A basic tenet of good business practice is to pay for goods and services after they have been received. This is also the University's policy, subject to the exceptions permitted by the State Comptroller. The Finance Office may request additional information to justify any advance payment. The cost center signatory authorizing the advance payment is responsible for ensuring that that vendor provides the goods or services to the University. That individual is also responsible for recovering the payment if the vendor fails to provide the goods or services.
Advanced payments are processed through the department and do not go through Purchasing. A purchase voucher is prepared by the requesting department citing the advance payment exception in the voucher comments and attaches other documentation if required. The purchase voucher requires one of the following statements:
- Advance Payment: Rent/Lease
- Advance Payment: Subscription
- Advance Payment: Meeting Room Rental
- Advance Payment: Maintenance
- Advance Payment: Payment to other State/Federal Agency
- Advance Payment: Tuition
- Advance Payment: Library Book/Material Purchases
- Advance Payment: Significant Cost Savings (include dollar amount saved)
- Advance Payment: Sole Source/Proprietary goods/services
- Advance Payment: Legitimate Public Purpose/Required by Vendor
Once a voucher is approved with any of the above statements, it is implied that the approver accepts the responsibilities of ensuring the goods or services prepaid by the voucher are received by the University.
If a contractor qualifies for an advancement payment exception, the executed contract agreement should be attached to the voucher as supporting documentation.
With the exception of certain library purchases, the Education Code specifically prohibits the expenditure of money in the Higher Education Assistance Fund (HEAF) to pay for goods or services before their delivery.
Advanced Payment Exceptions
- A state agency may pay rent for leased space up to 14 days before the due date.
- A state agency may pay a newspaper or magazine subscription up to six weeks in advance of the renewal date.
- The funds appropriated by the General Appropriations Act for a particular appropriation year may be expended to pay the complete cost of registering for or reserving a meeting room or other space for a seminar or conference notwithstanding the fact that it will occur during the next appropriation year. This paragraph applies only if the sponsor of the seminar or conference or the owner of the meeting room or other space requires the payment to be received before the beginning of the next appropriation year.
- A state agency may pay an annual maintenance agreement in advance, subject to the requirements described elsewhere in the guide about appropriation year determination.
- A state agency may make an advance payment to a federal agency or another state agency for goods purchased from the agency if the advance payment will expedite the delivery of the goods.
- A state agency may pay tuition directly to an institution of higher education not earlier than six weeks before the class begins. A state agency, however, may not reimburse a state employee for tuition before the class begins.
- An institution of higher education may pay for books and other published library materials before receiving them if reasonably necessary for the efficient operation of the institution's libraries. Library materials may be paid for in advance using HEAF funds. This is the ONLY allowable exception for advance payments using HEAF funds.
- The University may make an advance payment if significant cost savings would result from making the payment in advance.
- The University may make an advance payment to a vendor who is selling specialized or proprietary goods or services to the agency if the vendor requires the payment to be made in advance. Proper documentation must be attached to the voucher.
- The University may pay for goods and services before their delivery to the agency (1) if there is a legitimate public purpose and necessity that is documented on the voucher and (2) payment in advance is required by the vendor.