Payment Processing Guide

A.   OFFICE OF THE STATE AUDITOR

The Office of the Auditor is established in the Constitution of the State of West Virginia. The Constitution requires that every person having a claim for money from the State Treasury apply to the Auditor for payment. For the Auditor to be able to issue a payment on behalf of a state agency, there must be an appropriation and a state statute that authorizes the payment.

Most transactions under the Executive Branch of State government are authorized under the statutes and rules of the Department of Administration's Purchasing Division. Certain exceptions exist for the Division of Highways and Higher Education.

B.   HOW WEST VIRGINIA PAYS ITS BILL

The State of West Virginia is required by its Constitution to have a balanced budget each fiscal year, that is, to live within its means. What does this have to do with how State government pays its bills? The Modern Budget Amendment of 1968, as it is known, is the primary reason for the budgeting and appropriation process. Before each fiscal year, government is required to project spending needs. Then, based upon those projections, a Budget (or appropriations) bill is passed limiting spending to a specified amount, as a matter of law. Why is the State Auditor concerned with this? Because the Auditor's review of invoices is primarily a compliance audit: payment of any claim which is not legally authorized cannot be approved. The West Virginia Constitution, and West Virginia Code, and many rules and regulations are involved.

C.   CONSTITUTIONAL REQUIREMENTS

The State's fiscal year begins July 1st and ends June 30th. This Constitutional requirement is the source of many conditions and limitations in the State finance system. If exceptions do not apply, the spending authority granted in a fiscal year expires June 30th. This would be simple enough to understand except that there is a difference between the expiration of spending authority and the expiration of invoice paying authority. There are numerous types of spending authorities which have different conditions and limitations. Some originate in legislation which authorizes collection of a fee or tax, but require line-item appropriation each fiscal year before the money can be spent. Others authorize collection and do not require separate yearly line item appropriation. Some appropriations are effective for more than one year. Also, there are conditions which apply to the ability of the State to pay invoices out of these expiring accounts beyond June 30th of the fiscal year. Generally, certain grace periods apply, allowing for payments to be made up to and including July 31st of the next fiscal year. The entire State accounting system (and much agency spending strategy) is built around this concept.

D.   FUND APPROPRIATIONS

All State money must be appropriated in order to be spent. Either by statute or by a Budget bill, either by line item or by general language, there must be an appropriation before spending can take place. This applies regardless of how much revenue the State collects. Even if the State realizes a surplus from last year's revenue collections, those funds must be appropriated. In granting spending authority, every penny is accounted for. Appropriations are crucial to getting State bills paid.

E.   SPENDING AUTHORITY

Each fiscal year's budget and appropriations bills are law: all spending authority originates in them. Budget and other appropriations bills become law after they have passed both houses of the Legislature and have been signed by the Governor. As this implies, there can be more than one bill which appropriates money for a fiscal year. In a broader sense, any bill which grants spending authority is referred to as an appropriations bill. However, the Constitution still applies: the State cannot have an unbalanced budget for any fiscal year. After all of the appropriation bills for a fiscal year have been passed and signed into law, a spending unit may ask the Legislature for a supplemental appropriation. It is not prudent to count on receiving supplemental appropriations when making spending plans. Budget and appropriations bills are the "law of the land".

The State Auditor's Office uses the Budget and appropriations bills to perform its review of invoice payments against a spending unit's appropriation on a line item basis. This review helps to ensure that each expenditure is legally authorized.

A.   APPROPRIATION REQUESTS

Each fiscal year, spending units are required to submit an Appropriation Request which identifies revenue sources and details how they will be spent. The first step in developing the budget is to estimate State spending needs for the next fiscal year. The process begins when spending units submit their Appropriation Requests to the Governor through the Department of Revenue's Budget Office. Needs are identified, requests are justified, and revenue sources are specified. While the Executive Budget is based on these projections, it is the Governor's prerogative to allocate the State's limited resources as he or she thinks is best. A spending unit may or may not get the exact amount asked for in its Appropriation Request in the final version of the Governor's budget request to the Legislature.

B.   WHAT HAPPENED TO MY REQUEST?

Spending unit requests are combined into the Governor's Executive Budget Proposal and submitted to the Legislature. The Legislature passes the Budget bill (and other appropriations bills, if there are any). The Governor signs the bills into law setting the legal limits of State government spending authority for the upcoming fiscal year.

Budget and appropriations bills are the law and the final word on State spending for one year (if there are no supplemental appropriations by the Legislature or spending cuts by the Governor). They carry as much weight as any other act of the Legislature, including statutes in the West Virginia Code.

C.   REQUIREMENTS FOR EXPENDITURE SCHEDULES

State government attempts to keep spending within lawful limits. Spending units are not only limited to their appropriation, but are also accountable for how they spend it. They submit Expenditure Schedules to the Department of Revenue's Budget Office. In the Expenditure Schedule, the fiscal year is divided into periods known as quarterly allotments. A set amount of spending is allowed in each period based upon cyclical revenue collection patterns.

D.   ENCUMBRANCE ACCOUNTING

The encumbrance of funds is required in §5A-2-27 of the WV State Code. Encumbrances are used to stay within the budget. Although most encumbrances occur upon electronic approval of the invoice to the State Auditor, purchases exceeding amounts indicated in State Purchasing and Higher Education Guidelines require encumbrance at the time the purchase requisition is issued. Funds must be encumbered or the State Auditor will not approve the payment.

E.   THE STATE AUDITOR'S RESPONSIBILITY

The State Auditor is obligated to ensure that every expenditure is legally authorized. The State Auditor must determine from reviewing the invoice, the documents presented with it, and the contract itself, whether an invoice may be approved for payment. Payment for unidentified items in the document will not be approved. Transactions using State money demand the highest degree of scrutiny and accountability.

F.   APPROPRIATION BALANCE VERSUS FUND CASH BALANCE

Many people get confused with State finances because they do not understand the difference between an appropriation balance and a fund cash balance. An appropriation is an amount authorized by statute that can be spent for a specific or unclassified purpose. An appropriation identified by the source of the authorization such as a House or Senate Bill or other statutory reference and the title of the appropriation (activity code in WVFIMS). The amount spent against the appropriated account cannot exceed, under any circumstances, the total appropriation. However, an appropriation does not mean that expenditures can be paid. Revenues must be collected or a beginning cash balance must be available to support the appropriations of the fund.

The term "fund" relates to a fiscal or accounting unit with a set of self-balancing accounts that record all of the financial transactions such as the General Revenue Fund or Special Revenue Funds. After an invoice is approved by the Auditing Division, the Accounting Division verifies that an appropriation exists with sufficient balance authorizing the expenditure. In addition, a liquidity check is performed to verify that the fund has a sufficient cash balance for the expenditure. The key factor to remember is that an expenditure from any one fund is limited to the appropriation balance or cash balance, whichever is less.

G.   TYPES OF APPROPRIATIONS

Most money for operating State spending units comes out of the General Revenue category. Most of the others are considered dedicated revenue. Carried in separate funds, they are legally obligated for spending on a specific purpose in the State Constitution, a statute, or an appropriations bill. Some dedicated revenue funds are trust funds, including special revolving funds for self-supporting activities unrelated to normal government operations, such as book stores, cafeterias, and dormitories at State institutions and schools.

There are seven types of appropriations for transacting State business:

1.   General revenue appropriations expire at the end of the State's fiscal year. After June 30th, there is a "grace period" often referred to as 13th month to allow for the payment of goods purchased or the services received prior to July 1. The invoice must be received by the State Auditor's Office before the last working day in July at 4:00 p.m. to be paid.

2.   Re-appropriated general revenue refers to appropriations that have been been re-appropriated under certain circumstances for at least one additional fiscal year. West Virginia Code §12-3-12 states that appropriations for buildings and land or capital outlay will remain in effect and will not be considered expired for three (3) years after passage of the appropriating legislation. Re-appropriation can also occur when language in an appropriations bill authorizes it. Re-appropriated General Revenue operates the same as regular General Revenue appropriations, except that the authority to obligate and pay obligations begins in the original year of appropriation and continues through each year until the re-appropriation expires.

3.   Appropriated special revenue refers to special revenue funds appropriated on a line-item basis in an appropriation bill. These funds are treated the same as General Revenue appropriations for obligation and payment as appropriated in the Budget bill and references in the Digest of the Enrolled Budget Bill.

4.   Re-appropriated special revenue occurs for the same reasons as re-appropriated General Revenue. Authority to spend appropriated special revenue expires with the end of the fiscal year. These appropriations are similar to re-appropriated General Revenue in how they can be obligated and spent.

5.   Expiring re-appropriated revenues are appropriation balances which have been re-appropriated for one or more fiscal years, and which will expire at the end of the current fiscal year. Expiring re-appropriations operates the same as regular General Revenue appropriations, except that the authority to obligate funds and make payments begins in the original year of appropriation, and continues through each year until the re-appropriation expires. At the end of the last fiscal year of a re-appropriation, a 13th month grace period is allowed to make final payments.

6.   Non-appropriated special revenue is appropriated, but not on a line-item basis. These funds are appropriated by general appropriation language in a statute or a Budget bill. A good example would be an account for a dormitory at a State school. These funds are authorized by State statute. As long as the funds are collected and an Expenditure Schedule is filed by the spending unit, payments can be made with these "non-appropriated" funds. These are also referred to as "non-expiring accounts."

7.   Federal revenue received by state spending units must be appropriated on a line item basis according to Chapter 4, Article 11 of the West Virginia Code. Although a grant or other money may be given to a specific state spending unit by the Federal government, the state spending unit must have Legislative authorization to spend it.

SECTION I.   TRAVEL GUIDELINES

The State Auditor's Office processes reimbursements for State employee travel expenses. Each spending unit's travel requests for reimbursement are processed according to the laws and regulations which apply to that spending unit.

A.   TRAVEL CASH ADVANCE REQUESTS

The preferred method of obtaining a cash advance is to use the state corporate travel card at an ATM. Cash advances may be issued in the form of a warrant payable to the employee or approved bank account for business travel both in-state and out-of-state, payment of registration fees and/or daily miscellaneous expenses where the state corporate travel card (or state Purchasing Card where applicable) is not accepted.

The State Auditor's policy for cash advances is as follows:

1.   The cash advance field in WVFIMS must be marked "Y" to properly identify the payment type in WVFIMS.

2.   Beginning and ending dates of travel are required in the appropriate fields in WVFIMS.

3.   Cash advances may be requested by the spending unit within ten days of the travel departure date.

4.   A maximum of two cash advances may remain unsettled by a traveler at any one time.

5.   Athletic directors and wardens of correctional institutions may have up to four advances unsettled at any one time.

B.   TRAVEL SETTLEMENT

Each cash advance must be settled within thirty days of the last date of travel for which the advance was issued. If an employee does not settle within thirty days of the last date of travel, cash advance privileges for the entire spending unit may be suspended.

The following are requirements for submitting travel settlements:

1.   "Travel Advance" must be printed or stamped in the upper right corner of the WVFIMS coversheet by the spending unit.

2.   Travel expense account form must include:

a).   The traveler's title, headquarters, and purpose of travel

b).   "To" and "From" fields must be completed for each day of travel.

c).   Beginning and ending dates of travel must me entered in the appropriate fields of the WVFIMS Invoice transaction.

d).   Original signatures are required by the traveler and agency administrator or designee on the expense account form.

e).   Original receipts are required. Non original receipts must be certified by the traveler, agency administrator or chief financial Officer, and another employee of the spending unit with WVFIMS signature authority.

C.   EMPLOYEE TRAVEL REIMBURSEMENTS

1.   Employee travel reimbursements must be submitted on the appropriate expense account settlement form.

2.   Expense account settlement forms must be signed by the traveler and the agency administrator or designee.

3.   Original receipts that are required

4.   Advance bookings are expected to be made through the contracted travel service vendor to secure the least expensive airfare possible.

5.   Receipts for miscellaneous business related expenses such as: baggage, taxi, limousine, airport service, tolls, garage and parking fees, and gratuities may be required at the discretion of the spending unit.

6.   CDW insurance should be taken for rentals less than seven days unless the State's corporate travel card is used(this is provided at no cost up to 60 days).

7.   Cash Advance settlements which indicate money to be deposited should be mailed directly to the State Auditor's Office Travel Section after the deposit has been made.

8.   Meal reimbursement requests must be adjusted when meals are included in the registration fee.

9.   ATM receipt is required for reimbursement of ATM fees associated with the corporate travel card.

10.   Corporate travel card should be used for business-related travel expenses only.

11.   FAX copies must be certified original by the agency administator or chief financial Officer.

12.   Original receipts are required. If not available, please certify that the receipt provided is the only receipt available. Indicate that you have not been paid by any other source. Receipt must be certified original by payee, Agency Administrator or Chief Financial Officer and another individual with WVFIMS signature authority.

13.   Travel reimbursements flagged for "Special Handling" in WVFIMS must be certified by the agency administrator or chief financial officer.

SECTION II   GENERAL INVOICE REQUIREMENTS

A.   SPECIAL AUTHORIZATION CODES

1.   Special Authorization Code 1 - All invoices for purchases totaling $2,500.00 or less.

2.   Special Authorization Code 2 - All invoices for purchases totaling $2,5000.01 to $5,000.00.

3.   Special Authorization Code 3 - All invoices for purchases totaling $5,000.01 to $25,000.00.

4.   Special Authorization Code 4 - All invoices for purchases regardless of dollar amount that are exempt from State Purchasing Guidelines. The exemption must be referenced in the comments field of WVFIMS.

5.   Special Authorization Code 5 - All invoices purchased under the Higher Education Guidelines that total $25,000.00 or less.

6.   Special Authorization Code 6 - All invoices for essential items as listed and described in the Higher Education Guidelines.

7.   Special Authorization Code 7 - All invoices for payment of statewide and agency open end contracts.

B.   INVOICE REQUIREMENTS

1.   Original invoice, or certified original by spending unit if non-original.

2.   Non-Original invoices must be certified by either the agency administrator or chief financial officer and another employee of the spending unit with WVFIMS signature authority.

3.   Certification of receipt to verify the spending unit has received the goods or services. Refer to receiving report requirements.

4.   Invoice date

5.   Dates of Service are required when labor is included.

6.   Itemization which includes a description of the goods or services received

7.   Invoice extensions and total must be correct.

C.   WVFIMS COVERSHEET REQUIREMENTS

1.   Authorized spending unit signature or WVFIMS electronic authorization.

2.   Proper WVFIMS coversheet coding identifying the payment type.

3.   Special Authorization code as defined in Sub-Section A of this section of the guidelines.

4.   WVFIMS financial codes which properly identify the type of purchase as defined by the Expenditure Schedule Instructions.

5.   Vendor name agrees with the invoice.

6.   Total agrees with the invoice.

7.   Invoice number as required in policy statement #36 issued by FARS, Dept. of Administration

8.   Invoices identified as "Potential Duplicate" in WVFIMS must be certified by the agency administrator or chief financial officer.

D.   GRANT PROCESSING

1.   Grant number as identified on the grant agreement must be referenced in the "comments section" of the WVFIMS transaction.

2.   Complete grant agreement must be submitted with the first payment.

3.   Invoice period must be in accordance with the grant agreement.

4.   WVFIMS funding information on the WVFIMS transaction must agree with the grant agreement.

5.   Change order is required for any changes to original grant terms and conditions.

6.   Vendor name on the invoice and WVFIMS transaction must agree with the grant agreement.

7.   Multiple payments for the same period are not permitted unless the first payment is an advance, or the second payment is noted as a supplemental.

E.   REVENUE REFUNDS

A Revenue Refund is used to refund money that the spending unit collected in error or for services that were cancelled after payment was received. When processing a Revenue Refund, please provide the reason the funds are being returned. The revenue source on the Revenue Refund must agree with the type of refund.

F.   UTILITIES

Metered utilities are audited in accordance with PSC guidelines. Metered utilities can consist of water, gas, electric, sewer, cable TV and garbage and are considered an exempt item. See the Expenditure Schedule Instructions under object code 023 for a complete list.

G.   TELECOMMUNICATIONS

Telecommunications are audited in accordance with the terms and conditions set forth by IS&C. Telecommunication charges include monthly telephone bills, Internet charges and long distance bills which are considered exempt items. See the Expenditure Schedule Instructions under object code 024 for a complete list.

H.   ASSOCIATION DUES AND PROFESSIONAL MEMBERSHIPS

Association dues are an exempt item paid by the spending unit only when the spending unit receives the benefit and the membership is transferable within the spending unit. Agency administrators are authorized to sign and may delegate this function within their spending unit. These signatures must be on file with the State Auditor's Office.

Professional memberships and licenses for state employees are paid by the spending unit when the membership is necessary for employment. If the employment is terminated, the employee must refund, to the spending unit, the prorated share of the membership. A written agreement stating that the employee will return the prorated share must accompany the payment. See the example of this agreement in the Expenditure Schedule Instructions.

I.   CONTRACTUAL SERVICES

Requisitions for payment of contractual services that do not require prior approval of the State Purchasing Division or the Attorney General must be accompanied by a WV-48 agreement, or agency delegated purchase order.

J.   EMPLOYEE REIMBURSEMENTS (NON-TRAVEL RELATED)

Reimbursements to employees for purchases of commodities that are to become ownership of the state require the following:

1.   A request for reimbursement form signed by the employee and his/her supervisor

2.   An original, itemized receipt

3.   Non-original receipts must be certified by the following:

a)   Agency administrator or chief financial officer

b)   The employee who made the purchase

c)   An employee of the spending unit with WVFIMS signature authority.

SECTION III   WVFIMS ADJUSTING ENTRIES

Before WVFIMS, transfers of funds between state accounts were made by using Intergovernmental Transfers (or IGT's) regardless of the type of transfer. However, under WVFIMS, transfers are more specific. Adjusting Entry transfers fall into the following categories:

A.   FUND TRANSFERS

Using this type of transaction, spending units record the transfer of money from one fund to another. The transfer may occur between spending units or within the same spending unit. Spending units must reference code section allowing transfer of funds.

Financial Codes: In the "From" section, an expenditure object code 100 only must be used. In the "To" section, a revenue class/source 553/697 must be used.

NOTE: There are some fund transfers required by law, which are known as Statutory Transfers. A Statutory Transfer (Class Code 553) is a transfer of funds required by the West Virginia Code or by a Budget bill or other appropriation bill. Class Code 697 is used for operating funds transfers such as a joint agreement between spending units to provide matching funds.

B.   FUND TRANSFER REVERSAL

Using this transaction, a spending unit can reverse a prior operating capital or statutory fund transfer. As with fund transfers, this transaction can take place between spending units or within the same spending unit.

Financial Codes: In the "From" section the revenue class/source 553/689 must be used. In the "To" section an expenditure object code of 100 only must be used.

C.   EXPENSE-TO-EXPENSE TRANSFERS

Using this transaction, a spending unit can allocate or move expenditures to and from different funds. Documentation of the original expenditure is required to confirm the expenditure transaction was completed and original financial code combination.

Financial Codes: Only expenditure funds can be used for this transaction. In the "From" section, a decrease (or credit) to the expenditure fund is recorded, and a corresponding increase (or debit) to cash is recorded. In the "To" section, an increase (or debit) to the expenditure fund is recorded, and a corresponding reduction in cash is recorded.

D.   INTERGOVERNMENTAL TRANSFERS (IGT'S)

Transfers of this type authorize the payment of invoices within a spending unit or the payment of invoices received between spending units. These payments must meet the standard invoice requirements as listed under §3-2B of this guide.

Financial Codes: In the "From" section, an expenditure fund must be used. In the "To" section, a revenue fund must be used. This transfer results in an increase in expenditures for the transferring spending unit and a corresponding increase in revenues for the receiving spending unit.

E.   IGT ALLOCATION IN/OUT

These adjusting entries are utilized to correct a previously completed IGT. Both the paying and receiving spending unit can re-allocate the expenditure and/or revenue to the proper financial codes. Audit requirements include a reference to the previously completed IGT.

F.   REIMBURSEMENT TRANSFERS

Using this transaction, spending units record the reimbursements from fund to fund. For example, one agency may need to reimburse another for an overpayment. It can be done between spending units or within a spending unit and is considered the opposite of an IGT.

Financial Codes: In the "From" section the revenue class/source 553/689 must be used. In the "To" section, an expenditure object code of 100 only must be used. Reimbursement transfers will result in a decrease of revenue for the transferring spending unit, and a corresponding decrease in expenditures for the receiving spending unit, resulting in an increase in cash.

G.   REVENUE TRANSFERS

Using this transaction, spending units may allocate or transfer holding fund deposits to final deposit funds.

Financial Codes: Revenue class codes are used for this transaction. In the "From" section, the revenue fund into which the deposit was first made is listed. In the "To" section, the revenue fund into which the money is being transferred is listed.

H.   DEPOSIT CORRECTIONS

Using this transaction, a spending unit can correct an original deposit that was processed as a revenue when it should have been processed as a refund; or a deposit that was processed as a refund when it should have been processed as a revenue deposit.

Financial Codes: If the original deposit was recorded as a revenue and should have been a refund the "From" side is the original revenue account code combination and the "To" side is the appropriate expenditure account code combination. If the original deposit was processed as a refund and should have been a revenue deposit the "From" side is the original expenditure account code combination and the "To" side would be the appropriate revenue account code combination

SECTION IV   PAYMENT OF FORMAL ACQUISITIONS AND PROPERTY LEASES

A.   WVFIMS COVERSHEET CODING

WVFIMS Invoice coversheets must be coded properly. All information must be entered in WVFIMS. Handwritten is not acceptable. Refer to State Auditor's Office memorandum dated 6/12/99.

1.   Encumbered purchase orders must reference the WVFIMS 'P' document number in the encumbrance number field of WVFIMS.

2.   Invoice dates of service for encumbered orders must be entered in the appropriate field of WVFIMS. Dates of service are required only if a service has been performed.

3.   Agency Open End and Statewide contract numbers must be entered in the "Statewide Contract" field of WVFIMS to properly code the WVFIMS coversheet.

a)   Special Authorization code 7 must be entered for agency open end contracts to properly code the WVFIMS coversheet.

b)   A Special Authorization code is not to be used for statewide contracts to assure the WVFIMS coversheet is coded as such.

4.   Real property lease agreement numbers must be referenced in the comments field of WVFIMS. Special authorization code is 7 is required.

B.   INVOICE REQUIREMENTS

Building lease agreements are audited for the same basic requirements as indicated under the General Audit Section. In addition, invoices are audited in accordance with the contract's terms and conditions.

1.   Item descriptions such as model number, job title, service description and phase breakdown are required and must agree with the purchase order.

2.   WVFIMS funding information must be in accordance with the purchase order.

3.   Vendor/payee information on invoice and WVFIMS coversheet must agree with purchase order.

4.   Retainage must be in accordance with contract terms for construction related invoices.

5.   Notice to proceed letters are required prior to submitting the first payment to the State Auditor's Office for contracts which include a notice to proceed clause, unless the certified encumbered date has been considered the official notice to proceed.

6.   AIA documents may be required for payment of construction related invoices according to the contract terms and conditions. This is required when an architect is included in the contract.

7.   Freight is paid in accordance with contract terms. See current State Purchasing Guidelines for freight terms and definitions.

8.   Travel and other reimbursable expenses are paid in accordance with contract terms.

10.   A completed WV-15 form must accompany invoices for payment of temporary spaces.

SECTION V   RECEIVING REPORTS

A.   REQUIREMENTS

A receiving report shall be submitted to the State Auditor verifying the receipt of commodities by a State spending unit.

1.   The Spending Unit must generate a receiving report within 24 hours of receipt of the commodities.

2.   Approved formats for receiving reports are as follows:

a)   Receiving report form issued by the State Auditor's office, WVSAO RR1

b)   Electronic receiving report approved by the State Auditor's office

c)   TEAM generated receiving report

3.   Required information on the receiving report is as follows:

a)   Name of the spending unit

b)   Vendor name and address

c)   Itemized description of commodities received

d)   Signature and date of an authorized receiver for the spending unit

e)   Reference to the WVFIMS Document ID which contains the invoice to pay for the commodities listed on the receiving report

4.   The report must accompany the requisition for payment

5.   Electronic receiving reports must be submitted to the State Auditor's Office in the format required by the State Auditor.

SECTION I   PURCHASING CARD

The West Virginia State Auditor is committed to reducing overhead costs associated with small dollar payments by using the purchasing card on a statewide basis. The purchasing card is a credit card used by state spending units for the procurement of small dollar purchases.

The Purchasing Card Program provides an opportunity to streamline payment methods for small dollar transactions. The purchasing card effectively manages expenses and cuts program costs by offering spending units increased control and monitoring of payments. The number of invoices processed by the West Virginia State Auditor's Office is decreased due to the consolidation of small dollar payments into spending unit master statements distributed monthly to each state spending unit. The aggregate amount of monthly small dollar payments constitutes the amount due on each master statement, which is paid directly to the financial institution on one invoice through the State Auditor's Office.

For additional information concerning the State of West Virginia Purchasing Card Program, see the Purchasing Card Policies and Procedures available from the West Virginia State Auditor's Office or contact the Purchasing Card Program at 304-558-2251.

SECTION I   EPICS

The Payroll Section of the State Auditor's Office processes payrolls for all branches of State Government.

Employees are paid semi-monthly. Therefore, agencies process twenty-four regular payrolls. Additionally, agencies process an annual increment payroll for those employees who have three or more years of service on July 1st of a given year.

A.   STATE EMPLOYEE PAYROLL

The following steps are followed to process State employee payrolls:

1.   The Payroll Administrator completes all data entry online.

a)   Salaried Employees. The agency Payroll Administrator enters the regular salary amount on one screen. This amount is paid to the employee each semi-monthly pay period. Any exceptions to an employee¿s pay or deductions must be entered on an exception screen prior to running PREDIT.

b)   The Payroll Administrator must enter hours worked for ALL Hourly employees on an exceptions screen prior to running PREDIT.

2.   The Payroll Administrator runs a PREDIT Report to check employees and totals for accuracy. This report can be run as many times as needed (Files are not updated until final PREDIT).

3.   The Budget Department or the State Auditor¿s Office will run the PIMS/EPICS comparison report.

a)   If there are errors, Budget will contact the agency.

b)   The Payroll Administrator will need to make corrections for Budget, possibly a corrected WV-11 or a correction in EPICS and rerun the PREDIT Report.

c)   Budget will re-run the PIMS Report and approve the payroll to the State Auditor's Office.

d)   The State Auditor's Office will run a final PREDIT to update the file. If there are errors, the State Auditor's Office will make the appropriate modifications.

e)   If there are no errors, the State Auditor¿s Office will start the WVFIMS Processing Extract.

B.   EPICS SUMMARY FILE

Summary File Created from EPICS is used to create the WVFIMS Payroll Transaction.

1.   WVFIMS Payroll Transaction is forwarded to the agencies.

2.   Agency approves the WVFIMS Payroll Transaction to Budget (0200), via electronic authorization.

3.   Budget approves the WVFIMS Payroll Transaction Coversheet to the State Auditor¿s Office (1200).

4.   The State Auditor¿s Office approves the WVFIMS Payroll Transaction. If a liquidity problem exists, the agency is contacted to make a deposit or transfer.

5.   Once all WVFIMS Payroll Transactions are approved and completed by the State Auditor¿s Office, checks are released to agencies and vendors.

6.   Agency and vendor reports are available on the State Auditor¿s Office web site.

SUMMARY   WEST VIRGINIA PURCHASING AND PAYMENT STATUTES

This section summarizes the laws in the West Virginia Code which govern purchasing and payments. To read the entire text of each section, please refer directly to each statute in the West Virginia Code.

FEDERAL FUNDS  

§4-11-5 (d).   LEGISLATIVE APPROPRIATION AUTHORITY.

No spending unit may make expenditures of any federal funds...unless such expenditures are made pursuant to specific appropriations by the legislature. However, if federal funds become available while the legislature is not in session and such availability could not have been foreseen, the treasurer may accept the funds on behalf of the spending unit, and the governor may authorize expenditure in that fiscal year upon the filing of an expenditure schedule. But the governor may not authorize spending of such funds for the creation of a new program or the significant alteration of an existing one. This section does not apply to certain higher education funds; non-discretionary pass-through funds to local political subdivisions, designated organizations and individuals (not requiring state match); federal disaster relief; and all federal funds for the division of highways.

WVFIMS  

§5A-2-24(a).   MANAGEMENT ACCOUNTING

It is the intent of this section to establish a centralized accounting system for the offices of the Auditor, Treasurer, Board of Investments, Secretary of Administration and each spending unit of state government to provide more accurate and timely financial data and increase public accountability.

REAL ESTATE DIV  

§5A-10-1(a).   There is hereby created the Real Estate Division withing the Department of Admnistration for the purpose of establishing a centralized office to provide leasing, appraisal and other real estate services to the Secretary of the Department of Administration.

PROPERTY SALES  

§5-15-9   SALES OF PROPERTY OR SERVICES TO THIS STATE

Provided, That the law of the other state provides the same exemption to governmental units or subdivisions of this state and to the United States, including agencies of federal, state or local governments for distribution in public welfare or relief work;

STATE AUDITOR  

§12-3-1.   MANNER OF PAYMENT FROM TREASURY; FORM OF CHECKS

Every person claiming to receive money from the State treasury shall apply to the auditor for a warrant. The auditor shall examine the claim and the evidence offered in support of the claim, and if payment is authorized by law, and if there is an appropriation which is not exhausted or expired from which it can be paid, the auditor shall issue a warrant on the treasurer, specifying to whom and on what account the money is to be paid, and to what appropriation it is to be charged.

§12-3-5.   WHEN REQ TO AUDITOR SUFFICIENT TO ISSUE WARRANT

When an appropriation has been made by law, subject to the order or payable on the requisition of a particular officer, board or person, the order or written or electronic requisition is sufficient authority to the Auditor to issue a warrant for the same or any party thereof.

ITEMIZED CLAIMS  

§12-3-10.   ITEMIZED STATEMENT OF CLAIM AGAINST STATE;

It is unlawful for any state officer to issue his or her requisition on the state auditor in payment of any claim unless an itemized account is filed in the office of the officer issuing the requisition. The auditor shall propose rules for promulgation in accordance with the provisions of article three (29A-3-1et seq.), chapter twenty-nine-a of this code, to govern the form and manner by which claims shall be itemized for payment. (1919, c. 14, § 2; Code 1923 c. 17 § 30; 1996, c. 215.) See Title 155, Series I.

PURCHASING CARD  

§12-3-10a.   USAGE OF THE STATE PURCHASING CARD FOR PAYMENT

Notwithstanding the provisions of section ten [§12-3-10] of this article, payment of claims may be made through the use of the state purchasing card program authorized by the provisions of this section. The auditor, in cooperation with the secretary of the department of administration, may establish a state purchasing card program for the purpose of authorizing all spending units of state government to use a purchasing card as an alternative payment method when making small dollar purchases.

TRAVEL  

§12-3-11.   TRAVEL EXPENSES; RULES TO BE PROMULGATED

The governor shall publish rules concerning out-of-state travel by state officials and employees, except for those in the legislative and judicial branches, and except for the attorney general, auditor, secretary of state, treasurer, board of investments and commissioner of agriculture and their employees. The legislature, Supreme Court of Appeals, Attorney General, Auditor, Secretary of State, Board of Investments, Treasurer, and Commissioner of Agriculture shall publish rules for out-of-state travel for their branches and departments of state government. Copies of these rules shall be filed with the auditor and the secretary of state. It is unlawful for the auditor to issue a warrant to pay a claim for travel expenses unless the claim meets all of the requirements of these rules.

UNEXPENDED APPR  

§12-3-12.   EXPIRATION OF UNEXPENDED APPROPRIATIONS.

Every appropriation which is payable out of General Revenue and which remains undrawn at the end of the fiscal year shall be deemed expired and no warrant can be issued; however, warrants may be drawn through the 31st of July if they are for payment of bills for the previous fiscal year and have been encumbered by budget prior to July 1st; and appropriations for buildings, land or capital outlay shall remain in effect and will not be deemed expired until the end of three years after passage of the appropriating legislation.

PERSONAL LIABIL  

§12-3-17.   LIABILITIES INCURRED BY STATE

Except as provided in this section, it shall be unlawful for any state board, commission, officer or employee: (1) to incur any liability during any fiscal year which cannot be paid out of the then current appropriation for such year or out of fund received from an emergency appropriation; or (2) to authorize or to pay any account or bill incurred during any fiscal year out of the appropriation for the following year.

Any member of a state board or commission or any officer or employee violating any provision of the section shall be personally liable for any debt unlawfully incurred or for any payment unlawfully made.

HIGHER ED  

§18B-5-3.   AUTHORITY TO CONTRACT FOR PROGRAMS, SERVICES

Higher education governing boards are authorized to enter into contracts and expend funds for programs, services and facilities; however, duties of the (secretary of administration), director of purchasing and attorney general for approval of contracts under this section are not superseded. Contracts must conform to 5a-3-1 et seq. and 5a-5-1 et seq.

§18B-5-4 (c).   PURCHASE OR ACQUISITION OF MATERIALS, SUPPLIES,

Higher education governing boards may requisition the auditor for advance allowance accounts not exceeding 5% of the total appropriation for such board; the auditor shall draw warrants for such requisitions on the treasurer, but such accounts must be accounted for by the applicable board once every thirty (30) days, or more if required by the auditor. Either governing board may use the purchasing division to procure materials, supplies, equipment and printing at its option, and if requested to do so, purchasing will cooperate with such request.

§18B-5-6.   OTHER CODE PROVISIONS RELATING TO PURCHASING

The provisions of §5a-3-1 et seq. (purchasing) shall not control or govern the purchase or disposition of equipment, materials, supplies or printing by the governing boards, except as provided in §18b-5-4 through §18b-5-7. However, §5a-3 and §36-37-38 shall apply to all purchasing by governing boards.

INSURANCE  

§29-12-7(a).   PLACEMENT OF INSURANCE ON STATE PROPERTY

No one having control of or responsibility for any state property or activity shall pay any state money for insurance except upon prior approval of the state board of risk and insurance management; board must also approve subsequent invoices therefore.

GLOSSARY OF TERMS

-   Automated Clearinghouse (ACH) Payments - the indirect electronic transfer of funds between bank accounts; see also Wire Transfer.

-   Activity Code - a component of the WVFIMS accounting scheme which shows what resources are being collected or expended in a transaction, and which matches appropriation lines in a Budget or appropriations bill.

-   Adjusting Entry - a transfer of funds between or among State accounts accomplished in WVFIMS.

-   Spending Unit Clearing Account - an account out of which payments to or from a number of different but perhaps related accounts can be made, the different accounts being credited or debited later.

-   Agency Contracts - contracts which are established by the Purchasing Division on behalf of a State spending unit, usually to make recurring purchases more efficient and convenient.

-   Agency Administrator - the executive head of a spending unit, or a person designated by him or her.

-   Agency Purchase Orders - purchase orders used by an agency to procure items within its delegated small purchase authority

-   Allotments - quarterly or monthly subdivisions of the fiscal year, reported on Expenditure Schedules, in which State spending units specify how much of their appropriation they will spend.

-   Annual Increment - a yearly lump sum payment to State employees based on years of service; required by West Virginia Code §5-5.

-   Appropriated Special Revenue - special revenue funds which are appropriated on a line-item basis and which are treated the same as General Revenue with regard to limitations on, and conditions of, obligation and payment.

-   Appropriation - the legislative process by which the authority to spend State funds is granted.

-   Appropriation Request - a document submitted to the Budget Office of the Department of Revenue in which State spending units request funding for an upcoming fiscal year and which forms the basis of the Governor's Executive Budget Proposal to the Legislature.

-   Appropriations Bill - any legislation which appropriates State resources for expenditure.

-   Attorney General - an elected office created by the State Constitution which is responsible for the bulk of State spending units legal representation and other duties specified in the West Virginia Code.

-   Auditor - an elected office created by the State Constitution which is responsible for ensuring the legality of State expenditures and issuing warrants against the State Treasury.

-   Board of Public Works - refers to the Governor, Auditor, Treasurer, Attorney General, Secretary of State, Agriculture Commissioner, and the State Superintendent of Schools, collectively.

-   Budget Act - legislation usually passed in the Regular Session of the Legislature which grants State government spending authority for a fiscal year.

-   Budget Office - a division of the Department of Revenue, which administers Appropriation Requests, Expenditure Schedules, Executive Budget Proposals and encumbrance accounting functions.

-   Buildings - recent Budget bill terminology which means new construction, major alteration of existing structures, improvement of lands, including shelter, support, storage, protection or the improvement of a natural condition.

-   Capital Outlay - recent Budget bill terminology which means and includes buildings, lands or buildings with lands, with such category or item of appropriation to remain in effect as provided by §12-3-12 of the West Virginia Code, also known as a non-expiring appropriation.

-   Claims against the State - actions brought against the State through the Court of Claims, usually for unpaid vendor bills from expired appropriations or damages.

-   Classification - usually refers to the manner in which a State spending unit's funding is appropriated in a Budget or appropriations bill; may also refer to the manner in which a spending units spending is detailed in an Appropriation Request or Expenditure Schedule.

-   Code, or West Virginia Code - the West Virginia Code, 1931, as amended, is the definitive body of all statutory laws of the State of West Virginia.

-   Commodities - defined in §5A-1-1 of the West Virginia Code as supplies, material, equipment, contractual services and any other articles or items used by or furnished to a State spending unit.

-   Contractual Services - defined in §5A-1-1 of the West Virginia Code as including telephone, electric light and power, water and similar services.

-   Constitution - the founding legal document of our State comprising a series of laws which carry the most weight and which are the most difficult laws to change; all other types of State law, statutory and administrative, are secondary to it.

-   Current Expenses - recent Budget bill terminology which means operating costs other than Personal Services which do not fall under equipment, repairs & alterations, and buildings & lands.

-   Department of Administration - a Cabinet-level Executive Branch spending unit which houses the State Purchasing Division.

-   Digest of the Enrolled Budget Bill - a document prepared by the Legislative Auditor, at the direction of House and Senate conferees, which clarifies legislative intent regarding the manner in which appropriations in the Budget bill are to be spent.

-   Division of Finance - a division of the Department of Administration.

-   Employee Benefits - Budget bill terminology which means social security matching, worker's compensation, unemployment compensation, pension and retirement contributions, PEIA matching, personnel fees, or any other benefit normally paid by an employer as a direct cost of employment.

-   Encumbrance - a process which reserves specific amounts of a State spending unit's appropriation as it is obligated by purchase orders, contracts, invoices, etc.

-   EPICS - Employee Payroll Information Control System: The Auditor's on-line real time web based payroll system.

-   Equipment - Budget bill terminology which means equipment items with an appreciable and calculable period of usefulness exceeding one year.

-   Essential Services - refers to routine, repetitive, and non-competitive purchases under the Higher Education purchasing rules.

-   Executive Branch - all offices (including the Governor, cabinet-level agencies and their subdivisions, the Board of Public Works, and various Boards and Commissions) which are not under the Legislative or Judicial Branches of State government.

-   Executive Budget Proposal - a document which proposes a fiscal year spending plan for all of State government; based upon Appropriation Requests, revenue estimates, and surplus estimates presented to the Legislature each regular session by the Governor.

-   Expenditure Schedule - a document submitted to the Budget Office which shows how a spending unit plans to spend its appropriation during the fiscal year.

-   Expenditure Schedule Instructions - guidelines published each fiscal year by the Budget Office; contains information essential for proper completion of Expenditure Schedules.

-   Federal Funds - funds the State receives from the United States Government; generally appropriated on a line-item basis.

-   Fiscal Year - the State's fiscal year which runs from July 1 to June 30. State financing, law-making, spending, and accounting practices are built around the fiscal year since the authority to spend State funds is granted on a fiscal year basis.

-   From Collections - Budget bill terminology meaning the part of an appropriation which must be collected by a spending unit.

-   Fund Transfers - see Adjusting Entry.

-   General (Revenue) Fund - the general operating fund of the State which consists of all moneys received or collected by the State except as otherwise provided by law.

-   Goods- Materials, supplies, and commodities, printing, equipment and any other articles or items used by or furnished to a spending unit.

-   Governor - the office of the Governor of the State of West Virginia.

-   Intergovernmental Transfer (IGT) - a type of WVFIMS fund transfer utilized by a State spending unit to authorize payment of invoices received from another State spending unit.

-   Invoice Coversheet - a WVFIMS document which accompanies a vendor invoice through the State payment processing system; serves the same purpose as a Requisition for Payment or Transmittal; generated at the spending unit level.

-   Lands - Budget bill terminology which refers to the purchase or interest in real property.

-   Legislative Auditor - an office under the Legislative Branch which monitors spending unit expenditures according to Budget and appropriations bills; performs post-audits of spending unit spending.

-   Legislature - the law-making body of the State of West Virginia, consisting of the House of Delegates and the State Senate.

-   Non-Appropriated Special Revenue Funds - funds appropriated by general appropriation language in a Budget bill; also known as "non-expiring accounts."

-   Non-Expiring Accounts (or Funds) - those spending authority (appropriation) accounts which do not expire at the end of a fiscal year.

-   Object Code - a component of WVFIMS accounting which classifies what commodity or service was acquired by an expenditure.

-   Official State Purchases - Purchases and expenditures made by an employee on behalf of the state or the employing Spending Unit as allowed by law, policy and procedure and within approved budgetary authority.

-   Personal Services - Budget bill terminology which refers to salaries, wages and other compensation paid to full-time, part-time and temporary employees of a spending unit; does not include payments to consultants or independent contractors.

-   Printing - printing, binding, ruling, lithographing, engraving and other similar services; see §5A-1-1 of the West Virginia Code.

-   Purchasing Director - the head of the Purchasing Division under the Department of Administration who examines every State contract that imposes any obligation to pay any sum of money with regard to commodities and printing; see §5A-3-8 of the West Virginia Code.

-   Purchasing Division - The Division of the Department of Administration responsible for receiving and awarding bids for most of the purchases made by State spending units; see §5A of the West Virginia Code.

-   Receipts - revenue received by a spending unit; see also Disbursements.

-   Receiving Report ¿ A document generated internally by a spending unit verifying the receipt of commodities

-   Regulations - administrative law authorized by statute and promulgated by an agency to implement mandates; see also Rules.

-   Repairs and Alterations - Budget bill terminology referring to routine maintenance and repairs to structures, and minor improvements to property which does not increase capital assets.

-   Requisition for Payment - the formal, statutory name for a WVFIMS invoice coversheet; also known as a transmittal.

-   Revenue Class/Source - numeric codes which identify sources of revenue on Appropriation Requests and Expenditure Schedules which are defined in Expenditure Schedule Instructions.

-   Rule - administrative law authorized by statute and promulgated by a spending unit to implement the mandates of the authorizing statute; also known as Legislative Rules; see also Regulations.

-   Services - The furnishing of time, labor or effort by a contractor, not involving the delivery of a specific end product other than reports which are merely incidental to the required performance. Services include maintenance and utilities, but do not include tax reportable services.

-   Special Authorization Codes - a series of class types (numbers) used on WVFIMS coversheets to identify types of purchases made.

-   Spending Authority - funding level granted by Legislative Act.

-   Spending Unit - Budget bill terminology which references the department, division, office, board, commission, agency or institution to which an appropriation is granted.

-   Statute - laws in the West Virginia Code which are the final published form in which an enactment of the Legislature appears; statutes carry more weight than administrative law (Rules and Regulations), but less than the Constitution.

-   TEAM (Team effort for Acquisition Management)- The State's automated purchasing system.

-   Transmittal - formerly served the same purpose as a WVFIMS invoice coversheet; also known as Requisition for Payment.

-   Treasurer - an elected Executive Branch office created by the State Constitution; responsible for certifying that money exists in the State Treasury for the payment of warrants issued by the Auditor.

-   Warrant - the statutory, formal term for a check drawn on the State Treasury; issued under the State Auditor's signature after audit; the State Treasurer counter-signs the warrant after determining that there is money in the State Treasury.

-   West Virginia Financial Information Management System (WVFIMS) - an electronic accounting system used throughout State government; involved in every phase of government finance from the Budget bill to the payment of invoices; each account in the system is designed to "roll up" to another account in a hierarchical fashion leading up to the "Activity" Budget Act.

-   Wire Transfer - a direct electronic transfer of funds between bank accounts which settles on the same day; see also Automated Clearing House (ACH) Payments.

-   WV-48 Agreement - an agreement between the spending unit and the vendor stating dates of service and the terms of the agreement.