Agencies should consult their federal payment systems or their federal program liaisons for instructions regarding the return of federal funds. OSC is not responsible for ensuring compliance with federal program requirements.

The procedures that follow pertain to the refund or return of federal funds electronically to a federal agency due to: 

• Excessive cash balances on deposit that are not needed for program purposes;
• Unspent “advance” funds for awards that are closed;
• Monies returned by grant recipients due to audit disallowances;
• Cost reallocations (Expenditure Adjustment Journal transactions crediting federal funds);
• Any other accounting adjustment that results in an increase in federal fund cash that will not be immediately disbursed for program purposes and therefore must be returned to the Federal Government.

This process should not be used for awards that are open for draws and returns via the federal draw system. Please note that while an agency might consider an award closed, the award may not have been closed by the awarding agency in the applicable draw system. If the award is open in the federal draw system, and OSC draws on your behalf, this return will be processed through the federal draw system, and if the intent is for a refund to be issued separate from the normal draw process, this needs to be communicated to [email protected] prior to entering any transaction that would bill against the award.

REGULAR PAYMENT VOUCHER

To generate an electronic refund of federal funds to the federal agency, it is necessary for agencies to prepare and submit a Regular Payment Voucher. Before the agency submits the voucher, the agency MUST ensure the cash related to the refund has been posted in SFS. In some cases, funds to be returned will be recorded via a Refund of Appropriation (ROA). In other cases, the funds are excess cash from a previous federal payment or adjustment. Under no circumstances should a refund be paid to the Federal Government until the related funds have been posted in SFS.

In the case of an audit disallowance, or any scenario where there is no new cash being posted to SFS, and an expenditure is being moved from a federal funding source to another source, the movement of this expenditure must be done prior to submitting the voucher for the return of cash to the Federal Government. This should also be communicated to [email protected] to ensure no returns are mistakenly processed.

Amounts that are to be returned must never be charged to an appropriation that was provided to control grant expenditures since such charges are reported to the government as a use of grant funds. Refunds and returns to the Federal Government are not State expenditures and, therefore, must be recorded as a reduction of federal grant revenues. If returns are charged to expenditure account coding, reported expenditures and disbursements on SFS reports would be affected.

Refund Voucher - Required Information

• Voucher Style – Regular Voucher
• Pay Terms – 00 (Due Now)
• Invoice Number Field – The Invoice Number field is limited to 30 characters. The following information should be entered based on the applicable federal payment or draw system:
  • Payment Management System (PMS): This field should include the PMS Payee Account Number (PAN), PMS Document Number, and the reason for the return (generally “Refund”). Agency staff can identify their award’s PMS PAN and PMS Document Number by running the “NY_OSC_Draw_System_Attributes” query in SFS Query Viewer.
  • Automated Standard Application for Payments (ASAP): This field should include the Recipient ID and Award Number as well as the reason for the return (generally “Refund”).
  • G5-Department of Education (G5): This should include the Unique Entity Identifier (UEI), Award Number, and the reason for the return (generally “Refund”).
• Location – LOC01
• Payment Note Box on the “Payments” tab - At a minimum, the following information must be provided:
  • Reason for the refund.
  • The revenue chartstring where the refund or receipt was deposited. This must include, at a minimum: 
    • Fund 
    • Account (36121)
    • PCBU
    • Project 
    • Activity. 

This chartstring must represent EITHER:

• The refund deposited through a ROA or
  • The corresponding chartstring where expenditures were moved from an award and the return of funds cannot be processed through the normal draw process.
  • The voucher ID of the ROA or the journal ID that was used to deposit the refund or receipt into the SFS.
• Distribution Lines Coding - All refunds of excess or unneeded federal fund balances will be paid from the Comptroller's Refund Account (Fund 70200) and are charged to the following statewide ChartField values.

Once the voucher is audited, approved, and paid by OSC’s Bureau of State Expenditures, the OSC’s Bureau of State Accounting Operation (BSAO) Revenue Unit will debit the federal revenue chartstring as listed in the Payment Note Box, which funds the payment of the voucher out of the Comptrollers Refund Account.

Any further questions concerning the required return of monies to the Federal Government should be directed to the BSAO, Federal Billing and Projects Section at [email protected].

Guide to Financial Operations

REV. 10/27/2026