submit via FAX to the DFA-OA. Two persons from the approved agency personnel list must sign the request form prior to submission to the DFA–OA.

DFA staff will approve the request for submission to the bank. Designated Office of Accounting staff will fax the official "ACH Reversal/Deletion Request" form to the bank for processing.

Deletion of an item is possible if done prior to 5 PM on the day of transmittal of the ACH file by the Auditor of State. If an item is deleted, it will not be presented for reimbursement to the Treasurer of State, and Bank of America will return no money to the State. Cancellation of the electronic "warrant" will be necessary. No further payments should be issued until the DFA - Office of Accounting confirms the reversal.

Reversal of an item is at the discretion of the receiving bank. If the reversal is honored, money will be returned to the Treasurer of State’s bank settlement account and subsequently transferred to either the Vendor ACH Return Account or the Payroll ACH Return Account. At that point a check will be written to reimburse the agency for the funds or the Payroll Paying Account and deposited as a refund to expenditure, either current or prior year.

19-4-408. Distributions to public school districts.

(a)(1) The Chief Fiscal Officer of the State, the Treasurer of State, and the Auditor of State shall establish an electronic warrants transfer system to distribute certain funds directly to an account in a financial institution, as designated by the public school district's treasurer.
(2) The determination of the categories of funds to be distributed shall be made by the Director of the Department of Education.
(3)(A) The public school district shall accept distributions by the electronic warrants transfer system.
(B)(i) A public school district with a district treasurer may choose to have funds first distributed to the county treasurer or directly to the school district treasurer.
(ii) If a school district with a district treasurer chooses direct distribution of funds to the school district treasurer, the State of Arkansas shall forward all state and federal funds for the district to the district treasurer, whether they are in the form of state warrants or electronic warrants transfers.
(iii) If a school district uses the county treasurer as its treasurer, the State of Arkansas shall forward all state and federal funds for the district to the county treasurer, whether they are in the form of state warrants or electronic warrants transfers.
(b) The Chief Fiscal Officer of the State, the Treasurer of State, and the Auditor of State, by joint rules, shall establish the standards and procedures for administering the system, to include that the electronic warrants transfer shall be in such form that a single instrument shall serve as electronic warrants transfer.
(c) A single electronic warrants transfer may contain payments to multiple public school districts, appropriations, characters, and funds.
History. Acts 1993, No. 540, §§ 1-5; 1995, No. 232, § 8.